Good afternoon, ladies and gentlemen. My name is Victor Snellman, and it's my pleasure to welcome you to Savox Communications' H1 2026 earnings call.

This is an important milestone for Savox as it is the company's first results presentation as a publicly listed company after a successful IPO and listing to Helsinki Stock Exchange. Joining us today are CEO Jerry Kettunen and CFO Juha Järvi.

Jerry will begin by reviewing the key events of the first half of the year and business highlights. Juha will then take a closer look at the numbers and financial performance and key figures for the period.

After the presentation, we will have an open floor for questions. You can submit your question at any time via the chat function, and we will address as many as possible after the presentations during the Q&A session.

With that, I'm pleased to hand over to CEO Jerry Kettunen. Jerry, please.

Thanks, Victor. Historical milestone indeed.

Before discussing the results, I will briefly introduce Savox. As a recently listed company, many investors are still getting familiar with us, our markets, and our strategy.

Then I will cover the key messages from the first half before handing over to Juha for the financial review. Savox is a Finnish mission-critical communication technology company founded in 1982, with more than 40 years' experience serving some of the world's most demanding users.

We generated over €56 million of revenue in 2025 and have grown at approximately 15% CAGR over the last five years. We employ around 300 people globally.

What makes Savox different is not a single product. We operate where the communication simply cannot fail.

When people think of Savox, I want them to think of mission-critical communication, hearing protection, situational awareness, and operational effectiveness. That is the space where we compete and where we believe long-term demand remains strong.

Historically, Savox often been viewed as a product company. However, today Savox is increasingly a system and capability company.

We support professional users operating in demanding environments, from field teams to vehicle crews and industrial operators. Our offering covers hearing protection, professional communication, vehicle intercom systems, and situational awareness solutions.

This gives us a strong position across defense, fire and rescue, and law enforcement and industrial markets. This matters because customer demand is increasingly shifting toward integrated solutions, which aligns directly with Savox' strategy and strengthens our long-term positioning.

Although Savox is headquartered in Finland, our business is fundamentally international. We serve customers in more than 60 countries throughout three geographic regions: Europe, the US, North America, and Asia-Pacific.

Those regions are supported by our regional hubs, which are located in Finland, United States, and Singapore. This broad geographic footprint gives us exposure to multiple defense and public safety spending cycles.

At the same time, it reduce the depends dependency on any single geography or customer market. From a strategic perspective, that diversification is becoming increasingly valuable.

Before moving into the first-half performance, it is worth highlighting what changed fundamentally for Savox during the first half. We successfully completed our IPO.

The offering was multiple times oversubscribed and attracted a high-quality anchor investor base and strengthened our balance sheet with €30 million of gross proceeds. Trading commenced on Nasdaq Helsinki on 23rd of June.

For me, however, the IPO was never the destination. It was an enabler.

The IPO provides the platform for the next phase of Savox, giving us a stronger capital structure, improved visibility, and ability to invest in growth opportunities from a position of strength. If I summarize first half in one sentence: commercial momentum continued to strengthen, our financial position improved substantially, and the focus now shifts from preparation to execution.

What excites most me is not the historical numbers. It is what they are telling us about the future demand.

The first half demonstrated that customers continue to invest in mission-critical communications and that Savox is winning business in attractive segments of these markets. In our presentation, there are four key messages.

First, momentum is building, customer activity remains high, and the demand continues to develop favorably. Second, strategy execution progressed meaningfully, the IPO was completed, our financial position strengthened, and we advanced several strategic initiatives.

Third, our business remains strongly weighted towards second half. This is not new.

It reflects the nature of larger programs, delivery schedules, and acceptance processes. Fourth, guidance remains unchanged because our outlook and confidence in the second half remain intact.

This slide is probably the most important slide in the whole presentation because ultimately orders today become revenue tomorrow. The strong increase in orders demonstrates that customer demand remains healthy and that our market position continues to strengthen.

Defense remains the primary growth engine, while safety and security and industrial provide a more recurring demand base. Equally important is the increased visibility provided by our order book and options.

For investors, visibility matters because it reduces uncertainty. For management, visibility matters because it improves planning.

For customers, visibility often reflects long-term confidence in our capabilities. A key point we have communicated consistently throughout the year is that 2026 is strongly second-half weighted.

This characteristic is part of our business. Large customer programs rarely progress in perfectly linear way.

Deliveries, testing, approvals, and acceptance milestones often accumulate towards the second half of the year. Therefore, when evaluating our first half, it is important to focus on commercial activity, visibility, and execution readiness rather than simply analyzing the first-half results.

Exactly the same principle applies to profitability. The first half reflects seasonality, IPO-related costs, and preparation for anticipated growth in deliveries during the second half.

What I focus on are underlying drivers: product mix, scale, operating leverage. Juha is going to explain these in more details.

Those are the factors that ultimately determine profitability over the long term, and those drivers remain intact. Before handing over to Juha, let me leave you with one thought.

The first half was not about maximizing profitability. It was about building the foundation for the next phase of growth.

We strengthened the balance sheet, we improved visibility, we advanced strategically. With that, I hand over to Juha.

Thank you, Jerry. Good afternoon.

My name is Juha Järvi, CFO of the company. Welcome also on my part to this first Savox earnings call.

Let's go through the financials a bit more in detail as Jerry promised. Let me start by orders received as one of the strongest indicators of our business momentum.

In Q2, the orders grew 44 percentage compared to the previous year. In the first half, the orders received grew 47 percentage in terms of firm orders received.

If you were to consider the defense option on top, then the growth in the first half is 92 percentage. What is kind of important to note here is that the strong driver for the growth in the orders received was the defense business area, where the orders received grew 248 percentage in the quarter and 117 percentage in the half compared to the previous year.

That's a strong growth and an indication of the customer activity levels and momentum Jerry was also referring to. Safety and security recovered the somewhat slow start in the Q1 and grew 6 percentage in the orders received in the quarter.

Industrial was softer in the quarter, but grew modestly in the first half thanks to the very strong start of the year the area had in the Q1. Then when we logically move to look at the order book, the strong orders received obviously are visible in the order book, and the order book was standing in terms of firm orders at €36.2 million end of June, up from €21.7 million in the beginning of the year, 35 in the same period last year.

If we are to consider the options, then we are at a record level of €61.5 million end of June current year. The options here, again worth to remind, they relate to the multi-year governmental defense programs, and they are in terms of nature kind of add-on follow-up orders on already made binding orders with the pre-agreed commercial terms.

That said, they obviously do need the customer still to exercise the option, but we believe with the programs proceeding, we still feel these are more likely to realize and it's kind of a matter of the timing for them to convert into orders. Then when we move on to look at the revenue development, revenue grew 15 percentage in the quarter to 12.4 million euros and 12 percentage in the half to 22.6 million.

I'm pleased that the revenue growth was broad-based, with all the business areas growing both in the quarter and in the half. While it's not that obvious in the revenue numbers alone, want to repeat, defense remains as our primary growth engine.

We have discussed before the defense share of our total revenues having steadily grown from 13 percentage in '21 to just over half in the '25. Now in the first half, it's seasonally lower, the lower kind of unfavorable mix seasonality we discuss, 38 percentage in the half, as it actually was also in the previous year.

When you look at this seasonal revenue dip of the defense revenue here, it's worth to keep in mind that the defense book-to-bill actually was 2.5x at the same time. That to us serves as the proof point that this kind of a seasonal temporary dip, and we are confident that the long-term trend remains with the defense being the primary driver of the growth.

Of course, good to note that overall the book-to-bill also was 1.6x in the half. Now when we look at the revenue development by the geographies, it's kind of evident here that growth in the half was driven by Europe.

The other key thing that is kind of a learning in our business we want to share here is that the primary driver of the volatility also in the geographical dimension is the timing of the defense projects, how they realize between the different customers, different geographies. In the first half of '26, Europe was growing strong, while in Asia we had somewhat softer deliveries in the current year after a very strong comparative in the last year.

Then looking at safety and security, overall slower start in Q1, especially in Asia and North America, but then overall kind of a good recovery in Q2, and all of the key regions in the safety and security were growing in the quarter and in the half. Industry, just want to remind here, this is basically a Finnish domestic or European, as we saw here, business, so that contributes to Europe.

Then when we move on to profitability. Gross profit was improving 20 percentage in the first half compared to previous year and was €9.1 million in the half.

Also in relative terms, gross margin in the first half improved from 38 percentage last year to 40 in the current year. When we kind of compare the first-half gross margin to the last-year full-year basis, 45, this is where we come to discuss the seasonal kind of volatility here.

There's two primary drivers, which are totally in line with what we've been explaining about our long-term profitability drivers in the past. Firstly, in the first half with the lower volume seasonality, we have kind of lower absorption of the production fixed cost of sales.

This is kind of on the lower revenue periods impacting gross margin percentage. Then keep in mind what we discussed on the temporary mix where defense is lower share in the total revenues in the first half, and it kind of was in the last year in the full-year basis.

Keeping the order book, the defense 2.5 times book-to-bill in mind, it's a temporary one, defense in the long term will be gaining share of the total revenue. Combine that again by remembering that defense is our most profitable business area in terms of sales margins, and this is when we kind of have a season where defense share of the revenue is lower, this is visible in the gross margin performance.

In the long term, all of these long-term profitability drivers remain intact. Defense is growing in terms of total revenue in the long term, that supports us; scale is growing, that supports us in the long term.

As we see from the right-hand side here, opex is well in control. The opex, excluding the items affecting comparability, grew 5 percentage in the half compared to the 12 percentage revenue growth, also the operating leverage is still behind us.

When we look this then in the comparable EBIT profitability point of view, yes, we basically have a half of let's say zero comparable EBIT, in line with the previous Oops. Oops.

Oops. Oops.

I need to cross-check this. In line with the previous year.

Sorry. Yes, this correct, actually I realized we have a typo on the slide.

Zero, this is the correct operating profit for the half. Comparable operating profit for the quarter was zero, that's the way.

Sorry for the confusion. Then the comparable operating profit in the half is the €0.7 million negative.

Yes, I mixed myself with the slide, but the slide stands correct. Apologies.

Zero comparable operating profit in the quarter as in the previous year, and 0.7 negative in the half compared to the €1.3 million negative in the previous year. Now here we are improving, but still negative because of the seasonality performance.

The seasonality here is in the revenue that impacts the gross margin, gross profit, while the opex remains in control. Then for those of you who are looking at the operating profit, not the comparable operating profit, it's worth to note that the items affecting comparability in the half, €0.9 million, of which actually €0.8 million purely relates to the IPO, and it's kind of obvious we only do the IPO once, this is a clear non-recurring item for the longer term.

The other key thing to note, we recommend, as before, to look at the profitability in the longer-term pattern. There when we look at the last 12 months operating profit is still at 14.1 percentage comparable operating profit margin.

Then when we move on to cash flow and investments, the cash flow for the first half was negative, -€4.9 million, compared with the €4.3 million prior year. H2 actually last year was positive, and it typically is the way because, again, here the seasonality of the revenue drives the profitability.

I believe it's obvious on the left-hand side of this graph, profitability is the part which is weighted to the second half, and that also reflects into the cash flow. On top of that, we've been continuing to invest in the working capital deliberately in preparation of the second-half deliveries and capabilities.

Then we had some one-time financial expenses on the cash flow point of view when we cleared our balance after the IPO and also in connection of repaying the related party loans. Worth to note that going forward, our financials expenses are set to decrease with this strengthened balance sheet.

Then on the investments, we continue to invest mainly focusing in the R&D. Finally, after the IPO, we have a clearly strengthened financial position and balance sheet.

Net debt down to €14.1 million end of June, and we did prepay €12.3 million of related party loans, including all €10.8 million of subordinated or capital loans in end of June after the IPO. Also looking at the KPIs, clearly in a much stronger position in terms of balance sheet.

Here I welcome also Jerry to join me again for us to conclude how we see the full year in terms of our guidance.

Yes, as said, we keep guidance unchanged. The key reason is that the fundamentals behind the second half remain strong.

Customer activity continues at a high level, demand remains healthy, and our order book provides visibility. At the same time, we have been preparing the organization for growth.

During the year, we have strengthened our capabilities and expanded capacity, including starting to plan to recruit more than 12 new employees in Jyväskylä to support future delivery volumes and program execution. In addition, we see our geographic position strengthening, particularly here in Europe and selected international defense markets where customer engagement remains high.

With these words, I conclude the presentation, and we can move to the Q&A session.

Thank you very much, Juha and Jerry. Let's move on with the Q&A session.

This would be a great time to post questions via the chat function if you have already not done so. We have quite a few that we have here.

Let's start with the first question. It seems that because of the IPO, there's some of non-recurring costs.

How would you expect the non-recurring costs to develop for Q3 and Q4? Are there any indications?

I think this goes to Juha.

It's kind of a good question. Maybe there's not ever knowing exactly what may come in the future.

When you look at what we had in the first half, total of €0.9 million of non-recurring items affecting comparability, 0.8 of that relating to the IPO, I think it's kind of obvious we're not currently seeing so much of anything else there. Things may kind of change.

Maybe I actually also here want to add still to recap, the total cost of the IPO to the company was €3.4 million, but we did recognize the directly attributable cost against the proceeds, €2.6 million net of the tax effect of €0.5 million in basically in the equity, in the unrestricted equity. That kind of explains why €800,000 roughly is recognized in the profit and loss for the year on the IPO.

Okay. Now the orders received grew by 47%, and the order backlog, including the options, increased to €61.5 million, while revenue growth was only 12%.

Could you help the investors understand the expected conversion of the current order backlog into revenue during the second half of this year?

Perhaps I start with a bit of the reasons, and then Juha can continue with more the financial view on this. We are in electronics business where there are lead times regarding the components.

Naturally, when you get the order, and in many cases we prepare ourselves also before the order, you start to negotiate with the supply chain of these things. Some of the components do have a long lead times.

It's matter of getting prepared for the deliveries as well. All is related with the timing.

As I also said many times, there are different kind of processes related also to customer deliveries, acceptance tests, and compliance-related matters and so forth. These are also affecting on when the deliveries are actually going to be executed.

Do you have something to add here, or—

Maybe if this was also, and I believe there's questions on this, how do we come to the full year from here. It's kind of twofold.

Yes, there's the actual revenue we had in the first half, right? Then we have a kind of a strong order book that gives us visibility to where we are going, but not all of the order book is going to convert into the revenue still in the current year, right?

Then we do have the sight on the rest as we keep saying, there's a strong customer activity levels ongoing currently. Actually one way also to look is that you take the safety and the security and the industry, remember we keep saying these are more the recurring businesses where you typically have a three months order fulfillment lead times, there is this continuously repeating order book that is still not yet in the orders end of June, but it's definitely going to come there.

Then we also have, not only the orders we had in the defense we reported, which yes is strong, but there's also the activity ongoing. Maybe, Jerry, you want to add on a couple of the recent developments.

They're kind of ongoing. One, of course, we also did make the release as well.

One of them, which we actually published, is Patria case where they informed that they choose us as the future supplier of the vehicle computers. That demonstrates our capabilities to support these bigger vehicle integrators and primes with a long-standing products and long-standing partnerships.

The other thing Juha was referring on is that after the reporting period, we have strengthened our position also in some of the strategic geographic areas with new orders. That gives us a good visibility forward how the company is developing.

Now this CAVS program you mentioned, is it a deal related to one specific country or a broader CAVS program?

It's a broader.

Okay.

Not going into too much details.

Of course not. The guidance requires growing orders in the second half, quite heavily compared to the first half.

In addition to the vehicle computers CAVS deal win, do you see the near-term order pipeline strong even if excluding the €8 million to €20 million vehicle computer deal, which will be delivered over long term?

As said, there are already new items, not moving into too much specifics here, but that's our message. As Juha rightly pointed out, we shouldn't focus too much only on the project business part of which is usually the defense part of the business.

We do have this more recurring type of business in safety and security, and naturally that supports also the development. Having said that, I like to underline that we faced also a 6% growth in that business area when it comes to the received orders in Q2.

In short, it means it's not the actual revenue alone, obviously, first half. It's not that and the orders at hand at the moment.

It's that plus the ongoing activity levels in getting the new orders that makes us feel the guidance is still very very much at reach.

Do you have some kind of indication regarding the optional order backlog, how it converts to confirmed orders?

Usually, and we need to remember that these are related to governmental customers, the end users are usually governmental customers. We see that it takes one to three years to turn these option orders into revenue.

That's probably the answer I could give you at this point.

Yeah. Going a bit back to the CAVS, it seems that it sparked quite a few additional questions.

Is the CAVS contract related to only vehicle computers or also intercoms and other equipment?

This announcement what we made is related to just the vehicle computers, but of course what we are working on this specific program is a much broader spectrum. It depends on the end-user requirements and demand what sort of content we are then delivering into it.

Is there any kind of indication of the—

Don't want to go in specific details here. I don't want to.

Yeah. There's quite a few questions from several people, can you provide an update on Mission Core and other next-generation system solutions?

Are you currently conducting customer evaluation or pilot programs, and when could investors expect these initiatives to start contributing materially to revenue?

If I start with the last part.

Yeah.

It is there. It's related with the computer.

Computer is part of our Mission Core. What Mission Core represents to us is basically we combine audio, data, and video into one system.

With this system, we provide a situational awareness for the people working within the vehicles and when they are dismounted out from the vehicles. Naturally, this is very important for us.

This is strategic, and this is where we are focusing. It is not something what we are going to launch in one or two years.

It's there, but we are going to develop it also according the customer needs and building up more and more building blocks into these systems so that it fulfills, first of all, the customer requirements, but also provides a comprehensive system for the users. The aim is same: providing better situational awareness and understanding what's happening.

Yes. It seems that the chat is exploding, but I'll do my best in aggregating these questions.

Some of them we have already answered. For example, do you have any historical data how options have turned into orders in the past?

The timeline is one to three years, but what about the conversion rate? Do you have some kind of disclosure on that?

As I said, one need to remember that these are related to governmental customers. The biggest reason why they usually work with the options is related how they are budgeting their procurements.

I would say that usually when the governmental organizations are giving the option, it's a strong statement. Therefore, we tend to talk about the visibility that the options gives us.

Of course, still those are options, nothing is confirmed before you do have the signed order, but the visibility is important, and also the reason why these options are used in defense procurements.

You indicated that the gross margin was pressured by a weak mix. In which business areas did you see weaker gross margins year-over-year in the second quarter?

It's not so much really that, and we haven't disclosed business-area-specific gross margins, but it's kind of actually more general. Because what we have said before, we have the long-term tailwind on our profitability.

We have a favorable mix where defense is growing share of total revenue, and defense is the business area that has the best sales margins for us. Safety and security in the middle, industry was the relatively lower.

Yes, right? This has supported us over the years.

We confident it will continue to support us going forward because defense is the primary growth driver. Then when we look at the first half in particular, both in the last year and in the current year, the share of the defense of the total revenue, it was 38 percentage, down from 51 in last year.

This is what we mean with a weaker mix: less defense, basically more industry. It's this business area level unfavorable mix temporary in the first half that is kind of visible there in the results.

Then when we see most of the orders received is in defense, defense is going to be the one driving the growth, we will again see the gross margin percentage pick up as we go on from here for the second half and the full year.

I don't know, Juha, I don't remember if you mentioned the share of the defense business at the first half. It 38%—

38 percentage actually both current and previous.

While it was last year 51%.

Yes.

Naturally, when we talk about the second half, we are in strong opinion that it's going to be changed.

Maybe I still add on it. You take orders received, firm orders first half, defense was 59 percentage compared to the 38 in the revenue.

If you were to consider the options, they are defense, then the first half was basically 3/4 was defense. I think you can agree with us defense is going to grow.

This is temporary unfavorable mix in the first half.

If you look at the orders received, defense was growing 117% compared to same time last year. That gives you the favor of this why we feel so confident on that matter.

Yes, you feel confident on delivering your guidance.

That's what we stated.

Yes. Just a few more questions before we're out of time.

You mentioned the components. Are component availability and pricing secured for a high H2 deliveries, and how do you see component availability and pricing as we speak?

It varies on component category. Perhaps Terhi, our COO, would be the best person to answer on this.

If I take memories as an example, there we see a clear trend where the component prices are going up and the lead times are getting longer because of the big AI trend. Then what comes to other component, it really varies.

Therefore, we need to also manage quite well our supply chain. We need to manage the delivery schedules.

This is what we do. Part of this IPO money we got has been used to really buy also component into inventory to prepare us for the coming deliveries.

You said that the international positioning is strengthening. Can you open this a little bit further?

I believe we are going to open it this week, a bit, yes.

It's a little bit of a cliffhanger now. Then the final question.

I'm returning to the gross margin topic. Share of defense sales was higher, 41% of group sales in Q2 than in Q2 last year, when it was only 39%.

Group-level gross margin came down two percentage points in Q2 this year compared to last year. What is explaining that?

I can maybe take this, Jerry. You can then add.

I would kind of say that firstly, I recommend to look a bit then on the trends here. We obviously have looked to this question in our reporting as well.

I can't give it all details, but there is a significant defense-driven component there. Of course, it's kind of on the top level it's the share of the defense.

Defense is the most profitable area, this very much holds. Then there is project-to-project variances also in the areas, and we had a fairly tough comparison here on some of the projects that had a strong margin in the Q2 of the last year.

That kind of comparison is there, quite visible on the gross margin comparison. I would say that when we kind of won't drill too much into the detail, but we kind of rather a little bit look it further out and we focus on the trend, we will clearly see this pattern where defense is driving the improved gross margin performance because of the best sales margins.

Some quarter-to-quarter variances allowed, but the trend will be there as we see defense grow.

Thank you very much, Jerry and Juha, and thank you for the insightful answers. That concludes today's H1 2026 earnings webcast.

On behalf of the entire Savox team, thank you for joining us and for your continued interest in Savox Communications. We appreciate your time and participation today, and we look forward to keeping you updated this week and on our progress during the remainder of the year, of course.

Have a great start to the autumn, and we hope to see you again at latest at our Q3 results webcast. Thank you.

Thank you.