Karnov Group AB: Karnov Group reports first quarter 2025

Strong cash flow and margins

Financial highlights first quarter

• The Group's net sales increased by 6.5% to SEK 673 m (632). Organic growth (constant currency) was 2.7%. Currency effect was -0.4%. Acquired growth was 4.2%.
• The Group's adjusted EBITA amounted to SEK 175 m (144) with adjusted EBITA margin of 26.0% (22.7).
• The Group's EBIT amounted to SEK 92 m (55).
• Profit for the period amounted to SEK 77 m (-12).
• Earnings per share before and after dilution amounted to SEK 0.72 (-0.11).
• Adjusted free cash flow amounted to SEK 245 m (107).

Comment from CEO Pontus Bodelsson

In the first quarter, the adjusted EBITA margin improved to 26% and we achieved an organic growth of 3%. Online sales increased by 11%, thanks to volume growth and uplifts from AI sales. We deliver mission-critical legal knowledge to our customers, while investing in our AI roadmap to generate even more value. Our cost-efficiency efforts are coming through, improving the margins.

STRONG ONLINE SALES GROWTH AND IMPROVED MARGINS

Our customers are adopting our AI assistant with strong positive feedback, confirming the efficiency gains. User statistics show that the AI assistant is being used both regularly and with increasing frequency.

The Group's net sales amounted to SEK 673 m in the first quarter, an increase driven mainly by strong online sales in Region North including AI uplifts as well as acquired growth from the carved-out Schultz business. The strong performance in Region North is however partly offset by weak offline sales in Region South, resulting in organic growth of 3% in the quarter.

The Group's adjusted EBITA margin reached 26% in the first quarter, an improvement of more than 3 percentage points compared to the first quarter last year. The improvement is mainly the result of positive synergies effects thanks to our cost-efficiency efforts across the Group.

We achieved an adjusted free cash flow of SEK 245 m in the first quarter, driven mainly by renewals of annual subscriptions to our online solutions. Leverage was 2.4x adjusted EBITDA LTM by the end of the quarter. We intend to allocate our free cash flow to achieve further cost-synergies and enhance our AI solutions, benefitting all stakeholders.

COMMON AI ROADMAP WITH LOCAL CUSTOMER VALUE

We have an ambitious AI roadmap and will launch additional value to all our customers this year. In February, we advanced our AI ambitions launching our Group AI product organisation. Now, we are preparing our first Group-wide native AI platform. The platform is based on our success in Region North and combines a common user interface with our locally authored proprietary content for great local customer value. Development has been initiated and will be ongoing during 2025. With a common AI platform, we can accelerate development of new features, leverage economies-of-scale and knowledge, and continue to harmonise technological platforms across the Group.

COST-EFFICIENCY EFFORTS GENERATE EXPECTED SYNERGIES

We progress with our cost-efficiency initiatives. The effect of the synergies is coming through as expected, improving the margins. By the end of the first quarter, the annual run-rate synergies from our initiatives amounted to SEK 187 m. We reiterate our ambition to generate synergies of SEK 230 m on annual run-rate basis by the end of 2026. As announced earlier, the synergies are generated by organisational restructuring, product rationalisation, process streamlining and harmonisation of IT infrastructure.

NEXT PHASE IN REGION SOUTH

In May, the CEO of Region South, Guillaume Deroubaix, will leave Karnov Group. As we have concluded the merger in Spain and successfully relaunched the three flagship products in France, we can now move on to the next phase of developing Region South: from now on our Country Managers in Spain and France will report directly to CEO Pontus Bodelsson.

conference call on 14 may 2025

A webcasted telephone conference will be held at 09.00 a.m. CEST today, where CEO Pontus Bodelsson and CFO Magnus Hansson will present the report and answer questions.

You can follow the presentation via webcast and ask questions in written form on the following page:
https://karnov-group.events.inderes.com/q1-report-2025

If you wish to participate via telephone, and thereby be able to ask questions verbally, please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference: https://conference.inderes.com/teleconference/?id=5003853

The presentation material and the report will be available before the conference starts at www.karnovgroup.com. An on-demand version will also be available after the presentation. The presentation will also be available on www.financialhearings.com.

For more information, please contact:
Pontus Bodelsson, President and CEO
Telephone: [phone]
Email: [e-mail]

Magnus Hansson, CFO
Telephone: [phone]
Email: [e-mail]

Erik Berggren, Head of Investor Relations
Telephone: [phone]
Email: [e-mail]

This press release contains inside information that Karnov Group AB (publ) is required to make public pursuant to the EU Market Abuse Regulation (MAR). The information was submitted for publication by the contact person above on 14 May 2025 at 07:45 a.m. CEST.

Karnov Group clears the path to justice, providing mission critical knowledge and workflow solutions to European professionals in the areas of legal, tax and accounting, and environmental, health and safety. With content provided by over 7,000 well-renowned authors and experts, Karnov Group delivers knowledge and insights, enabling more than 400,000 users to make better decisions, faster - every day. With offices in Sweden, Denmark, Norway, France, Spain and Portugal, Karnov Group employs around 1,200 people. The Karnov share is listed on Nasdaq Stockholm, Mid Cap segment under the ticker "KAR". For more information, please visit www.karnovgroup.com.