I.A.R. Systems Group AB (publ) Interim Report January - June 2023

A changing market that requires new, modern solutions.

”Asia continues to demonstrate strong results, including
favorable growth in the mature Japanese market.” Richard Lind, CEO

Second quarter 2023

Net sales SEK 108.2m (107.6)
Net sales growth of 0.5% and -4.5% adjusted for foreign exchange effects.
EBITDA of SEK 30.5m (31.9), corresponding to an EBITDA margin of 28.2% (29.6).
Adjusted EBITDA of SEK 32.0m (31.9), corresponding to an EBITDA margin of 29.6% (29.6).
Operating profit of SEK 11.2m (19.6), corresponding to an operating margin of 10.4% (18.2).
Adjusted operating profit of SEK 17.4m (19.6), corresponding to an adjusted operating margin of 16.1% (18.2).
Capitalized work on own account amounted to SEK 10.4m (10.5).
In a year-on-year comparison, currency translation had a positive impact of SEK 5.4m on net sales and a positive impact of SEK 4.4m on operating profit for the period.
Cash flow from operating activities amounted to SEK 29.4m (26.0).

January - June 2023

Net sales SEK 215.9 (205.0)
Net sales growth of 5.3% and -0.2% adjusted for foreign exchange effects.
EBITDA of SEK 55.8m (62.1), corresponding to an EBITDA margin of 25.8% (30.3).
Adjusted EBITDA of SEK 59.0m (62.1), corresponding to an EBITDA margin of 27.3% (30.3).
Operating profit of SEK 22.7m (36.9), corresponding to an operating margin of 10.5% (18.0).
Adjusted operating profit of SEK 30.6m (36.9), corresponding to an adjusted operating margin of 14.2% (18.0).
Capitalized work on own account amounted to SEK 19.8m (22.7).
In a year-on-year comparison, currency translation had a positive impact of SEK 11.3m on net sales and a positive impact of SEK 8.3m on operating profit for the period.
Cash flow from operating activities amounted to SEK 55.5m (54.6).

Second quarter in brief

Chief Revenue Office appointed for increased focus on sales in relation to a shared objective.
Subscription offering tested in the USA in preparation for a broader cloud-based SaaS offering.

Key events after the second quarter

IAR announced a reorganization with cutbacks that will yield an estimated SEK 27m in cost savings.

About IAR
At IAR, we provide world-leading software and services for embedded development, empowering companies globally to bring secure products that shape the future. Since its founding in 1983, our solutions have been instrumental in ensuring quality, security, reliability, and efficiency in the development of over one million embedded applications for a wide range of industries, including Automotive, Industrial Automation, IoT, MedTech, Military, and Public Safety sectors. With support for 15,000 devices from over 70 semiconductor partners, we are dedicated to fostering innovation and enabling our customers' success.

The company is headquartered in Uppsala, Sweden, with a global presence of sales and support offices strategically located across the world. IAR is an I.A.R. Systems Group AB subsidiary, listed on NASDAQ OMX Stockholm, Mid Cap (ticker symbol: IAR B). To learn more, visit us at www.iar.com.