Mildef Group (MILDEF) CMD 2024 summary

Strategic direction and market context

• Focus on becoming the leading tactical IT provider in the Nordics, expanding into selected EU, NATO, and global markets, with 80% of sales to defense customers and a strong reputation for reliability and innovation.

• Emphasis on multi-domain offerings (land, air, naval) and digitalization, with a product mix of 70% hardware, 25% services, and 5% software, and ambitions to grow the software/services share.

• Significant increase in European and NATO defense spending, with expectations that this will drive demand for digitalization and tactical IT solutions over the next 5–10 years.

• Strategic collaborations and reference projects with major defense contractors such as BAE Systems, SAAB, and Clavister support growth and credibility.

• Sales are organized into two business areas: Nordics and Europe/North America, each with dedicated leadership and local presence, targeting both end-users and integrators.

Financial performance and guidance

• Net sales reached SEK 1,151 million in 2023, with a CAGR of 36% since 2019 and 57% since 2021, driven by organic growth and acquisitions.

• Order backlog reached an all-time high of SEK 1,447 million, with LTM order intake at SEK 2,406 million, providing strong visibility for future sales.

• Gross margin improved to 49.4% (LTM), with ambitions to maintain or slightly exceed 50% depending on project mix.

• Upgraded financial targets: at least 25% annual growth, EBITA margin of at least 15%, net debt/EBITDA not to exceed 2.5x, and dividend payout of 20–40% of net profit.

• 2026 targets include SEK 2,248 million in net sales and EBITA margin above 15%, driven by organic growth, acquisitions, and operational leverage.

Business model evolution and portfolio development

• Transitioning from a hardware-centric model to a full solution provider, integrating hardware, software, and services for military and critical infrastructure clients.

• Modular, ruggedized IT products (notably the 19”/2 form factor) enable customization and long lifecycle support, key for military platforms.

• Recent acquisitions (e.g., AVT in the UK, Handheld, Defcon Solutions) have expanded capabilities in displays, mobile devices, and integration services.

• Ongoing investment in R&D and digitalization, including the launch of a dismounted soldier ecosystem and enhanced video/image processing capabilities.

• Active M&A agenda and strategic acquisitions are expected to create additional value and strengthen market position.