Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arribatec Group ASA (LTS:0M3T, Financial) achieved an all-time high revenue of 151 million Norwegian kroner in Q4, marking a 5.2% increase compared to the same quarter in the previous year.
- The company successfully raised 41 million Norwegian kroner in gross proceeds from a share issue, resulting in a net cash position.
- Sales for Q4 increased by 33% compared to the same quarter last year, marking the best quarter in the company's history.
- Recurring revenue now accounts for 43% of total revenue, with a 17% increase in absolute terms compared to a year ago.
- The company signed a total of 610 contracts in Q4, valued at 285 million Norwegian kroner, reflecting strong sales performance.
Negative Points
- The company undertook a significant headcount reduction, eliminating 25 full-time equivalents and downsizing the corporate head office by approximately 70%.
- Continental Europe, including Sweden, saw a 20% reduction in revenue compared to the previous year.
- The company took an impairment of goodwill for hospitality, amounting to 22 million Norwegian kroner in Q4.
- Cash flow from financing activities was negative, primarily due to lease payments and repayment of bank overdrafts.
- The balance sheet showed a decrease in total assets from NOK501 million at the end of 2023 to NOK442 million at the end of 2024.
Q & A Highlights
Q: What led to the large write-down on the goodwill of the hospitality segment in Q4?
A: The write-down was necessary due to the financial performance of the hospitality segment over time, which did not meet the expectations associated with the acquisition. This adjustment was made to reflect the actual performance of the segment.
Q: Can you provide more details on the cost efficiency program implemented in Q4?
A: The cost efficiency program included a reduction of 25 full-time equivalents across the organization and a downsizing of the corporate head office by approximately 70%. These measures are expected to improve margins, cash flow, and visibility, with full effects anticipated in 2025.
Q: How did Arribatec Group ASA perform in terms of sales during Q4?
A: Sales in Q4 were strong, with a total of 610 contracts signed, valued at 285 million NOK, representing a 33% increase compared to Q4 2023. Notable contracts included significant deals in the oil and gas sector and with a research institute in continental Europe.
Q: What is the current status of Arribatec Group ASA's cash position following the recent share issue?
A: After the share issue, the company raised 41 million NOK in gross proceeds, resulting in a net cash position. The company ended the quarter with 23 million NOK in cash equivalents, with 11.7 million NOK of that being restricted cash.
Q: What are the expectations for Arribatec Group ASA's future growth and strategic initiatives?
A: The company expects growth in cloud services and managed IT services to continue driving revenue. Additionally, demand for E BPM services is strong in the Nordics and UK. The company is also focusing on its MUI partnership strategy, which has started to yield positive results, including new contracts in the Nordics and UK.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
