Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Exsitec Holding AB (OSTO:EXS, Financial) reported record strong sales numbers in Q4 2024, with order intake more than 50% higher than Q4 2023.
- The company achieved its highest quarterly revenue to date, reaching SEK227 million, driven by M&A activities.
- Recurring revenue from software grew by 32% for the year, making up 23% of total revenue, highlighting a strong software offering.
- Exsitec's geographical expansion has been successful, with around 20 offices now covering Sweden, Norway, Denmark, and Finland.
- The company has a diversified customer base of around 5,000 organizations, reducing risk as no single customer accounts for more than 1% of revenue.
Negative Points
- Organic growth was negative, with a 5% decline in Q4 2024, indicating challenges in the market environment.
- Adjusted EBITA for Q4 2024 was SEK30 million, significantly lower than the SEK45 million reported in Q4 2023.
- Professional services revenue was weak due to lower resource utilization and a cautious market pushing out investments.
- The company experienced inefficiencies and onboarding costs related to recent acquisitions, impacting short-term performance.
- Employee turnover decreased, leading to a reassessment of the trainee program size, which could affect future capacity planning.
Q & A Highlights
Q: Can you provide insights on the order intake growth and expected lead times for these new orders?
A: Hampus Strandqvist, Investor Relations, explained that the lead time varies depending on the offering, typically ranging from 3 to 9 months before results are visible. The significant growth in order intake is expected to start reflecting in future quarters.
Q: How have billing ratios in Sweden changed, and what measures are being taken to address this?
A: Johan Kallblad, CEO, noted that billing ratios in Sweden have fallen by about 4% compared to the previous year. To address this, Exsitec has reviewed areas with weaker resource utilization and has already executed a reduction in headcount affecting around 20 colleagues.
Q: Can you elaborate on the performance of different segments and any headcount adjustments made?
A: Johan Kallblad highlighted that the ERP segment in Norway showed strong sales but low resource utilization, while the e-commerce space in Sweden had weak utilization but improving sales. Data analysis and business intelligence sectors performed well with strong utilization and sales.
Q: How is Exsitec managing recruitment and trainee programs amid a challenging market?
A: Johan Kallblad explained that due to reduced employee turnover, Exsitec reassessed its trainee program needs. The program for the fall of 2025 is expected to be about half the size of 2024, with readiness to scale up if sales numbers remain strong.
Q: What is the long-term growth outlook for Exsitec in current geographies, particularly with Wisma systems?
A: Niklas Ek, Business Manager, stated that there is potential for growth with Wisma systems, especially with the migration to cloud solutions. In Sweden, growth can also come from new sales to customers using other systems, while Norway has a larger market share of Wisma systems.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
