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Good morning and welcome to Crayon's Q3 result presentation. My name is Kjell-Arne Hansen and I'm the head of investor relation. With me today presenting the results for the quarter, we have CEO Melissa Mulholland and our CFO Brede Huser. After the presentation, there will be a Q&A session. And with that, I hand it over to Melissa.

Thank you for joining our Q3 presentation. Gross profit ended at 1.4 billion NOC, a growth of 14%. Overall, we continue to see solid growth. Demand for software and cloud remains strong, while consulting in the Nordics continues to be cautious and declined 1% year on year. And therefore, we have been conservative in hiring. As a result of our performance year to date, we have revised our outlook for 2024 from 18% to 20% to 15% to 17%. As we have communicated earlier, the measures we have taken to strengthen profitability yield results and our adjusted EBITDA ended at 238 million NOC, which is an improvement of 95 million compared to the same quarter in 2023. The adjusted EBITDA margin ended at 17%, which is an increase of 5 percentage points from the same quarter previous year, and it's a record high level for Q3 compared to historical numbers. Reflecting the performance year to date, we upgrade our outlook from 18% to 20% to 19% to 20% for the full year. Our working capital measures continued to improve and ended at 157 million, an improvement of 748 million from last year. Consequently, we upgrade our outlook also for networking capital to minus 10 to minus 15 percent, an increase from the current minus 5 percent to minus 12.5 percent. Brera will go through the details in his part of the presentation. Our financial performance year to date reflects strong progression towards our main ambitions set out in the beginning of the year. As already mentioned, we continue to deliver solid growth across our markets And we deliver profit improvement across all markets. And we continue to deliver an improved working capital. I'm very pleased with our development thus far, and we are now laser focused on delivering a strong end of the year Q4. Looking at the market, we are uniquely positioned to deliver profitable growth based on strong customer demand in software and cloud, which grew 18% across direct and channel in Q3. We continue to see expansion on our software and cloud business across both the private and public sector with increasing our market position in Europe based on our ability to scale. Equally important is the development in our adjusted EBITDA, which improved from 45% to 54% as our international businesses continue to scale. We see continued strong demand for software and cloud across a whole range of vendors. Our service business, which represents more than 40% of our gross profit, grew 7% in the quarter, with an improved profitability from 6% to 8% as planned. The demand remains a bit cautious, particularly in the Nordics, where we see positive development and improving trends, but at a gradual pace, as customers remain budget-constrained in spend. We delivered strong improvement in consulting profitability as part of our EBITDA recovery from a sluggish Q4-23, with two percentage points of margin improvement. We also continue to see strong demand for our support services, security offerings, as well as AI. Copilot continues to progress as we help customers to help maximize on Copilot use case scenarios and ensuring we deliver ROI by adoption and initiatives that are put into place. Software and Cloud Direct continue to perform strongly with a 28% growth. which results in 504 million NOC. The strong performance was driven by the Nordics and Europe, which grew 32% and 37% respectively. Demand remained strong across multiple vendors. Gross profit in the channel business grew 4%, negatively impacted by performance in Europe, which declined 4%. Europe's channel business is a result of a loss of partners from the consolidation of Broadcom's distribution model. This is revenue expected to shift from Europe to APAC, but is taking longer than expected due to the slower ramp up on the Broadcom agreement. In APAC, operationally we are executing well with Broadcom, given the complexity of moving partners to Crayon, but do see slower than anticipated volumes with Broadcom, driven by increased prices set by Broadcom as customers look at competitive solutions in the market. Profitability development in our software and cloud business is strong. Adjusted EBITDA for our direct business improved seven percentage points to 47%, and our channel business improved 14 percentage points to 66%. In absolute numbers, adjusted EBITDA in our software and cloud businesses increased with 124 million NOC. The strong improvement is driven by the continued scaling of the international markets. Gross profit in the consulting segments increased 5% to $460 million. The Nordics represents approximately 60% of GP in consulting and declined 1%, as stated earlier. This is somewhat continued in a soft market. Our primary focus has been to improve profitability and the actions we took at the beginning of the year are now materializing in improved results with adjusted EBITDA ending at 10%, an improvement from 5% in Q3 last year. As stated earlier, we have been continuing to be cautious in hiring consulting given the slow Nordics market and have prioritized margin improvement and ensuring increased utilization with our consultants. Software and cloud economics grew 12%. The strong growth is a result of focused investments as well as strong drive from customers to optimize and reduce their costs in their IT infrastructure. Looking at the market performance, the Nordics grew 12%, driven by software and cloud. Adjusted EBITDA margin ended at 37%, an increase from 31% in Q3 last year, positively impacted by increased profitability in the consulting business. Europe delivered a strong growth of 23%, with all markets delivering growth in the quarter. The direct business delivered solid results, offsetting a 4% decline in channel, which continues to be negatively impacted by the Broadcom transition. Adjusted EBITDA ended at 9%, an increase of 1 percentage point compared to Q3 23. APAC and MIA grew 8% with slower demand than expected in SMB and less than anticipated volumes with Broadcom. Adjusted EBITDA improved from 15 to 19%. As stated previously, we continue to engage with the relevant Philippines government procurement entities to resolve the payment in partnership with Microsoft of $45 million. The Commission of Audit's audit findings continue to be undisputed and there are no questions around the fact that all services have been supplied. As such, we continue to follow up on this receivable and continue to expect a full settlement in due course. We will continue to keep the market informed about any significant developments. In the US, gross profit grew 6%. The performance was mainly impacted by soft performance in software and cloud, with slower decision cycles given the US election. We continue to focus on hiring organically to build up our US presence. Our subsidiary angle point grew by 13% and continued to deliver strong results. Adjusted EBITDA improved from minus 8% to minus 5%, reflecting our ambition to deliver profitable results. Looking at some of the relevant market development, we normally do not comment on the Microsoft incentive changes and programs as they are an ongoing part of our overall portfolio management. However, given comments from other industry players and market concerns, I feel the need to provide clarity. Microsoft is one of Crayon's largest suppliers, and Crayon is also one of Microsoft's largest partners globally. Crayon is Microsoft's fifth largest partner. 95% of Microsoft's commercial revenue is generated through partners, and it has built the largest partner ecosystem of any hyperscaler in cloud-based history. As part of its product life cycle management, Microsoft adjusts its incentive model for different products and programs on an annual basis to correspond with its strategic focus. Microsoft provides these incentives to ensure sustainable, attractive margins for partners in supporting the growth and onboarding of end customers onto products and programs which are important to the long-term success of Microsoft. Given the importance of Microsoft, I want to take a moment to explain the dynamics of the evolution of the program. Back in 2005, the cloud journey gained momentum as more third-party hosting providers began offering off-premise IT infrastructure management services and data centers. This shift enabled businesses to outsource their IT needs, enhancing efficiency and scalability. By 2010, the number of third-party hosters had grown significantly, along with the revenue and incentives from servicing them. Recognizing this shift and the opportunity, Microsoft launched its own cloud services, including Azure and BPOS, later known as Office 365. In 2010, with the emergence of cloud, Microsoft started to incent higher amounts toward cloud-based products such as Office 365 over its on-prem disks of Office fully packaged product called FPP. For those that remember, this is the time when you could buy Office and install it with a CD versus downloading it in the cloud. Having led Office FPP incentives at Microsoft at the time, there was a large focus on transitioning partners to move to the cloud, but also recognizing that this would take time to build capability and skills. This was also the start of service incentives, where partners were paid on delivering cloud services to customers and consequently decreased the amount available to on-prem. In 2015, to accelerate cloud growth, Microsoft established the Cloud Solution Provider Program, called CSP, to enable partners to bundle services with licensing needs for a customer and a partner. This created more flexibility than the standard enterprise agreement, called an EA, which was built for enterprise customers to provide accessibility to cloud to mid-market enterprise customers and small businesses. To support our customers and partners, Crayon built a platform called CloudIQ when CSP launched in 2015. CloudIQ has been central to our go-to-market to deliver scale and margin expansion. Fast forward, we are now in a similar era, but instead of floppy disks, it is the transition of a three-year enterprise agreement into cloud with a focus on CSP to enable cloud services such as AI and security. Based on the latest changes, we see the growth trajectory in software and cloud continuing. We are the largest CSP business out of the traditional licensing partners globally. We already today see double the margins on CSP and it is growing at an accelerated state. The incentives will increase as they have year on year, but with a shift to cloud initiatives. As stated in October by Jeff York, Microsoft's VP of Global Partner Investments stated, with the increased demand for AI transformation supported by Copilot, security, and cloud migration, we have increased our partners' incentives, both in general and in these areas. Incentives are at a record high and focus more than ever on enabling partners to deliver business outcomes of our customers in each solution area, customer segment, and geography. This move is all about helping our partners innovate and grow in these crucial areas. From a market outlook perspective, we continue strong growth on software and cloud in 2025 and beyond. We also do not see these changes impacting this view, as the overall incentive pool continues to grow and is supportive of Crayon's business model. We have always been services-led since our inception in 2002 to today. Our business has never been built on selling the license, but rather through monetizing a set of services we offer to navigate the complexity of software and cloud licensing to manage costs. and the implementation of cloud. We measure and run our business on gross profit and EBITDA, and will always prioritize opportunities to drive incremental growth, as we have done in our 22-year history with Microsoft. We are well prepared to continue expanding CSP and service opportunities with our customers and our partners. Building on our multi-cloud capability, Crayon continues to expand with AWS. I am pleased to announce that we have been selected as one of nine global partners participating in the Generative AI Partner Innovation Alliance based on our deep competency in EMEA. We see this as an important step in our ability to deliver AI solutions based on customer needs And, as our CTO Florian Rosenberg states, as AI capabilities continue to evolve, ensuring trust and compliance is paramount for enterprise adoption, especially in highly regulated industries. This program will help us implement the necessary security requirements and governance frameworks that provide trust to our customers across Europe. With the EU increasing compliance and regulatory requirements on AI models as part of the EU Act, this further solidifies Crown's trust with customers to deliver. Turning to a customer story, I'm very happy to present another strong customer win for our data and AI team with a well-known brand name. Coca-Cola manufactures 2.7 billion unit cases of the soft drink every year. Its factories work with 220,000 spare parts, and the time spent identifying and then sourcing the right part for crucial maintenance and repairs was impacting production line efficiency. Coca-Cola operates 62 bottling plants in 20 countries. The sheer size of Coca-Cola operations can pose problems because the factories must manage source and stock and inventory of those 220,000 spare parts. An image recognition app developed by Crayon will dramatically speed up this process. we developed a tool that would recognize a spare part and tell engineers when to find it just by a photograph of that part in the database. After a proof of concept has been rolled out and has been rolled out, Coca-Cola is planning to onboard the app across all its European and African bottling sites by mid-2025, with an ROI achievable in just under two years. The first POC demonstrated a high level of accuracy but with a small number of photographs, so the pilot phase was extended on reaching 97% accuracy for the top match for 200 parts. Crayon demonstrated a viable solution and began to roll it out beyond the bottling plant used for the pilot. As I have mentioned many times before, we have over the years invested heavily in our data and AI practice, and this is a great example of how we take it to market and deliver results for our customers. Now with that, I will hand it over to Breda to cover the financial section.

Thank you, Melissa. I look forward to taking all of you through the financial section of our Q3 presentation. Networking capital ended at 157 million. This is a 748 million improvement compared to the same quarter last year and in line with our forecast. As a reminder, we still have a vendor payment extension of 450 million that was put in place in Q4 23. Excluding this item, and taking into account the reduction in factoring of 112 million, we see a strong underlying improvement in working capital performance. As we said in our Q2 presentation, the net working capital in Q3 is significantly impacted by the seasonality of our business. I'm very satisfied with the net working capital in Q3 and see it as a strong signal that we are driving sustainable improvements. As a result of the performance year to date and our forecast for Q4, we upgrade our outlook for the full year to minus 10 to minus 15 percent from the previous minus 5 to minus 12.5. As a reminder, this is the second upgrade on working capital outlook. We initially started the year with an outlook of minus 2.5 to minus 10. Networking capital remains a key priority for me and the organization, and we clearly see that the actions we have taken over the last year will continue to drive improvement going forward. Our gross sales ended at 11.5 billion in the quarter. Our gross sales is the driver behind the significant swings in our network and capital positions. Our reported EBITDA ended at 232 million, an increase of 97 million compared to Q3 prior year. Adjustments consisted of share-based compensation of 6 million, bringing adjusted EBITDA up to 238 million. Depreciation and amortization ended at 85 million at the same level as Q2, but an increase from 66 million in Q3 prior year. The total expense in Q3 last year of NOK 66 million was positively impacted by timing of investments versus fully written off assets. Interest expense ended at 65 million, down from 70 million. The reduction is driven by lower interest on the new bond loan and RCF, but offset by increased cash flow interest as we actively use our internal cash flow to mitigate FX impact on our balance sheet, and increased lease and amortized transaction costs related to the new RCF. Other financial impact ended at plus 29, an improvement from minus 17 million last year. This development is driven by exchange rate movements. Net profit ended at 82 million, a strong improvement from minus 13 million in Q3 last year. Moving over to the balance sheet. Our long-term interest-bearing liabilities amounted to 2.3 billion. This consists of our 1.2 billion bond loan and utilized amounts under the RCF of 1.1 billion. The increased utilization on our RCF reflects the refinancing of the bond and reduction from 1.8 to 1.2 billion on the bond. Compared to Q3 last year, factoring was reduced from 237 million to 125 million. Supplier financing, 207 million, was down from 541 million last year. Our operating cash flow for Q3 ended at minus 1.3 billion This is driven by the 1.6 billion change from the record-setting working capital result in Q2. Our cash position and available liquidity reserve remained solid and ended at 1.8 billion. Our leverage ratio measured as net debt over EBITDA ended at 1.9 compared to 3.2 in Q3 last year. To summarize our updated outlook, our gross profit outlook is revised to 15% to 17%. Adjusted EBITDA is upgraded to 19% to 20%. Networking capital is upgraded to minus 10% to minus 15%. So overall, if you compare our updated outlook with our initial guiding for 2024 at the start of the year, GDP is reduced. Adjusted EBITDA in absolute terms remains unchanged and the cash flow has increased due to the improved NCA outlook.

To summarize, we remain focused on delivering on our ambitions. First, strong profitable growth, higher margins and significant improvement in working capital, despite a more cautious consulting market in the Nordics than expected. With our differentiated and scalable business model, we are well positioned to take full advantage of the global growth opportunities ahead. Second, we continue to see strong growth opportunities and will continue to strategically invest in both sales and technical resources to capture growth across the international markets. And lastly, we see a significant improvement in margins and working capital year-to-date and will continue to deliver on these key measures by staying agile and controlling our costs. Thank you for joining our Q3 presentation. I will now hand it over to the operator and we look forward to answering your questions.

Thank you. If you do wish to ask a question, you will need to press 5 star on your telephone. To withdraw your questions, please press 5 star again. There will be a brief pause while questions are being registered. Our first question comes from the line of Markus Hörberg from S&B. Please go ahead. You will now be unmuted.

Thank you. Thank you for taking my question. So just looking a bit into the pace into Q4 and 2025 here, because now in constant currency growth, you're growing at 12%. That's a step down compared with the first half here. But now your guidance suggests a meaningful Q4 recovery. So to what extent does that require the market picking up? And what are you making into your assumptions? Because now we're seemingly taking it down in the growth phase, but then it should be picking up. So that's my question. Thank you.

Thanks, Markus. It's a great question. Q4 is our largest quarter, and we still see significant volume going into the quarter. As a reminder, our software and cloud business is significant, and we expect continued growth within that business unit. In addition, we are ramping up resources and hiring on the back of consulting. We are seeing higher, let's say, pipeline and demand now, and are making sure that we're hiring and ramping up resources to increase that growth in the consulting business, and subsequently going into 2025. Those will be key. As I stated in Q2 of the last quarter, we also have a lot of public sector wins that will start to invoice within the Q4 quarter. So that's also folded into our assumptions.

Okay, so you don't really rely on the market getting better. Just to follow up.

The market is solid in terms of software and cloud business. It continues to remain solid. The consulting business, we are seeing a pickup. It is still conservative, but we are seeing trajectory going into the quarter for Q4 as well as 2025. It's still soft relative to historic performance in prior years, but nonetheless, we are seeing gross profit improvement.

Thank you. The next question will be from the line of Michael Brief from UBS. Please go ahead. Your line will be unmuted.

Yes, good morning. Thank you. Just coming back on the Microsoft side that you put up, thank you for that. Could you maybe say what level of headwind you do expect to experience as EA incentives ramp down? Or maybe if it's not specific to you, to the market, what proportion of users out there are still covered by EA rather than CSP contracts? And then just on Copilot, can you give a bit more granularity on adoption and, you know, sensitive users? How much that figures into your Q4 or 2025 outlook? Thank you.

Thanks for the questions. I don't have the view across the whole EA market because that is a Microsoft specific number. But what I will say is that we're always driving to a margin positive in terms of our EA agreements as we measure our business on gross profit. And that's really important to mention. So whether it's increasing front end margin through our services that we add in, we will always make sure that we deliver. We are just as a reminder we are one of the largest CSP partners so we don't see a negative shift certainly there will be more incentives applied to CSP as well as services going into 2025 so we don't see a negative impact in terms of the EA incentive decrease. This has happened historically and we've always performed and thus we expect to continue to do so. In terms of the co-pilot volume, this is still I would say single digits of our total gross profit mix today. But the volume is as expected, it's continuing to perform and we are seeing increased adoption across our customers as well as our partners. Copilot is certainly something that I've always stated will take time to ramp up because it is a new product and certainly coming into market, users will need to adopt it and also it's got price sensitivity baked into it as well.

Okay, thank you.

Thank you. The next question will be from the line of Stein Lotka from ABG. Please go ahead. Your line will be unmuted.

Good morning. My question is on consulting. You're saying that you will hire new resources to ramp up the growth in that segment. Can you say which areas are you seeing a market improvement there? And when you say you're ramping up resources in that segment, how big increase is that?

I don't have the increase per se, but what I will say is that we're ramping up resources as we have been really focused on utilization. And now we're at the point where we see healthy utilization in terms of our consultants, And we also are seeing an increase in terms of, let's say, pipeline as we go in from Q4 to 2025. Specifically, this will be targeted towards the Nordics, where we have been really focused on resource optimization and making sure that we improve our profitability in that segment of the market.

Okay, thank you very much.

As a reminder, please press five stars to ask a question. For the next question, please state your name and company before asking your question. Your line will now be unmuted.

Hi, this is Christian from MarTech. Thank you for taking my question. So the first one for you, Melissa, just could you name some specific drivers in software and cloud for Q4 that will also accelerate the growth there as the guidance seem to rely on high growth here. compared to year-to-date as well, and not only consulting. And then second for you, Breda, the working capital guidance for the full year at midpoint. It's a bit difficult to quantify, but at midpoint, it seems to be some worsening year-over-year in Q4. If you could just clarify that topic, please. Thank you.

Great questions, Christian. So in terms of Q4, specifically for software and cloud, there are several factors. If I look at the direct business, we are accelerating market share performance in Europe, which has been very much a focus. As we have been increasing our hiring for the full year in terms of sales capability, We are seeing growth across all European markets in Central Eastern Europe, as well as markets like Germany, the UK, as well as the Netherlands. That's a mix of both public sector as well as private sector wins. We're starting to get to, I think, a scale within the business, which is very much on point. And I'm pleased to say, as We've been talking for a long time about focused areas of growth in large European economies that we've been subscale. So this is very much our, let's say, international expansion focus. In addition, we also are seeing, let's say, projected growth on the channel side going into Q4, which is very important. We're expanding, I think, our business not just with Microsoft and CSP, but also with other vendors such as AWS VMware. And this is important to mention for Q4.

Regarding network and capital and guiding, we have upgraded to minus 10 to minus 15%. And this is based on the strong year-to-date performance. And I must emphasize that our Q3 network and capital ended in within our expected range. So I think if you take the upgraded guiding, the midpoint should be about minus a billion in networking capital. And then again, we're quite confident in our guiding.

Thank you.

Our next question comes from the line of Christopher from GNB Markets. Please go ahead. Your line is open.

Yes, good morning. So just a quick question, follow up on the incentives. So you're saying you're expecting no headwinds from that into 2025. Does that mean you don't really have any enterprise agreements in your business at all? Or do you think that there will be a headwind, but you will be able to increase prices to counter that into next year on EAST?

Good question. So thank you for asking. We definitely have EA customers, and that is something I just want to remind you. We run our business on gross profit, so we will always make sure that we increase with front end margin and services. When we work with enterprise customers, they often look for additional services such as support, being able to help them negotiate on price, all of these areas, as well as software asset management, so reducing costs. We bundle those services in, in addition, if they want to access Cloud IQ, that's also provided into it. So we never thrive on or build on our business model on just the license incentive alone, rather in we build in margin into the agreements, and that's important. So that's why we don't see any, let's say, headwinds going into 2025. And on top of it, I think the shift that Microsoft is making, we actually see as positive. Because it actually pays additional on terms of services. So now the work we're doing in terms of migration, you know, AI, security, these areas, there will be additional incentives put into place. So all in all, we see increased growth going into 2025 for incentives.

Yeah, that's helpful. And then just to follow up on that on the working capital side, if you look at your historical numbers and the kind of the nature of billings and so on in CSP versus EA, there seems to be kind of an inherent headwind to working capital if there is a shift from EA to CSP. Does this mean that if your business goes more CSP over time that this will drive a slight headwind to working capital in the years to come?

I'm not certain it will be a headwind, but I'm certain it will flatten the curve. So it will have more visibility and less variation in the network and capital.

Okay, that's great. And just a final quick one. You just noticed that there was this dividend to non-controlling interest in the quarter. Can you help us understand a bit what's wrong with that and how we should think about the dividend policy in some of these? subsidiaries going forward?

I wouldn't expect a change in the dividend policy going forward, but we can, if you have detailed questions, we can do that in the analyst post-call.

Okay, thank you.

As no one else has lined up for questions in this call, I'll now hand it back to the speakers.

Thank you so much for your questions and thank you for participating in our Q3 presentation. Look forward to seeing you in Q4.