White Pearl Tech Grp B

White Pearl Technology Group and very welcome all of you to this investor conference call. We have a number of people from the company with us today. And let me start by introducing our CEO, Marco Marangoni. We have also, not Ashley, he's not in right now yet, but we have Chetan Ottam, our dear CFO, and we have Vikas Gupta. Vikas is our CIO. And we also have a number of other people with us. But let's start with those guys who are going to present today. And I would like to take the opportunity to say to all our guests that please feel free to ask questions when you like. And let's hand over them to Marco, right?

I don't know who will share the presentation, who will do that. I will.

Let me... Let me share the presentation. I'm loading. It's one second more. Yeah. Okay. 1st. Yes, sure.

Okay, can you see the screen?

Yes, we can.

Perfect, so I think we can start. I think, well, I don't know, Stephen, if you wanted to introduce the agenda or... I will, I don't know what is... Well, anyway, let's start the presentation related to the Q4 and the full year 2024 results. We will start with the CFO introduction related to the financial performance. Then I will talk about our strategic overview. And then we can move to Stephen. talking about operational what we did in terms of operations in terms of improving performance and optimization of the business and then we can close with the questions and question answers so Chetan please could you comment on to provide us a comment related to the financial part of the financial result

Sure. Good afternoon, everyone, or good day, everyone, depending on which part of the world you're in. Thank you for joining us. Thank you, Chairman. Thank you, Marco, for the introduction. The results have been shared, and this is just a synopsis or a high-level overview, highlighting some of the key indicators and some of the key points. some of the key matrix in terms of our results for 2024. As you all know, we've got some of the, or we've got the comparative results for 2023, and we are looking at the indicators in terms of percentages between 2023 and 2024. Revenue has been up in the group. We've achieved revenue of just below 310 million for the full year 2024. This is an improvement of close to 70 million set from 2023 to get to a result of 309 million in 2024. Our EBITDA margins have increased both on quarter to quarter, quarter 24 to quarter 23, as well as for the full year between 2023 and 2024. Our balance sheet is looking is looking quite good in terms of our ratios on cash more more cash has been realized this year we've increased our cash position from 11 million sec to 23 million sec we had a lot of work in progress in 2023 Our work reduction to 2024 has gone from 19 million to 1.8 million SAC. So those are some of the highlights in terms of the performance for 2023. The full year results, even after the extraordinary items or the write-offs that we've had, we still come to a profit for the period attributable to the group of over 25 million SAC. The EBITDA percentages, like I mentioned, look healthy and look steady between 2023 and 2024. The current liabilities have also decreased from $40 million SAC to just over $21 million SAC. So that has improved our liquidity and that's been a lot healthier now this year. Thank you for now, and I'm sure there will be questions from our guests. Maybe over to you, Marco.

Yeah, well, perfect. I think we can receive the questions maybe even using the chat. So if you can, if for the audience is during the presentation, the audience has different questions that can write the questions from the chat. And once we finalize the session, we will take the questions. So we will start answering. So. About the vision, as you know, during 2024, we issued a press release related to our vision until 2028 in terms of revenue growth. And as you probably remember, maybe more, I remember it was a really nice press release. We explained about the journey in terms of growth, really nice, because we know that according to our strategy, according to our result and the forecast that we probably we already know where we are going in the next years. I think a part of this growth is probably visible in 2024, and this is due to the change of the strategy we adopted during the year. Mostly because we moved from specific services, selling more products, solutions and of course services, but this time related to the innovation technology, such as artificial intelligence platforms or other solutions for not really oriented to the typical services that we We deliver it until now. So artificial intelligence and other innovation technologies are moving fastly. And we are basically we are really creating this revenue coming. We are moving to this kind of quality, this kind of revenue. Another we during 2024, we we didn't receive a strong in both coming from the acquisition. This is something we have been starting right now from 2025. It's in process, in progress, a plan, the acquisition plan in different areas, especially in areas where we consider it's strategic, be really, be more present. In this case, we started, as you know, the first acquisition in Sweden. We are currently doing due diligence for another potential prospect. But also we are moving fast also in the Americas, especially North and South America. No need to explain that the other markets, more mature markets where we are present, of course, are always pretty much, we have a strong attention because these markets are really also important. If we can find opportunities, we will take these opportunities. in my opinion it's important also the access to the u.s uh market listing market and the specific in the otc market the listing today we we don't we don't have a clear idea about that which kind of potential we can but we know according we know will be a huge in terms of volume will be really important what we can produce so we can do there. And this is coming basically because we had different meetings in US. We had a really good positive welcome in that market. And we know that it's something that we can create good opportunities. We know that this will be absolutely do an impact also in all in all the group in the future. So we are positive in terms to what we can do, acceding to this kind of market. And the last point I would like to underline is related to the technology innovation. As I explained, well, artificial intelligence is the main, but also we are working in different other areas. in mostly related to digital and this is something that this new paradigm where we are going as a group so in the future we will see more innovation more technology more projects related to innovation such as artificial intelligence blockchain or different kind of realities Virtual realities, augmented reality. So we have a long list of, of course, connected each other. And this will be the big change. Also changing our business model, moving more to the subscription model. and this is where we are going what we are doing and what we already started in 2024 and we saw basically the uh in part of the result impacting in the in the in the in the full year uh result you can you can see in the report now um i think steven we can move talking about the operational improvements. If you can share with us your vision.

Steven. Stephen, you're on mute.

Let me take myself off mute. I do apologize. It's always a bit embarrassing for someone who's supposedly working in tech to leave themselves on mute. So yes, thank you Marco and Chetan for that. So following Marco's strategic overview, I'm going to do a bit of a deep dive into operational performance and the business transformation achievements we've made for 2024. What we'll explore demonstrates not just improved metrics, but a fundamental strengthening of our business model across every dimension. Most importantly, I want to show you how our operational excellence initiatives directly support our Vision 2028 objectives. So I'd like to start by highlighting three key findings from 2024. Firstly, I think our revenue mix transformation has been faster than was anticipated originally. Our operational efficiency gains have exceeded our initial targets. And I think we've built a significantly more scalable business model. So if we look at our revenue mix evolution, which is on the left of the slide, we'll see that managed services is currently sitting at 39% of revenue. Year-on-year growth, we've moved from 38 to 39, so not a massive jump. But I think in absolute terms, this represents a growth of about 31 million SEC in managed service revenue. Now, what are the key growth drivers in this space? I think, firstly, cloud hosting services. which are up around about 42%. Our cybersecurity services have grown approximately 38%. And our infrastructure managed business has increased by approximately 35%. I think what's perhaps more fundamental in terms of this shift is our average contract length is now closer to 36 months, up from about 24 months previously. And I think what this shows is, A, that we are signing better contracts, B, that our relationship with our customers is significantly improved. well, it has led obviously to a significant improvement in that relationship to obviously extensions of contracts beyond the original contract date. And our client retention rate is currently sitting around about 95%. So I think obviously from a managed service perspective, that goes a long way, I think, to supporting the revenue growth in that space. emerging technologies i think is perhaps our um our star performer of of 2024 um it's currently sitting at about 13 of revenue and it's more than doubled from six percent last year so in absolute terms it's grown from around about 14 million to just under 40 million in terms of of the revenue mix that growth is driven primarily by ai and machine learning solutions iot implementations and then advanced analytics i think in terms of the the project value the average project value is increased by approximately 75 percent and um it's our highest margin segment sitting around about 22 percent uh ebitda um We've got a very strong pipeline for 2025 with around about 45 million SEC projected revenue from AI platforms specifically. Now, if we look at our system implementation revenue, which is currently sitting at about 28%, you'll see there's a significant reduction from 38% in 2023. Now, this is a strategic reduction. And we've undertaken a selective approach looking at more digital transformation projects, cloud migration initiatives and enterprise system modernization. I think the reasons we've done so and the reason this has been a strategic shift is that the the ability to to sign better deals allows us to increase margin i think the digital transformation projects typically tend to be more technical in nature and the margins for those are uh better than traditional system implementation type work. So our focus, as I said, has been on those three things where we've been able to up the project value by close to 45% despite signing fewer projects. And then I think our project delivery metrics have also improved significantly. So we're sitting at about a 94% on-time delivery, 91% within budget, and a client satisfaction score of about 4.8 out of 5. And ultimately, this leads then to better client satisfaction, but also then client retention and, as we discussed previously, extension of contracts. Lastly, our licensing and SaaS revenue, it's grown from 13 to 15. What's driving this margin improvement is specifically our proprietary solutions. And our key products there are in the AI analytics, fraud management, cloud management suite, as well as then our enterprise security framework. And the nice thing about this segment specifically is that 88% of the revenue in the segment is recurring. So I think that obviously allows us to be a little bit more confident about 2025, but also just in terms of how we can drive consistent recurring revenue in not just this segment, but hopefully expand that to the other segments as well. So moving on to our operational metrics, working capital efficiency. So we've had a 91% reduction in work in progress. And this has been achieved through primarily improving our project management methodologies, enhancing milestone tracking, improving resource allocation, and improving our client engagement model. This obviously allows us to make sure that, A, we bill on time, and B, that we collect money as per the milestones. So our work in progress is not as onerous as it was previously. This has had an impact on cash flow. We've had a substantial increase in operating cash flow. We've had close to 45% reduction in billing cycle, which I think definitely helps. And I think for us, quite importantly, is we've been able to improve our forecasting accuracy by close to 70%. So the next item here is balance sheet optimization, specifically the lowering of our current liabilities. Key components here are optimization of trade payables, negotiating better terms with suppliers, and then obviously reduce working capital requirements. um the financial impact there is obviously uh a better debt equity ratio our current ratio has strengthened um and i think the financial impact is is quite evident to see in the in the results for for 2024 as well as for q4 And just a little bit about margin profile enhancement specifically. So our EBITDA margin for Q4 was 17.5%. The year-on-year improvement drivers for this have been, as mentioned previously, our mixed At least our revenue mix, that's improved by about 2.8%. Operational efficiencies, as well as then, as I mentioned previously, better resource utilization. We've also managed sustainable improvements through automating processes, enhancing our delivery frameworks, optimizing our resource allocation, and then ultimately reducing overhead costs as well. Now, lastly, I just want to take a few minutes just to look at the business impact analysis. So I think firstly, if we have a look at how these improvements have translated to business value, and I think that's obviously for us the most important thing. I think we've built some resilience into the business model. Our recurring revenue is now close to 54% of total revenue. um we've reduced our client concentration risk uh we're improving our geographic diversification and as marco mentioned previously that is a a ongoing initiative um but all these things obviously lead to us uh or at least position us to be uh more competitive um and uh and obviously to put us in in a stronger competitive position Operational scalability, standard delivery frameworks, as I mentioned previously, automating project management, enhancing resource management and improving knowledge sharing across the group. As the group grows and as we learn and as we integrate these businesses into the White Pill Group, enhancing resource management across as well as then improving knowledge sharing becomes a key driver in this business impact and obviously how we ultimately translate these improvements to business value. From a future growth perspective, we're setting the foundation. We're ready for our vision 2028 scaling. I think we are moving quickly along that timeline and I think things are certainly looking significantly better. I think our capability for geographic expansion has grown significantly and our capacity for innovation is being enhanced. As we bring more companies into the group, as we expand our ability to deliver and we explore our revenue mix bringing new solutions new technologies into that mix the capacity to innovate becomes a very important driver for future growth Just to close, I just want to highlight our operational excellence achievements for 2024. As I mentioned previously, I think the transformation of our revenue mix towards high margin services is key. i think we've dramatically improved our working capital efficiency we've created a more scalable and resilient business model and i think this is ultimately key not just for the the the results we've seen in 2024 but more importantly uh to set us up for a vision 2028 and uh and positioning us to to reach the the the targets we've set both for ourselves and the targets we've obviously communicated to the market But I think these have positioned us very strongly to hit those targets as communicated previously. I think just closing, these improvements aren't just numbers. They represent a fundamental strengthening of our business model and our delivery capabilities. And they provide the foundation for sustainable growth and continued market leadership. As I said, I think the strengthening of our business model, both making it a more robust, more innovative and more diverse, allied to our ability to deliver more complex projects, at higher margins with our own technology and solutions, ultimately has obviously driven the numbers we've seen for 2024. But I think, as I said previously, positioned us strongly for our Vision 2028 achievement. So with that, thank you. And I'll hand you back to Marco and the management team for questions if they are. Thank you very much.

Thank you, Stephen. Just before to move to the question, just an observation, just confirming something I explained it before. And of course, Stephen underlined it again. You can see in the table related to the revenue mix evolution, how is changing the paradigm? So we are basically moving from a typical system implementation and we are moving to emerging technologies and of course use a different kind of software as a service, platform as a service. So this kind of this kind of new way to do business in technology. So we are moving that. We started in 2024, but you can see in the result that it's already producing really good effects. So this is important because we are moving fast to innovation. And this is really important for our future. So I think we can move over to the questions.

I think, Marco, I asked on the chat if there are any questions. I think we've got two so far. So if I could perhaps just read them out, and then I'll just ask yourself or Chetan, or I can answer as well if it's in my way. So I think the first one is from Guillermo. he says, congratulations for the excellent results. Thank you, Guillermo. By when are we expected to be listed on OTC? So I think that's a question for you, Marco.

Yeah, I can answer, yes. We are finalizing the process. We are already in the final, really final days of the We already provided all the documents, everything is fine. We are expecting between this week and the next week to finalize and set basically the meeting with them in order to go live. So we are just waiting for the final announcement to us from OTC. But it could be potentially, according to what we understood during this week, maybe the beginning of the next. But I think this is it. So we already finalized the process. from our side that nothing is pending anymore. So in any moment we should receive some feedback from OTC to go live.

Thank you. Thank you, Marco. The next question is from Magnus. He says, congratulations on the strong performance. Thank you, Magnus. Regarding the guidance towards 2028, how much of the revenue growth do you expect to be organic versus growth from strategic acquisitions? I'm not sure if this is a Chetan.

I'll take that question. Thanks, Vikas. Thank you, everyone, for taking our time for our earnings call today. And we appreciate your contribution and engagement. So the question is, what's the mix going to be between organic and strategic acquisitions? I think the kind of stage we are at in the business in terms of evolution, we will continue to grow. And for this growth, it's important that we continue accelerating our presence in our current markets. but at the same time continue growing in the markets that we are not present in currently say uh that is europe that is uh america that is probably a south southeast asian countries so i think in long term our our revenue should be between uh 50 50 to 60 40 uh between organic and acquisitive uh of acquisitive nature if that that answers your questions Thank you.

Thank you, Magnus. Okay, I'll open the floor to any other questions, any other points that anyone would like to discuss. Please go ahead. you're welcome to type them in the chat or um use your mic or we're not superstitious okay um thank you i think um with that being said um mark i'm not sure if you or sven would like to do a closing

I think, I don't know if we want to close together, Sven. The most important point is, well, I would like to share my message before to leave, Sven, to close this meeting. My message is, I think we are really excited about what we will go, what will happen during this year. We had a really good closing of the year 2024. But we are really, really optimistic about what we will go. We will happen during 2025 for different reasons, for a change of for the results, for the OTC, for many, several reasons for this are. moving our forecast or our future development in i think in in a better position so i think it will be will be really nice will be really interesting for the investors for who will follow us and because uh i'm i'm 100 sure we will we will provide something really interesting for who is uh he's following us definitely this is because we already have a clear idea about what what's going on and what will happen so so this is a i would like to transmit this optimist optimism also to our shareholders because we are really excited and we are just at the beginning of the year that's it so i don't know as well if you wanted to

well i can i can perhaps just add that you know the proof of the eating is in the pudding and i think that we are preparing a rather nice pudding so with those words i would like to thank everybody who's been in this call and also everyone from white pearl for participating and please don't hesitate to reach out to us if you have any further questions or or ideas thank you so much everyone

thank you thank you thank you thank you so much everyone thank you