B3 Consulting Group AB (publ)

Hej och välkomna till dagens sändning med B3 Consulting Group där vd Martin Stenström och Head of Communications i IR Katarina Lundqvist kommer presentera bokshuskommunikeringen för 2024. Efter prestationen kommer det hållas en Q&A så om ni har några frågor kan ni skicka in dem i formuläret till höger och med det sagt så lämnar jag över ordet till er.

Yes, good morning and thank you for that. Welcome to this presentation of BT Consulting Group's book release communiqué. My name is, as you heard, Katarina Lundqvist, and with me is Martin Stenström, our CEO and head of the board, who will take this presentation of the quarter and also the book release communiqué. You can ask questions via the broadcast. If you also have questions, you can send them directly to us, if you have answers during the day, and then you email to ir at b3.se, so you have a little question time at the end. So, with that Martin.

Thank you for listening to our presentation of the fourth quarter of BTW. I usually start by talking about our culture, as well as today. BTW's culture is what makes us unique and what keeps our employees and companies together. The culture is formed by our three words of value. Experience, competence and continuous learning is important to build trust and trust in customers and employees. Energi, med entusiasm, engagemang och driv skapar B3 tillsammans med sina medarbetare en kultur av innovation, uppmuntran och välmående. Olikheter, det är bevisat att olika bakgrunder, utbildningar och intressen leder till bättre resultat i ett team, men det gör också jobbet roligare. Att vår kultur är framgångsrik kan vi bland annat se genom våra mätningar och vad våra medarbetare tycker om att arbeta på B3. Och det kan vi glädjas åt ytterligare ett år av framgången med fortsatt hög e-NPDs och flera utmärkelser inom employer branding. But let us now go into the Q4 report. I have three things that I want to remember from today's presentation. The weak Swedish market never turned under 2024 and our results are very weak. We did a lot both before and during the year. We go against the current and invest in tough times. We still have work to do before we enter 2025. Stronger and profitable growth has begun. En sammanfattande bild av 24. Vi hade ju då tyvärr en negativ tillväxt, minus 1%, och minus nästan 6% om vi bara tittar på organisk tillväxt. Vi hade en låg EBITDA-marginal på 5,1%, men om vi tar hänsyn till engångskostnader som var 17,4 miljoner, så har vi ett justerat EBITDA på 6,6. Dessa kostnader består till största delen av förvärvskostnader och kostnader knutna till vår polska transaktion. Vi föreslår att inte göra någon utdelning i år utan vi vill använda vårt kapital till fortsatt expansion. Vår tillväxt är då tillbaka i andra halvåret men det är fortfarande trögt på den svenska marknaden. Det tar vänt men förbättringarna går långsamt. Vår polska verksamhet går fortsatt mycket starkt med en tillväxt på 7,4% och ebitda på över 14%. Vi har då dessutom genomfört framgångsrika kostnadsbesparingsprogram som sparat oss 41 miljoner. Vi fortsätter att fokusera på rekrytering, effektivisering och höja timpriser under 2025. Om vi tittar lite närmare på fjärde kvartalet så sammanfattar jag det med följande. Q4 växer vi med 14,5% varav organiskt 4,4%. EBITDA landar på 5,3% men även här belastar med stora engångskostnader på 6,2 miljoner så justerat fördel landar vi på 7,1%. Vi tror att marknaden i Sverige har bottnat och nu blir den bättre efter hand. I Polen är konjunkturen redan mycket bättre. Vi har förbättrat vårt debiteringsgrad i kvartalet, men den är inte bra nog. Vi kommer att titta vidare på det sen. Vi kommer fortfarande att fokusera på operationell effektivisering, vilket kommer att ge resultat under 2025. Den här bilden som visar lite mer detaljer har vi varit inne på det mesta som har varit noterat. Men det som finns en gröna rutan kanske man ska förklara, om ni inte var med och lyssnade förra gången, för det här är Q3. Det ser lite underligt ut, den där siffran. Detta beror på att vi nu har konsoliderat in B3 Poland som ett dotterbolag, och då har vi enligt IFRS omvärderat bolaget, och detta har skapat en positiv effekt på 77,8 miljoner. Men som inte påverkar kassaflödet, och detta påverkar också vinst per aktie. Webstep. Yes, in the Q2 report, we said that we had purchased Webstep. As you know, it is a company that has had low solvency for a long time, and the price that was expected to be the result for 2024 was very low. But on the positive side, we can see that the integration with B3 is going faster than expected. Last quarter, presentation, that we should have taken decisions about savings that would be carried out under Q4, which we have now done. This means that we have saved 16 million SEK in cost synergies by terminating staff, dismantling offices. In this process, we have adapted the organization to B3 and formed three focused B3 companies. B3 Link, which is a system development company in Stockholm and Uppsala. B3 Beyond, which is system development in Stockholm, and B3 Engage, which focuses on consulting services and platform site vision. The Umeå business has moved into our subsidiary B3 Vibe. We see a lot of positive in the development and expect profitability improvements in the company from the beginning of 2025. And then we have the great joy of telling you that we have taken the step into another country, Norway. We have signed an agreement with the owner of Haberstad AS to acquire 51% of the shares for 15.8 million. The agreement also includes a four-year earn-out where Petri can buy the remaining 49%. We see this as a very interesting company with a business in an expanding area that is also a stable and developable customer base. The company has about 40 employees with a turnover of 78 million under 24. And of course, it is very important for us that the existing management remains. And since the company is very well managed and stands on its own two feet, there are no cost synergies that can be made. Therefore, we believe in fine income synergies, both in the short term as possible for cross-selling, but also in the long term, when we see this as a foothold on the Norwegian market to expand with further operations. Denna bild visar ju då också skillnaden i intäkten mellan Q4 2024 och Q4 2023. Tillväxten på 14,5% beror ju till största delen av den positiva effekten av konsolidering av Betapolen och förvärvet av Webstep. Den största negativa effekten har vi att vi har minskat FTE, alltså konsulter. Det beror då mest på att vi har rekryterat mindre än svårare marknad. Denna negativa effekt kommer gradvis att minska under 2025. Nu över till debiteringsgraden. Q4 is the first quarter, which is a positive difference compared to the same quarter last year. If we look separately at the Swedish figures, it increases to 82.7 and 81.2 in Q4 2023. This is an improvement of 1.8%, but we are of course not satisfied with that level. 85.5% shows the entire company, including Poland, and we can note that Poland has a significantly higher debiting rate than the rest of the company. Yes, as you know, B3 consists of many subsidiaries that operate in completely different markets with different demand. This means that we have several companies that are doing very well, but also several that have big problems. Of course, we work intensively with it later so that it can return to profitable growth. Growth is a general problem in the market we have had in 2024, and therefore we focus a lot on sales and marketing, but also on recruiting so that we can share an improved market that we see coming in 2025. Of course, we focus a lot on the fact that the company is doing well and is growing so that it will continue to grow. As you know, we had a cost savings program under 2024. We have completed that with success. It has delivered even more than the original target. We are reducing our costs by 41 million per year. Then we continued to follow the initiative we started in Q2 2024 to get a lower cost in our subsidiaries. We started this program to prevent the cost cut we saw when the revenues fell in the first half of 2024. Despite a challenging market, we take new deals. Here is a tax block. Two of Sweden's largest authorities have made large deals with us. We have progress with new deals within the regions. Vi har gjort en stor affär med ett internationellt bolag i södra Sverige. Vi har utvecklat flera affärer inom bankfinans. Vårt nya bolag, BT Engage, har tagit många nya affärer baserat på Sitevision-plattformen. Andra viktiga händelser under 2024. Vi har genomfört den årliga medarbetarundersökningen. Den visade på 86 % nöjdhet och ENPS på 45, vilket är extremt höga siffror. Vi startar BT Next och genom det expanderar vi B3 offers SROS. B3 Link grows from previous web steps. We have deepened our collaboration with IBM and connected to IBM's CREATE for AI-driven healthcare. We become SiteVision Platinum Partner with three MBPs and win the best intranet with Humana. We are seen as this year's Employee Branding company. And finally, to sum up, this has been a challenging year that ended in quarter four with an increase of 14.5% and an increase of 4.4%. The Swedish market became weaker throughout the year. Profitability has been unacceptably low. Cost savings at the headquarters have delivered according to plan, but further measures need to be taken to reduce overhead costs in some DOT companies. The investment has continued to improve during the year. We have been strengthened by expansions in Poland and the acquisition of Webstep. Vi är starkare nu när vi går in i ett nytt år. Och med det så kan vi gå över till frågor.

Ja, tack till er som har skickat in frågor. Och den första frågan gäller ju Norge som vi annonserade igår kväll att vi går in i Norge nu Martin. How do you see the opportunities for BT to become an actor?

Yes, we see this as a first step for us to enter the Norwegian market, which is a very good foothold for a good company. And then we think that this can be a platform to expand with more businesses, for example new startups or other acquisitions, if we see such opportunities. So I think this can be an expanding market in the long term.

Och sen kom det lite frågor från flera håll kopplat till rörelsemarginalen. Tror vi ni fortfarande att 10% rörelsemarginal är rimligt framöver? Och vad krävs för att vi ska uppnå det?

Jag kan förstå att man kan ställa den frågan med ett sådant resultat som vi visar då. Men absolut, 10% är fullt rimligt. Och vad som krävs för att nå där, det är att vi fortsätter effektivisera So det kommer att ta ett tag innan vi är dåligt, skulle jag säga.

Och vet du när man kan räkna sig?

Det kan man. Det vill jag inte spekulera i, kanske.

Ja, den organiska tillväxten ser fortfarande ut att vara negativ. Hur går det ihop med att marknaden har byggt ut?

Då är det som... Marknaden har verkligen bottnat ut. Den går ju inte alls lika fort upp som jag och alla andra, tror jag, i branschen hade förväntat sig. När vi stod här i Q2-rapporten, till och med Q1-rapporten, tror jag vi pratade om att Q3, Q4 skulle vända. Nu ser vi att det har vänt, men det är fortfarande svag förbättring. Så det är inte den här riktiga boomen ännu. So that's the explanation. Gradually, it will get better as the current situation improves and we succeed in recruiting and selling.

And regarding the degree of debiting, which you will also ask about, what is done to increase it?

Do you think you can see an improvement there? Yes, we see an improvement, quarter by quarter, and that will continue. So how do you increase the activity rate? Effective sales. Recruiting competent consultants that we can get on the job. We work with that all the time and we see a good improvement in that area.

The publication law has been talked about. Can B3 see any impact from the employment law?

Yes, we see an impact. There are very few customers who have forgotten about this, and many have interpreted it in many different ways. But we have some examples of customers who simply cancel all tasks that have taken two years. And that affects us, because then it means that we have to There are other consultants, so it's possible for us to sell consultants there. So it's a bit of a storm at that point, but it's a zero-sum game in a total sense. Then there was an interesting case here in Skåne that showed that you don't think consulting companies are affected by it. We'll see what this is about. But it hasn't been a big impact, I don't think so.

And how do you see recruitment now? Do you continue to work with recruitment or is it still? And when do you think you can see an organic growth in the number of employees?

We are now putting a lot of focus on recruitment. We want to grow during this year. I would like to express myself so that we will see it during the year. It is a little unclear when this turn will come. Startup is something we have talked about quite a lot earlier.

We have established some startups and have a plan. How do you see start-ups and how do you see the growth model to move forward?

Just like you said, Katja, we have started a number of start-ups now. Some of them are quite new and will develop nicely this year, I expect. We will definitely look at the possibilities for new start-ups. It is a good growth engine, so we have it as one of our weapons in the arsenal for growth.

And the biggest challenges have been within the business world of digital experience and solutions, where there has been competition about system developers, especially in Sweden. How would you say the competition situation looks now and what makes B3 to turn the negative trend?

I think earlier, I may not have said, but I think it was that this crisis and my system development started in Stockholm. Now Stockholm has turned. Now we see a much larger demand for the Stockholm market. But it is still not the same super trend as it was in 2022. Out in the country we are still tougher. This will come to pass, I am completely convinced of that. And what we do is make sure that we sell, we meet customers, we find customers. Some customers buy more consultants, some buy fewer consultants. It's about being in those places where there is a little more demand. So we work intensively with that. But it has absolutely become much better. The system is developing.

There are still questions. Thank you for that. You have received a question here.

How does BT see the overall development of the economy and the impact on BT's business during 2025? My assessment is that the economy will generally improve. I think that we have actually covered the questions that came in, if there are any last ones here at the end of the minute.

And as we said earlier, if you have more questions, please feel free to email us at ir1b3.se and we'll be back per email during the day. So, one last tip. No, but Martin, do you want to round off?

Yes, thank you so much for being here and listening to this. I hope that we have a better quarter to present in the future, so we can come back about that. Thank you so much.

Thank you for today.