BIMobject AB

Hello everyone and welcome to this webinar. Thank you for taking the time on this Friday and in July, perhaps from your vacation, to listen to us as we present our Q2 presentation for you. So as usual on the call today, you can send your questions to ir at bimobject.com where we will do a Q&A section at the end of the call. So you can either use the chat function here in the Zoom webinar or ir at bimobject.com. That's where you reach us. But allow me to present our panelists today. We are joined by Niklas Agvik, who is the CEO of BIMobject. Welcome, Niklas.

Thank you.

And we're also joined by Per Göransson, who's the CFO of BIMobject. Welcome, Per. Thank you. My name is Lisa and I'll host the call for you here today. On the agenda, as usual, we are going to hear a business update from Niklas and then we're going to talk through some of the financial numbers for the quarter. And as mentioned, we'll wrap up the call with a Q&A session. We have some questions already come into the email, so we'll answer those for you and you can send us questions along the way as well. But without further ado, I'll leave the word to you, Niklas.

All right. Thank you, Lisa. Good. If we can go to the next slide. We had a strong quarter. We ended the quarter with an ARR growth of 11% since last year. This, of course, also translated into higher revenue and then the quarter with a revenue growth of 10%. And if we adjust for the currency effect from last year, that's even higher at 14%. EBITDA was as expected at minus 21.7 million SEK. But that figure does include the restructuring program that we announced during Q2, where we restructured into two business areas. That restructuring program was a cost of 11.7 million SEK. So without that restructuring cost, we would have ended with EBITDA at minus 10 million SEK. We also ended the quarter with 147 million SEK in cash. I can add that one contributing factor to this number is that we did have the options program from 2023, the LTIP program. which many of the employees converted into stock which also added an extra 8.6 million SEK in cash and as I mentioned I mean the major event here that shaped this quarter was our reorganization into two business areas design enablement and data solutions I thought I'd go and do a quick recap about our strategy and why we did the reorg and how that ties into our strategy. For those of you that have followed along on previous quarterly reports and maybe even attended the AGM this will be mostly a repetition but I'll keep it short. So the background here is that, as you know, we've done BIM models for many years and that continue to be the core of our business. We've been very focused on the 3D models, part of the BIM objects, but actually a BIM model can contain a lot more data like object properties and climate data, technical properties and compliance data. And our strategy, our growth strategy has been to expand beyond just those 3D models and have complete data around the objects in our database. And that data is needed by industry databases, different planning tools, and by distributors like Alcell that we have already announced that we are partnering with. And that was the background to our reorg that we already have this strong established business distributing the BIM files to the AEC community. We want to keep running it that way as a profitable, growing business. Meanwhile, the new products that we have added, like Predict, like Connect and the AndoX, they are more in an early phase where we are investing and we want to invest towards the milestones that we believe are important to make them successful. Last, I just want to give a quick update on data solutions. The big work here that we're doing and that we talked about on the AGM is the new AI powered version of Predict. It will onboard customers much faster. It provides much more accurate data thanks to the automatic big collection of data. and do advanced functions like fit that together data into a complete EPD. We are already in a strong position for data solutions when it comes to partnerships we need to execute in that plan. The big thing that we're working on right now is the product development. We're almost ready to start testing with live customers to give you a little bit of understanding where we are in the development process. So with that said, I'll hand over to Per to dig down into the financials.

Yes, let me take you through the quarterly financials. And overall, again, keep in mind recurring revenue kept growing and the underlying cost base came down and the reported result carries the cost of restructuring we carried out through the quarter. Starting with revenue. Recurring revenue grew 10% or 14% adjusted for currency and ARR is up 11% in constant currency with contribution from both design enablement and data solutions. The platform business held up through the restructuring and retention in the existing customer base continues to develop well. New sales were somewhat affected by the restructuring but overall we have a stable platform business. Services revenue came down to 4.5 million from 6.7. Part of that is restructuring. Part is our shift in data solutions from project work towards platform revenue. Net sales in total landed at 42.6 against 41.0. The split in ARR is roughly 136 million in design enablement and 16 million in data solutions. Design enablement is the mature business on bimobject.com. Data solutions is smaller and still in investment phase. And the products we're building haven't fully launched yet, like Niklas mentioned, and that's where the investment is going. Operating costs were up 4% including restructuring and down 11% excluding it. The reduction comes from fewer employees and fewer consultants. And the yellow bars show the restructuring costs in each quarter here. We're not introducing an adjusted EBITDA as an ongoing measure, but this quarter the restructuring costs are large enough to point out specifically. And the large majority of the restructuring costs is personnel costs for employees released from duty during the notice period. A smaller part is consultancy and legal fees connected to carrying out the reorganization. Part of the effect is already visible, but we expect the underlying cost base to come down somewhat further once the restructuring takes full effect. reported EBITDA was minus 21.7 against 20.6 last year that includes the 11.7 million of restructuring costs I just went through and against 2.9 last year excluding those costs EBITDA improved to minus 10.0 from minus 17.8 and that's the number that shows where the business is heading EBIT was minus 25.7 and minus 23.1 last year.

Great. Thank you, Per. And I think with that, we can move over to questions.

Thank you. We're keeping it short since it's Friday in July for everyone. But we do have some questions and we'll take them now. So... The first question comes related to data solution. So the question is then how has data solution developed and what concrete progress has been made since Q1 in this area?

I think the major progress that has been done is the product development where we are moving forward according to plan. We will not announce a release date, but as I mentioned in the presentation, we are at the point where we are ready to start testing live with real partners and manufacturers.

And then we have a question related to, we announced a collaboration with Sveriges byggmaterialhandlare. earlier this year. I'm afraid I don't have the translation in English for Sveriges Byggmaterialhandlare. But the question is then, how has this collaboration, has this collaboration already led to new customers or increased demand from manufacturers? Niklas mentioned in the latest reports that partnerships are key, end quote. But there has been no more communication or news to the market about that.

Yeah, good question. I can't answer exactly on that partnership, how much that in particular has contributed. But I mean, as I said, partnerships are key here to grow. And what we can say is that we are in a very good position for the Nordics with the partnerships that we have. That is not what is stopping our growth here. The key thing for us is to get the new version out. More partnerships will be more important later on when we go outside the Nordics. But that won't happen until we are ready with the product development and ready to launch live with those partners.

We mentioned improved retention as a driver for ARR growth in Q1. And the question is here, is that improved retention still strong?

Yes. We have continued to improve retention. It's always hard to say how much have come directly from the reorg that we did. I mean, I think that's something we'll have to look at, come back to a bit later. But we do see that we are getting better at operations and handling customers and we continue to improve the retention. So, yes, it is something that continues to improve. And I also want to address that, you know, why are we doing the big investment in data solutions? It is because that is where we believe we can get a deeper lock-in with customers and improve retention even more. So I'd say, yes, it's continued to improve through operations, but we believe that the product investments that we're doing right now, that will contribute even more in the future.

Thank you. Switching topics, is there today any concrete examples where AI investments are creating value for customers or contributing to new business?

Yes. I mean, the new version of Predict that we're building, we will not be able to build this at all without the AI investments we have done. And all of that development is based on customer feedback, where we've seen what is difficult for our customers to do. So 100% that that's something that's entirely based on the green metric acquisition and continuing to invest in AI. And apart from that, I mean, I'd add that just general productivity improvements. I mean, the way we work across the company with AI, if it comes to any sort of already or marketing or finance or whatever it is. So, yes.

Thank you. A question related to different KPIs. Are there plans to reinstate or add more operational KPIs? but also a more clear investor story so that the market can better understand and follow how the strategy develops over time.

Yeah, very good question. Yes, that is something that we want to do. We do have some work to do here, or it's work that we are doing. Presenting the business areas separately and presenting the strategy behind them has been the first step toward that in making the equity story easier to understand. We are working on deciding on KPIs that we can communicate externally. We do need some time to quality control our KPIs and make sure it is something we feel ready to share. And it is something that we can continue to share over time. But definitely, that is something that's going to come.

More to hear on that topic then. Those are the questions that we have for you today on the call. As you can tell, Niklas loved these questions, so keep sending them to us. Outside of these calls, you can always reach us at our ir.bimmobil.com email if you want to get in touch with us. So that's all we had for today. Thank you so much for joining us and we'll see you for our next quarterly presentation. And in the meantime, don't forget to follow us on social media. We have separate LinkedIn accounts for our different products. We post updates there on new customers and other important events for our platforms. So you're very welcome to follow us there as well. But for now, have a continued lovely Friday and a good weekend.

Thank you.