Knowit AB (publ)

Thank you very much and I would like to start to introduce myself and Marie here. We are going to take you through some operational highlights during the first quarter for Merwit. As you saw, we start with a stable trend for the year. And the end of last year, we were able to stabilize our utilization. And I think that this trend has been continued into Q1, although it is on a too low level and our focus on sales and cost remains. It's yet too soon to say that we see a broad market recovery. We do, however, note some improvements in certain parts of Sweden. reported decrease in net sales compared to q1 last year and this is mainly explained by negative calendar effect and of course fewer employees and i have to say that the calendar effect is quite big this quarter marie will go into that later We also see some geographical differences, and of course, the biggest challenge is in Sweden, while Norway remains somewhat stable. We can take the next slide, please. And take a look at our biggest business area solution. We have EBITDA margin around 8.4%. It's a decrease compared to last year, but both margin and sales are somewhat stable compared to Q4 2023. Our efforts to optimize our organization pays off with utilization stabilizing. There are in solutions as well, big geographical differences, while Sweden have the largest challenges. And as we talked about in Q4, we see a better market in Norway. We also have several strong partnerships with clients there, for example, the police authorities that we signed in Q4. And in both Norway and Finland, we see positive margin development for the quarter. We can take the next slide. And going into experience, our digital agency, and experience is facing the largest challenges in the market for time being, and that is impacting both sales and margin, unfortunately. The margin was 8.4%, and that's substantially lower than last year. We work intensely to reduce costs and capacity to adjust the organization. And of course, in parallel with that, we have high focus on sales activities to improve utilization. Also in experience, Sweden remains the most challenging market while we see higher margins in Finland, Norway, and Denmark. We can take the next slide to go into connectivity. Connectivity report sales of around 219 million SEK for the quarter. The margin was in line with last year, a little bit higher in Sweden, a little bit lower in Poland. We have a strong delivery in the quarter, but difficult to assess the current market, particularly in the industry segment. We are pleased to have prolonged and extended our frame agreement with Saab. It's a very important customer for time being, and I think it's going to be a very important customer for the future development. Within connectivity, we have several different product initiatives that are developing really well during the quarter as well. We can move to our management consultancy, the next slide, Insight. In Insight, we're reporting sales around 235 million SEK for the first quarter, and that is actually a slight growth compared to Q1 2023. The margin was lower, 8.4%. We see a stabilization from Q2, and we are pleased to see a small pickup in demand for general management consulting in Sweden, actually. There is a continuously stable development in defense and cybersecurity and legal services, and that is a trend that has been going on for several years now. We also see, and this is new since last year, a rapid development within AI, and that creates new need for competences within legal organization and processes, opening up new opportunities for us in this business area. And with those highlights for our four business areas, we are now going into our Q1 figures a little bit more in detail, and I hand it over to you, Marie.

Thank you, Per. Next slide, please. And we can go to... Yes, exactly. Perfect. Thank you. I want to start with comment on the figures for business areas that Par talked about before I go through the overall numbers. We've made a change in the classification of net sales per business area, and we're now including deduction for internal direct quotes, which impact margins positively for each business area. And we're doing the adjustment to encourage cooperation and comparable figures are updated in the report. So you'll find them there. And there is no effect on the know-it group as a whole. So back to the total figures for the quarter. We delivered sales of approximately 1.8 billion SEC, a decrease of 10.4%. Adjusted for FX effect, revenues declined by 9.9%. And there are three things that I would say are affecting the decline. First, we have the calendar effect, and we have 14 hours less than last year, which is a rather big effect on the figures. And second, we have a decrease in number of employees. The net recruitment of the quarter was minus 156 versus minus 33 last year. And all four business areas have a negative net recruitment. And this is influenced by our deliberate measures to slow down recruitment and adjust capacity. And we dismissed 73 employees during the quarter due to low utilization, which also ended in 13 million second restructuring costs. And the third reason is that we do have a stable utilization, as Per mentioned, but it is still on a too low level. EBITDA amounted to 136 million SEK for the quarter, a decrease compared to the same quarter last year, and this leads to an EBITDA margin of 7.7% in the quarter. Last year, it was 10%. As we already mentioned, this margin decrease is due to the slowdown in demand that has been, and it's causing lower utilization affecting several markets, Sweden in particular. We still see that our hourly rates increased compared to a year ago, even though we are experiencing price pressure. And reducing capacity has been one measure to protect margins, although I want to highlight that we're still recruiting in areas where we see good demand, and we will continue to do so. And another measure that we've taken is cost cutting. And during the first quarter, we saved 19 million compared to last year, which is according to our plan. And the cost cuts are referring to conferences, travels, marketing events, and post projects and more. Next slide, please. This slide shows the development over time and also on a rolling 12-month basis. Our adjusted EBITDA for the latest 12 months is at 436 million and revenue at 6.9 billion SEK, which is an adjusted EBITDA margin of 6.3%. The past year has been a year of challenges in demand and utilization. And in connection to that, of course, action to improve our margins. We mentioned cost savings and reductions of capacity. a work that we will benefit from for a long time to come. We have also increased our sales capacity and made a successful switch from recruiting to sales that has created a solid base for taking on the rest of 2024. Next slide, please. This is an overview of our net debt development. We have a 500 million SEK in used credit facility. NOID has a total credit facility granted of 1 billion 50 SEK. Future considerations amount to 41. Other liabilities, mainly leasing debts, amount to 537 million SEK. and the amount has decreased since last quarter because of amortization. This totals a net theft of 884 million SEC, and divided by our EBITDA on a rolling 12-month basis, we are at a leverage of 1.4. We still have a stable balance sheet and a good financial position, and also this means that we are well within our financial targets, which is set not to exceed two. And I think it was last time I got a question concerning the covenants to the bank, and I can assure you that we are well within these as well. Next slide, please. We have a solid platform and a strong position as a digitalization partner in the Nordic region. Having a broad footprint is a strength in tougher times, And the share from the public sector has decreased compared to last year, following a softer demand in some areas compared to a year ago. We noticed a growth in the industry sector driven by a good demand. But as Per said, the market visibility isn't that good at the moment. We also see a decrease in our telecom industry following lower demand from large telecom companies. All in all, clients remain focused on business-critical projects, also in an economic downturn. And of course, the megatrends are driving the need for digitalization in all our industries. And with that, I'll leave it to you, Per, to say some final words.

Thank you. Well, to summarize, we can take the next slide. see a stable trend continues from Q4 last year with utilization. That's important. Although the market is still hesitant, we continue to keep our focus on cost control and sales activities. And I have to say that there is really high activities connected to sales right now. And I think that's very important. We see quite big geographical differences in the Nordics with the toughest situation, as I talked about, in Sweden. I think that we are really well positioned when the market turns, and this is thanks to our intense work to optimize our organization, but also that we continuously invest, although we have tough times, We invest in new offerings and we develop new offerings, not least offerings around AI. And with that, I would like to open up for some questions. Thank you.