Knowit AB (publ)

Thank you and welcome to NODES report for the fourth quarter and full year 24. My name is Per Valentin and with me is also our CFO Marie Björklund. Next slide please. First, I would like to uh take you through some operational highlights during the fourth quarter in our largest business area solutions we have a continued positive trend in utilization and improved margins for the third quarter in a row we have a stable delivery in connectivity um largest challenges still in our digital agency experience and also to some extent in our management consultancy insight. We work with further cost reductions and organizational work in this quarter as well in these units. We outperform our peers in Finland and we now see some early signs actually in improvement in Sweden. The Norwegian market remains rather stable. And in Denmark, the market is still uncertain as it is in Sweden. Work to balance cost optimization and increase sales activities remains a priority throughout the whole group. And as you probably have seen, the board of directors proposed a dividend of 2.3 secular shares for 2024. We can take the next slide, please. And we'll now take a look at our business areas more in detail, starting with solutions. Our largest business area with more than 50% of our revenue. We reported a net sales of 915 million SEK for the fourth quarter. The margin increased slightly to 9.3%. And we are happy to see that utilization continues to improve. But the geographical differences remains and Norway is the more stable market. We perform well in Finland relative to our peers and now see some early signs of improvement in Sweden. We can take the next slide, please. Our digital agency experience have a net sales of 290 million SEK and an EBITDA margin of 2.8. And here we still have a really weak market and work with downsizing and cost reductions. And of course, this impacts our profitability and margin fell compared to last year. But we maintain a very strong focus on sales activities and our position as the leading digital agency in the Nordics remains. And when the market turns, and we are ready to take off in experience as well. We can take the next slide, please. Business area connectivity reported sales of around 212 million SEK for the fourth quarter. EBITDA margin somewhat below last year at 10.7%. Our ability to adapt quickly to changes in client demands have been a strength during this recession. We have a near-shore offer in Poland. It's attractive and supports our overall performance. Our investment in sales capacity has had the desired effect and has helped us with some new clients and broadened our client portfolio during the quarter. We can take the next slide. Going to our business area inside, reported net sales of around 233 million SEK for the fourth quarter. EBITDA margin fell to 5.3%. We continue to work on balancing good demands in some areas such as defense and cybersecurity and we need to continue our cost control and optimization in the organizations in others. The challenges in Finland in Insight remains with lower performance than expected and we have a high focus on transforming the business areas towards a more ai based delivery delivery in all areas and we really see some good signs of of performance connected to ai and business consultancy or or management consultancy and next slide please and now now i would like to turn to Marie and go through our financials in more detail. Next slide, please, Marie.

Thank you, Par. So back to the group as a whole. We delivered sales of approximately 1.6 billion SEK, a decrease of 10%. And there is a negative calendar effect of the quarter of six hours and also a small negative currency effect. Also notice that we are at the end of the quarter more than 400 employees less than the previous year, which amounts to around 10% less. So we have an organic decrease in sales that was expected. The adjusted EBITDA amounted to 107 million SEK for the quarter, a decrease compared to the same quarter last year. This leads to an adjusted EBITDA margin of 6.5% in the quarter, last year it was 8.1 percent so here we also have a decrease and yes there is the calendar and currency effect and we see that the market is still challenging and competition is tough but we do see some early signs of improvements as par mentioned next slide please so let's have a look at four year figures since we are at the end of the last quarter We delivered sales of approximately 6.4 billion SEC, a decrease of 9.6% following the decline in market demand and our actions to reduce capacity. The adjusted EBITDA amounted to 395 million SEC for the full year, a decrease compared to last year. And the adjustment that we are making is of a provision of 28 million SEK related to the decision of the Swedish Agency for Economic and Regional Growth on repaying of support for short-time work that we received in the connection to the COVID-19 pandemic. And all in all, we have an adjusted EBITDA margin of 6.2%. Last year, it was 7%. Solutions is, as we mentioned, on a good journey with improved utilization for several quarters. And main challenges are within an experienced business area and also insight. And they are more vulnerable to the macro environment. We worked hard during the year on our hourly rates and managed to raise prices towards clients, but not to the full extent to compensate for salary increases. And despite this, I want to emphasize that our main challenge and also opportunity for growth and improved margins is our utilization. We have a good potential to increase this in the year to come, and we have the right competences and have done a hard focused work on our cost structure and are ready to continue our journey towards the 12% that are in our financial targets. The proposed dividend for the year is, as mentioned, 2.30 SEC per share, which is in the higher range of our policy of distributing 40 to 60 percent of net profits to our shareholders. 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 395 million and revenues of 6.4 billion SEC. We can take the next slide, please. This is an overview of our net debt development. We have 500 million SEC in used credit facility. and NOID has a total credit facility granted of 1,050,000,000 SEK. Future considerations amount to 26, and other liabilities, mainly leasing debts, amount to 496,000,000 SEK. This totals a net debt of 624,000,000, and divided with our EBITDA of 541 on a rolling 12-month basis, we are at a leverage of 1.2%. And this means that we have a stable balance sheet and a good financial position. Also, it means that we are well within our financial target, which is set not to exceed two. Next slide, please. We have a solid platform and a strong position as a digitalization partner in the Nordic region. And the share from public sector, as you can see, has decreased compared to last year, following significantly softer demand in some areas compared to a year ago. And the demand within defense continues to be strong, also in the public sector. We have a strong, solid position in the industry sector, partly thanks to good development in the defense sector, allowing us to grow despite challenging market conditions. And we see that the retail sector improve, and this is coming from several customers increasing demand, which is potentially a sign of general improvements in the economy. The negative development in the telecom sector primarily relates to one significant client reducing its demand. And to sum up, clients remain focused on business-critical projects also in an economic downturn. And with that, I hand over to you, Per, to say some final words. Next slide, please.

Thank you, Marie. Well, to summarize, we see a continued positive trend in our largest business area solutions with both utilization and margin improved. The market recovery is still at a low pace, but we now see the first signs of improvement in Sweden. That's really good. We maintain our focus on sales and cost control. We are very proud of our strong position as a Nordic partner in the digital transition. We are in good shape for growth when the market improves. And with that, we are now open for questions.