Lime Technologies AB (publ)

So good morning everyone and warm welcome to Lime Technologies Q1 update. My name is Nils and I've been running at Lime since 2006 and having the position as CEO since 2021.

Yes and my name is Anders and I've been at Lime since Q3 last year.

Perfect and feel free to write any questions in the chat and we will walk through them later on at the end of this session. So let me give you a little bit of update before we jump into the Q1 and looking at the picture about Lime. We've always been running Lime with a very long-term perspective and that has left us with a fantastic footprint. In more than 20 years now we've been growing in average 19% per year with an EBITDA margin of 25% in average per year and I think that's something that I'm very very proud of. But no matter how big we've been, how many customers we had, we more or less have had the same goal and that is to help our customers to become really strong in sales and in customer care. And when we do our best more or less it's when we combine fantastic software with on-point expertise focusing on specific verticals. We have done this for many years now and over the years we've been scaling our business into seven markets and since 2020 we entered Netherlands in 2021, Germany and we welcomed Lime Connect to the Lime Group and last year in 2024 we welcomed Sport Admin in the beginning of the year and Plan Plan as an add-on acquisition more or less to Sport Admin in December as a part of the Lime Group. So looking at Lime today we now are present in seven markets. We have 12 offices and around 500 employees. And some of the key success factors over the years, starting at the bottom there you could see the strong corporate culture. I think that's what's in the foundation of Lime to continuously investing in our employees, building a great culture even if we are growing quite rapidly. We have a sticky customer base, it means that we're not depending on one or two, five big ones, so we have a low customer concentration. Something that we've seen both last year is that we increase our share in recurring revenue, so it's a predicted model. Today it stands for 66% and we have long-term profitable growth in our DNA as you can see in chart below. So looking at the quarter then, we give you a little bit of sum up before we jump into the details. We continue to deliver quarter with profitable growth in a tough market I would say. Revenue growth amounts 11%, EBITDA margin 25% and the ARR growth was 14%. And looking at it was mainly driven in Q1 by subscription revenues which of course in line with our strategy. As we left like 2024 behind, I really hoped for a more positive business climate in 2025. And the first quarter brought some challenges of course as we have already reported on, including the cyber attack on LimeSport admin and of course the ongoing macroeconomy uncertainty out there. And therefore if we look at the results, it feels nice to report a good order intake, especially then in new sales where we exceed recent quarters. At the same time, looking at the market, the market for existing customers remains lower. We have long decision making processes, many customers choosing still to delay their investments. And this is especially noticeable in our area within expert services where a larger share of the sales comes from existing customers. Let's look into the different business units and start with LimeCRM. And the LimeCRM offering is especially designed as you all know to support companies in our selected verticals. Our focus there is to streamline their most mission critical processes and we have that in three areas. We have in sales, we have in marketing and we have in customer service. And by combining our software with deep industry knowledge, that's when we create real value for our customers. And as I said, during the quarter we saw a nice growth in new sales and we welcome many nice companies. I will get back to that in a bit. But I think one area that we need to zoom into is on expert services as well. And for a long time now, we've been working on delivering our expert services offering more effective by making sure that we have really nice tools in our platform. It has become easier to build business critical flows, easier to build integrated solutions, which of course is very, very good for our customers. And at the same time, we see this as a little bit natural shift towards a higher proportion of recurring revenue in the long run, which of course for us as a product company is in line with our strategy. If we look into Lime Sport Admin, this quarter, of course, we've been focusing on recovering from the cyber attack that January 16th, where a well-known criminal group was behind the attack. They stole the data, they tried to blackmail us, they tried to sell the data, but they didn't succeed. And then, as you all know, they published sensitive data about children and young people in Swedish organization. And being in all of this, of course, it makes me frustrated, it makes me really angry, and of course also sad. Together with the affected organizations, we acted quickly and we used every legal option available to us following the data reach. And for now, this is a matter for more or less relevant authorities. Looking into Lime Go, I reported in Q4 that it was a little bit slower order intake. And it's really nice to see that we came back and delivered a strong new sales in the first quarter and showing that we are on the right way. We focus on the larger companies, and I think that is also paying off. We win bigger deals and we also see more satisfied users and customers. And if we zoom in a little bit then on Lime Connect, we see that it has similar trends as both Lime CRM and Lime Go, where we steadily is growing the new sales. It's great to see we are trying to build more revenue streams with both inbound and outbound, and that it starts actually to pay off. But with that said, we also know that the German market, it's still tough, especially when it comes to existing customers as well for Lime Connect, especially in the automotive industry where many companies are using Lime Connect. And finally, before we jump into the details, I would say that we have really continued to recruit despite the tough climate. We kicked off the year with a fantastic onboarding in Lund, around 25 new Limers, and the recruitment has stayed quite strong since then. We are still seeing a lot of great candidates and the pipeline is good for that, and we hired around 40 new colleagues so far. And by continuing to invest, we are setting ourselves, I would say, for a good position going forward. So what will follow, we look into the order intake and talk a little bit about the deals. We zoom in on the revenue and the revenue split. And Anders will talk about the profit. We go through the financial target and then end the session with a summary and, of course, a Q&A. So looking at the order intake, and as I communicated before, our customer concentration is low, and as you can see, it has decreased a little bit, going from 7 down to 6.6. And the biggest customer stands today for 0.8%. And I would say still, it's a very good thing in this market conditions that we're not depending on one or two or five big customers. Instead, we are making deals with many customers. We have a spread in the geographies, and we are also doing it in different verticals. As I said, we had a good development in new sales. Meanwhile, it was still a tough market, especially for expert services towards existing customers. But zooming in a little bit on the different logos, as you can see on the right hand side, on the Lime CRM side, we welcomed many nice new companies, both in our home market, and I'm really glad to see that also on the international markets. We have a great, it is really great to welcome the utility company Glittre, a Norwegian utility company. We have the Swedish real estate company Sjövdebostäder, and also a very strong brand in FM Mattsson in the wholesale industry. And I think all these deals fit right into our game plan, focusing on our selected verticals. Looking into Lime Go, also feels nice to welcome, I would say, as I said, the right target group for us. We have the consulting company GSP, we have Odds, a Swedish company specializing in solar energy solutions, we have Govo Fabriken, and all of these companies we are helping to improve their sales and marketing. And the good thing here is also that it's integrated together with Fort Knox. In Lime Connect, several new customers, and we have two different types of customers that we have took as an example here. We have Langard, where we help them with the communication towards WhatsApp campaigns for their local stores. And if we look at Meta, where we deliver an AI solution to handle their FIQs in their web shop. And last but not least, we have Sport Admin. And to pick one, we have the eight time Swedish championship winner in floorball, Storvreta, they won last year, and they are also now playing for the gold medal this weekend. So let's look into the revenue instead, and starting with the ARR. And as you know, as a product company, I would say it's very important for us to continue to follow this metric. And this is something that we will follow even more closely going forward. And looking at subscription alone, it's grown by 16% compared to Q1 24. And the service agreement, as you can see, a quite big decrease of 31% in line with our strategy, we are converting the old customer base coming from service agreement and upfront licenses into subscriptions. And that together then sums it up to a 14% growth in our ARR. Looking at our different revenue streams, and we can see that subscription, as I said, growing steadily 16% in Q1 and 29% last 12 months. And today it stands for 63% of our revenue. And looking at the service agreement, 3%, and we continue, as I said, to transform the customer base from old service agreements up into subscriptions. And today it totally adds up to 66% recurring revenue. So it's a predictive model, and it's nice to see that this share is increasing. Upfront, more or less, amounts more or less zero. We don't have any upfront licenses today. And looking at the expect services, where we see a growth, slow growth in Q1 of 3%, and today it stands for 33% of the revenue. And it will continue, of course, to grow, but in the long run decrease as a part of the total net sales going forward. Looking at the revenue side, we can see that if we look at the development here, and the growth, we reach 11% in Q1. In the last 12 months, we have 17% growth. Organic growth, which is important for us in the quarter, amounts 10% in the quarter, mainly driven by subscription revenues, which is exactly more or less the same as in Q4. When we entered, as I started with the year of 25, we expected a little bit higher organic growth. The deviation between outcome and expectation is mainly in expect services. And if we look between our segments, we have Sweden is growing 10%, and the rest of Europe is growing by 13%. And looking at the last 12 months, 19% in Sweden and 12% in the rest of Europe. So let's look

into the profit. And Anders? Yes, thank you Nils. So adjusted EBITDA in the first quarter reached .1% compared with .6% for the same quarter the year before. The decrease in EBITDA margin year on year is mainly due to lower sales growth in expert services. Looking at the last 12 months figures, EBITDA amounted to 176 million compared to 155 million. Last 12 months, EBITDA margin amounted to 25.0%. Thus, we continue to deliver an EBITDA margin aligned with our financial targets. In Q1, we have continued to invest in sales, marketing and employees to strengthen our market presence in Sweden and rest of Europe, but also to strengthen our product offering through new features, improving the overall user experience. Going over to our OPEX development, personal expenses in the quarter amounted to 112 million SEK, an increase of 13%. Last 12 months, personal expenses amounted to 408 million, an increase of 19%. The increase of personal expenses both in the quarter as well as last 12 months relate to our continuous investment in staff and employee activities, which enable us to further grow our business as well as due to our acquisition of plan plan in December 2024. Furthermore, the increase of expenses last 12 months is due to Sport Admin being included in the Q1, which is a quarter in Q1, while only one quarter in the comparative period. Then on the right-hand side, we have our operating expenses. As you can see, operating expenses increased by 14% in Q1 compared to last year. The increase is mainly due to that we invest in more in future growth, physical sales events and our product offering. Operating expenses last 12 months amounted to 124 million SEK, an increase of 21%. The last 12 months figures include Sport Admin fully, while only including one quarter in the comparative period.

Perfect. Thanks for that, Anders. Then looking to the summary and the financial targets. As you can see, we reached a growth of 17% over the last 12 months compared to the target of 18. We have reached an EBITDA margin of 25% over the last 12 months, and that's in line with our target of 25. Looking into the net debt in relation to EBITDA, it should be less than 2.5, and we're down to 0.7. In 2024, the board proposed an increased dividend amounting to 53.2 million SEK, corresponding to 60% of net profit. That was all for the presentation. Let's go in and start looking at the questions

that are written in the chat. First question is, do you see a risk of fines from EMEA due to their investigation about Sport Admin League?

Right now, we take it from the beginning, Sport Admin makes up around 8% to 10% of our total revenue, and Incident has been completely isolated to Sport Admin. As we mentioned in our Q1 report, we had a one-time cost of around 1.5 million SEK tied directly to the tax. That said, I feel that we managed the situation so far in a smart and efficient way, and we kept the financial impact so far under control. The question is about EMEA, and I think it's really hard to speculate. At this point, it is a matter for the different authorities out there, so I don't want to go into any speculation of that at

the moment. Second question then, could you add some flavor to the international markets?

I think that it's really nice to see that we continue to close really, really nice deals. Glittre in Norway, which is one of the largest deals in in in life history, we have OPR Finance, which I'm not mentioning, a great deal in Finland, we have Kyso in the Netherlands, it's also three deals that I feel is spot on for us, and that's exactly what we want to work for going forward. But with that said, one deal standalone doesn't build a lasting success, so it's really, really important now to keep up the good momentum that we are actually having with these deals to build that kind of confidence, so we can do it more over and over again. But we are laying a solid foundation, and so let's keep up the momentum with these deals in our back.

Okay, good. Then we have another question, is it possible to say anything about the churn in Lime Go, following the increased focus on larger companies?

I think we see a positive effect on the churn, if we divide that a little bit, and of course we look into analysis the churn in Lime Go, and if we look into the deals that we have closed over the last year, I think we are doing it more on the right ICP, with the right target group, is what I'm meaning with that. And there we can see that we have happier customers, we have a good hit rate, and also that they are staying for a longer time period. So if we continue to do that, I think that we will see a better traction and a decrease over time in the churn in Lime Go, which is one of the biggest focus areas for us in Lime Go, and it already starts with how do we market ourselves, what kind of deals and companies do we actually bring in, so we can create value over time for our customers. But I think that we are on the right track.

All right, and another question, is it fair to assume a slight negative impact on our ARR from FX due to strengthening of the SEC? And yes, of course, in the quarter, we can see that we have a slightly stronger SEC compared to previous periods. That's why we see a negative impact to ARR. Another question is, how significant is the increase in order intake from new customers, and when do you expect it to positively impact sales growth?

It depends a little bit on which kind of product we are talking about, but if we look on the Sport Admin case, it's a very long process before we more or less recognize the new ARR, and that's something that is different for it. For example, take Lime Go and in Lime Connect, where it's much correlating to a closed deal, and then you start with the implementation and onboarding and start using the systems quite fast. If we take Lime CRM, which of course, it stands for 70% of our revenue, there is also quite long lead times from when we close the deal until we recognize the ARR going forward.

Okay, good. Another question, when will the expert services recover? Do the client buy more modules, up sales, employee turnover? When will the new 25 employee contribute?

Okay, I mean, if we take, there is a little bit different questions there, but let's start with the first one there. When will the expert services recover? I think that's something we can start with. And I think there are two sides of this. First, more than 60% of our expert services revenue still comes from our existing customers. And as I said, that is a tougher market right now, given the current market conditions, and that leads to a more challenging market has a clear impact on the expert services revenue. And I hope for a better business climate, and then you could see what happened in Q1 on an overall perspective. So I think it's hard to give any guidance in that, but I mean, we are doing everything we can to really, really try to be as proactive as we can and to handle the quite tough market conditions within expert services. And I think from an employee perspective, I see it very positive. They are doing a lot of efforts to keep up and they are really having the right type of attitude in that organization and are contributing to make it better all the time. So that's one side of it. The other side, I would say, is what I tried to also put a talk. We've come a little bit like longer way in building tools to make our implementations faster, more efficient. And I would say that's a big step forward, which is really, really positive development for all of our customers, because we can do integrations, we can do customizations with all the new techniques out there. We can do that in a faster way, which will benefit our customers and also strengthen, I would say, our competitiveness out there. And over time, I think, of course, that will have a little bit another impact on expert services. And it's also then important to see that we can move that and increase the share of recurring revenue will be even more important going forward. If we look at the second question you had there, yes, do the client buy more modules? Yes, they buy different kind of add-ons, as we are calling it, and they are also buying different type of tiers. So a customer can start with, say, the sales package in Lime CRM. And then, of course, they can add on with the marketing suite and they can add on with the customer service suite. But they can also buy different individual add-ons, such as e-signing, for example. So it's a combination of this. Looking at the employee turnover, it's still lower than if we look on historical levels. I believe still that the turnover will go up when the market conditions is improving. And therefore, I think it's important for us to balance all the time, both the recruitment and looking into the churn. I still meet all new candidates out there. So therefore, I think I feel that we have quite good control over the balance going in. We also have a question regarding Sport Admin here, if there is any negative impact on new sales as a result of the data breach. And, yes, the first, when the attack happened there, January 16th, we couldn't really go into a sales mood. So then it was more helping our customers, focusing on really holding their hand and be there, taking care of questions and so on. We can see that we have now increased the contact also with new customers. And I'm really happy, as I mentioned, you could see, I think it was two or three logos there on the slide, where we get really nice new clubs in. And I feel that the booking situation when it comes to new clubs is going really, really well. But of course, if we look into January, February, that was impacted on the new sales side. Let's see if we have any more questions up here. How are your customers reacting on the new tariff situation and how is it affecting new business? I would say looking into our main verticals with the local utility companies, we have local real estate companies. So we are mainly focusing on our business on those customers. We have Sport Admin, which is like the Swedish club life. So the main thing, I wouldn't say that they are really affected by the tariff issue. It's more the overall concern in the business climate, which creates an uncertainty in many different levels. And that is, of course, affecting our customers. And then, of course, it's affecting us in that sense.

Yes. All right. Perfect. That seems to sum up all the questions that we have received in the chat. We have one more coming in just now. It says, when can we expect you getting back to 18 to 20% revenue growth?

Looking into that question, as I said, we have a financial target of reaching 18% growth. And it's a combination of organic growth and if we do any acquisitions. I said it before, maybe it was like one or two years back. And it's important for us that we don't stress just because we want to get back on 18, 20%. We stress out doing acquisitions. The importance when we go in, we are looking into the organic growth and see, okay, how can we impact that in a good way? On top of that, we are looking at acquisitions. But it's important that those acquisitions are in a really, really good shape that we feel that it suits into our culture, it suits into our different business and to be really a good fit for us so we can have it with us for a very, very long time going forward. So therefore, I will not stress the acquisition part just because then reach 18 or 20, then it's better to have a little bit lower growth. So we are developing the core of Lime in a good way.

Perfect. So that was all questions that we received today. Thank

you very much. Nice to see all the questions in the chat. And if you have any more questions popping up, never hesitate. Just give me or Anders a call or send an email and we will of course get back to you as soon as possible. But thanks for today and have a really, really nice day going forward. Bye. Bye. Thank you.