Lime Technologies AB (publ)

So good morning everyone and warm welcome to Lime Technologies Q1 update. My name is Nils. 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 21, Germany, and we welcomed Lime Connect to the Lime Group. And last year in 24, we welcomed Sport Admin in the beginning of the year and PlanPlan 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 predictive model. Today, it stands for 66%. And we have long-term profitable growth in our DNA, as you can see in the 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 the growth, it was mainly driven in Q1 by subscription revenues, which of course in line with our strategy. As we left 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. 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 Expect 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 welcomed 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 expect services as well. And for a long time now, we've been working on delivering our expect 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 Lionsport Admin, this quarter, of course, we've been focusing on recovering from the cyber attack that happened 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 organizations. 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 breach. And for now, this is a matter for more or less relevant authorities. Looking into LimeGo, 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 LimeConnect, we see that it has similar trends as both in LimeCRM and LimeGo, 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 LimeConnect, especially in the automotive industry where many companies are using LimeConnect. And finally, before we jump into the details, I would say that we have really continued growth to continue to recruit despite the tough climate. We kicked off the year with a fantastic onboarding in Lund, around 25 new limers. And the recruitment, I would say, 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 we 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. 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 seven 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 kind of 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 LimeCRM 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. It's really great to welcome the utility company Glittre, a Norwegian utility company. We have the Swedish real estate company Skövdebostäder, and also a very strong brand in F&M Mattsson, in the wholesale industry. And I think all these deals fit into our game plan, focusing on our selected verticals. Looking into LimeGo, 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 Fortnox. Inline Connect, several new customers, and we have two different type 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 FAQs in their webshop. And last but not least, we have Sportadmin. 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 our 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. 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 sell any upfront licenses today. And looking at the expect services where we see a growth as 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 had 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.