Lime Technologies AB (publ)

Hello everyone and welcome to the Q4 update with Lime Technologies. My name is Tomas Davoo. I've been at Lime since 2017 and joined or started as CEO 1st of January this year. And with me I have Anders.

Hello everyone. My name is Anders. I've been at Lime since September 2024 and I'm the CFO.

Fantastic. Feel free to write any questions in the chat. And we will try to answer them in the end of the session. If we look at the agenda, we'll start with an overview of Lime and the sum up of Q4 and 2025. We'll go into the order intake, we'll look at the revenue, we'll go through the profit and we'll finish off with summary. And let's start with an overview of Lime. We have always been running Lime with a long-term perspective, and that has left us with this fantastic footprint. In 25 years now, we have grown on average with 18%. We have had an average EBITDA margin of 25%. And of course, that's something that we are really proud of. And I would say that the biggest reason why we have managed with this year after year is our people and our great corporate culture and we know that in order to win in the competitive environment that we are playing in we need need to be a little bit better in everything we do and we believe in creating a culture that is great at combining high performance with a lot of care and no matter the times good or bad our goal has always been the same to help companies become really, really good at sales and customer care so they can help their customers in a really good way in their customer journey. And as a supplier, we are strongest when we combine our software and our expertise so we can be a true partner to our customers. We have two revenue streams, the software and the licenses. And if you look at the software side, the AOR coming from that, it stands for 68% of our total revenue. And we have done this for many years now, starting in Sweden and scaling our business into several markets. Now growing into Nordics and since 2020 also entered the Netherlands and 2021 in Germany. Now we're present in seven markets, 12 offices, and we have around 500 employees. Across our products, we have more than 7,500 customers and over 1 million users. And let me give you a sum up of Q4 and the full year of 2025. We deliver another quarter with profitable growth in a challenging market. Market conditions have been difficult for a couple of years now, and we entered 2025 believing it would improve during the year. We can conclude that it did not, not in a major way anyway. And in Q4, revenue growth amounted to 5%, EBITDA margin to 25% and our ARR growth to 7%. However, adjusted for currency, the ARR growth was 10%. And if we look at our overall revenue growth, it was held back by the services side. On the services side, we see that the revenues declined 3.9% in the quarter and 2.3% for the full year. But if we zoom in on the software side, that was 10% growth in Q4, 13% for the full year, showing that despite headwinds, we continue to have a competitive offering and grow faster than the market. And despite a modest sales growth, We increased our results per share and our overall financial position allows us to increase dividends. The board of directors proposes a dividend of 4.5 kronor per share, which equals 60 million SEK and 54% of the net profit. If we go into the highlights, one that I want to point out, is that we continue our expansion in Germany and the utility segment. We made another two deals, I will come back to them on the order intake, and we also made a smaller strategic acquisition of a portal solution with an established customer base in the German utility sector. This solution simplifies the process of connecting new customers to various utility networks, and that will further strengthen our position with both new and existing customers. Second bullet, in order to accelerate our execution, we are clarifying mandates and growth agendas for all business units. Each unit is expected to meet the rule of 40, meaning a combined growth and profit margin above 40%. Some will prioritize growth acceleration, others margin expansion, but all should contribute to our overall value creation for customers, and for the Lime Group. I'm also happy to welcome two new business unit directors, Lucas in LimeGov, bringing strong sales expertise, and Hanna in SportAdmin with a deep experience in M&A and international expansion, both critical capabilities for our next phase of growth. And AI. And where many see AI as a threat to establish software solution, We see it as a great opportunity. We have genuine competitive advantages that generic AI cannot replicate. If we take the combination of our software and the expertise, where we have the human touch, we have a vertical experience, we have a lot of compliance and regulations that we need to live up to. We have the data that is owned by the customer and that we can work with, and we have deep integrations. So with AI, we see that we can deliver more value faster, both internally and to our customer. And we are continuously working here to launch new value, new features, and they are met with really, really good interest. In LimeConnect, we released our own AI platform in November, and we've already closed around 40 deals there. We have introduced AI agents in LimeCRM. We have introduced AI-powered sales features in LimeGo. And I believe that 2026 is the year where AI is moving from investment to even more of a revenue driver. So going into the ordered intake, and if we look first of our customer concentration, you can see that that that is really low our top 10 customer customer stands for less than seven percent and our biggest customer stands for less than one percent and we've also done some really nice deals in the quarter and we can start with line crm uh we continue our street in germany utility as i said and the two more customers joining our iconic is our biggest deal of the year And Langenfelt is another Stadsverket, rather close to Cologne, where we have our office. In the real estate segment, we welcome Catena and Heimstaden, who both will use our commercial real estate solution, helping them manage the leasing of commercial properties. A highlight in Langenfelt Connect is that we've also gained some traction in the utility segment. And we have done two nice deals here, Stadsverket Julisch And NPAL. NPAL is actually one of the biggest deals ever done in LimeConnect. One deal to highlight in LimeGo is Vexman. They sell professional workwear. They have a sales team of around 10 persons and a lot of volume in the sales transaction. That is a really great customer profile for us in LimeGo. In Sportsavning, among many others, we welcome Falkenberg and Växjö Vipers. Växjö is a bit of extra fun for me since I've met them a lot of times playing for floorball in younger days. All right, moving on to revenue. So this slide shows revenue stream development since 2019. And starting back in 2015, we have completed several strategic transformations. First, moving new customers from a front sales to subscription, later converting existing customers from service agreements to subscription. And subscription revenue is growing steadily. In Q4, we have 12% growth for that. In the last 12 months, we have 15% growth. Service agreement is going down and now stands for only 2%. In total, the recurring revenue represents 68% of our total revenue and that is up from 65% in Q4 last year, bringing us closer to our target of 70% subscription-based revenue. And as I said, expert services declined and in Q4 we had minus 3.9% and minus 2.3% for the full year. This reflects two factors. One is the softer market condition that we have in professional service that we are seeing. And the other one is our own efficiency improvements. AI is helping us deliver implementations faster, of course, then reducing implementation time, making us more competitive. So services, they remain highly valued by our customers and they They really want us to help with holding their hands with product management and so on. But when we can do technical deliveries faster, it allows us to drive more leverage through our software business. And if we look into 2026, I expect expert services to have a modest growth with services continuing to decline as a share of the total revenue in the long term, consistent with the strategy towards a shift with higher software share. And our revenue, as I've said, 5% in Q4, 8% over the last 12 months. If we break this down by geography, Sweden grew 2% in Q4, 6% the last 12 months. Rest of Europe, 13% in Q4 and 12% last 12 months. As I said before, a modest growth overall, but the strong performance in the rest of Europe is really encouraging. It demonstrates that our vertical strategy and product offering resonates beyond Sweden, which is critical for our long-term growth ambitions.

And with that, over to you Anders. Thank you, Thomas. So looking into the profit, the adjusted EBITDA in the fourth quarter reached 25.3% compared to 25.8% for the same quarter last year. The EBITDA margin of 25.3 compared to an even stronger margin last year is explained by lower sales and expert services, partly offset by an increase in software related revenues. Looking at the last 12 months figures, adjusted EBITDA amounted to 184.9 million compared to 172 million. Last 12 months, adjusted EBITDA margin amounted to 25% in line with our financial targets. And then going over to our OPEX development, looking on the left hand side first, Personal expenses in the quarter amounted to 112.9 million SEK, an increase of 7%. The increase is mainly due to a higher number of employees compared to last year. Last 12 months, personal expenses amounted to 430.4 million SEK, an increase of 9%. Adjusted for the acquisition of PlanPlan made in December 2024, personal expenses increased by 8%. The increase in the last 12 months for the quarter is explained by a high number of employees. Cost per employee has remained stable, increasing broadly in line with inflation. Going forward, we will continue to invest in growth and talent, but at a slightly slower pace than the current increase. As the share of recurring revenue grows, we expect our cost base to develop more efficiently relative to revenue. strengthening our long-term margin profile. Then on the right hand side, we have our operating expenses. Operating expenses in the quarter amounted to 34.9 million SEK compared to 32.4 million SEK last year. Last 12 months figures amounted to 133.7 million SEK compared to 120.2 million SEK last year, corresponding to an increase of 11%. Adjusted for the acquisition, the increase was 10. The increase both in the quarter and lateral months is primarily driven by external product related costs and growth related items such as cloud and hosting services and product licenses, as well as investments to support international expansion. Back to Thomas.

Yes. So. turning to our financial targets. So as you know by now we have reached a growth of 8% over the last 12 months compared to the target of 18%. We have reached an EBITDA margin of 25% over the last 12 months in line with our target. The NIF-DEP in relation to EBITDA is 0.6 compared to the target of being below 2.5. We increased the results per share and for 2025, the board of directors proposes a dividend of 4.5 kronor per share equals around 60 million SEK and 54% of our net profit, which is higher than the financial target of at least 50%. And to sum it up, Q4 closed a challenging but important year for us. We delivered profitable growth with a 25% EBITDA margin We want several strategic customers and deals, not least within our core verticals. We're not 100% satisfied with the growth rate in all our business areas, but we now have a really strong team. We have a clear focus and a good foundation to build on in 2026. And with that, we open up for some questions.

All right, so we have first question here. Some lower software related revenue growth in Q4. Do you think this is related to expert services and upselling or new sales? Do you still see new sales performing well? How was the beginning of Q1 started? Yeah, two questions.

Yeah, but let's give you some flavor on that. Well, first and foremost, we have some currency effect, as in the EUR, as I said, 7%, but 10% adjusted for currency. But we continue to have a rather stable, I would say, growth. If we look into our business units, Lime CRM continue to have solid growth, both on new sales and on existing customers. We're not 100% happy with looking into Line Connect, where we have been a little bit hit by AI that we have had with the third party before, our solution. We have changed that, as I mentioned quickly as well, in November to our own AI solution and AI platform. And as I said, 40 deals closed since November. So we're seeing a nice trend there. And if we look at the sport admin, what in 20, for last year, we also were hit by the criminal hacker attack, and that has had some effect on us. And we see that we haven't been able to spend as much time on new customers, but we have spent and holding our hands of our existing customers. So in both ways, it also has some effect. okay perfect so second question then can you elaborate on how you transform lime serum with ai agents yeah absolutely so when it comes to the ai agents we are really focusing on building something that gives a lot of value for for our customers so looking into specific processes that they are always working on how can they make that even more efficient So for example, say in the ticketing and help desk, when you get a ticket and if you can help them set up a solution that helps them summarize the ticket, suggest the category that you should place it in, suggest maybe an email answer that of course makes things easier for our customers and gives a really hands on value. And then we take it into our verticals to be of different value when it comes to the agents.

Perfect. Next question then. Do you have any comments on the currency effect? It seems to have a fairly clear impact on the results. Yes, there was a currency effect in the quarter. Our sales growth adjusted for currency impact was 7%, thus 2% higher than reported sales. The euro is our foremost biggest foreign currency amounting to about 20% of total revenue, followed by other currencies, I would say around 10%. As a result, movements in the euro have the most significant translation impact on our reported figures. And then next question we have, it reads, despite rather soft market conditions, you add more new employees this year in January compared to last. Why is that?

When it comes to recruitment, we always are investing in that to be able to grow long term. And when we dig into it, we of course also have people that are leaving us throughout the year. So the net, though, is not necessarily higher this year. We don't have that many more employees going into this year compared to last year. And you can also see a shift in how we are focusing more to get on the sales side, as we talked about as well, to see a higher portion of the ones coming in to working on the sales side.

Okay, good. So next question, what's your view on the future of the seat based pricing model and how that fits into future where agents do a lot of work that was done manually before?

Yeah, a good question. And we've followed this for quite a few years, to be honest. And First and foremost, we have started to do some transformations. If we look into our verticals, for example, the real estate segment, instead of seat-based, we can offer solutions that is more based on the real estate number of houses that they have. And same when you look at membership, for example, instead of looking at seats, we can offer based on how many members do you work? So we are doing that. At the same time, we are actually looking into how it fluctuates here, because we also see that we still have a lot of increase in seeds. And in most segments, we have more increase in seeds than what it actually takes us down. So we are watching this one closely and making changes over time in a very strategic and practical way. Good question.

All right, let's see if we have another question. Yes. As new CEO, what's your main focus going forward? What will what will change with you as a leader?

Yeah, I mean, I've been here for for almost 10 years, and part of the management team for the past six years. And last, I've been responsible for lime CRM, which stands for 70%. So said I feel like I've really been a part of you know the strategy and what the choices we have done and but of course there are a few things that I would like to focus on and to highlight a few and as I mentioned push out mandates and decisions and responsibility even more into our business units and also to our different countries at different verticals and so forth If we can do that, I believe we can run faster. We can be even more engaged and be closer to decisions. So that's one thing. Second one is to continue to really be the expert everywhere we can. Continue with our verticalization where we see we have a really nice traction. We see that our customers stay with us for a long time. We see that we have higher win rates and so on. So continue that journey. And then we have also the transformation. We talked about that today as well, that where the software is growing as a part of the total revenue share. And first goal now is to take it up to 70%. And I believe that that's a natural development that we will see over time.

Okay, perfect. So we have another question coming in. It reads, you made a small acquisition in January. What does the acquisition pipeline look like in 2026?

So we have a small team working with this and we are meeting new prospects or possible acquisitions every week. So we have a continuous pipeline in this and we have two main strategies. One is on the international expansion of SportAdmin. And as you know, with the PlanPlan is according to that strategy where we enter the Netherlands in SportAdmin. And we continue to look for similar types of acquisitions around Europe. And the other one is for LineCRM, where we are looking at different ways of completing our whole offering, making it even better and maybe more competitive. So we're looking into that, but we are not rushing. It needs to be the right fit. We, of course, need to find the right culture. We need to find the right product fit and the right valuation. So we're not rushing it, but definitely high on our agenda as well.

Okay, perfect. So next question then. The Privacy Protection Authority, EMI, it is in this case, has imposed sanctions of 6 million on sport admin following the last year's cyber attack. How does this affect the organization is the first one. And the second question in this is how are customers reacting?

Yeah, I mean, as I think most know, we were attacked by a criminal network here around a year ago. And first and foremost, we're really sorry for everyone affected, both our employees and our customers. And as you said, we got the cold sanction and we do not agree with the EMIS decision. And we are currently investigating whether we will appeal or not. IT security has always been high on the agenda for us, both now and then. And despite that, they did manage to reach into our systems. And so at an even higher pace, we have implemented necessary changes and now stand stronger than ever. And if you take, as you said, internally as well, of course, this has been something that we have focused on a lot, really holding our customers' hand during the year. and that has taken a focus and energy from everyone in the world. But I think we're all looking forward to really turn the table, so to say, and look forward.

Okay. I think we have one more question in the chat here. So you have a clear goal to become more international. Could you comment on the split between Sweden and the rest of Europe?

Yeah, sure. First and foremost, all markets that we go into, we know we've done that organically, more or less on the CRM side. And then we have had a few more outside of Sweden in the end. But all markets should help us grow in the next five to 10 years when we go in there. And when we have done it, we've done it better and better for each market. If we take from standing from point zero, so to say. And our goal is to be market leaders in each different markets that we go into for a specific verticals. And we have been better and better to go in more focused. So, I mean, with the latest now, the traction that we see in Germany, I think it's a really, really good example of this. We really said from the beginning, let's focus on the utility segment and it is taking time. but it has really paid off, and now we are really someone who is taking ground on that market. If we look at the other one, just some more flavor, Norway, also good traction both in the utility sector and in the wholesale. Finland has had a tough market for some years, but we've seen a little bit better trends in the last period. And actually, we also had a quite stable growth. We are not happy with the Netherlands and Denmark, where we can accelerate the road from where we are and looking into being more specific in our articles there. All right. Perfect. That was it. Fantastic. So if you haven't seen it yet, Then we have a capital market day coming up, coming up in 4th of March. And really hope that if you haven't already registered, please do so. And hopefully we can meet there.

And yeah. Yeah, with that, we would like to say thank you for listening in. And please touch base if you have any further questions to hear Thomas or myself.

and that's all perfect as always don't hesitate to contact us if you have any things they want to discuss further have a fantastic day everyone