Lime Technologies AB (publ)

Hello everyone and a warm welcome to our Q2 call. My name is Tomas Davout and I've been at Lime since 2017. Started as CEO 1st of January this year and with me I have Anders.

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

Feel free to write any questions in the chat and we'll try to answer them at the end of the session. Looking into the agenda, we will have an overview of Lime and a sum up of Q2. We'll talk about order intake, revenue, profit, and we'll end up with a summary. So let's get started. We have always been running Lime with a long-term perspective, and that has left us with a fantastic footprint. 25 years now, we have grown on average every year, 18%. we've had an EBITDA margin of 25% as an average as well each year. And that's of course something that we are really proud of. The biggest reason I would say what 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 where we operate, we 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, if it's been good or bad, our goal has always been the same. And that is to help companies become really, really good at sales and customer care so they can help customers in a really good way. We create value by being a true partner to our customers. We do it by being local, close to our customers, and we combine our software and expertise. And we have two revenue streams, which is the software and the services, the expertise, the AOR or annual recurring revenue. That stands for 68% today and the services for the remaining part. And we've done this for many years now. We started in Sweden. We've grown into the Nordic countries and also taken one leg down in Europe, Netherlands since 2020, Germany since 2021. And now we are present in seven markets. We have 12 offices and almost 500 employees. Across our products, we have more than 7,500 customers and over 1 million users. So let me give you a sum up of Q2. Looking at the number, we have 10% ARR growth, 25% adjusted EBITDA margin, and also EBITDA margin is the same, and 12% organic revenue growth. And on the first bullet, I'm glad that we've been moving in the right direction, basically on all levels. We are now on 10% ARR growth. which can be compared to 9% in Q1, 7% in Q4 last year. The adjusted EBITDA margin is 25.4, which can be compared to 25.0 in Q1 and 24.6 last year in Q2. Organic revenue growth 12% now compared to 8% in Q1. So I'm glad we're trending in the right direction. However, we are not satisfied and I believe we still have more to give. On the second bullet, we continue our traction in Germany. We grow deeper into the utility vertical. During the quarter, we have expanded with some existing customers. We have started cooperations with billing system providers. We've closed a nice deal with Netz Leipzig Stachwerke. That's one of the biggest Stachwerke in Germany. We have also fully integrated the acquisition of one portal and moved the customers to our Lime solutions, which opens up new possibilities to grow with them over time. On the third bullet, we continue to make investments in our AI offerings. During the quarter, we launched Workflows, an AI platform where users can build integrations and AI agents directly within their CRM environment or take help of our services department to do the same. The customer reception has been very positive and we have had record attendance when we have had webinars and customer events and so on. Our Connect AI offering that is now driving the growth in LimeConnect. We see a much higher win rate compared to our last AI offering. And we are expanding both on new customers and on existing customers. And one thing that I'm really excited about is LimeGo Agendic. It's a brand new product. It's built from scratch with the latest technology. It has 30 plus years of European CRM know-how behind it. We shouldn't mix it up with LimeCRM. That's a much bigger and more complex platform. But this is more comparable to LimeGo. It has the same DNA as LimeGo with prospecting, with real-time company data, but now it's urgent. So instead of just assisting, the AI agents actually do the work. They could research accounts, they could prep meetings, log calls, write follow-ups, and the salesperson, well, they should just focus on selling. Of course, human always got the final call if we want to make the acceptance and so on. And now we are in beta. And we're rolling it out. We will roll it out step by step, running alongside the current Lime Go as we see it. Speaking of AI, the world of SaaS is changing faster than ever. That brings, of course, a lot of challenges and more than anything, a lot of opportunities, especially for the ones that have a business that fit well in the new environment or are able to change with a new situation. And I dare to say that I believe that we really are built for this moment. And let me explain what I mean. Three shifts are reshaping the entire SaaS market right now, all at the same time, and all three play in our favor. First, we have the geopolitics. European companies are rethinking their dependence on American software. Gartner, the research firm, they expect that 75% of European companies will choose software based on sovereignty by 2030. That number is around 5% today. We are one of the biggest and largest European players out there. So of course, that is a real opportunity for us. And we're already having a lot of these conversations in our customer dialogues and the processes. Second, we have a generic. Generic is not enough anymore. Companies, they want verticalized, they want customer specific solutions that are built around how they actually work. And we've got a flexible platform, we've always had that, which makes it very easy to make customer adaptions and vertical-specific solutions. And we've also had a bet on the vertical offerings for a long time now, where we build our core offerings. Utility, real estate, membership and wholesale, that is more than 70% of our revenue. So, also fits us very well. Third, we have our AI offering and how we develop together with that. Everyone knows that they need AI, but few knows how to do it in a great way. We have always guided our customers through every tech shift before. If it's internet, mobile, cloud, SaaS, and so on. AI is no different. We are the partner who can help them hold their hands and we help them to use it. We do it in their industry on their terms. Add to all of this our size and our mindset and culture. We are not the global conglomerate. We are not a startup. We are an established European partner with a track record. We have thousands of customers, a lot of experience, and we're small enough so we can still move fast. thanks to both our size and our culture. And that's exactly the supplier or partner that can stand out in these times. All right, so let's move into ordering. If we look at our customer concentration, you can see that it's really low. Our top customer stands for 1% of our revenue, our top 10 for less than 7%. And we've also done some nice deals, so let's talk a little bit about them. If we start in LimeCRM, apart from Statsfac in Leipzig that I've already mentioned, we can also say welcome to Shell, Bayer and Möller in the real estate segment. We are expanding our solution together with BALC to support them even better in their customer journey. In LimeGO, we have welcomed HandyDay during the quarter. and we have both Skellefteå Kraft and Jönköping Energi who have chosen to integrate their Lime Go solution with a Lime CRM solution which they also have so they can work even more seamlessly. In Lime Connect I would like to highlight AXA as a new customer. They're a big Cologne based insurance company and they have more than 1,300 branches and we are just starting with some of them so of course here a big opportunity to also expand together with the customer. For Lime Sport Admin, we can also say welcome to one of Sweden's most iconic sport clubs, Brynäs IGF, which we of course are very proud of. All right, let's have a look at the revenue. Looking at overall growth, we reached 12%, as we've said, Same organically, 8% if we look over the last 12 months, which is 9% organically. But if we break it down by geography, let's see how it looks like. Sweden grew 9% in Q2 and 6% the last 12 months. If we look at the rest of Europe, here we grew 19% in Q2 and 14% last 12 months. So, of course, it's a development also from Q1 and so on, which I said, but also development of the differences here. And as I said before, I'm happy to see that we're trending in the right direction and also that we grow faster in rest of Europe compared to Sweden. It demonstrates that our vertical strategy and our product offering resonate beyond Sweden, and that is critical for our long-term growth ambitions. So with that, handing over to you, Anders.