Litium AB (publ)

Välkomna till dagens presentation var med oss litium där vd Patrik Sättlin kommer att presentera Q2-rapporten för 2024. Om du nu ska ställa frågor så går det bra att använda formuläret. Finns det högre om sändningen så tar vi upp det efter själva presentationen. Med det sagt så lämnar jag ordet till dig Patrik. Varsågod.

Tack så mycket för det Martin och välkommen hit alla lyssnare. Jag heter som sagt Patrik Zetlin och är vd på Lithium sedan dryga fyra år tillbaka. Jag ska ta er igenom rapporterna för andra kvartalet i 2024. Som Martin sa, om ni har frågor, ställ dem i chatten så plockar vi upp dem och strömmar med min CMO här i studion, Malin Bodolla, som kommer att ställa frågorna till mig och så svarar vi dem på slutet i en frågestund då då. But first, we'll start by talking about Elysium and for new listeners and shareholders, tell us a little bit about what we do in our business that creates value for our customers in the market. And then we'll go into Q2-rapport with the numbers and then we'll finish with this question time. Okay, let's move on. Lithium, for those of you who are new to Lithium, we have a single platform where we market our products. This is something that you build your single solution of as a customer, so it contains different components. You can say it's a bit like a building set, like a toolbox. So this visualization to the right for you in the picture, symbolize some of the components that are part of this design. For example, we have a PIM, a product engineering system, with a lot of heart, the motor in a single solution, and what you see as an average where you are as a product. You tell them what the products look like, with pictures, with white papers, safety instructions, and so on, and so on, how they fit together. And then we have a commerce warehouse that manages orders with campaigns and so on, which is all based on business logic. And a performance warehouse that shows up products in the best way possible, so you get a good shopping experience as a customer. Then, of course, to have an automated solution, you also need a whole integration with other types of systems in your text actor, for example, a business system or logistics or personalization system and so on, so that you get a full automatic solution. We are not driving these smaller solutions, this is more advanced trade and quite large volumes. We usually talk about that our target market is somewhere between 50 million and 5 billion digital, which sets completely different requirements to sell for 5-10 million and simpler setups. So that's what we have as a product, where we go to the market with them. There we deliver to the market via a partner network. We have worked with the vastest consulting houses in digital trade in the Nordic countries, who then spread the exact needs that you have as a customer, so that you get your customer-equity, where you have a type of business logic, a character trait that is special for your own business, which makes you unique and is, is vast and wins your own market, your own vertical and so on. So allt det här kan man göra med verktygslådan så man anpassar den exakt till sina kundunika behov och blir stark och vass på att sälja digitalt där ute på alla olika typer av marknader. Det här är någonting som en hel del kunder har upptäckt att Lithium är väldigt bra på. Vi har idag dryga 200 kunder i den här isomålmarknaden. Allt ifrån de som säljer stål, plåt, marksten, färdiga kommersiella ventilationshuvudar för kommersiella fastigheter till cutting edge fashion säljare. So all the cool products with direct-to-consumer models all over the world. So that the whole range between all the business models that are built into this value chain, from manufacturing something to being in the hands of a customer, whether it's a consumer customer or a company customer. De här kunderna säljer idag till 150 plus någonting i geografiska marknader. Genom plattformen lite så snurrar det 20-30 miljarder svenska kronor. Så det är ganska stora affärsvärden som går igenom plattformen varje år nu. Men då har vi ändå bara börjat. Men vi får hjälpa oss på att tacka alla fina kunder. Vi är väldigt stolta över att ha er som kunder och att vi får fortsätta vara leverantörer till er. So, it's a little bit short about what we do and what business value we create for our customers out there. And of course, this translates to business value for Lithium as well. And I would like to go into the numbers for the Q2 quarter report for the second quarter. Det första och som har varit vårt viktigaste huvudmål och är för det här året också är att vår ebit, vår resultat, bottenlinjen är förbättrad. Återigen i Q2 och i första halvåret och H1 som brukar nämnas förbättrar med 3,5 miljon vilket är för oss ett stort steg till att bli to deliver positive results throughout the year and end up in this really self-financed situation that we have been striving for for a while in the company. It is a very nice platform for us to grow further when we want to take the company to the next level and continue to grow both in the north and outside the north and take the step to become a real international player on our market. So a big and important step forward there is the most important thing for us. Looking at the income side, EBIT is obviously one of both growth revenues and keeping the costs at a good level so that you have a profitable business. In Q2, the revenues were not up that much, but looking at the H1, it was a total of 7% up. It was a pretty tough market, I can say that it was a pretty long-awaited market overall, as I said. The strength of our income mass is that when you look at it, all of our revenues are recurring. Out of our revenue, it's 100% annual recurring revenue, which is something that differs a bit from other similar companies in our character. So that's something to note. Rörelsemarginalen på EBITDA-nivå var återigen över 20 i sträcket, vilket är gångbart. Det har skett kvartalet i rad som vi förbättrar det där. Det visar hur vårt förbättringsarbete när det gäller lönsamheten har verkligen börjat eller ger effekt kontinuerligt. Det här är en trendlinje som vi såklart avser att fortsätta när vi går framåt här. In the cash register we have close to 8 million. We have a stable cash position. Of course, we are also moving towards a profitable situation in the state budget. We are almost there already. We have a stable foundation to stand on financially. We have a nice position on the market to be able to take a step forward when the market starts to get a little warmer. We've been a bit cold for a while. Generally, we've been, as everyone knows, in a tough macroeconomic situation, with a low economy and so on. Then we have the advantage that we are good at B2B, and there we haven't been as affected by the effects of low economy, or the fight against inflation and so on. It's a little more steady business on the B2B side, while B2C, and a lot of vertical, especially in B2C, we've had a very tough time. under ett par års tid då och fortsatt har i viss mån. Det är inte så att liksom även om man pratar om att räntesänkningen ska komma och så vidare så att konsumtionsutrymmet ska öka så har det ju faktiskt inte hänt än får man komma ihåg och det är många Many are still fighting with their state accounts on the consumer side. The best thing is that everyone has largely trimmed down their layers. Those who are left are very agile, very trimmed and very ready to take a step forward when the market turns on the B2C side. B2B, an underlying strong trend, continues to be so and has been so all the way. All of us, on the whole line, during the first half of the year, have been quite vigilant in making decisions about new investments. The level of activity has been significantly higher than it has been during men fortfarande så är det just det avgörande att man vill se beviset på att det faktiskt har vänt. Man är väl kanske lite bränd av att det har varit några gånger man har trott att det skulle komma något snabbare men så har det inte skett. Men nu verkar det faktiskt börja som att de här räntorna kommer att åka ner. Många som upplever vi väntar på att se bevisen på det här och att man då är beredd att gå direkt till handling när We are in a very good position where the market is well, we are in a good position regardless. We are able to continue to grow and improve our business despite the fact that it has been a tougher market. But it's also built into our business model that it should be like that. But now we are in this self-financed situation. We have a very nice product on the market. We have a completely refactored, modernized platform that we released two years ago. So we've just been working on refining and refining now when we released new capabilities. on tech language, headless and serverless and others that make it even more flexible, even more modular, even more easy to work with and easy to make and use for our customers. So we are strong when the better times come. If we go down a bit further and look at ARR, Annual Recurring Revenue, we increased again. We have a long line of quarters where we have increased ARR. Lately we have got 1.3, no big uptake from Q1, but 7% better than last year and on the right track. There is a part omläggningseffekter också. Vi har ju en del kunder som är väldigt glada såklart över att de har gått under första halvåret på Lithium Commerce Cloud och man ser också en del väldigt fina både prestanda och försäljningsökningar hos de kunderna. Några av våra största på både B2B och B2C sidorna har gått live med det här under första halvåret. Så det påverkar en del, men det är någonting som jämnar ut sig över tid och vi får igen längre fram där vi har bytt prismodell och affärsmodell på de kunderna samtidigt som vi har bytt teknik och så vidare. Så det ligger inbaka till det där, men oavsett så har vi en lång rad av tillväxtkvartal bakom oss då och en väldigt fin plattform att kunna växa vidare ifrån. Intäktssidan som jag var inne på, ganska flätt i kvartalet, 7% upp i första halvåret, kanske lite mer representativ siffra som så. Styrkan där såklart att 100% av alla intäkter är just återkommande så vi ger väldigt stor stabilitet i både tillväxt och intäktsmassan som sådan. Vi står väldigt stadigt när det When it's windy out there, which it has been for the past two years, but now it's going to be a little warmer wind again, so we hope that it will help us to grow more when we move forward, of course. One thing worth noting is that our mix of revenues has increased a lot on the moving parts, such as the contract bond with the moving parts, which is linked to sales parameters or how much you use the platform, the type of parameters that move on. And then you see that the proportion has increased here in the quarter to about 15% of the total revenue. which is up from, well, it's not a lot, but it's 1.5% up since last year. It's like a trend line that we think will keep up, and we definitely expect that this moving part of the income mix will increase as we move forward. It's built in as a price model to be able to grow with customers as we move forward. Bruttomarginal is these green... Romborna, som kanske är lite svåra att se, men brottomarginalen var lite ner i kvartalet jämfört med förra året. Men vi har alltid viss fluktuation mellan kvartalen där, så det är bättre att kolla över längre perioder. Kollar man över H1, så ligger den på exakt samma nivå strax under... Under 69%, 68.9% I think. And what is worth noting there is that as we get more effect of that we introduce serverless cloud drift now on our commerce cloud customers, we count on that the gross margin will tick up a bit over 70 lines and more when we move forward. So that we should be able to stay at 72-73% over time. So it helps a lot. There are a lot of other things that affect the bruttomarginal as well. But it's just that maneuver that I think we should get our bruttomarginal to tick up 100%. But it takes a while to get the full effect of the introduction. If we look at the cost side and the green circles here, it's the EBITDA percentage. As I said, the EBITDA margin has improved by six quarters in a row now and to a fairly large extent. Gångbara nivåer i sikt är naturligtvis högre. Vi är ju här för att bygga stort värde i elitkömmat och skapa en riktig tillväxt- och vinstmaskin av det här över tid. Kunderna ska vinna, partner ska vinna, vi ska vinna på det här och aktieägarna definitivt på det. Nu har vi en bra platta och vi visar återigen att det finns bra skalbarhet i affärsmodellen, vilket är ett fint kvitto när man tittar framåt. A bit about product investments, the cash flow, I think I have already mentioned the most. Product investments have dropped a bit in Q2 compared to last year. It mostly depends on the fact that we invested a little more last year. We had a very high pressure in the product development pipeline regarding headless technology and serverless technology. We have now launched it more and more in the refining phase and care phase and we have released it there, so it requires a little less product. resources just now, but we are absolutely ready to invest more. When we move forward, we will do everything where we are a product company at the bottom of our core, our DNA. So it is natural for us to invest, because we have always had the best products and platforms, and to have the very best technology out there for our customers and our partners to work with is very important to us. Kassaflödet ska vara värt nämnda. Vi förväntar oss att kassaflödet ska vara positivt under andra halvåret. Just nu med 8 miljoner i kassan tror vi att vi kommer att ha lite mer i kassan när vi stänger året. Givet att vi når evigt mål och så vidare, men allting nu talar ju för att vi ligger linjärt mot att klara det. Så det var ju fram till oss när vi går framåt. Bara vill bara poängtera det för stabilitetssignalen som jag vill att det ska sända. Alright, om vi kollar lite framåt då, när vi går igenom Q2 där. some general things, but resistance power or stability in the business. We have our SaaS model and that 100% of our revenue is recurring ARR. It gives a lot of stability and predictability. We have high what is called stickiness. We deliver a soft product that is in the core of what it needs. i för att sälja saker digitalt, helt ens visa upp dem digitalt med kärnan för digital försäljning då, så att vi är ju nära en kärna i en tech stack hos en kund. Även en kund har väl valt litium installerat där, customiserat där till sina behov, så har vi ju en, det är ju så mycket till för att man ska byta då, så länge man är nöjd så finns det liksom ingen anledning att byta, sen händer det saker ändå, att den här goden har blivit uppköpt eller i vissa fall till och med går omkull så är det, men det är ju en väldigt ovanlig händelse, så att Men har du inte de anledningarna så finns det ingen större anledning att byta plattform. Vi har byggt vår plattform för att vi ska kunna växa med den i takt med att man växer sin business. Vi har exempel på kunder som har gått från 50 miljoner upp till 2,5 miljarder. Det finns fortfarande inget tak i plattformen som sådant. Det är snarare en design för att hjälpa kunder att växa och kommer att fortsätta hjälpa kunder att växa. So customers who have chosen us are often left behind for a long time. We have a very good position in B2B, we have good speed there, also good festival attraction. And B2B as such, the whole sector has been less affected by low-income in the last two years and is also on a stronger digitalization trend, you could say. The digital transformation of digital sales has not come as far as it did on the B2C side, but it will come very strongly now, we feel, and there is a lot of data that points to that it is actually happening. And we see it ourselves in our business, in our business pipeline, that there is a lot of activity in B2B. Think about how to take steps to digitalize your sales, or get sales support for your sales team, or create self-service for your customers to increase your skills. It will push both from within the company that you want to be modern in the front and deliver the latest to your customers, but also to buy your site. VHB has set much higher requirements now than just five years ago. that it should be digital to be effective and that you don't want to do it in the old analog way for longer. This trend is really strong and it continues to increase in strength. Målsångskraft, eller bara stabilitet, när vi redan var inne på vår kassaposition, att vi tror att det blir kassaförutspositivt det andra halvåret, men nu var jag punkterad med det verkligen. Vi står på en solid finansiell plattform för att växa vidare härifrån, vilket är precis den position vi vill ha, den vi har jobbat för att komma till den. Growth, sustainability, we want to take this to the next level and grow and become a much larger company. Much more profitable too, of course. We have our platform, Lithium Commerce Cloud, which is top-modern. We get quotes, we get fame, we get appreciation around our platform by both partners and customers all the time. And it's something that we're of course looking forward to continuing to grow on. What we are building on is that it should be flexible, it should be able to grow, it should be future-proof, it should meet all types of technical requirements, both on the security and performance side, and it really does. It is something that makes the platform work, no matter what type of contract it is, we have things that work on the cost efficiency side or on the growth side. Sidenhållplattformen hjälper till att göra båda sakerna i kundernas business kontinuerligt. Vi har släppt lite ny teknologi där vi har Service-teknologin och AppCloud som vi lanserade i H1. AppCloud är till för att göra vår plattform ännu mer skalbar och modellär. Vi har olika komponenter där man kan lätt koppla in tredjepartskomponenter till plattformen utan att man behöver skräddarsyda om integrationen hela tiden. Primärt sådana saker som gör att man kan koppla på komponenter runt omkring i sin tech stack. to both much faster and lower costs and much lower project risk. So that's something we think will grow well for us in the future, something that is very good, especially because it delivers a very nice customer value. But a customer value and business value together is what we see being created here. We have an e-commerce cloud business model that is made to grow with customers. Of course, it has been the worst time to introduce such a business model when we started two years ago. We didn't know that at the time, but now we have. And it's been in the area for two years now. So there are good chances that it can give a better discount when we move forward. And when our customers sell more, more revenue will come in our way. That's how we've built it. We think it's very smart that we all have the same goals and instruments for our customers to When they succeed, we and our partners will succeed as well. It will be a very nice win-win situation that we like. Again, B2B. We have a great opportunity in the B2B sector, and thanks to the trend for digitalization being strong and underlying, there are now also some obstacles to investing, purely in terms of how the situation is, and the economic situation is developing. If they disappear, there will be even more speed in B2B. B2B-sektorn då då och vi har redan idag någonstans inflödet nya kunder ungefär 70% B2B och 30% B2C om man drar ganska grova linjer. Någonstans där har vi legat de senaste två åren och vi tror att det här kommer att förstärkas ännu mer när vi går framåt. Plattformen är väldigt väl designad och funktionalitet är den som behövs i väldigt stor utsträckning i nästan alla B2B-case men också möjlighet att man kan liksom Toppa upp det här och skräddarsyra och anpassa efter sina exakta behov. Vad man nu har för någonting i sin manufacturing eller wholesale affärsmodell. Så har lite som svaret. Det var väl alldeles så. Några key takeaways då för Q2 innan vi går in på frågorna. EBIT, the bottom line, improved by 3.5 million, really aligns with the financial goal. We have set up for 2024, so we do what is required to deliver on that goal, to reach this self-financed situation fully and have the growth platform that we want to have to grow the company further. Återigen, hamra på med den, men revenue är 100% recurring. Den växer stadigt, men den har också varit stadigt fast det har varit lite mer avvaktande marknad under ett par år. Det finns ju bra förutsättningar att växa mer såklart. Bara trenden, lönsamhetsförbättringen på EBITDA-nivåer och sjätte kvartalet i rad, att vi ökar på den sidan. Vi anser oss själva vara väldigt väl positionerade för att fånga en upp. Yes.

Skulle investeringar i tillväxt på bekostnad av lönsamhet vara intressanta i det fallet sentimentet man kunde bli avsevärt bättre?

Yes, of course. There is always a balance between growth and profitability when you run a business. It's a name of the game. But of course, now we have a very nice self-financed situation. So we see opportunities. We get parties. We see great opportunities to grow. And we know we have the right unit economics on there. So of course, we are ready to go. And we have the position to do it now, which it has been. Of course, that's the most important thing for now, but it's somewhere now that we think there will be a break in the market, that there will be better conditions and more willingness to invest, and then we are ready to invest more in it as well, of course, to get even more speed.

Yes, you were a little bit into it, but how has the business momentum within B2C, respectively B2B, looked before the summer or semester period started this year?

Yes, I've been dragged into it several times. B2C and B2B have had a tough time for two years. Some have had a very hard time. In some verticals you can rarely buy more premium goods. When you as a private person start to get caught up, That's the first thing you stop buying. So that's been extra tough, of course. But the weather and morning air in the B2C are starting to change. We've seen some pretty good reports now, that they're not growing a lot, but that they've delivered much better profitability, roughly like we ourselves. And that you still have better storage levels, it looks better, it's stronger, and you manage to find a profitable place. So even the B2C side now, many believe that it will get better from the east and forward, which makes the investment will to return there as well. But until now, B2B has been more... Stabilt ur vårt perspektiv och en högre aktivitetsnivå. Och det verkar ju hålla i sig fortsatt också. Men vi tror att båda de här är så vertikala. Både sektorerna kommer att ha en ökad investeringsvilja till hösten. Tror jag det har varit ganska likt avvaktande under våren också.

Kan du berätta lite om intresset för Lithium App Cloud? Hur det har utvecklats sedan vi lanserade det?

UpGlav is quite new, I can say that. I have experienced that the interest there is very large. And of course, as a customer, you can both connect things faster to a tech stack and make it to lower project risk. So both faster and lower cost, lower project risk. So of course it is attractive as such. And that is the great value we want to deliver there. Because it's so new, we still have to connect suppliers, and those we have connected have started to be used, and the uptake on the solution is going steadily upwards. There are two levels of apps. There are public apps that everyone can take part in, and then there are customer-unique apps that we call private apps, which can be used in every such unique customer project. Both of these are of course very... They do the same job for the customer. Du får ner projektrisken, du får en mindre underhållskostnad när du går framåt. Det är lättare och smidigare att driva en tech-stack. Det verkar bli populärt.

Du var inne lite på pipeline. Kan du utveckla lite kring vår pipeline och kommentaren att det ser bättre ut än på länge? När senast såg ni denna aktivitetsnivån?

The last time we saw it, I would describe it as if we were looking back at the pandemic, somewhere around 2021. The last time we saw this level of activity, both in terms of the width and depth of the pipeline, it was the same size as it is now. That's how I would express it.

How has your partner model and partner network developed in recent years? Partner-modell och partner-nätverk.

Partner-modell har ju sett relativt lika ut. Vi har ju ett partner-program i grunden där man kvalificerar upp sig. Det finns en del krav därinne om att man har certifierade konsulter och vissa antal kunder och så vidare så kan man gå upp en trappa. Den har ju varit relativt lik som sådan så nu ändrar vi lite granna parametrar över tid. We have grown our partner network quite a bit. We are now approaching 50 partners in the Nordic countries. We think we are the most powerful in digital trade, but also a part of our consultants are very good at business integration, business systems, logistics, personalization, CRM, and the parts that you also need to be able to run effective digital sales. Jag skulle tycka att vi är nöjda med hur representationen av Lithium Partners ser ut i Norden. Sen så vill vi ta steg såklart ut i Europa och världen också på den sidan. Men våra partners här på Hemoplan kan ju mycket väl leverera internationellt också och gör det. Vi har ju delkunder utanför Norden idag.

En fråga relaterat till det då. Hur ser planen ut för att växa utanför Norden?

Vi har ju inte haft jättemycket fokus på det de senaste två åren, men vi har ju en del planer i pipeline nu kan vi väl uttrycka det som då. From our perspective, we want to find the most effective model to do that. Right now, it's not the time to spend money to get an expansion. Everything happens with quality and effect. But you can see clear tracks that go close to our solution partners. Footprint, for example, or our technology partners. We work with an interesting tech partner that has a much broader footprint than what we have out there, so that you can grow that way.

On that topic, you have talked earlier about creating more open-ended offers to different customer groups. How does this work?

Yes, we have done that to a certain extent. We have just started. The platform allows us to do that. It is so modular and flexible that you can put out much more finished, offered packages to different verticals. It's just a matter of how you do it and to which verticals. Men vi har ju kommit en bit på väg, det har varit mycket så att man tar någon slags analogi kring tåg, att de har lagt mycket räls de senaste åren, men nu ska vi se till att sätta en hel tåg på den där rälsan också.

Vad är det som har bidragit mest till den markanta lönsamhetsförbättringen under första halvåret?

Oh, there's nothing special about that. There's a lot of things that have been done. If you look at our history, we've improved the EBITDA turnover margin, which of course leads down to the EBIT bottom line. So there are several different things, both in terms of real income, and then we do things more effectively today, you could say. So there are several different costs that come from that. We have always been efficient, but now we are not. I would say that we are very efficient and we have no ambition to be. For example, as a software company, the most beautiful thing that exists in my eyes is to grow through the fact that the technology is so good. And then you also get the maximum scalability and profitability in the company. So that's what we're looking for. Now we have found a good platform to stand on and now we're going to take it and grow further.

And you also talked about the fact that the desire to invest among customers has been a bit down for a while. Do you think there is an established need that can lead to some sort of catch-up effect in the future?

Catch-up effect, yes. Yes, there are some who talk about it quite a lot, I should say. Partly how you see, you put together the activity level, how the pipeline looks, and take our perspective on it. but also just the general tone of the economy and the situation out there. There is a lot of talk about the economy starting to turn up and being more offensive in terms of the position as an actor on this market. There is a lot of talk that you just want to invest as soon as possible. Vi ser ju det själva, men vi hör ju också kring samarbetspartner runt omkring. Man fångar upp samma typer av tongångar, både när vi pratar med konsulthuset och med teknologipartners. Så det är väl inte bara vår syn på saken, utan vi tror på, jag tror, att det kommer att börja ta fart i höst. Då tycker vi att vi är i ett bra läge att ta hand om det också.

Tack. Inga frågor?

Okay. Tack för det. Väldigt bra frågor. Jag återstår bara att tacka för att ni har lyssnat eller om ni kollar på streamen efteråt i någon hängmatta någonstans. Jag checkar ut några veckor nu också för semester så jag vill passa på att önska alla där ute en glad och skön och härlig sommar det som återstår av den. Så ses vi till höst igen och kör på helt enkelt. Så tack för nu.