Litium AB (publ)

Hi, and welcome to today's webcast with Lithium, where CEO Patrik Settlin will present the company's Q4 report for 2024. After the presentation, there will be a Q&A, so if you have any questions for the company, you can send them in the form to the right. With that said, I hand over the floor to you, Patrik.

Thank you, and welcome to all of you who are watching the stream. My name is Patrik Settlin, as Ludvig said, and I am the CEO of Lithium, at least today and tomorrow. Today is a special day. Martin Belenius, who is also here in the studio with us, will present himself at the end of the interview. In the studio we also have Malin Modolla, our marketing manager, who answers questions in the chat. So ask questions in the chat and we will answer them at the end of the interview. But for new listeners and perhaps new shareholders, we'll start by talking a little bit about what Lithium does, what it does for us in the market. A little repetition for some, new for others. But then we'll go into Q4 and the whole year's report for 2024, followed by a little forward look. Then Martin will come in and I'll round off with questions. So that's how we'll roll this out. Lithium, for those of you who know us, you know that we are a tech company within commerce. We have a product called Lithium Commerce Cloud, which we use to run advanced digital trade around the world. The product itself is built as a building site, the most important parts that need to be driven, advanced and volume-based trade. It needs something like the products, there we have PIM, it needs something that shows up, digital merchandising for those who are going to buy things, where we have our CMS and front-end parts, and then we have all the logic that goes with both moving data out to a purchase decision, but also to take it home and therefore deliver it, which is in the commerce parts. All of this is packaged together in an all-in-one solution, but we can also break up these parts and use them individually, and we have accelerators so that they can move forward quickly. Then other connections are also required to other systems, such as an economy system and logistics system, and other things to do with personalization or marketing, for example. And there we have something we call AppCloud and you can also build your own integrations and adjust the platform as much as you want. And that is done together with a partner. We deliver via a partner model and we work with them. And we think they are the very best in e-commerce and digital commerce in the Nordic countries. So we have 40 to 50 solution partners today who together with their customers shred the platform to the exact needs. When it's done, we deliver it to the so-called single-tenant SaaS and you subscribe to your platform. So that's what it looks like. This is something a lot of customers have discovered and think is good. We have over 200 customers today and we have a lot of nice companies with us. We have the whole range from B2B, those who sell land, stone, plates, ventilation, commercial properties and so on, to steel, to distribution, to those who are really cutting edge on so-called direct-to-consumer business models, such as Revolution Race, which has been a customer for us for many years now. We are very proud of this and we also see customers who sell via the Leasing platform all over the world. Most of them, as far as I know, are from over 150 countries that we deliver and have a digital presence on. So that's something we are very proud and happy about. And the most important thing for us at Leetium is that our customers should rather outclass their competitors in digital trade. And when it goes well for our customers, it also goes well for us, which takes us into Våran egen Q4 och helår 2024. Ni som har varit med och sett rapporterna som publiceras i morse såg ju att vi återigen levererar på vårt finansiella mål. Vi slog det i 2023 och vi klarade av det nu också igen. Vårt finansiella mål var att bli positiv på ebit, det vill säga cash and bid, och att vi verkligen tjänar pengar i bolaget. Det är ju en resa vi har varit på under ett par år att ställa om till ebit. And that's what we managed to do. We had a pretty significant improvement as well. And if you look back one more year, we have an even stronger improvement. We improved by 4 million from last year. But if you look back two years to the full year 2022, we have improved by about 13 million. And that's something that is... I feel proud of it and it also shows that the cost efficiency program that we launched in 2023 has really had an effect. But it's not just about saving costs, it's also about growth, of course. And we also managed to manage to grow during this time despite a pretty tough market. Nu är senast så är vår annual recurring revenue, vårt viktigaste KPI-bolaget, uppe på dryga 72 miljoner. Och det var en tillväxt på ungefär 5 procent den här gången. Viktigt att bemärka så här tycker jag att 100 procent av våra intäkter är just återkommande, så kallad RRB recurring. Det är en väldig styrka om man jämför med lite olika jämlikade peers ute på marknaden som vi brukar jämföra med då då. It is worth noting that in the last five years, the revenue has been up more than 20% in Q4. This indicates that there is a better market for our customers. a better sales position for them, because this is based on parameters such as sales volumes and also how many platforms are used technically. But it is also evidence that our price model, business model, which we have already set up a few years ago, really works and starts to give some effect. It has been a rather ungrateful or bad timing to introduce that model, but when the market turns up, we also get more revenue from these models. If we look at the target market, we have experienced since last fall that the optimism is starting to return in the target market. Tittar efter nya tekniska lösningar och också viljan att investera har ökat. Snabbare till beslut, det finns fler affärsmöjligheter i omlopp och det blir snabbare säljprocesser igen. Det har varit två år, det har varit ganska mycket fram och tillbaka i de här säljprocesserna. Mycket studsande mellan ledning och styrelse, helt naturligt i den typen av läge vi har varit i. Men nu börjar de flesta ana en ny marknad och vädrar lite morgonluft och agerar därefter, vilket är glädjande. Vi är Politium. Vi är nu självfinansierade. Vi är i en bra position för att fortsätta att växa och växa lönsamt. Så det är ett bra läge för min efterträdare Martin att komma in och ta över. Möjligheterna, handelsutrymmet är öppet så att säga. Det är alltid en fördel. And Martin, and then the first one, will perform himself soon. But in my eyes, it's perfect to get to run this company to the next phase. We're going to switch from the focus of the year, now we've reached this goal, to look at more growth again. And Martin has a very nice track record of running growth in a company called Medjust, where it's been zero for many years, and taken out of the world. And I think it's Sweden's largest SaaS company today, with a billion-dollar turnover or something at that time. Martin will tell you more about it. Martin will join us tomorrow and I'm still here for a while. I think this will be great for the company. Before we let Martin in, let's dive into the financial statements. As I mentioned, ARR is the chart for the whole. It shows that our long series of quarterly improvements continue. Som jag sa på förra sliden så har ju rörliga intäkter ökat, vilket ju är glädjande här. Det är någonting vi väntar oss ska fortsätta också då. If we look at revenues and gross margin, we see that the blue stacks are revenues and the yellow dots are gross margin. Revenues increased about as much as they did last year, about 5%. 100% recurring, as we said, and this revenue mix is worth noting that we are up to 21% now in total, 79% of fixed income. Bruttomarginalen är ofta lite slagig mellan kvartal, så här tittar man över hela året så får man lite jämnare kurva. Vi har legat under flera år runt 70%. Vi har skösat en del ny teknik som vi räknar med ska förbättra den här bruttomarginalen när vi går framåt. Gradvis kommer det att ske när vi går framåt över tid. Lönsamheten, vi har ju redan pratat mycket om det här men vi har ju varit på en resa där vi har förbättrat den ganska markant får man ändå säga. Den här gången tittar vi på kostnader så är det blå staplar, gula prickar, EBITDA, alltså inte EBITDA utan EBITDA rörelsesdata. Då ser vi att kostnaden ökade lite grann i Q4 jämfört med förra året men ganska marginellt ändå och eftersom intäkten ökade mer så har vi ändå förbättrat lönsamheten då då. The EBITDA margin was over 25%. I think it's worth noting that this is the eighth quarter in a row that we incrementally improved compared to previous years. As I mentioned earlier, the EBITDA has improved by 13 million in the last two years. So, some investments, cash flow. The product investments were in line with last year. We continue to invest the surplus we generated in the business. It was even a bit up this time. The focus during the quarter, Q4, has been on Framförallt djup i funktionalitet kring PIM, produkthantering och order management, orderhantering och att göra vår redan bra användarupplevelse ännu bättre så att vi vässar till vår användarupplevelse för de som sitter och jobbar med Lithium varje dag och flyttar fram positionerna för vad ekonomi är för någonting. Det är därför vi gör det här. Kassan är solid. Vi har 7 miljoner i kassan när vi stänger Q4. Eftersom vi nu är positiv på ebit-sidan på elårsbasis så indikerar det att vi har en stabilt kassaflöde att vänta framåt. Let's take a look at the future, and then Martin will introduce himself. We usually divide it into two parts. The first is how stable the business is. It has been important for the past two years. The market has changed a bit, but we will talk about growth later. It's called Business Resilience. As I said, we have a very good SaaS model in these times. We also have 100% of our revenue that is recurring. We have high stickiness in the product. We deliver a core in our e-commerce platform. When it comes to digital trade, it's really core software. So everything that has to do with digital sales goes through a platform that we deliver. The installed base we have, they have customized and adapted to their needs. And it's also very integrated, it's like a tech stack. So we have invested in customers and we work very much with our customer satisfaction that we will continue to be chosen by customers that we already have on board. And it works well. Vi har en väldigt stark position och bra fäste i B2B-sektorn. Och här är ju den digitala transformationen lite mer omfattande nu. Konsumentsidan har väldigt mycket redan skett. Det sker ständigt i utvecklingen där också, att man pushar gränserna absolut. Men i B2B så är det mycket kvar att göra. Och den här trenden att göra förändringar, att göra transformationer, är starkare än i B2C-sidan, upplever vi just nu. pengarna, vi har som sagt en solid kassa positiv ebit och vi har en bra plattform för att växa vidare och växa vidare lönsamt Tillväxtdorven och skalbergsmöjligheter. Vi har ju Lithium Commerce Cloud, toppmodern ekoplatform som är i marknaden sedan ett par år tillbaka. Den vässar vi och förbättrar hela tiden, bygger mer djup funktionalitet, användarvänlighet. Den är modellär, den är snabb, den är flexibel. Vårt värdeerbjudande funkar både bra när kunder vill växa, men också när man vill effektivisera sig och spara ner procestid så att man kan driva sin business ännu mer effektivt. or do both. Most of them make it possible to get more sales and make it more efficient. We have released a lot of new technology during 2024 that is good from several points of view. It is mainly the service technology that allows all platforms to drift towards customers, which makes it more dynamic, more scalable, more cost-effective as well. And app-loaded architectures, which means that we can build out, or every customer can build out their platform much easier and faster. So we deliver finished apps, integration apps, for example, that you can connect to. So this is good for both our customers and also for us and our partners. We have a business model that is designed to grow with customers and that is something that we over time will think will boost our growth. And it is definitely an advantage when the market turns upwards, we also go with it when customers succeed better out there, which is the whole point with business models. We want to align ourselves with customers so that we can earn on the same thing, that it goes well. Vi har en väldigt stor möjlighet, har haft den i några år, har den. Vi har bra träff där också i B2B-sektorn. Vi har en stark position, vi har en bra product market fit för vår plattform. Marknaden är enorm. Och den här digitaltransformationen pågår allt snabbare och den är stark. Så det här är ju vårt fokusområde när vi tittar på Skalbergs initiativ framåt. Och det är någonting det kommer att fortsätta att vara under Martins ledning. Vapro Martin! So, are you here today? There are many who are curious about you, surely. You are formally taking over tomorrow, but I thought it would be a good opportunity for you to present yourself again, so here you go.

Perfect, thank you. Perfect. Hi everyone. Before I get into myself, And who I am, I would like to start with a big thank you to Patrik. It is an impressive journey that you have made with Lithium in the last five years. I mean, you have taken a company that at that time made relatively large losses to what today is a very, very nice company that makes a profit. At the top of this, I also think that you have created a Lithium at a very, very good place, a good platform from which we can now take the next step. So no matter what you choose to do as the next task, I'm sure it will be gallant. And if you miss us, you know that the Lithium door is always open to you. Good luck with whatever you choose to do, Patrik. My name is Martin Belenius. I am the CEO, formally, during the morning. My background in softwares comes earlier from a role as CRO for a global company called Medius. My primary goal was to grow ARR from about 300 million to create Sweden's largest SaaS company. With that said, I have to say that this next chapter with lithium feels incredibly inspiring. Jag ser en enorm potential med Lithium och jag tror verkligen att med rätt investeringar, ett växande team, en klar och tydlig go-to-market-strategi, fortsätta bibolla fokus på att bygga och leverera a product that generates increased sales and value for our customers and partners, then I definitely see a great opportunity for Lithium to become a shining star in Europe as an e-commerce platform within Business to Business. As Patrik also mentioned, Och med den stabila grunden som vi har skaffat oss på Litium så kommer fokus nu att skifta mot tillväxt och ny kunstanskaffning. Jag behöver bli lite mer varm i kläderna, men min förhoppning och min ambition är att inom kort kunna kommunicera och presentera nya mål inom det här området. Jag kan inte betona nog hur viktigt det är att ha en hälsosam ny kunstnadskaffning inom Lithium. Enligt mig så är Lithium på en väldigt bra plats. Vi har super kompetenta och duktiga människor ombord. Såklart finns det saker vi kan göra bättre. Ambitionen är naturligtvis att tillsammans med alla de här medarbetarna skapa ett väldigt fint bolag som genererar ett högt kundvärde. Återigen, ett stort tack till dig Patrik och till er befintliga som nya aktieägare. Så vill jag bara säga att jag verkligen ser fram emot att börja jobba tillsammans med er och för er. Tack så mycket.