Neovici Holding AB ser. B

It's Friday the 28th of February and I'm here with the CEO of Neovici, Jan Berggren. How are you? Good, thanks. How are you? I'm great. You have released your quarterly report for the fourth quarter and the whole year, 2024.

How has it gone? It has gone well, I think. We have an exciting year ahead of us. It is a transformative year. We went to the stock market. We ended the year with an exciting acquisition. So, in terms of growth, if we think about revenue, it is not yet visible. But we have, so to speak, cracked in the manager, so that 2025 will be the year when it happens.

That's right. If we dive into the figures for the report, you ended up with an increased turnover in Q4 of about 4% to almost 14 million and with 6% to 65.3 million for the whole year 2024. How should you look at those figures?

Yes, everyone thinks that it should go faster. That would also make me happy. But we have focused on preparing for growth this year. We have put a lot of time on the stock market introduction. A lot of time has also gone into this acquisition. So we are still happy with the results.

So 2024 was a year of transformation and investment. Is that how you should summarize it?

in time and in the organization and also in terms of money.

A big news during Q4, as you mentioned, was the acquisition of the IoT company Wraptech at the end of December. Would you like to tell us a little more about that business and how the shareholders should be able to interpret the importance of it?

Yes, it is a trend in this vertical that we are doing. It is retail. Detail trade in Swedish. Detail trade and especially pharmaceutical stores. Where Wraptech has already established a customer base. It is interesting for us. But simplified we can say that Wraptech is good at hardware. We are good at softwares. We get married and get a fantastic product that handles the items from purchase to store to sales. And then you get this transformation, that is, the store becomes data-driven. We can take an example that the prices that are changing now all the time, it is very important that there is the right price on the shelf. And then there are labels, there are signs, it's all about having everything digitally. The merger happens because it is physically and digitally overlaid. If I want to have a campaign for a couple of hours, it is not possible without this technology. The time when the price changed once a month is gone. We all know how often the price changes.

The main product that Wraptech has is these digital price labels that you see on shelves in stores. It's about the same thing as if there is another stock company called Pricer, what they do, if you want to understand what it's about.

Exactly. Pricer is the grandfather of this with digital price labels. Reptech has taken one more step and it's signs and it's different types of displays, even on a scale. You don't think about that, but there must also be the right price. And they have a spectrum that is more comprehensive.

And all this is connected and connected to your business system.

Exactly. We have a platform called Cosmos and all this is connected end-to-end from purchase to sales.

So now you own both gungas and carousels and the whole Tivoli?

The whole Tivoli, yes.

Exciting. The revenue if you count with Raptek will make you go from about 65 million for 2024 to over 100 million under 2025. So you will be an essentially larger company, but the journey does not stop there if I understand it correctly.

That's right. We will pass 100 with ROGE this year and we continue this conversion strategy. We will also grow organically. This is just the beginning of the year. 2025, even if February is now over, we will see incredible growth during the rest of the year.

And the acquisition also means that you increase your customer base with over 1,000 new customers. How are you going to look at the development of the customer base and sales here in the future?

We have had and have a strategy to approach larger companies that have a mass of suppliers, a number of thousands of suppliers that we want to include. But here we already see with Wraptech's model, we have a thousand customers that we are going to develop further. And it is smaller companies that are incredibly exciting for our next step in the strategy.

So you are growing strongly within the retail vertical with this acquisition? Exactly. And you have started with one acquisition as you mentioned here with Raptic. Will we see more acquisitions in 2025?

I hope so. We are constantly looking for companies that are profitable and have an interesting customer base. Moreover, we would like them to have a good organization when it comes to different types of support and sales.

If we go back to the report and the figures, you halved the loss for Q4, but the EBITDA result for Q4 and the whole year is still negative. But you have said that the plan earlier is to reach profitability during the coming year, i.e. 2025. Do you want to give an update on that?

We still have a high gross margin. It is, as you can see in the report, at 70%. That is, we are a SaaS company at the bottom. So we can lower the costs when we want, if we want to reach profitability, but we have chosen to focus on growth. And the plan is to get the cash flow positive this year at the EBITDA level. So we are working hard for that with organic growth and also with acquisitions.

And now you have taken in some money in connection with this acquisition of Wraptech. Do you have enough cash then? Because it takes you to profitability, as it looks now.

Yes, we have.

This with AI agents and specialized, industry-specific FinTech solutions seems to be the call right now. How is the interest for you out there on the market right now?

We notice that we are seen on many radar screens. We also see that in America, especially, people talk a lot about these AI agents. One example is in bookkeeping services, accountants as they call it. It is about to become a black hole, 3 million. only America disappears. It's a 100 billion dollar market. They will disappear in 15 years, they will retire, but it will not be filled with new ones. This has to be solved with AI agents who do this job. It is not a teenager who wants to invest in this today.

So you get inquiries from American investors, but also European investors who have identified this with vertical AI solutions that are interesting, is that right?

Exactly. Retail is an example, but this with fintech, if you just look at financial transactions, is of enormous interest. There are investors who only invest in companies that are doing that type of service. We are in the right place, I can feel that.

And if we take the step back again, it's time to end this interview. Your core business is still here in Sweden. How is the existing business with the big customers, especially in retail, going here in Sweden?

We have expanded the contract with existing customers. The transformation continues and our volume of transactions is also growing. There are many millions of transactions we handle in our platform. There are hundreds of millions of decisions we make. It's easy to forget, but we are already there to handle these boring tasks instead of people having to do it.

So you have received increased contracts with these existing customers, if I understand correctly?

Yes, exactly. And we have reported about this earlier.

We see that it will increase, continue to increase, in my hope, during 2025. Super exciting! And finally, what do you most look forward to during the current quarter, Q1, and the rest of 2025?

I agree with the shareholder, profitable growth. That's the heading. Full focus on that? Full focus on that. On the way there are several businesses, organic and acquisition growth, very simple. But what I look forward to most, apart from that, it is exciting to see different parts of the world, how we can develop the different businesses that we have and that we will get in 2025.

To sum it up, 2024 was a transformative year for the company. You made a big acquisition and now in 2025 you will achieve profitable growth, maybe more acquisitions and continued organic growth. The integration of Raptek will hopefully bear fruit. Absolutely. Exactly. Good summary. Thank you very much, Jan Berggren, for being with us today. Thank you for having me.