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W5 Solutions AB (publ)
10/29/2024
Hello and welcome to WFM Solutions' third quarter report for 2024. My name is Hanna and I am joined by our CEO Evelina Hedskog. Welcome, Evelina.
Thank you, Hanna.
During the coming minutes you will get an overview of WFM's financial results and important events during the quarter. Evelina, can you briefly summarize the highlights during the quarter?
What we are most looking forward to right now is that we have an order book that has increased significantly over the past few months. And this is of course the very foundation for us to be able to grow and a message of strength, I would say. So it feels great that we have come this far. At the same time, we have worked hard with several strategic initiatives in the company, and that includes many things, but among other things, we have established a new vision and mission, and we have also set up new financial goals for the company.
Exciting, and what does the new vision and mission mean?
I would say that it gives us a clearer identity as a modern and relevant defense company. It shows more clearly that it is just defense that is our main customer and it also gives an increased focus on sustainability.
Can you tell us a little more about the new financial goals?
We are now aiming to convert 1 billion SEK to 10% when we close in 2027, so that's three years from now. It feels both good and challenging to have set these goals, but we have a clear strategy on how to get there. It includes increased efforts on the export market, It is about further acquisitions and it is also about focusing more than before on system business and not just product business.
During the autumn, we have, as mentioned earlier, implemented a new business area structure. Can you tell us a little more about what changes have been made during the quarter and how you see these changes can contribute to VFM Solutions' continued growth in the long term?
From September 1, we organize our seven subsidiaries in three business areas, power, training and integration. This becomes a more efficient way to work in the group. It is also a sustainable platform for future growth. We can scale this organization that we have established. And we have established a new group management, which of course has the task of managing and leading the business. But it is also about coordinating group functions. We are very geographically distributed, so it is important that we can get that type of function out to the entire business. So yes, it is a big change, but it feels great.
If we switch subjects and talk about the financial result, we see a sluggish profitability. What are your thoughts on that?
We can't ignore the fact that profitability has the potential for improvement. But I think the most important thing right now is to increase the order book by as much as 50% in the last quarter. And that is a message of strength, and it is also the foundation for future growth and future profitability. In addition to increasing the order book, we have also won a framework agreement worth 0.5 billion, and that is something that, with its decrees, can hopefully also drive order entry forward. So if you look at the placement situation for the staff, which was not very fun during the first half of the year, they are now back on a much more healthy level, given that we have received these orders. And that means that profitability will also become more healthy over time. So I think we are on the right track, quite simply.
And in addition to the order entry, what do you see more that can affect profitability in a positive direction?
We have several development projects underway in different parts of the company, where we have had a number of important delivery milestones on the development side over the past few months. We have shown that we have a stable and quality-focused organization, and this is a strong message to the market, because now the serial deliveries in these projects are coming, and then it is We have succeeded in the development phase and I think we can be proud of what we have done now and it is also important for the future.
If we conclude today's interview and look into the future, what is the focus for WFM in the future?
In summary, we have a tough period ahead here, even if the order flow is starting to point in the right direction. But I think you should see it from the perspective that we have a stable gross margin, we have a staff cost that is now in balance with the order stock we have, and the rest of the external costs are in line with last year, despite the fact that we have carried out a number of important strategic initiatives in business in recent times. So that feels good. But again, ordering is where we put our primary focus, because that is the key to continued growth. And it feels good that we have dealt with this period with a little more calm in the business, to put it that way, with actually getting these structural parts in place. So now when the businesses start to fall in, we are ready, quite simply. And it feels really exciting with these new financial goals. We know where we are on the way. We have a clear way out there. And now it's just go.
Tack Evelina för att du har delat med dig av dina insikter och planer framåt. Tack så mycket Hanna. Tack till er som har lyssnat in idag.