Release Date: April 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased from EUR 162 million to EUR 184 million, a growth of 13.9% despite economic challenges in Europe.
- EBITDA increased significantly by 37.4% from EUR 11.9 million to EUR 16.41 million.
- EBIT increased by 46% from EUR 6.31 million to EUR 9.22 million.
- Order backlog grew by 24.7% up to EUR 57 million, indicating strong future revenue potential.
- The company has a strong focus on improving transparency and will focus more on EBITDA and EPS figures in future reporting.
Negative Points
- EPS decreased by 28% from $0.75 to $0.54, primarily due to investments in acquisitions and higher interest rates.
- The company proposed not to distribute a dividend for 2023 due to financial strategy and high-interest rates on loans.
- The equity ratio decreased from 35% to 29%, approaching the company's internal minimum threshold of 25%.
- Software share is down due to a shift towards SaaS models, which spreads revenue over several years instead of recognizing it upfront.
- There were unexpected legal costs in France amounting to EUR 365,000 due to employee terminations.
Q & A Highlights
Q: Do you have the organic growth figure for 2023 excluding all the M&A revenue at group level and then maybe also at a segment level?
A: The overall organic growth figure for 2023 is 9.2%, which does not include any acquisitions. For EIM, excluding MIP, the organic growth was negative due to a major impact on the PLC business shifting to SaaS and a three-year wave of contract renewals. For PLM, the organic growth was 7.8%, with France achieving close to 10% growth and Germany around 4%, excluding services. Including services, the growth in Germany was 6.8%. For 2024, a minimum organic growth of 5% is expected for both EIM and PLM.
Q: How big of a margin step-up do you expect for 2024? And can you provide more detail on how you plan to improve profitability internally?
A: The margin step-up for 2024 will be driven by better utilization rates and performance levels of employees. The company plans to have discussions with underperforming team members and make necessary adjustments. There are no plans for restructuring, but employees who do not see opportunities within the organization may need to seek them elsewhere. This approach is expected to be the main driver for margin improvement on the organic side.
Q: Can we expect further steps in the USA operations this year or next year?
A: The company currently has 13 employees in the US and is considering either shutting down the business or making a significant jump into the market. The decision is to expand, potentially through an acquisition of a team with 50+ employees, to strengthen the backbone and introduce all products to the US market.
Q: Are you also discussing or thinking about changing the dividend policy?
A: There was no direct answer provided regarding changes to the dividend policy. The current policy is based on the balance sheet figure and net profit, and there was no mention of a shift to basing it on EBIT or EPS.
