Crayon Group Holding — Earnings Release 2024

Nov 6, 2024

Crayon Q3 2024: Significant profitability growth and strong working capital improvement

Crayon Q3 2024: Significant profitability growth and strong working capital improvement

Crayon Group Holding ASA (OSE: CRAYN) today reported its third-quarter results, delivering significant profitability growth. The adjusted EBITDA was up 66 percent, and the working capital improved by 748 million NOK. The gross profit increased by 14 percent.

“I am pleased to present a quarter characterized by strong, profitable growth, higher margins and significant improvement in working capital, despite a more cautious market than expected. With our differentiated and scalable business model, we are well positioned to take full advantage of the growth opportunities ahead,” said Crayon Group CEO Melissa Mulholland.

Gross Profit increased by 14%, primarily driven by strong growth in the Nordics and Europe. Demand for Software and Cloud remains strong across multiple vendors.

Adjusted EBITDA ended at NOK 238m, reflecting a margin of 16.6%. This is an increase of NOK 95m compared to the same quarter the previous year. The increase is a result of the company’s clear priority to improve profitability in the consulting business as well as scaling the international markets.

Net working capital was NOK 157m, an improvement of NOK 748m compared to the same quarter previous year.

Financial highlights:

Gross Profit NOK 1 435m Up 14%

Adjusted EBITDA NOK 235m Up 95m

Net Profit NOK 82m Up 95m

Net working capitalNOK 157m Up 748m

Significant growth opportunities

“Even if we experience strong demand and are ramping up to take advantage of new opportunities, the overall market has been more cautious than expected. Consequently, we are making minor adjustments to our guiding. However, we still see strong growth opportunities, increased profitability and improved working capital, driven by our service-first business model focused on customer value and careful cost-control”. said Mulholland.

Updated guiding:

Gross profit growth: 15% to 17% (prev.18-20%)

Adjusted EBITDA: 19% to 20% (prev. 18-20%)

Net working capital: -10% to -15% (prev. - 5 to -12.5%)

Microsoft Incentives

In reference to the announced shift in Microsoft incentives that has received recent attention, it is important to underline that these types of shifts have always been a part of Microsoft’s partner model.

“As Microsoft Partner of the Year and fifth largest global partner, we believe that the evolution of incentives will continue to support our profitable growth in line with market demand, the way they always have,” said Mulholland.

Microsoft stresses that the incentives will continue to benefit its partners and increase over time.

“The incentives and earning opportunities as a percentage of partner revenue have increased over time as the company and partner network evolves. We’re now shifting more partner funding into different strategic areas and investing more than ever in our partners to drive growth in key areas like Copilot, Data & AI, Security, and migrations. This move is all about helping our partners innovate and grow in these crucial areas,” said Jeffrey York, Vice President of Global Partner Investments, Global Partner Solutions Microsoft.

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The financial report and presentation for Q3 2024 are enclosed and available at https://www.crayon.com/investor-relations. CEO Melissa Mulholland and CFO Brede Huser will present the results in a live webcast at 8:30 am CET that can be accessed at www.crayon.com/investor-relations. It will be possible to submit questions online. To join the conference call by telephone and ask questions, please use the information below.

Dial in numbers:

DK: +45 7876 8490

SE: +46 8 1241 0952

NO: +47 2195 6342

UK: +44 203 769 6819

US: +1 646-787-0157

DE: +49 30 21789327

Conference Code: 115901

A recording of the webcast will be available on-demand after the live event has concluded.

Investor contact:

Kjell Arne Hansen

Head of Investor Relations and Corporate Finance

ir@crayon.com

+47 950 40 372

About Crayon: Crayon is a customer-centric innovation and IT services company with over 4,000 team members across 46 countries. We optimize businesses’ IT estate to help them innovate with expertise they can trust. Our services create value for companies to thrive today, and scale for tomorrow. For more information, visit www.crayon.com.