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Webstep Investor Presentation 2024
3788_rns_2024-08-27_210a4a53-d4f8-4978-ae0e-3c4e32416115.pdf
Investor Presentation
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Agenda
Highlights from the quarter
Financial Review
Organisation and projects
Market update and outlook
Highlights from the quarter
Highlights
- ● New CEO Kristine Lund in place from May
- ● Interim CFO Nina Stemshaug in place from end of July
- ● Further strengthening group management to drive growth and performance
- ○ Eva Johannesdottir appointed as new general manager for our Stavanger Office starting in October
- ○
- ● Webstep AB sold to B3 Consulting Group
- Transaction closed beginning of July
- NOK 51 million proceed from transaction to be allocate to buy-back of own shares and dividends
Organisation and projects
Organisation and employees
The Webstep experience going forward
- ● Strategy process kicked off pre-summer picking the path how to reach our future growth targets
- ○ Create synergies cross locations to attract large customers and create upsell opportunities
- Efficient processes to deliver profitable growth
● Strengthened leadership and organisation
- ○ Nina Stemshaug appointed Interim CFO, improving Webstep's analysis and finance ahead of the new CFO
- ○ Regional offices reinforced to enhance efficiency and collaboration
- ○ Successful recruitment of new General Manager in Stavanger Eva Johannesdottir starting in October
- ● Inspiring Enterprise market track record
- Significant growth at Equinor is inspiring
- Highly skilled teams give Webstep a crucial edge
- ● Recruitment aligned with Webstep's profile
- ○ Experienced consultants remain in demand
- ○ Continued focus on the right skills and deep expertise
- ○ Cross-sale opportunities across locations
Sklls- HiSklls CallerSim
- Sklls is located in Stavanger, and offers simulation training through their core product, HiSklls.
- The HiSklls technology utilises advanced machine learning algorithms, neural networks, artificial cognitive intelligence, and natural language processing (NLP) to create a realistic communication simulator where users can practice and learn without any real-life consequences.
- Webstep has assisted Sklls in the design of their latest solution, the mobile game CallerSim. The game is designed to help children and young people practice handling emergency situations and communicating with various emergency services in a safe, virtual environment.
- The app is mainly "prompt-based." Everything from sound, illustrations, and the voice assistant you interact with in the game is created using AI. The app is designed as a game, incorporating elements of gamification to enhance the user experience.
- The goal is to help children and young people feel more confident about whom to call and what questions they might need to answer if they ever require assistance from emergency services.
Adept Concept™
- Adept Concept has been specializing in compliance management and risk management systems for more than 20 years, serving a variety of industries with a primary focus on the offshore sector.
- Webstep has developed the "Adept AI Engine," utilising AI technology to automatically track regulatory changes and classify these changes.
- The "Adept AI Engine" is using NLP and Machine Learning to streamline the process of documenting compliance with requirements by up to 90%.
- With the permission of Adept's clients, we have developed the AI algorithm using high-quality Adept™ data collected over many years. As a result, the solution is not only "language model"-based but also heavily "knowledge"-based.
Read more about Adept Concept here: https://content.webstep.no/adept-concept-avansert-samsvarsstyring-gjort-enkelt/index.html
Financial review
Key figures - Group
| Q2 | Q2 | YTD | YTD | FY | ||
|---|---|---|---|---|---|---|
| NOK million | 2024 | 2023 | 2024 | 2023 | 2023 | |
| Revenues | 258.3 | 249.5 | 520.2 | 526.7 | 1,000.0 | |
| Change | 3.5% | 16.0% | (1.2%) | 17.5% | 12.6% | |
| EBITDA | 24.8 | 23.0 | 53.1 | 53.5 | 65.7 | |
| EBITDA margin | 9.6% | 9.2% | 10.2% | 10.2% | 6.6% | |
| EBIT | 18.9 | 17.6 | 41.1 | 42.8 | 18.5 | |
| EBIT margin | 7.3% | 7.1% | 7.9% | 8.1% | 1.8% | |
| Net profit | 13.9 | 12.8 | 29.9 | 31.5 | 4.4 | |
| Net free cash flow | 31.3 | 6.3 | (0.4) | 22.5 | 71.0 | |
| Cash flow from operations | 32.2 | 7.8 | 1.4 | 25.7 | 76.5 | |
| Equity ratio | 51.6% | 54.9% | 51.6% | 54.9% | 50.7% | |
| Earnings per share (NOK) | 0.50 | 0.46 | 1.08 | 1.14 | 0.16 | |
| Earnings per share, fully diluted (NOK) | 0.50 | 0.46 | 1.07 | 1.13 | 0.16 | |
| Number of FTEs, average | 527 | 559 | 531 | 557 | 561 | |
| Number of FTEs, end of period | 530 | 561 | 530 | 561 | 570 | |
| Revenue per FTE (TNOK) | 489.8 | 446.7 | 979.9 | 946.0 | 1,784 | |
| EBIT per FTE (TNOK) | 35.7 | 31.4 | 77.5 | 76.4 | 32.9 |
Q2 Comments
- Figures includes discontinued business from Webstep AB. Going forward the figures will only include continuing business from Webstep Norway.
- The Norwegian segment accounting for approximately 89 % of the consolidated revenues in the quarter.
Norway Q2
Key figures - Norway
| Q2 | Q2 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| NOK million | 2024 | 2023 | 2024 | 2023 | 2023 |
| Revenues | 229.5 | 212.5 | 459.2 | 451.1 | 857.7 |
| Change | 8.0% | 4.7% | 1.8% | 16.5% | 12.2% |
| EBIT | 19.0 | 16.5 | 40.4 | 38.9 | 17.0 |
| EBIT margin | 8.3% | 7.8% | 8.8% | 8.6% | 2.0% |
| Number of FTEs, average | 448 | 457 | 448 | 455 | 459 |
| Number of FTEs, end of period | 451 | 459 | 451 | 459 | 471 |
| Number of workdays | 60 | 58 | 122 | 123 | 251 |
| Revenue per FTE, TNOK | 513 | 465 | 1025 | 991 | 1,867 |
| EBIT per FTE, TNOK | 42 | 36 | 90 | 85 | 37.1 |
| Revenue breakdown | Q2 | Q2 | YTD | YTD | FY |
| NOK million | 2024 | 2023 | 2024 | 2023 | 2023 |
| Oslo | 104.4 | 90.7 | 212.3 | 190.9 | 372.7 |
| Regional offices | 108.0 | 104.6 | 212.0 | 222.7 | 414.6 |
| Subcontractors | 14.2 | 12.7 | 29.3 | 29.6 | 57.6 |
| Resale of licenses | 2.9 | 4.5 | 5.2 | 7.7 | 16.4 |
| Other | 0.1 | 0.0 | 0.3 | 0.1 | (3.6) |
| Total | 229.5 | 212.5 | 459.2 | 451.1 | 857.7 |
Q2 Comments
Comparison to corresponding period last year
- Revenues from own consultants
- Q2 212.4 MNOK, increased by 8.8%
- Growth primarily driven by increased hourly rates and two more working days
- Solid growth in the Oslo region, up 15.1%
- Slightly lower utilisation in the regional offices
- YTD 24 424.3 MNOK, increased by 2.6%
- Growth primarily driven by increased hourly rates and number of consultants, offset by slightly weaker utilisation and one less working day
- Q2 212.4 MNOK, increased by 8.8%
- ● EBIT affected by
- ○ Increased revenues
- ○ Effects from the implemented cost reduction program
- Accrued costs for temporary increase in employer contribution
- Q2 1.4 MNOK (0.4)
- YTD 2.9 MNOK (0.4)
● FTEs 451 end of period
○ Reduction of non-billable FTEs related to cost reduction programme
Sweden Q2
Key figures - Sweden
| Q2 | Q2 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| NOK million | 2024 | 2023 | 2024 | 2023 | 2023 |
| Revenues | 29.7 | 37.9 | 62.9 | 77.4 | 142.3 |
| Change | (21.7%) | 19.9% | (18.8%) | 24.1% | 12.1% |
| EBIT | (0.0) | 1.1 | 0.7 | 3.9 | 1.4 |
| EBIT margin | (0.1%) | 3.0% | 1.1% | 5.1% | 1.0% |
| Number of FTEs, average | 80 | 102 | 83 | 102 | 101 |
| Number of FTEs, end of period | 80 | 102 | 80 | 102 | 99 |
| Number of workdays | 60 | 59 | 123 | 123 | 251 |
| Revenue per FTE, TNOK | 371.2 | 371.7 | 760 | 759.3 | 1,405 |
| EBIT per FTE, TNOK | (0.4) | 11.0 | 9 | 38.7 | 14.0 |
| Revenue breakdown NOK million |
Q2 2024 |
Q2 2023 |
YTD 2024 |
YTD 2023 |
FY 2023 |
| Regional offices | 24.0 | 29.8 | 49.7 | 61.5 | 112.0 |
| Subcontractors | 5.3 | 7.9 | 12.6 | 15.4 | 30.0 |
| Other | 0.4 | 0.2 | 0.6 | 0.5 | 0.3 |
| Total | 29.7 | 37.9 | 62.9 | 77.4 | 142.3 |
Q2 Comments
Comparison to corresponding period last year
- Webstep AB sold to B3 Consulting Group
- With effect from the second quarter of 2024, Webstep AB is classified as a disposal group held for sale and as a discontinued operation
Market update and outlook
Webstep market update
- Continued challenging markets Long sales cycles, postponed project starts
- Top ten increased revenue Substantial Webstep power in enterprise sales
● Strengthened Equinor presence
Doubling the number of delivery agreements—developers paving the way for architects, agile coaches, business analysts, and team and delivery managers
● Strategic divestment of Sweden
Sharpened focus on Norwegian sales and customer value creation
Outlook
- Digitalisation continues to trend upwards Despite simultaneous lower demand and increased assignments- and projects competition
- Loyal, recurring customers
Webstep maintains a diverse portfolio of loyal, recurring customers across various business sectors and public institutions
● Webstep's Triple Win
The divestment of Sweden provides a foundation for attracting top talent, optimising sales and driving value creation. Employees, customers, and the company all benefit
- Increased profitability strongly prioritised Continued balance between costs and opportunities. Measures monitored and evaluated continuously
- Steadfast focus on long-term goals Well positioned for EBIT-margin above 10%
Questions?
Please contact us at [email protected]
Appendix
Customer base characteristics Norway
Optimizing sales and strengthening focus on enterprise market and large clients
A large and loyal customer base in both private and public sector
A diversified customers base between business sectors
Cash flow and net debt
NOK million 30 Jun 2024 Cash and cash equivalents* (45.0) Restricted cash 28.4 Debt to credit institutions 0.0 Net interest bearing debt (NIBD)** (16.7)
| NIBD/EBITDA (rolling 12 months) | (0.3) |
|---|---|
| NIBD/EBITDA (rolling 12 months) | |
| Including IFRS 16 Lease liabilities | 0.9 |
● The Group has credit facility of MNOK 110 in Norway and SEK 5m in Sweden
- Credit facility was unutilised by the end of second quarter
- Capex relates to office and equipment
*Negative indicates positive amount **Effects related to IFRS 16 (leasing) are excluded
Top 20 shareholders at 23 August 2024
Revenue, EBIT and FTE development
Revenue (LTM) EBIT (LTM)
Number of FTEs (EoP)
Number of FTEs, end of period
| Number of FTEs, end of period | Q2 | Q1 | Q4 | Q3 | Q2 |
|---|---|---|---|---|---|
| Norway | 2024 | 2024 | 2023 | 2023 | 2023 |
| Norway total | 451 | 448 | 471 | 463 | 459 |
| Oslo | 213 | 211 | 223 | 221 | 211 |
| Bergen | 88 | 84 | 91 | 90 | 94 |
| Trondheim | 65 | 65 | 65 | 64 | 61 |
| Stavanger | 55 | 56 | 59 | 57 | 62 |
| Sørlandet | 21 | 23 | 24 | 22 | 22 |
| Haugalandet | 9 | 9 | 9 | 9 | 9 |
| Q2 | Q1 | Q4 | Q3 | Q2 | |
| Sweden | 2024 | 2024 | 2023 | 2023 | 2023 |
| Sweden total | 80 | 83 | 99 | 103 | 102 |
| Stockholm | 41 | 46 | 60 | 62 | 60 |
| Malmö | 18 | 18 | 18 | 19 | 20 |
| Uppsala | 21 | 19 | 21 | 22 | 22 |
Disclaimer
This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Webstep ASA and Webstep ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Webstep ASA. Although Webstep ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Webstep ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Webstep ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.