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Webstep Investor Presentation 2024
3788_rns_2024-05-23_81577aea-22bb-458f-9932-3ddb5e709859.pdf
Investor Presentation
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Agenda
Highlights from the quarter
Financial Review
Organisation and projects
Market update and outlook
● Six years CEO and founder experience in the IT-consultancy industry ● International financial sector experience
Kristine Lund
Webstep CEO May 2024
"Entering Webstep, the immediate feeling of belonging makes me confident that together we will ensure an exciting new chapter in the Webstep history."
Webstep Letter from the CEO
Highlights from the quarter
Highlights
New CEO appointed
● CEO Kristine Lund assumed the position from May 2024
● ● Revenue development and EBIT
- ○ Three fewer working days in the quarter compared to corresponding quarter
- ○ Reduced cost base starting to yield results
- ○ Accrued costs of 1.5 MNOK due to the temporary increase in the Norwegian employer contribution
- Profitability in focus
○
- ○ Cost reduction program proceeding in accordance with plan
- ○ Estimated total cost reduction MNOK 21-25, 2024 effect of minimum 21 MNOK
- Projects
●
●
- ○ Webstep goes prime in framework agreement with Husbanken in collaboration with four partners
- ○ Signed framework agreement with the Scandinavian insurance company Tryg
Organisation and projects
Organisation and employees
The Webstep experience going forward
● Annual employee survey results confirms
- Continued high employee satisfaction and likelihood of recommending Webstep to others
- A reduction compared to last year, but still well above benchmark
- Followed up with mitigation activities
● 531 FTEs at the end of Q1 2024
○
- Reduction of 26 FTEs due to rightsizing of the organisation executed in Q4 2023
- Less top heavy and capacity adjusted after demand
- Enterprise customers giving opportunities
- Experienced consultants are key
- Enterprise market creates employee opportunities
- Cross-sale opportunities between locations
mLink: Digital platform for the world's largest supplier of multipurpose boats to the aquaculture industry
- The maintenance and safety platform mLink simplifies, modernises and streamlines work processes
- mLInk integrates with essential systems, managing everything from documentation, equipment, procurement and inventory to operations, maintenance, work planning, and checklists - all accessible via dashboards and reports.
- 192 companies have, so far, adopted the solution.
- Webstep also provides Moen Marin with a system for managing building specifications (mSPEK), 3D representations of Moen Marin's boat types (3D SPHERE), and integration of boat hardware and sensors for cloud storage and aggregation. (CONNECT)
AMVConnected: Real-time hard data acquisition
- AMV AS (Andersen Mekaniske Verksteder) integrates advanced technology with heavy machinery.
- Together with Webstep, AMV has developed AMVConnected, a SaaS platform for real-time machine data.
- AMVConnected allows AMV customers to monitor real-time data from various types of vehicles and equipment used in tunnel and underground operations.
- AMV Connected helps customers optimize performance, improve project outcomes, and receive alerts
- Accessible on all web-based devices, the solution optimizes workflow, reduces downtime, and provides hard data for informed decision-making.
Financial review
Key figures - Group
| Group | Q1 | Q1 | FY |
|---|---|---|---|
| NOK million | 2024 | 2023 | 2023 |
| Revenues | 261.9 | 277.2 | 1,000.0 |
| Change | (5.5%) | ||
| EBITDA | 28.3 | 30.4 | 65.7 |
| EBITDA margin | 10.8% | 11.0% | 6.6% |
| EBIT | 22.2 | 25.2 | 18.5 |
| EBIT margin | 8.5% | 9.1% | 1.8% |
| Net profit | 16.0 | 18.8 | 4.4 |
| Net free cash flow | (31.7) | 16.2 | 71.0 |
| Cash flow from operations | (30.8) | 17.9 | 76.5 |
| Equity ratio | 51.6% | 54.9% | 50.7% |
| Earnings per share (NOK) | 0.58 | 0.68 | 0.16 |
| Earnings per share, fully diluted (NOK) | 0.57 | 0.67 | 0.16 |
| Number of FTEs, average | 534 | 555 | 561 |
| Number of FTEs, end of period | 531 | 557 | 570 |
| Revenue per FTE (TNOK) | 490.1 | 499.5 | 1,784 |
| EBIT per FTE (TNOK) | 41.5 | 45.5 | 32.9 |
Q1 Comments
Comparison to corresponding period last year
● Revenue
○ Revenue from own consultants
- Q1 237.6 MNOK (- 5.1%)
- Three fewer working days and slightly lower utilisation in the regional offices of the Norwegian segment
- Pressured hourly rates and reduced billable capacity due to weakened market demand in the Swedish segment, in addition to one less working day
- EBIT affected by
○
○
- Positive impact from reduced cost base and periodic shift in execution of activities
- Offset by decrease in revenues and;
- Accrued cost related to the temporary increase in the employer contribution for Webstep Norway, Q1 1.5 MNOK (0.0)
- Cash flow from operations negative mainly explained by calendar effects related to when receivables fall due
- FTEs reduction of 26 due to rightsizing of the organization and adjusted capacity after demand
Norway Q1
Key figures - Norway
| Norway | Q1 | Q1 | FY |
|---|---|---|---|
| NOK million | 2024 | 2023 | 2023 |
| Revenues | 228.7 | 237.6 | 857.7 |
| Change | (3.8%) | ||
| EBIT | 21.4 | 22.4 | 17.0 |
| EBIT margin | 9.4% | 9.4% | 2.0% |
| Number of FTEs, average | 449 | 453 | 459 |
| Number of FTEs, end of period | 448 | 455 | 471 |
| Number of workdays | 62 | 65 | 251 |
| Revenue per FTE, TNOK | 509.6 | 524.2 | 1,867 |
| EBIT per FTE, TNOK | 47.8 | 49.4 | 37.1 |
| Revenue breakdown | Q1 | Q1 | FY |
| NOK million | 2024 | 2023 | 2023 |
| Oslo | 107.9 | 100.3 | 372.7 |
| Regional offices | 104.0 | 118.1 | 414.6 |
| Subcontractors | 15.2 | 16.9 | 57.6 |
| Resale of licenses | 2.4 | 3.2 | 16.4 |
| Other / eliminations | (0.8) | (0.9) | (3.6) |
| Total | 228.7 | 237.6 | 857.7 |
Q1 Comments
Comparison to corresponding period last year
- Revenues from own consultants
- Q1 211.9 MNOK, decreased by 3.0%
- Adjusted for three less working days, revenue from own consultants at the same level as last year
- Solid growth in the Oslo region, up 7.6%
- Slightly lower utilisation in the regional offices
- ● EBIT affected by
- ○ Decline in revenues
- ○ Effects from the implemented cost reduction program and a periodic shift in execution of activities between quarters
- Accrued costs for temporary increase in employer contribution of 1.5 MNOK (0.0)
● FTEs 448 end of period
○ Reduction of non-billable FTEs related to cost reduction programme
Sweden Q1
Key figures - Sweden
| Sweden | Q1 | Q1 | FY | |
|---|---|---|---|---|
| NOK million | 2024 | 2023 | 2023 | |
| Revenues | 33.2 | 39.5 | 142.3 | |
| Change | (16.0%) | |||
| EBIT | 0.8 | 2.8 | 1.4 | |
| EBIT margin | 2.3% | 7.1% | 1.0% | |
| Number of FTEs, average | 86 | 102 | 101 | |
| Number of FTEs, end of period | 83 | 102 | 99 | |
| Number of workdays | 63 | 64 | 251 | |
| Revenue per FTE, TNOK | 388.0 | 387.6 | 1,405 | |
| EBIT per FTE, TNOK | 8.8 | 27.6 | 14.0 | |
| Revenue breakdown | Q1 | Q1 | FY | |
| NOK million | 2024 | 2023 | 2023 | |
| Regional offices | 25.7 | 32.0 | 112.0 | |
| Subcontractors | 7.3 | 7.5 | 30.0 | |
| Other | 0.3 | 0.0 | 0.3 | |
| Total | 33.2 | 39.5 | 142.3 |
Q1 Comments
Comparison to corresponding period last year
● Market
○ The Swedish market is still characterised by reduced market demand for IT consulting services and prolonged sales cycles
● Revenues from own consultants
■
- Revenue 25.7 MNOK decreased by 19.7%
- Revenue affected by
- Reduction in number of consultants
- One less working day
- Slightly reduced hourly rates
● EBIT
- Positive effect from cost reductions; offset by
- Decline in revenues and salary commitments in a period of weakened market demand
● FTEs 83 end of period
○ Adjusting capacity after demand
Market update and outlook
Webstep market update
- Slow markets increased competition Sweden more affected than Norway
- Challenging times competitive advantage Webstep's expert consultants prove to be an advantage in challenging times
- Enterprise market renewed trust Focus on the enterprise market and large clients, resulting in renewed trust through comprehensive and long-term contracts
- Oil and energy new opportunities rise Norwegian POSC Caesar Association (PCA): Webstep enabling interoperability between systems and players draws attention across energy industries
● Knowledge sharing draws attention
Facilitating competence development on AI, Data Platforms and UX for Webstep's employees, customers and partners
Outlook
- Benefits from Webstep expert consultants A proven advantage in challenging markets
- Increasing focus on enterprise market and large clients Enables Webstep to utilise its resources more effectively
- ●● Recruitment balanced against profitable growth Expect to be approximately 527 employees by the end of second quarter 2024.
- Profitability is key Measures implemented and evaluated continuously
- Focusing long term target EBIT-margin above 10%
Questions?
Please contact us at [email protected]
Appendix
Customer base characteristics
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
| 31 Mar | |
|---|---|
| NOK million | 2024 |
| Cash and cash equivalents* | (42.7) |
| Restricted cash | 1.8 |
| Debt to credit institutions | 0.0 |
| Net interest bearing debt (NIBD)** | (40.9) |
| NIBD/EBITDA (rolling 12 months) | (0.6) |
| NIBD/EBITDA (rolling 12 months) | 0.8 |
| Including IFRS 16 Lease liabilities | |
- The Group has credit facility of MNOK 110 in Norway and SEK 5m in Sweden
- Credit facility was unutilised by the end of first quarter
- Capex relates to office and equipment
- Operating CF negative by NOK 30.8 million due to calendar effects giving increased trade receivables
*Negative indicates positive amount **Effects related to IFRS 16 (leasing) are excluded
Top 20 shareholders at 21 May 2024
| Shareholder name | Shares | % | ||
|---|---|---|---|---|
| 1 EMBRO EIENDOM AS | 8,312,727 | 29.9% | ||
| 2 HVALER INVEST AS | 2,699,402 | 9.7% | ||
| ന | J.P. Morgan SE | 1,970,890 | 7.1% Nominee | |
| 4 PROTECTOR FORSIKRING ASA | 1,673,052 | 6.0% | ||
| 5 SALT VALUE AS | 1,535,258 | 5.5% | ||
| 6 VPF FONDSFINANS UTBYTTE | 1,273,942 | 4.6% | ||
| 7 JAKOB HATTELAND HOLDING AS | 1,000,000 | 3.6% | ||
| 8 J.P. Morgan SE | 900,000 | 3.2% Nominee | ||
| 9 HOLMEN SPESIALFOND | 861,524 | 3.1% | ||
| 10 VERDIPAPIRFONDET NORDEA NO | 664,317 | 2.4% | ||
| 11 INTERTRADE SHIPPING AS | 400,000 | 1.4% | ||
| 12 ESPEDAL & CO AS | 308,980 | 1.1% | ||
| 13 EUROVEST AS | 292,247 | 1.1% | ||
| 14 Bank Pictet & Cie (Europe) AG | 232,675 | 0.8% Nominee | ||
| 15 MP PENSJON PK | 224,000 | 0.8% | ||
| 16 LEROLI AS | 197,281 | 0.7% | ||
| 17 Saxo Bank A/S | 155,074 | 0.6% Nominee | ||
| 18 BUGS AS | 126,736 | 0.5% | ||
| 19 Nordnet Bank AB | 116,905 | 0.4% Nominee | ||
| 20 KRONOKO HOLDING AS | 96,137 | 0.4% | ||
| Top 20 shareholders | 23,041,147 | 82.8% | ||
| Other | 4,777,696 | 17.2% | ||
| Total share outstanding | 27,818,843 | 100.0% | ||
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 | Q1 | Q4 | Q3 | Q2 | Q1 |
|---|---|---|---|---|---|
| Norway | 2024 | 2023 | 2023 | 2023 | 2023 |
| Norway total | 448 | 471 | 463 | 459 | 455 |
| Oslo | 211 | 223 | 221 | 211 | 205 |
| Bergen | 84 | 91 | 90 | 94 | 92 |
| Trondheim | 65 | 65 | 64 | 61 | 64 |
| Stavanger | 56 | 59 | 57 | 62 | 63 |
| Sørlandet | 23 | 24 | 22 | 22 | 21 |
| Haugalandet | 9 | 9 | 9 | 9 | 10 |
| Q1 | Q4 | Q3 | Q2 | Q1 | |
| Sweden | 2024 | 2023 | 2023 | 2023 | 2023 |
| Sweden total | 83 | 99 | 103 | 102 | 102 |
| Stockholm | 46 | 60 | 62 | 60 | 58 |
| Malmö | 18 | 18 | 19 | 20 | 22 |
| Uppsala | 19 | 21 | 22 | 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.