Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Techstep ASA (LTS:0K2D, Financial) has delivered a positive EBITA adjusted for the seventh consecutive quarter, showing a NOK28 million improvement over the last 12 months.
- The company has achieved ISO certification for information security management and has been upgraded to gold in the EcoVadis sustainability performance rating, ranking among the top 5% of global companies evaluated.
- Techstep ASA (LTS:0K2D) has signed several new strategic partnerships and contracts, particularly in Norway and Poland, which are expected to drive future growth.
- The company is transitioning its business model towards more recurring and holistic services, with recurring revenues annualized growing by 4% year over year.
- Techstep ASA (LTS:0K2D) has reduced operating expenses by 12% year over year, contributing to improved profitability and a positive cash flow from operations for the first time in the second quarter.
Negative Points
- Total revenues for the quarter were down 5% from the same period last year, with a notable decline in the Swedish market impacting overall performance.
- Device revenues declined from NOK192 million last year to NOK185 million this quarter, primarily due to reduced gains from end-of-lease contracts.
- Net gross profit decreased by 12% year over year, with a decline in the net gross profit margin by 2 percentage points.
- The Swedish market remains challenging, with weak sales and organizational changes affecting performance.
- The company experienced a net loss of NOK15 million for the period, attributed to non-cash items such as amortization of assets.
Q & A Highlights
Q: Can you elaborate on the challenges faced in the Swedish market and your strategy to address them?
A: Morten Meier, CEO: The Swedish market has been challenging due to weak sales and organizational changes affecting performance. We plan to strengthen the organization and revisit local sales strategies. The new agreement with Consafe Logistics should gradually improve our position in the second half of 2024.
Q: What are the key drivers for growth in the second half of 2024 and into 2025?
A: Morten Meier, CEO: Growth will be driven by our refocused commercial strategy, upselling value-adding products and services, and increasing sales through partner channels. We expect acceleration in Norway and Poland, with a strong pipeline for 2025.
Q: How is Techstep addressing sustainability and circular technology?
A: Morten Meier, CEO: We focus on circular technology by advocating for responsible device use throughout their lifecycle. Our solutions help organizations meet ESG commitments, and we have achieved EcoVadis Gold Rating and ISO certifications for sustainability and information security.
Q: Can you provide more details on the financial performance and outlook?
A: Ellen Solum, CFO: Total revenues were NOK266 million, with a decline in device revenues. However, recurring revenues are increasing, and we expect EBITA-adjusted conversion to improve. Our outlook for 2024 includes growing recurring revenues by 20% to 30% and net gross profit by 0% to 5%.
Q: What progress has been made with strategic partnerships and new agreements?
A: Morten Meier, CEO: We have signed new agreements, particularly in the public sector, and are progressing with the Sykehuspartner contract. Our indirect channel is also seeing good progress, with the first joint customer onboarding with devicenow in September.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
