Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Addnode Group AB (FRA:AR7, Financial) reported a 52% improvement in EBITDA to SEK200 million, showcasing strong financial performance.
- Earnings per share increased significantly by 181% to SEK0.73, indicating enhanced profitability.
- The Design Management Division more than doubled its EBITDA due to organic growth and effective cost control.
- The company completed six acquisitions in 2024, expanding its growth opportunities and market presence.
- Recurring revenue forms a stable part of the business, now up to 74%, providing a reliable income stream.
Negative Points
- The economic situation remains uncertain, affecting customer investment decisions and potentially impacting future growth.
- The Life Cycle Management Division experienced a 3% decrease in net sales, with organic growth at minus 5% when adjusted for currency.
- The transition to a new transaction model impacted net sales, with an estimated 25% increase if the previous model had been maintained.
- The Process Management Division faced a tougher market with fewer tenders compared to last year, particularly in the public sector.
- The company is dependent on the automotive industry, especially in Germany, which poses a risk if the sector faces downturns.
Q & A Highlights
Q: Have you seen any early signs of Symmetry's competitive advantage in the US after the transaction model change?
A: Johan Andersson, CEO: It's early, but we see signs that our investment in complementary software and services is providing a competitive edge. The new agent model requires competitiveness through services and software rather than price, and we believe this will increase our advantage over time.
Q: How did you estimate the underlying organic growth in the Design division, and how confident are you in this estimate?
A: Kristina Elfström Mackintosh, CFO: We used data from Autodesk's system, adjusting for contracts not realized this quarter. We are confident in our estimate, having done thorough checks and backtracking.
Q: Is the decrease in OpEx in the Design division from Q2 to Q3 due to vacation effects, and can this be extrapolated to Q4?
A: Kristina Elfström Mackintosh, CFO: The decrease is partly due to vacation effects. We are not providing further guidance for Q4 at this time.
Q: Are there any changes in the M&A outlook given the weak macro environment?
A: Johan Andersson, CEO: We have a strong pipeline and ongoing discussions. While timing is uncertain, we believe we have good prospects for acquisitions, whether by the end of this year or next.
Q: What is driving the weaker order intake in the Design Management division, particularly in the UK and Germany?
A: Johan Andersson, CEO: It's partly due to market conditions, especially in facility management and construction. We expect this to be a short-term effect, with tenders expected to return.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
