Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- StrongPoint ASA (LTS:0JEZ, Financial) reported a 17% growth in rolling 12 months recurring revenue, driven by increased license revenue from proprietary and third-party solutions.
- EBITDA improved by NOK 16 million to NOK 10 million, indicating a positive trend in profitability.
- The company achieved a breakthrough with its AutoStore solution in the UK, marking a significant expansion into new markets.
- StrongPoint ASA (LTS:0JEZ) initiated proof of concepts for AI solutions to reduce theft in self-checkouts, showcasing innovation in addressing retail challenges.
- The company maintained a stable equity ratio of 46%, well above the covenant requirement of 30%, indicating financial stability.
Negative Points
- Revenue declined by 3% to NOK 347 million, primarily due to the previous year's electronic shelf label rollout in Norway.
- The rollout of the order picking solution for Sainsbury's is delayed, potentially impacting the timeline for revenue realization.
- Despite improvements, the EBITDA margin of 2.9% is still below the company's aspirations.
- Net interest-bearing debt increased by NOK 12 million, driven by development CapEx and leasing payments.
- Disposable funds decreased from NOK 102 million to NOK 85 million, reflecting a reduction in available cash resources.
Q & A Highlights
Q: Can you elaborate on the factors contributing to the 3% decline in revenue this quarter?
A: Jacob Tveraabak, CEO: The decline is primarily due to last year's rollout of electronic shelf labels in Norway. However, we saw a 17% growth in rolling 12 months recurring revenue, driven by increased license fees from our proprietary and third-party solutions, including Sainsbury's order picking solution and self-checkout solutions in the Baltics.
Q: What are the key drivers behind the 17% increase in recurring revenue?
A: Marius Drefvelin, CFO: The growth is mainly fueled by a 68% increase in license revenue, particularly from our order picking solution for Sainsbury's and self-checkout solutions. This reflects the successful implementation and growing adoption of our solutions.
Q: How is the Sainsbury's project progressing, and what impact does it have on your financials?
A: Jacob Tveraabak, CEO: The Sainsbury's order picking solution rollout is progressing well, though we expect to extend the timeline into next year due to additional requirements. This extension does not have significant financial implications for Strongpoint, and the project continues to move forward positively.
Q: Could you provide more details on the new proof-of-concepts for AI solutions to reduce theft?
A: Jacob Tveraabak, CEO: We have initiated two proof-of-concepts for AI solutions to prevent theft in self-checkouts in Norway and Sweden. Early indications are promising, and we have formalized a partnership with the supplier, SAI, to further develop these solutions.
Q: What is the outlook for Strongpoint's revenue and EBITDA for the rest of the year?
A: Jacob Tveraabak, CEO: We remain cautiously optimistic about achieving our revenue target of NOK 1.5 billion to NOK 1.8 billion with a 4% to 6% EBITDA margin. This is supported by positive trends and customer interest in our solutions, particularly in the Nordics, Baltics, UK, Ireland, and Spain.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
