Hi, and welcome to the earnings call for the fourth quarter for Cyviz. My name is Espen, and with me, I have the company's new CFO, Karl Peter Gombrii. Welcome. Thank you. Glad to be here. We'll take you through the agenda of today before we dive into the numbers. So this is the earnings call for the fourth quarter. We will, of course, also summarize and talk about the 2023 results. Makes sense for us to do that. So Q4 in a brief: performance, business highlights, year-to-date finals, outlook, and then opening up for questions at the end. So again, welcome. Let's kick it off. All right. So proud to be here today to present numbers for Q4 and for the year. It's an all-time result for Cyviz across more or less all financial KPIs for the year, and across three out of four KPIs for the quarter itself. So Q4 ended with an all-time high order intake, driven not necessarily just by one large deal with Aker BP, but multiple deals across all our regions, summing up to an order intake of NOK 383.5 million, which is an increase from similar quarter last year of 169%. Order intake is a good proxy to indicate future revenue stream, so that's where we build our order backlog. So extremely happy. It also compensates for the type of slow quarter in Q3, as we talked about in the previous earnings call, where we had some slippages of some of the larger deals. So happy to see that we have recovered, as we planned and stated last quarter. Revenue, NOK 168 million, a little bit down from same quarter last year. Q4 last year was a bit inflated by one large deal in Middle East, so we are still very, very happy with the revenue numbers in the fourth quarter this year. Positive increase in our gross profit, and a gross profit of NOK 88.3 million. Also, in showcasing a gross margin of 52.5%, one of the strongest quarters the company ever had on gross margins. Very, very happy to see that the EBITDA numbers for the quarter ended at NOK 20.1 million, which is NOK 2.5 million up from last year. Also, bringing the full year EBITDA to a NOK 28 million result, which is up NOK 19 million from 2022. Karl Peter will go through the full year numbers more in detail when we get further down into the presentation. So with that, I hand it over to you. All right, thank you. So first, starting with the full year figures for order intake, 2023 ended at NOK 757 million, which, as has been mentioned, is an all-time high. That's an increase of 29% over last year. That takes the backlog entering 2024 to NOK 443 million, which is about NOK 170 million higher than last year. Gross profit ending up with 32%, which is a 4 percentage point increase, which takes us to a margin of 49.3%, which is a 4 percentage point increase on last year, also the highest recorded for the company. EBITDA ending, as has been mentioned, at NOK 28 million, which is tripling from last year of NOK 9 million or a 208% increase. Margin also increasing for the EBITDA ending at 4.6%, up 2.7 percentage points. Okay, Espen, moving on to business highlights. Yep. So as you can see here, we talked about this during the Q2 earnings call and the Q3 earnings call. The job that was put in place, I think in 2021 to, I mean, broaden our portfolio of verticals, I mean, our diversification, strategy, giving us more type of market opportunities across multiple verticals in all the four regions, but also provide that type of buffer- Mm-hmm. Because there are always seasonalities and swings in the marketplace, in and between different verticals. So as you can see, Q4 was particularly strong in the energy sector with Aker BP as one of the key carriers for that type of position, but also supported by some energy deals across both APAC and Middle East in the quarter. And if you look at it on a regional perspective, so far this year, before we entered Q4, I think Middle East and North America has been the two key regions that have carried the larger load of our... I mean, orders. I'm really, really happy to see that Europe is picking up and stepping up. It also gives us three large regions that can help us continue our journey for profitable growth. So it's a very, very strong signal on the uptake in the European market. Multiple deals coming into the quarter. Of course, the Aker BP deal in as such, of $23.4 million is standing out. Mm-hmm. But very proud to see that we continue to carry on selling over and over to some of our global accounts across all our regions. It is a sentiment, as we stated previous as well, for the quality our people and our solution provides to our customers. Overall, very strong order intake for the quarter, as we have mentioned. Let's look at the full year view. So if you look at the full year view, you would see that the energy sector, that was like more than 70% of Q4, is now slightly above 50%. It aligns more with the government and defense. We stated in Q3 that we had some slippages on some large government and defense deals in the U.S., moving into Q1 and Q2. With those inside, you would have a slightly more balanced view between energy and government, and defense. We have also expressed that corporate, so like private, large customers inside enterprise, had a quite slower year in 2023 than in 2022, for multiple reasons. You saw companies like Microsoft and Accenture, and other large ones, doing some resets and downscaling and firing or firing of people, not investing as heavy as they did in 2022. We do see trends now that that will pick up in 2024. So I think we should be able to present in the upcoming quarterly calls, some interesting new wins also in the corporate sector. But overall, quite good and quite diverse portfolio by verticals, but also by regions. Here you can see that Europe now, going out of 2023, is the largest region with 42%, Middle East 36%, and then North America 19%, and APAC, who is still like in the starting phase, 3%. So yeah- Yeah. Let's move to the financial highlights. Okay. So starting with the quarterly review first, starting with revenues. A slight decline in Q4 revenues of 6.6%. This is related to last year's very high revenue related to a large Middle Eastern project. It is still the second highest quarter on record for the company. And as you'll see further down, the revenue performance is reflected in the results. Moving to the gross profit, which ended at NOK 88 million for the quarter, which is an 8.4% increase on last year. That gives us a gross margin of 52.5%, which is an all-time high for any quarter. EBITDA, likewise, highest quarterly EBITDA on record. I think, looking at the EBITDA, it's also worth mentioning that, we did take a more conservative approach to, R&D capitalization and also inventory obsolescence. So there is an added cost there, of about NOK 5-6 million related to, to those two things. Bookings, obviously, I think is, is the single thing which, which stands out, the most with a 169% increase, taking the, total to NOK 384 million for the quarter. Espen mentioned the Aker BP, which, is the single largest one, but still moving Aker BP out of the, the full equation, we have a, a booking of about NOK 200 million in the quarter, which, excluding Aker BP, is still a 40% increase on, last year. Yeah. Okay, so then moving to the full year results. Thank you. I'd say that the full year results kind of reflects the positive development that we saw in Q4. All the metrics that we're looking at here are up by at least 20%. So, looking at revenues first, ending the year at NOK 585 million, which is an increase of 20%. Gross profit up 31%, outgrowing revenue, which implies a margin expansion on last year. EBITDA, likewise, tripling from last year, ending the year with NOK 28 million compared to NOK 9 million of last year. And then lastly, the bookings, which ended at NOK 757 million for the year total, which is an increase of 29%. Right. Then moving to cash, which is a key focus area for us and will continue to be so. Starting with the quarter, had a positive operating cash flow of about NOK 25.1 million, compared to around NOK 0 last year. That implies a free cash flow of about NOK 18 million in the quarter. The primary driver is the underlying result, which was strong. I think the single most important thing to note here is inventory, where, as I mentioned previously, we took a loss on inventory of NOK 4.5 million, since we have adopted a more conservative approach to inventory obsolescence. Full year -NOK 10 million, compared to NOK 0 last year. The single most important driver there is accounts receivable, which is, as I said, the cash is a key focus area, and then the—within cash, accounts receivable is, I think the single most important metric that we're looking at. So for the quarter, the change in accounts receivable was minor, but for the year, it's still quite large in an undesirable direction. And it explains why the operating cash flow is down by NOK 10 million. It's solely related to slow collection in the Middle East. We'll get back to that in a minute, how we're approaching that. The rest of the portfolio in other geographies are developing fairly okay in terms of collection. We wanted to kind of shed some more light on where we are on cash. Things are changing quite rapidly due to the project nature of the business. Q3 was kind of quite high on the agenda for many investors. We had drawn almost fully drawn the credit facility, so we thought we give you some more light. Since things have changed quite a lot since year-end. Thank you. So we're seeing from a cash perspective a quite solid headroom in February. We had a cash headroom of about NOK 23 million at New Year. We've increased the credit facility from NOK 49.5 million to NOK 60 million in January. And that takes us today with a cash headroom of NOK 28... Sorry, NOK 29.8 million. And then we have written confirmation of a major payment coming in early next week, which takes the headroom to above 100 million NOK. And then lastly, I mentioned the collection in the Middle East. We have received about half of that in January, so the overdue receivables from the Middle East has come down. Looking forward, we do anticipate to finalize a $3.5 million Letter of credit with a strategic partner in the Middle East. And maybe you want to add some extra flavor to that. First and foremost, I think this is one of those things we have lifted to the top of the agenda. It's important for us, it's important for, like, the trust and predictability of our business. We are still a very project solution-driven business, so there will be fluctuations between quarters, and also will be fluctuations based on what region carries the largest load by quarter. Traditionally, good and bad, Middle East have had a tendency to not be the best payers. They always pay, but they tend to pay by choice or by whatever, a bit later than the due date. Which is normal. It's not a Cyviz thing, it's a- It is- ... general, cultural thing. I mean, I've spent so much time in that region over the last year and talked to so many companies. It is the same everywhere. We are actually better off than a lot of the others because we have established partnerships in between us and the customer. That takes a lot of the type of risk and responsibility, securing that we get paid at least a lot faster than if we went directly with customers. Mm. Over the last years, we have developed a very strong partnership with one of our key strategic partners in that region. As part of that conversation, to, like, continue to grow and develop our business, and these are very often very large projects that we drive in that region. So it becomes, like, significant also on the revenue side, but also on the cash side. We have then come to a place where we now are finalizing the last piece of a contractual agreement with that strategic partner, where the partner would enable in the bank an open LC, where we can secure that we get our cash when we sign deals with customers. We don't have to wait- Mm ... until the payment from the customer comes. So the partner, through this partnership, would then carry the type of local risk on that. And that, on top of all the other things we do, and of course, the internal discipline we apply across- Mm ... the company to, like, get more paid when you sign contracts, pay attention to follow up early on the payables, are elements that would drive us in a direction to be cash positive at the end of, hopefully, at the end of this year. Yeah. Then for the foreseeable future. Very happy to see the work from our finance department leading this, but also across the company, really putting all the efforts in place to make sure that we move that last needle. Good. So, kind of last slide of the presentation, looking a bit forward in terms of bookings. So, what the slide shows is the seasonal booking trend that we've seen the last four years, where there is quite heavy backloading of bookings to the second half of the year. So, what it tells us is what we're expecting also for the current quarter that we're now in, Q1, going forward, and how we kind of see things. I think it's important to understand that there is a quite significant seasonality in both the bookings and when we deliver projects- Yeah ... which is, Let me try to elaborate a little bit. Yeah. I mean, this is an area where we internally- Mm ... especially across our sales department, are trying to, like, gradually change the needle so that we get a slightly more balanced, distributed year when it comes to when orders comes in. But since the majority of our business still is very project-driven, and it's a lot of RFQs and RFPs and processes that runs, we have to apply and follow those type of timelines that are there. And historically, the first quarter, and somewhat the second quarter, is softer- Mm ... when it comes to, like, order intake than the second half of the year. And the inflation that came now in Q4, just to give some perspective of the expectations for Q1 this year, with Aker BP coming in with a slightly larger deal, we thought potentially some would come in Q4, some would come in Q1. Now, everything in the first batch of the order came in Q4. We also were positively pushed by two customers in Middle East for projects that were, like, scheduled for February, March- Mm ... within Q1.... they wanted to, like, finalize so that they can get the delivery and installation done faster, so that also came into Q4. Mm. In some sense, Q4 is significantly high- Mm. Also driven by some of the cases that was expected to come in Q1. So we do expect a slightly leaner Q1 when it comes to booking. Yeah. The majority of the Q4 ramp-up on bookings- Mm ... from a revenue point of view, we would expect to see from early Q2 and onwards through this year, and for projects like Aker, also somewhat into 2025. Yeah. Because it has something to do with delivery time and installation time on how we book our revenue, so. It's timing differences, and I think it all comes down to Q4 being so, the backlog entering the year is NOK 170 million higher than last year. Yep. So that's kind of an important part of the equation here as well. So it, But I think with that said, I mean, we are still looking, and aiming, and planning to have a, I mean, a positive trend when it comes to, like, growing our business in 2024 from 2023, and also focusing even more on growing it as profitable as possible. Mm. Maybe we can finish off with the outlook slide and talk a little bit- Yeah ... about some of the key priorities into 2024 before we jump into questions. So, I mean, the tagline this year is profitable growth, driven by, of course, our core business, because that's the foundation. That is largely the 757- Mm ... million NOK in bookings coming in 2023. But we have worked over the last 2-3 years, also developing new products and new services, largely focusing on moving more of our business into a SaaS subscription-based business model. Focusing more on providing value through a platform that integrates and connects with services that will also be a subscription-based service, that we can provide to our customers, and also partners can bring out to their customers for, I mean, use cases similar to what we sell- Mm ... but also completely different use cases where this is relevant. And of course, delivering on the cost optimization plan that we talked about in our earnings call after Q3. Mm. Those are key things. So number one priority, profitable growth. Increased focus on profitability through our cost savings or cost optimization platform, meaning we would focus on not adding a lot of new cost out of 2023 into 2024. The new services, and of course, continue the revenue growth through delighting more customers, but also existing customers. And we are still comfortable on maintaining our medium-term 15%-20% EBITDA margin- Yeah ... as a company. There is a positive growing demand for what we describe as advanced collaboration solutions. I mean, these are solutions we sell to our customers and where we compete. I do expect to see a positive increase in demand, as I also mentioned earlier, especially inside the private enterprise sector. We already have, I mean, conversations with a lot of our large global private companies- Mm ... that didn't, I mean, buy and install a lot last year- Mm ... with solid, good plans for multiple opportunities across 2024. I think that is also the balance point to, like, balance out the confidence- Mm ... of committing ourselves to continue to grow our business in a more profitable way. And of course, as we have talked about, the increased focus on cash management. Karl Peter talked about all the type of metrics and mechanisms, and you can see it here as well. I mean- Mm ... improve our financial headroom, trade finance solutions, tighter receivable collection, getting customers to pay more upfront- Mm ... longer payment terms with our partners, and secure that type of gray market space in Middle East- Mm ... through an open LC that allows us to reduce risk and collect cash way faster. And as a final comment, I think before we jump into the Q&A, just want to reiterate, we are proud of 2023. In a market where the majority of our global competitors have seen a decline in between 10%-25%, we still continue to grow all our financial KPIs with 20%+. Yeah. We have an ambition to continue to gain market share and outgrow our competitors, while we, at the same time, add new services and focus even more on profitability and cash management. With that, thank you, and let's open for questions. All right. So, we have a couple of questions in already, and they're quite related, I can see. So the first one is: considering the Aker BP deal, one could have anticipated an even higher revenue for Q4. How big share or revenue comes from the Aker BP deal? And the question to that is, 10.8% of the total deal value is recognized as revenue. We have quite meticulous procedures for how to recognize revenue, and we're following those. I think that's the, Yeah, and I think- Short answer ... and I think it's important to say it's 10.8% of the largest portion of the sum of Aker BP within Q4. Yeah. We talked about $24 million. Mm. This is, like, based out of $18 million, I think. Mm, mm. That is the revenue recognition based on our internal- Mm. audit approved principle on how we Yes ... build and book revenue. Yeah. So it's, yeah, as I mentioned, it's quite meticulous and, and we're kind of following quite, Yeah, and as a follow-up- Yeah ... statement on that, the Aker BP deal is fantastic. I mean, revenue-wise- Mm ... booking-wise, margin-wise. But the best thing with that deal is that it's not necessarily just like a customer buying a solution from us as a company. Mm. It is definitely a token of a strategic commitment and partnership- Mm ... between Aker BP and us as a company. Mm. Where we together will build the new modern digital Aker BP, making sure... I mean, Aker BP is the most forward-leaning company within- Mm ... their industry when it comes to, like, really taking advantage of technology. I'm extremely proud for us as a company to be part of that journey, and it is a frame agreement. That means that there will be multiple opportunities for Aker BP and us to continue to build and develop and grow- Mm ... the magnitude of this partnership and value. So hope that answered the question. Good. And then, next question: "Do you consider the gross margin that we see in this quarter sustainable going forward?" And that's closely related to what we just discussed in terms of recognizing revenue for Aker BP. So we have been accumulating cost for Aker BP for about a year. We've had quite a lot of cost, but operating expenses, not cost of goods sold. So now that we're recognizing part of the revenue for Aker BP in Q4, there are no COGS related. So that's why we see a slight increase in gross margin for this quarter. Yeah, and I think it's important to be clear. We are definitely not standing here committing a 53.4% or 53.5% gross margin across all customer cases in average through 2024. But of course, as a company, we have an ambition to continuously work to improve our gross profit. And frame agreements with customers, that is now luckily becoming more and more frequent, especially on large- Mm ... customers and large projects, allows us also to add a lot more, I mean, services with much higher- Mm ... margin. But I think the key carryover over time would be our ability to be successful- Yep ... with our new products and new solutions that carry a much higher base margin- Mm ... than our type of turnkey overall solutions. Mm. 2024, we're still working to maintain the best margin in the industry. Mm. Heading into 2025, we do expect to put challenge on ourselves to continue to grow the overall gross margin%. Yep. And I think that kind of naturally takes us into the next question. You've mentioned the medium to long-term goal of a 15%-20% EBITDA. What is the timeframe from now? And I think that kind of comes into what we just discussed in terms of the gross margin. Yes, we do expect that to come up, and that's the goal of the company. The Q4 is kind of higher than what you'd expect as a run rate. That said, the 15%-20% target. Yeah, so I, I would like to be a bit cautious saying that is year X. But I mean, at least from when we started to do the adjustments, launching our plans in 2021, I mean, COVID just paused the ability to even launch anything- Mm ... for us in 2020. It's more a question on survival. My personal ambition, at least within those, that type of plan and framework, extends to, like, somewhere, 2026, 2027. And that's how I would rate and look at, like, medium term for us as a company. Mm. We have a lot of interesting things launching this year. Getting it partner-ready, getting partners to get in and involved is key this year. Mm. 2025 is, like, the first year where we should really start to see abilities to capitalize- Mm ... on the new services with a lot more margin. And of course, the majority of that is SaaS and subscription-based, so that will also help build our ARR as a company, which is important to build that predictability in the revenue streams. So yeah, I think that's the type of timeframe we look at. Yeah. All right, "What is the status of the slippages related to a client in the U.S., as mentioned in the Q3 webcast, referred to as a multi-million-dollar deal? Yeah, so where it lies right now is that we... The signals we have is that we do expect to see parts of that in the late stage of Q1, and the remaining part coming into Q2. Mm. It's not something we have lost. It's just, like, the process framework- Mm ... for some, I mean, reason within the federal and public sector, across all the regions, but probably in the U.S. more in particular than in Europe. How much of the Aker BP deal will likely materialize in 2024? That is a very good question. And that question, I mean, I talked to parts of Karl Peter's organization while we were working to see if we can, like, close and finalize, the deal. Because it's an important question, not just from a revenue point of view, but it's also a very important internal question. Mm ... on how we set up our resources to manage to get things delivered so that the revenue materialize. So I think what we looked at in the beginning was, like, 50% would come 2024. I mean, we took 10.8% in Q4. Then out of the remaining part, we looked at 50% in 2024 and 50% in 2025. It seems like the customer has slightly more rush to get more delivered. So I would say anywhere between 55%-70% of the remaining revenue recognition would happen in 2024. And then the rest, first half of 2025. I mean, these can change because these are new sites new build, new buildings. So it can go faster, and it can also be some delays. Would be hard to, like, guarantee because I'm not sitting on the other side of the table. Yeah. So, I think it's fair to say that we're ready to deliver, and then it depends on external factors to the extent that we can deliver, but we're, we're ready, and then- Partners are ready. Our team are ready. The first type of orders and shipping is going out within Q1. Mm. Will be revenue recognized as soon as we ship stuff. Yep. So I think you-- we expect to see a good portion of revenue recognized within the first half of the year. Mm. And, of course, also in the second half of the year, and the remaining part would happen- Mm in the first half of 2025. Yeah. How comfortable are you with the company's liquidity situation?" We've covered that in quite a lot of detail in today's presentation, where we see a comfortable headroom now in February. As we mentioned, there are a number of metrics that we're working on, receivable collection being the key one, where, looking at the year that just passed, one of the biggest challenges has been the Middle East and the receivable collection. It is being addressed with the Letter of credit, which will hopefully alleviate some of the concerns there. We're also seeing that a larger percentage of the current backlog is skewed more to Europe and other areas where collection is more straightforward, which will hopefully help us get the receivable side down and more kind of matching the payable- Yep... outstanding. So I can echo that. I think with the efforts that are put in place, the LC in Middle East, the extended credit line with our bank- and also now trying to get a larger portion of every contract signed, paid with, by when signing is happening, and increase, I mean, payment terms with vendors, and especially for large projects. I mean, the big ones, $5 million, $10 million, $15 million, $20 million, that also has a long lead time. We are also now working with our partners to accept payment terms that is in line, not with our payment terms with the client, but when we actually get paid by our clients. Yep. So if you want to join us on large projects, with all the benefits that comes from that, you also have to live with us paying you as a partner when we are paid, so that we reduces the type of impact of cash. Yep. "Can you please update on the progress in building the ARR as part of the total revenue?" I can do it on high level. I mean, we have built a new platform, which is like the essence. of the path towards having more of our business connected to a platform type of technology than just like a turnkey solution. It's taken us 2.5-3 years to get to a place where we have a platform that is architecturally built with very few limitations. So it could literally integrate with plugins and integrations of everything. It is something that will, of course, be key for us going forward to use to upgrade our existing customer base, and that platform would only be delivered as SaaS also to our customers. It is a subscription-based business model but also be brought out by partners as a subscription-based model to their customers. They will pay us on monthly level for the platform and, of course, for the services that we provide. We are now working on finding mechanisms that allows us to get a small amount of money on services that partners build and put on top of the platform, so that we create a larger pool of revenue streams for us as a company, being the one enabling the opportunities for partners as well to bring that out. We have 11 partners now globally that have signed the MOU, which is like the first step of interest of being a partner, going out selling a commercial product. 8 of these partners had the opportunity to get a demo of where the platform is today, I think a couple of weeks ago during ISE in Barcelona. We have an internal ambition of having the first set of partners bringing this out commercially to the market early April this year. Yes. I do not expect a ton of platforms sold by partners within the first half of this year, but we do expect to see a pickup in the second half of the year, driving the first type of wave of subscription-based revenue. And then 2025 is the year where we'll put a lot more emphasis and resources behind making this the core element of higher margins, better profitability, and a larger pool of ARR. Yep. If I can add some flavor to that, it is a very high focus area in the organization, both on the technical side with our new CTO, Gøran, working meticulously on developing this to be the right product, and also on the commercial side. So it's a very high focus, and I think. Do our Q1 earnings call. But the feedback so far from the ecosystem is quite positive. Yeah. I think we are confident that this is, like, the right add-on for the company. Mm. It enables us to be even more competitive on, I mean, our solutions. Yeah. It enables us to have a higher portion of ARR inside when we sell solutions. Mm. And it also opens a completely new marketplace through partners that can sell that to a much broader audience than we can do ourselves. The last thing is we are continuously looking at our licenses, and subscription-based, and services, and support agreements- Mm ... with customers, making sure that we continue to up the price on that. And also looking at, can we change some of the parameters that are more perpetual- Mm ... over to a subscription-based license on some of the other products we have, incorporated into the overall solution we sell? So that is where we are. Yeah. I can't share more details than that, but we should be able to share more in-depth details during our earnings call after Q1. Yes. I think that kind of concludes the questions. I think it's, Still see top-line growth for full year 2024, according to previous statements? Yes, we definitely expect to continue to grow our revenue- Mm ... in 2024 compared to 2023. There is absolutely no signals that we can see. I mean, there are tons of things in the external- Mm ... part of the market that we don't control, but we can't spend time on it. Mm. We focus every day on doing what we do as good as we can, without being too much jeopardized by the noise outside. We are entering 2024 with a much stronger order backlog. I just want to be clear, if that is plus NOK 400 million versus NOK 276 million, all of that will not convert into revenue in 2024. Mm. But the majority of that- Mm ... are projects that will materialize into revenue. Mm. And then a portion of what we do of order intake in Q1, quite significant, I would say, probably 80%-90%, would, during 2024, be converted into revenue, and then slightly smaller portion from Q2, and then even smaller from Q3 and Q4. That is, like, the base of how we run our business. But there is no signals that should indicate that we are not confident to continue to grow our top line, and also through that, enhance and strengthen our bottom-line profit in 2024. All right. Then I think we get- Then we will- ... to the end of the show. Yep. Okay. Thank you everyone for participating, and thank you so much for a lot of really, really good questions. We appreciate that, and we wish all of you a good day. Thanks, Karl, too. Thank you.