Good morning and welcome to 4C Strategies' presentation of the fourth quarter financial results announcement call. I'm Jonatan Jürisoo, the Director of Group Sales and Marketing Operations here at 4C Strategies, and I will be your moderator today. We have a lot to cover, including our latest financial results, strategic achievements, and what we expect for the coming quarters. But first, let me introduce the key leaders with us today. First up, we have Magnus Bergqvist with us, our CEO. Also with us is Anders Nordgren, our Chief Financial Officer, who will join the Q&A session. We will now open up the possibilities to write questions in the closed chat. We will address these during the Q&A session. Now, without further ado, let's dive into today's session. Of this team. Starting up with an executive summary, I'd like to take a more general perspective and ask you, Magnus, how would you characterize the quarter from a market and operations perspective? Thank you, Jonatan. Before answering, very welcome to this call. Considering the geopolitical circumstances, 4C Strategies' offering is more relevant than ever. However, it is important to note that this also means that our clients are busier than ever, which impacts the sales cycles more than in the past. Diving down and looking at the fourth quarter, we see that our diversification as a company has been very important for the group. While our North America segment has been characterized by delays in sales processes, our international segment has shown very strong development. We have won and extended several new software agreements of significant nature, which shows that Exonaut is a very competitive software platform. Already back in 2022, we launched a new version of the software platform called Exonaut Next Generation. The platform has been well received by our customers during our rollout in 2023. Thank you, Magnus. When looking at the financial with a revenue growth of 18% and 15% EBIT margin, are you pleased with the performance of the quarter? Well, absolutely. 2023 has been challenging, but we're ending the year strong. As I previously mentioned, our North America segment has had continued challenges. Our performance in Nordic is stable, and our international segment had a very strong development. Combined, this leads to an overall good growth and okay margins, and given the investments made, especially given the investments made during the quarter. Now, let's put the quarter into context of the historical development of 4C Strategies. The full year 2023 has been challenging, and the full year margin was -2%. What are the factors behind this? The key driver is the low net sales during the second half in North America. This was not according to expectations. The other main reason for this is a slower developing corporate sector due to the existing investment climate. Additionally, the past two years have been investment-heavy, especially in R&D, sales, and market outreach. For example, we have grown our workforce with over 20% since the IPO. Additionally, we have, in 2023, opened three new branches in Australia, Finland, and our corporate business in Washington, D.C. While the work to strengthen our global brand continues, we do not expect investments in R&D, support functions, and administrations to increase in 2024. The trends in the fourth quarter have improved significantly. Could you provide a breakdown of the trends and the action you took in each of the segments, Nordics, North America, and International? Let's start with Nordics. Okay. The revenues for the quarter in Nordics are at the same level as the comparable period in 2022. This is due to delay in several sales processes, which negatively impacted the growth for both the quarter and the year. However, and it's important that Nordics secured several strategic contracts during the year. As mentioned also in previous communication, we have experienced delays in converting major contracts in the defense sector. However, as already announced, we have managed to finalize several of these deals during the fourth quarter. Experiencing these delays has a negative in-year effect on net sales due to the ability to recognize revenue. These contracts include both licenses and new development, which confirms our strong position in the industry. During the year in Nordics, we have made significant investments in the sales organization, as well as, as I already mentioned, in the geographic expansion into Finland. We also expect that Sweden's anticipated membership in NATO will give us improved access to procurements and new potential customers and users. Great. Moving on to the segment of North America, what have been the overall trends? Yeah. So, in the fourth quarter, revenue decreased by 61% compared to the same period the previous years, to SEK 8.9 million. In this segment, the defense sector accounts for 87% of the revenue. And since the size of individual deals is very large and the finalization of several of these has been pushed forward, it has a significant impact on the quarterly trends. The fundamental reason for this is that the American defense budget is delayed and not yet approved by Congress. And the assessment is that the budget will be approved no later than the second quarter of 2024, and that orders must be finalized by the end of September as the next fiscal year begins, October 1st. And to enhance our position within the U.S. defense sector, we have recruited a new president and appointed a new board of directors. Another area worth highlighting is that we have invested and expanded into the private sector. We have also secured new contracts during the quarter. Finally, the international segment has seen considerable growth during the quarter. Could you please tell us more about this? Absolutely. As we can see in these numbers, the international segment has significantly advanced its position during 2023. This resulted in revenues increasing by 120% compared to the same period last year, amounting to SEK 62.3 million. Though this segment accounts for 58% of the group's revenue in the quarter, the growth is primarily driven by Europe and Asia-Pacific. 77% of the revenue comes from the defense sector, with the remainder primarily from the privates. We're glad to see this trend as the investments made into the sales organization are a significant contributor of the growth. Also important for the quarter and the future is our signing of major contract extensions with NATO. Finally, another thing worth mentioning in international is our delivery of solutions to one of the world's largest humanitarian organizations. This is very important for the 4C brand now and in the future. Thank you. Comparing all three segments, we can see a clear difference between 2022 and 2023. The international segment has become a lot more important for 4C Strategies, amounting to almost half of the net sales. Do you see this trend continuing? As mentioned and shown in the 2023 graph, our full year net sales growth is suffering from lower levels of sales in North America. Our outlook is that the international segment will keep being an engine of growth. However, going forward, we expect the revenues from the segments in more balance as we expect the defense sector in North America to recover. Thank you. Looking forward, what are your views of the coming quarters and year? Well, our ambition is in the medium term to achieve a net sales growth of more than 20%. And that 70% of total net sales is generated by software revenue. In addition, our ambition is to generate an adjusted EBIT margin of at least 20%. And during the upcoming year, many of the delayed sales processes from 2023 are expected to materialize. And due to the size of individual deals, they may have a significant quarterly impact. We, therefore, anticipate continued quarterly volatility and expect growth to pick up during the second half of the year when the situation in North America has improved. The work to strengthen our global brand continues. We're excited that our R&D is shifting more towards innovation, for example, by having AI as an integrated part of Exonaut. And I look forward to presenting more on this in coming quarters. Thank you, Magnus. Also, a big thank you to the audience for your attention during this part of the presentation. We will now address the questions that have been submitted in the chat. Okay. First, before turning into the Q&A, I would like to welcome Anders Nordgren, our CFO. Magnus, over to you. Yes. Let's start with the questions that have been submitted. So, I'll start with the first one. In your Q3 closing, you mentioned several delayed deals. Were these closed during the fourth quarter? The answer is yes and no. Several very important deals, as we have already announced in press releases, were converted. But if we go back to the practical, approximately 5 key deals were unfortunately slipped into 2024. But our ambition is to convert all of them in the coming quarters. So, yes, we can go to the next one. The Q4 figures in the corporate sector came in strong. What is the reason for the strong end to 2024? Well, as mentioned in the Q3 communications, we have been experiencing delays. And there is a more difficult investment climate, especially for the non-defense part of the business. In Q4, we were able to convert several of these contracts. The Q4 corporate sales grew with 121%. Full year, 12%. So, we have a cash flow question here also. We actually have two. So, the cash flow for the year has been negative during 2023. Can you elaborate around the main factors affecting cash flow? Sure, I can take that one. So, we are leaving two years of investments behind us, investments that we have made into our four strategic pillars and where the majority has been allocated towards sales and R&D, all according to plan and what we have been communicating. So, the main reason to the development, I would say, is the poor result or the weak result in North America during 2023, timing and invoicing plans of large software contracts. And that is something that we need to accept due to especially military budgets. But important to highlight is that our military customers are always paying according to contract. Another reason to the development is the repayment of tax support or the tax debt, COVID support, which is planned to be finalized during next year or 2024. Our ambition 2024 is, of course, to see a more positive trend in the cash flow, which we plan to deliver with a more profitable growth, when we will return to profitable growth during next year. Okay. Yeah. Next question, and they are coming in here. So, during 2023, the international segment has become a lot more important for you, going from, okay, growing from a quarter of revenue to almost half. Is that something you are pleased with? Yes, we're pleased with the performance from international, even though we were expecting higher performance on the corporate sector. I'm especially pleased with the new business and the growing pipeline in Asia-Pacific. That was better than expected. We expect the international segment to be, of course, a very important engine of growth. But looking into 2024, we also see that the three segments should be in more balance, looking at that. So, going back to North America segments decreased in revenue, how do you see that in the coming quarters? I think I mentioned this in the webinar. It's no secret that the second half of 2023 for North America has been a major setback for us. It's also the main underlying reason for our 2023 challenges. However, the number of new and exciting opportunities gives us a lot of confidence that we will be able to deliver stronger in 2024. Yes, we also have a question on our climate resilience solution. Can you comment a bit more on how the climate solutions were received by the customer? What's the outlook? It's a very good question. Overall, there has been, I would say, large interest and positive response. It's also clear for us that customers are more careful. And this goes for the whole corporate, but especially, I would say, in the climate area, being more careful in investing fully into software at this stage. They're monitoring and evaluating how they're going to manage the compliance requirements where there are no options. The feedback we're getting, and we're fully confident that this solution is a very important complement to our overall solution. And we are budgeting for a number of contracts in 2024 in this area, especially with our existing customers that we already have in other areas. Yes. Let's scroll down. Just a second. Some technical issues. There we are. So, next comment, operating cost OPEX. There are questions about our outlook for 2024. I can read this one. Operating costs, especially personnel costs, have increased for both the quarter and the year. Can you elaborate around this and expectations for 2024? I think we have several questions on that topic. So, operational expenditures have increased in line with expectations, both for the quarter and for the year 2023, I would say. For 2024, we will focus on streamlining our administration and support functions together with a continuous focus on improving brand awareness, expansion, and sales. This means that the cost is expected to increase in 2024, however, not in the same pace as the revenue is expected to grow. Okay. There's a lot of questions on our next year outlook. What are your views on the coming quarter and year? Are we seeing the same level? Well, what I can say is that the plan next year is to reach our financial targets of 20% growth. Recovery in North America that we talked a lot about today is essential to reach that target. We especially anticipate more accelerated growth in the second half of the year, as we also announced, and that is mainly due to the already planned contracts, but also the budgets, especially with our military customers. The quarterly volatility is, of course, unfortunate, and we're going to do everything we can to balance that. But it is a nature of our business and the sales processes we operate within. Let us see here what we have more. Are there anticipated changes in customer behavior or market conditions that could impact 2024? It's a very difficult question. If we look at the geopolitical environment and our global presence, of course, it affects our customers. I mentioned also how busy our customers are due to the world situation. However, I think this goes for all actors in this industry. Longer sales cycles are clearly something we are facing in 2024 and planning more for. Clearly, as I said, on the volatility, it makes the outlook more difficult. But it also means that, you know, we are more relevant than ever and we are, you know, selling more and more contracts. But of course, we're monitoring the world and trying to adapt to it. So, that I think was the last one there, right? Okay. Okay. Thank you for all the questions. Thank you. So, that concludes this webinar. I would like to thank both Anders and Magnus, of course, but especially everyone that participated. So, thank you for today. Thank you. Thank you. Talk to you later. you. Talk to you later.