Welcome to Vitec Software Group Q1 2024 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Olle Backman and IR Patrik Fransson. Please go ahead. Thank you, operator, and a warm welcome to everyone on this call, where we will cover the Q1 report of 2024. My name is Patrik Fransson, I'm Head of Investor Relations at Vitec Software Group, and with me in this room is our CEO Olle Backman. We will, again start with a brief overview, of Vitec and then followed by an update of the Q1. As always, after the presentation, we will open up for questions. With that, I hand over to you, Olle. Thank you, Patrik, and warm welcome to this presentation. As always, I will start up with, with the broad picture here. Those of you have seen it before, not much changed, but that's part of the point. What has changed, of course, is that we are now 41 business units. And the pro forma sales is close to SEK 3 billion, and we're approximately 1,500 employees. Other than that, it's fairly stable. If you look at our five home markets, the four Nordic countries and the Netherlands, you can see the sales distribution is, by quarter by quarter becoming more and more even, basically. And that's also a good thing. And then just moving on, no changes here either, but it is very important to keep in mind how we work and with the strategy and the strategy chain. You can read this from left to right or right to or the other way around, starting with the values or starting with the vision. I prefer to start with the values because that is sort of the foundation of the company. Here it's very clear that we are a product company. That's our foundation. We try to keep things simple, but as always, we don't mistake simple for being sloppy. It's really hard doing simple things. But it's, it's just a mindset of trying to do things, in the most efficient way. Then, of course, trust and transparency. The bigger the group becomes, and I, I wrote that also in the Q1 comment, it's very important that we share knowledge and share best practices within the group, but that really makes us grow, makes us more efficient. So that's a very valuable part of this. Then, of course, the brand promise to rely on today and tomorrow. That's basically what we do. We invest today in our products and in our people in order to be relevant tomorrow and have a clear communication with that to our customers, makes us not only their choice for the future, but they stick with us. And that's also a very important part of what we do and how we do it. Then moving over to our focus areas, which we have, this is a way we have chosen to work with sustainability. This is also nothing new. We have four focus areas: responsible growth, which is basically taking care of the existing customers, our brand, and how we work together. We have, of course, our enabling products, which is, by far the biggest impact that we can have on society. But most of that impact is with our customers. So we facilitate them. We help them through our software. Then, of course, empower people, our staff, doing all the work and the fantastic efforts there. And of course, we reduce our own footprint where we can and then so forth. Moving over just to that, responsible growth, touching on that a bit. And it's all in developing the business units that we have. We do that through our decentralized organizations, product investments, and solid focus on organic growth. To help us there is, of course, our business model where we have a high percentage of recurring revenue, which is something we strive for. We're usually also the market leader in our respective niches. Then, of course, we add acquisitions on top of this. Here we have the same set of criteria that we look for in each company. They should be, of course, vertical, well-established, profitable. They have their proprietary software, which means that we are in total control over the product development and a decent amount of recurring revenue. And this has been very consistent over the years. Then, one way of looking at the entire group is, of course, by vertical. Here it's a bit of a new picture. We just try to highlight the great variety within the group, and which makes us a very sort of stable and company so that we are not dependent on any subsegment or vertical, especially. Some are bigger. Some are a bit smaller. You can see property management, energy, healthcare, very stable verticals that we have been active in for, for many, many years. And then you have others popping up, with, with acquisitions coming along. But, all in all, we are more than, I think, 20+ different verticals distributed across these 41 business units. And of course, looking at the business units of today, this is a picture that you also recognize, so in which country, when we bought them, the annual sales numbers, for last year and the recurring revenue portion there. And, and here you can see it's everything from 46%-100%, in, in, recurring revenue model. Talking about acquisitions, of course, this year we started in January with the acquisitions of Dutch LDC, the software that helps in labor mobility in the Netherlands, career coaching, matching of candidates and vacancies and trainings and so forth. A really nice addition that has all the characteristics of a nice software company that we like, a bit on the small side, but nevertheless very good addition. Just a few more. This is last year's six acquisitions that we did. And here you can also see the range between smaller, like, Entry Event and DL Systems, which are actually add-ons to an existing business unit that we have. And then Megin, Kodia, Memorix, and Enova, are all standalone businesses. And you can also see that, you know, it was both in Sweden, Finland, and the Netherlands, for last year. Organization-wise, we look pretty much the same. We have our very important strategy here with the autonomous business units there in the bottom, of course. And they are doing all the work. And that's the foundation of the company. To their aid, they have the very important VPOs, which is like a working chairman of the board, helping, coaching, but also challenging them to become a little bit better each year. And then, of course, we have group functions that support this. And one of these support functions is all about sharing, like I mentioned earlier, that this is something that has grown over the years. And we have now a very good platform on how to share this common culture with sharing concepts and forums for best practice. And it could be anything from development. It could be marketing. It could be finance. It could be product development, basically everything that is of interest. Of course, today, UX, AI forums, and such like, there we challenge each other. We share good practices, best practices, but also, of course, mistakes that have been made, in order for everyone to be able to become a bit better. Finally, of course, we have our own footprint that we try to take care of. We have a target to reduce our carbon emissions by 75% to 2030. And we are on the path in that direction, moving along nicely. Of course, we had a huge downfall in the pandemic, but we have sort of been able to sustain that level, even if we grow a lot. So this is something that we work with continuously during the year. Then, moving over to the interim report, some numbers for you. Look at sales, see by quarter, pretty solid, what we saw, 17% in total. And if you look at just the subscription-based part, we grew 10% in local currencies, which is a good number. Services and licenses are a bit lower, especially if you compare to Q4, but there is a bit of a seasonality effect as well, and an effect, like I mentioned in the report, that it has during 2023 been a bit slow in new sales in certain verticals. And of course, that affects license and service revenue a bit. But of course, looking at the profit levels, margins, really good, 31% EBITDA compared to 30%. And then keeping up that pace is really important for us. EBIT margins, which is a bit lower down, follow the same pattern, basically. We had 21% compared to 20%. And then, of course, really, really, good cash flow for the quarter as it should be. But, you know, we had 42% growth in cash flow, which was really strong. Of course, that cash flow also has an impact on our financials. And so the net debt to EBITDA came down from 1.8 at the year end down to just below 1.4. Talking about that organic growth, which I mentioned a bit before, you can see two charts here. One is the organic growth in subscription-based recurring revenues. And then this is really the big foundation of Vitec that gives us this stability. And like I said, 13%, 10% if you take out the currency, or FX effect. On total sales, the equivalent numbers was 9% growth, or, or 6% if you take out the currency effect. And this is on rolling 12-month basis because we think that's an appropriate way of measuring such a stable business like ours, where we usually send invoices year ahead or quarterly ahead or something like that. We increase prices once a year, perhaps. So I think rolling 12 months is a good way of measuring how the company is developing. And of course, diversification of sales, like I mentioned, this gives us a great both stability and low risk. You have the between the countries there. You also have the bigger recurring revenue of 86%. And And of course, also the customer distribution, so no big single big customers. The top 10 only accounts for 7% of the subscription-based revenues. And all in all, we have nearly 25,000 customers. And that's just, rounding up, some highlights there. Well, like we said, solid quarter in terms of growth, in sales. And of course, the annual recurring revenue part is up to SEK 2.5 billion, total sales, like I mentioned earlier, SEK 2.9 billion on a rolling 12-month basis. EBITDA for the quarter, up 19%, margin up one percentage point to 31%, and strong cash flows. So all in all, a pretty solid quarter, total in line with what our own internal expectations were. So with that, we sort of round off the presentation and open up for questions. If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Erik Larsson from SEB. Please go ahead. Thank you, operator. Good morning. Hope you are good. I have two questions. So first off, a question on Enova. So you, you acquired it more or less a year ago. And I'm just curious if you have noted any clear seasonal patterns that are worth mentioning that we should take into account going forward. Yes. Hi, Erik. Yeah, we acquired it. I should say we consolidated Enova from March 1st. So in the comparison numbers, we have one month. And of course, we have the full three months in this quarter. So that's one thing to note. And then the seasonalities. Yeah, there is a certain seasonality in that market where they have the balancing market. And it's usually the Q2 and Q3 are the strongest because when the power plants are running at full speed during wintertime, there is less volatility in the grid. And during summertime, of course, they tune down them a bit. And then there's more solar power, more wind power. So usually Q2 and Q3 are a bit stronger in that particular market. Okay. Great. Thanks for that. And then, second and final question just on the M&A outlook. So I'm curious if you have any specific country where discussions are better in terms of price and such, or any market standing out on the negative side, perhaps, if you have anything you can share. Well, no, no, no, not really anything to share. I mean, we are active in all our markets. And we also look at new markets, like we always have. Like I mentioned many times before, we apply the same set of criteria, both when finding the companies. And we have a fairly similar model when we look at prices and multiples. So we are basically standing at the same spot all the time. And then markets go a bit up and down. And sometimes we're more successful and sometimes we're not. But I'm pretty confident that, I mean, we are able to keep up a decent M&A pace. We have lots of things to look at. So there's no shortage in volumes or inflow of companies coming our way. Of course, we need to assess them. We need to always, you know, buy the right type of companies for the right reason and hopefully for the right price. But there's no market, you know, that's especially standing out in one sense or the other. It's very company by company. Okay. Makes sense. Thank you for that. I'll get back in queue. Thanks, Eric. The next question comes from Daniel Thorsson from ABG Sundal Collier. Please go ahead. Yes. Hi, Olle and Patrik. I can start off with two questions as well. The first one is on recurring revenue. That was up 1% versus Q4. I guess pricing is behind that, which means annualized roughly some 4%. Is that the correct observation for the current price increases that you see? And also, how do you think we should think about kind of the quarter-over-quarter organic growth here in recurring revenue during 2024? Is this 1% level here in Q1 a fair assumption also ahead or maybe slightly higher than that? Thanks. Well, hi, Daniel. Thanks. Well, if you take price increases, yeah, I mean, they are roughly in line with, that's a fair assumption that you mentioned. They're around the 4%, because that's basically the average of the different CPI indexes and that we have in the various markets. We also have some companies that use more labor cost index than, and then they are roughly the same as well. And it comes a bit different. Not all price increases have been made during Q1. There's a bit of a lag there. But by Q2, we have made all of the price adjustments for the year. But the ballpark is in Q1 for sure. And then when it comes to growth, sequentially, I think you should look at the subscription-based part of the recurring revenue because the transaction part, that is a bit more volatile. And it's not always weak control in any sense that. But it's also a very different gross margin contribution from these two different revenue streams. Of course, the subscription-based part is very high because it's our own in-house developed software. And then the transaction-based is some sort of revenue share or cost-plus component to that. And that's, of course, a very different gross margin profile. Okay. Okay. Okay. I see. That's, that's helpful. Thanks. Second question then on M&A, which I think is, you know, relatively in line with Erik's question here. But if I rephrase it a little bit, I think in Q4, you said that you looked at some 200 targets last year. You bid for 26 and you won 6 or so, if I remember the numbers correctly. And has this year started off at around the same pace for Q1 if we if we kind of look at by quarter? Or do you see any changes in the M&A landscape to be aware of for us? No, not if you look compared to last year's number. Of course, M&A also has a bit of seasonality in it. Lots of things that usually they want to close before the big holidays. And then at some part, you wait in the year-end figures. So, January is always slow. But that was the same last year. So, I think this year has started up in the same way as last year. So, yeah. Excellent. Looks, looks basically the same, in terms of the volume. Yeah. All the potentials you see out there and so. Yep. Yeah. Thank you very much. The next question comes from Viktor Lindström from Nordea. Please go ahead. Yeah. Hi. Thank you and thank you for taking my questions. So first off, the number of employees seems to be up 6% on a sequential basis. But the personnel cost is roughly flat. So is there any specific reasons for this? I think it's a bit of a calendar effect there that, I mean, the Easter was early this year. There's some more, yeah, holidays basically taken out. So no, no, no drama there. All right. Thank you. And the second one here. So you stated that you've seen some slower, I mean, market sentiment here. Have you seen any changes here by the start of Q2 in terms of new sales? No. It's very consistent both, I mean, how we end the ballpark of Q4 of 2023, all of Q1, and also so far in April. No changes really. It's very different, I mean, vertical to vertical. There are some verticals that are doing really great. And some are more challenged. So there's no change in that pattern we can see. Okay. Thank you very much. That was all for me. The next question comes from Christian Binder from Redeye. Please go ahead. Hi. And thanks so much for taking my questions. I have two quick follow-ups on Enova. You already mentioned the potential seasonality with stronger Q2s and Q3s. Looking at your transaction-based recurring revenues, it seems like there is a sequential decline since the first quarter of consolidation in Q2 2023. Is that purely due to, you know, the seasonality you mentioned? Do you think there's also maybe a broader mean reversion for the demand for Enova's products, so to speak? I think I can answer that in a few layers there. One, of course, the demand for Enova's products. Enova is a software company to start with. I mean, the demand for their underlying software is great, actually. And it's really growing very steadily and very well. Then, of course, it is this big transaction-based part, which is the participation on the balancing market. And there, no, I haven't seen it's not a sequential decline there. It's in line with our expectations of how the balancing market works. But yet again, we don't control the balancing market, because that's totally up to the big power plants and the big utilities. If there is a market or not, what we can see is that we hold up our market share. We hold up our margins. But then the volumes there, we are totally in the hands of others. But as I have said many times before, this is a great value add for our customers, which is the horticulture sector mainly in the Netherlands. We provide great value to them. And of course, we make a decent amount of money on that as well. But there's no big risk to it because we don't have to invest to protect this kind of volume. And we don't have to organize ourselves against it. So, it's I mean, we just have to go with whatever the big utilities are doing there. But I would say it has been more stable or less fluctuations than we actually expected. But still, of course, there are some bumps up and down there, but actually less than expected. All right. Got it. That's very helpful. One last follow-up there. I guess, out of your current, potential contingent, considerations of SEK 900 million, around SEK 500 million, were related to Enova. I guess your view on how much you need to pay there potentially remains unchanged. Yeah. Yes, it does. I mean, we paid the first installment now and during Q2. And they are performing great. So, the—I mean, we still expect them to reach their full potential. And hence, we have accrued for that full earnout. Perfect. Thank you so much. That was all from my side. The next question comes from Erik Sandstedt from Kepler Cheuvreux. Please go ahead. Hi. Thanks. Erik Sandstedt from Kepler Cheuvreux here. Just have a few questions. Firstly, a follow-up on M&A, although you elaborated on it in the previous question. But you've only done one acquisition year to date. And is that related to lack of interest in companies to buy at the right valuation multiples? Or does it rather reflect a higher gearing in the company right now, although it came down seasonally in Q1? Just a bit curious on that. It's the first part there. I mean, like I said, we have a good pipeline. But, you know, we buy companies for the right reason at the right price. So no, we have there; there's nothing stopping us from, financially, that is, from buying nice companies, so. Yeah. Okay. Fair enough. Also, in terms of, you only disclose organic growth on a rolling 12-month basis. And, and, and I guess a deviation on revenues relative to expectations in this quarter may have been on acquired units. Can you, can you share some more details and light on the revenue impact year-on-year from acquired companies in this quarter? And also, I guess it's fair to assume that the impact will be lower in Q2 versus Q1 from acquired units. Well, we don't distribute it in that detail. So sorry. I can't really help you with the specifics there. But on a general note, of course, looking at next quarter, we will. I mean, we've made some pretty big acquisitions throughout 2023. So for sure, there is a tailwind with us, especially now in the early parts of the year. But then, like I mentioned, of course, we hope to land a few acquisitions also this year, more than the one we have already made. But that's still to be seen. Yeah. Thanks. And then just a couple of specific questions. Tax rate guidance for the year? Yeah, that has gone up. And that's, of course, a mix. I mean, in the Nordic countries, we have very stable tax. And then in the Netherlands, it's a bit higher. And then, we have quite a chunk of revenue coming from the U.S. where taxes have really gone up. So, looking at where we are now, I think it's roughly around 24%. And that seems to be a fair assessment, going forward with the mix we have today. Yeah. Thanks. And also specifically on the depreciation cost in Q4 was pretty high, SEK 33 million, I think. And now it was down to SEK 22 million in Q1. And if I understand it correctly, there was an leasing impact in Q4. But how should we think about depreciation over the coming quarters? Is the Q1 sort of level a fair proxy going forward? Yeah. It's a fair proxy on existing units. What happened in Q4 is that we acquired some of the units in the later part of the year. And then you started recalculating that according to IFRS. So, we have the right number now for the units that we have. So I would say the Q1 depreciation is the best proxy for that. Okay. Perfect. Thank you so much. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Okay. Thank you. Well, thank you all for listening in and also for posting the questions. Always interesting to have a dialogue with you guys. And all in all, we're pretty happy with the quarter as it turned out. And we look forward to the next. So, hopefully, we will hear each other in the next quarter. Bye-bye.