B3 Consulting Group Ab · OMXSTO:B3
B3 Consulting Group Ab — Q3 2023 Earnings Presentation
40 slides from B3 Consulting Group Ab's earnings presentation, October 2023
Slide 1: Interim Report B3 Consulting Group Q3 2023
Interim Report B3 Consulting Group Q3 2023
Slide 2: Speakers from B3 Consulting Group
Speakers from B3 Consulting Group Questions? Please click on the envelope icon next to the audiocast or send an email to: ir@b3.se CEO HEAD OF COMMUNICATIONS & IR Sverre Bjerkeli Katarina Lundqvist CEO B3 SKILLED CEO B3 KODIFY Fredrik Fiedler Johan Kuylenstierna
Slide 3: ENPS
ENPS 63
Slide 4: André Karlsson new CFO
André Karlsson new CFO André Karlsson has been appointed new CFO for B3 Consulting Group He has a bachelor's degree in accounting and finance from Uppsala University André Karlsson has worked as Acting CFO since July 2023, Head of Business Control at B3 since 2022 and before that as Business Control
Slide 5: Q3 2023: Declining growth in Sweden, full steam in Poland
Q3 2023 Declining growth in Sweden, full steam in Poland • Revenue 223,3 (235,8), -5.3% growth • EBIT Q3 10.0 (24.4) MSEK • EBIT-margin 4.5% (10.3%), • Profit after tax 9.7 (20.8) MSEK • Profit per share before dilution 1.05 (2.14) SEK • Average number of employees is 799 (762) • Revenue incl. B3 Po
Slide 6: Financial overview Group
Financial overview Group Declining growth and EBIT 4.5%, weaker market demand Q3 jan-sep jan-dec Extract of B3’s key figures 2023 2022 Δ% 2023 2022 Δ% 2022 Q3 EBIT 4.5% after one one- off relative to management Net Sales, SEK million 223,3 235,8 -5,3% 847,2 815,8 3,8% 1 148,1 changes sized 2.5 SEK E
Slide 7: Alternative financial overview incl. B3 Poland
Alternative financial overview incl. B3 Poland Poland is doing very well again Q3 jan-sep jan-dec 2023 2022 Δ% 2023 2022 Δ% 2022 Alternative key figures with B3 Poland fully consolidated² Net Sales incl. B3 Poland, SEK million 264,0 269,0 -1,9% 963,4 900,8 6,9% 1 269,5 Increased utilization rate and
Slide 8: Revenue break-down
Revenue break-down Utilisation rate has stopped falling but still on low level Revenue break-down second quarter (MSEK)* 7 -1 Positive effects due yo 14 Increase in the number of -8 employees relative to 2022 -3 will continue down in Q4 236 One working day less 223 -22 Net Sales FTE Hourly rates Pro
Slide 9: Customers and new business
Customers and new business Strengthened relationships with many customers • B3 has continued to strengthen the positions at several of Sweden’s major banks with consultants from several of our specialist companies • B3 has been awarded in SVT's procurement of IT consultants in the categories App dev
Slide 10: Other important events
Other important events B3 wins new awards and welcome start ups • B3 was awarded the IT consulting company of the year when the event Developers Day was arranged for the first time in October • B3 made it to the final of the Career Company of the Year 2023 as one of 16 companies among over 200 nomin
Slide 11: Updated long term targets
Updated long term targets 11
Slide 12: Adjusted Financial Targets 2023-2025
Adjusted Financial Targets 2023-2025 We adapt our goals to the changing market • The market was very good in 2022 and the outlook has New targets Previous targets weakened more than predicted Revenue SEK 1.5 billion end Revenue SEK 1.7 billion end • Volume target 1.5 (1.7) SEK Billion end of period
Slide 13: Our companies
Our companies Fit and proper, doing well in a difficult market B3 Healthcare Consulting B3 HealthTech B3 DBAce B3 Mobile B3 Networks B3 Cloud B3 Indes B3 Skilled B3 Kodify B3 Visab Consulting B3 Init B3 Business Transformation B3 Complete B3 Vibe B3 Financial Consulting B3 Upphandling B3 Innovation
Slide 14: Market Outlook
Market Outlook Still challenging, we adapt quickly • Q3 market is considered equally soft as end of Q2, but is not falling further through Q3 • How market will continue in Q4 and onwards is too early to say • IT mega trend is on our side • We adapt to the new situation and have an ambition to get ou
Slide 15: EBIT% of the companies
The 23 companies’ - B3 is not a company in one market 10 companies with higher Ebit than last year in a difficult market 20 15 EBIT% 10 5 Note that 2 companies with EBIT < 0% has been adjusted to fit the scale of the picture 0 Growth <0% Growth 0-20% Growth >20% 85
Slide 16: We accelerate and brake at the same time
We accelerate and brake at the same time
Slide 17: We accelerate
We accelerate
Slide 18: Let's accelerate in the southern Sweden
Let’s accelerate in the southern Sweden B3 is growing and breaking new ground in Skåne • B3 has a strong presence in Skåne with the companies B3 Skilled and B3 Kodify as well as smaller operations through several of B3’s companies; B3 Healthcare Consulting, B3 Healthtech, B3 Grit, B3 Networks and B3
Slide 19: Plats för sidfot
19 Plats för sidfot 2023-10-28
Slide 20: B3 Skilled
B3 Skilled Brain, Heart and Willpower - the core in everything we do • Today we are 60 specialists within software development. • Founded 2011 and we still love our Skilled family and customers • Our office is a home away from home for all of us • Numbers are important, we focus on growing in a heal
Slide 21: Plats för sidfot
21 Plats för sidfot 2023-10-28
Slide 22: B3 Kodify
B3 Kodify This is the way – we grow together • B3 Kodify started in total uphill April 2020, the first people in are still with us today • We built it on a strong foundation of trust and transparency • Today we are 25 colleagues and now we are also expanding to Stockholm • We help our customers to c
Slide 23: New Start-up company decided
New Start-up company decided. Will be up and running from January 1st. First time in history with people from inside B3s organisation. Who's next? We will accelerate We help organisations identify the core – their "winning concept" and maximize the business benefit based on standard cloud-based plat
Slide 24: We brake - Cost cut initiatives
We brake - Cost cut initiatives Parent company will add more value and reduce costs at the same time. HegdeHog inspired by Good to Great. PASSION No 1 in ECONOMY Sweden 24
Slide 25: Cost cut initiatives - financial implications
Cost cut initiatives - financial implications 1.6% in 2024, 2,5% in 2025 based on rather conservative assumptions • Assumption (not guiding) • 0 growth in volume in 2024 (negative in Q1, 0 in Q2 and growth in Q3-Q4) • 10% organic growth in 2025 • Cost cut program delivered according to plan • Poland
Slide 26: Headquarter cost in relation to group revenue
Headquarter cost in relation to group revenue Internal target 6% Illustrative future figures 11,0% Actual HQ-cost 2020-2022 and illustrative figures 10,9% 125 11 2023-2025. 10,1% 10,0% 120 10 • Budgeted 2023 for high growth and strategic investments, could lead to HQ costs at 10.9% 2023 115 9,0% 8,4
Slide 27: Cost cut initiatives – where do we cut back
Cost cut initiatives – where do we cut back We brake and accelerate at the same time Reduced Costs Comment Top management Roles will change and FTE decrease HR - Reduced Roles and responsibilities clarified, reduced FTEs Economy/Admin Increased efficiency and automation leads to fewer FTEs IT/Licenc
Slide 28: Capital allocation strategy
Capital allocation strategy 28
Slide 29: New Capital allocation strategy
New Capital allocation strategy Buy back not considered shareholder distribution but could be used for Earn-outs and option programs Manage Leverage Invest in Growth, buy back for Earn-outs Dividend Organic Start ups M&A • Up from 1.5 to 2,0 x • Reduced to EBITDA since margins • Continued focus • Ta
Slide 30: Buy back programme
Buy back programme Buy back program sized 25 SEK Million decided in the board • Buy back policy states that B3 will only use buy-back for Earn-Outs (Start-ups and M&A) • Discount to intrinsic value should be > 33% • Our intrinsic value analyses show a present discount > 33% with a reasonable margin
Slide 31: Summary
Summary We will emerge stronger from a weaker market • Q3 was weaker, we adjust our costs rapidly • First 9 months were second best EBIT in history • We have a strong market position and a solid business model • We continue to win prizes underpinning our strong culture. • We will accelerate and brak
Slide 32: Q&A
Q&A 32
Slide 33: Appendix
Appendix 33
Slide 34: B3 Consulting Group
B3 Consulting Group 19 years of building a successful group of companies • Consulting company within IT and management • Founded in 2003 • 800 employees in Sweden and 200+ in Poland • 11 Offices in Stockholm, Borlänge, Gävle, Gothenburg, Jönköping, Linköping, Malmö, Sundsvall, Örebro, Krakow and War
Slide 35: Revenue and EBIT (R12)
Revenue and EBIT (R12) Strong long term development, decreased growth in Q3 Revenue per quarter and R12 (MSEK) EBIT per quarter and R12 (MSEK) The dark gray line shows the development per rolling 12 months 35
Slide 36: Revenue break-down
Revenue break-down Strong organic growth based on own consultants Revenue break-down per quarter (MSEK) Comments: 14 13 25 26 B3 has a history of growth in 11 12 14 revenue based on own 12 24 24 19 25 consultants 6 20 9 13 5 12 11 20 19 11 21 22 20 11 9 Insignificant proportion of 9 17 subcontractor
Slide 37: Cash Flow & Net debt
Cash Flow & Net debt Steady financial position and net cash positive 1Comparison figures for Interest-bearing liabilities have been updated 37
Slide 38: Share per Business Area
Share per Business Area Continued growth in Cloud & Technology Platforms Revenue, share per business area EBIT, share per business area Comments: Adjusted names of the business areas since Q1 2023, minor impact on financial reports Equal distribution between the business areas Continued strong growt
Slide 39: Spread across different industries
Spread across different industries Stability and risk diversification in a more uncertain market Share of revenue per industry, Jan-Sep 2023 (Jan-Sep 2022) 39
Slide 40: Creating Possibilities Together
Creating Possibilities Together