Smartcraft Group Ab (publ) · OMXSTO:SMCRT
Smartcraft Group Ab (publ) — Q4 2024 Earnings Presentation
27 slides from Smartcraft Group Ab (publ)'s earnings presentation, Feb 13, 2025
Slide 1: Q4 2024 report
Q4 2024 report FEBRUARY 13TH, 2025
Slide 2: Disclaimer
2 Disclaimer IMPORTANT – You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by SmartCraft ASA (the "Company") or any person on behalf of the Company, and any question-and- answer session that follows the or
Slide 3: Agenda
3 Agenda o Q4 in brief o Financials o Summary and Q&A
Slide 4: This is SmartCraft
4 This is SmartCraft Leading Nordic provider of SaaS solutions for craftsmen and the construction industry 260 employees Norway, Sweden, Finland and the UK 13 400+ customers 130 000+ users
Slide 5: Construction industry challenges
5 Construction industry challenges Low margins Conflict Accidents Documentation 0-5% margins = High High level of conflict High level of Increasing demand level of bankruptcies between construction accidents and deaths for documentation company and and reporting customer
Slide 6: What we solve
6 What we solve People Material Documentation o Business overview and insight with control of people and material costs o Digital flow of documentation to avoid conflict o Digital quality assurance to build according to rules and regulations o Health and safety at your fingertips
Slide 7: Q4 2024 in brief
7 Q4 2024 in brief Continued strong growth, strong cash flow but increasing churn and downgrades MNOK 482 24% MNOK 48 9% Annual Recurring Adjusted EBITDA-capex Operating cash flow Churn Revenue -1 p.p. + 53% +2% +25% excl. +3,1%acquisitions points +45% +21% All growth figures are YoY
Slide 8: Strong sales performance, but organic ARR growth dampened by soft macro
8 Strong sales performance, but organic ARR growth dampened by soft macro 8% organic growth, hampered by: Churn in % of revenue 10 1. Increasing no of customers churning due to 9 8 bankruptcies, 2 p.p YoY effect 7 6 2. Higher level of downgrades from existing 5 customers as their business activities
Slide 9: Continued effective marketing and sales execution
9 Continued effective marketing and +58% brand exposure 1 (52,5 million) sales execution Best in class sales engine with broad reach and highly effective lead conversion +11% inbound leads +70% sales meetings 44% Sales Conversion from sales Meetings Meetings to sales (LTM) Lead processing Campaigns
Slide 10: Solid marketing and new sales performance in a challenging market
10 Solid marketing and new sales performance in a challenging market o Number of new customers in Q4 at highest level since Q1 2022 * New customers (quarterly) * 600 o Best ever new sales performance in Q4 for Bygglet, 500 400 our solution carrying the highest revenue in the 300 Group 200 100 o Unde
Slide 11: Adjusted EBITDA-capex margin reduced by M&A and planned investments
11 Adjusted EBITDA-capex margin reduced by M&A and planned investments Adjusted EBITDA-capex margin (%) 35 o Two acquisitions in 2024 dilute margin by 5.8 p.p 30 25 o Strategic development initiative in H2 2024 lowers 20 margin by 1.9 p.p 15 10 o Margin increased when adjusting for these two 5 0 fac
Slide 12: Improvements in recent acquisitions
12 Improvements in recent acquisitions o Our strategy is to increase recurring revenue in acquired High-level strategy to enhance performance of acquired companies companies which typically drives down short-term revenue and margin o Locka (acq. Apr 24) o ~50% recurring revenue at acquisition o Annu
Slide 13: Successful launch of disruptive solution for electricians
13 Successful launch of disruptive solution for electricians o SmartCraft Spark, disruptive solution for electrician companies, o Aim is to build a complete ecosystem for electricians in all markets, starting with offer and calculation tools Customer endorsements: o SmartCraft Spark creates value fr
Slide 14: Large total addressable market (TAM)
14 Large total addressable market (TAM) o TAM of NOK 50 billion* o ~700.000 addressable construction 10% companies 10% o ~10-15% penetration of mission critical 17% solutions o Ongoing digitalization of a digitally immature market 63% *Analysis by SmartCraft, August 2024. Calculated on basis of ARPC
Slide 15: Positive signals in Sweden and Finland
15 Positive signals in Sweden and Finland Swedish market looks to improve after four interest rate cuts Construction starts have surpassed completions in Finland1 Norway is still experiencing a tough market with no immediate signs of recovery More challenging construction market with high interest r
Slide 16: Q4 key takeaways
16 Q4 key takeaways o Continued strong demand from potential customers but o Growth dampened by higher level of customer churn and downgrades and headwind from lower price increases YoY o Improving performance in acquired companies will gradually increase ARR, but puts pressure on margin in the shor
Slide 17: Financials
17 |, Smartcraft Financials BETTER DIGITAL TOOLS
Slide 18: Attractive financial model
18 Attractive financial model Key metrics 2024 MNOK MNOK 482 37% 179 9% 27% Annual Recurring Adjusted EBITDA Operating CAGR Revenue margin +3,1% points cash flow Churn since 2019 +21%
Slide 19: High growth in recurring revenue as basis for success
19 Quarterly ARR growth history, mNOK High growth in recurring Organic growth M&A revenue as basis for success 54,7 o 25% growth in ARR o 8% organic growth year-over-year 5,8 o Increasing churn combined with a high level of 17,3 10,3 12,8 13,2 12,7 downgrades hamper growth 12,1 9,2 2,0 8,8 3,4 o Ann
Slide 20: Continued growth in revenue and strong profitability
20 Continued growth in revenue and strong profitability Solid YoY revenue growth Consistently high profitability R&D capex mNOK mNOK 97.2% 94.0% 40 0 35 0 +27.7% 0 136,3 30 10,0 % 0 39,3 % 40,9 % 38,5 % 7,9 % 36,0 % 34,2 % 25 0 107,0 20 0 31,4 % 33,1 % 13,6 0 29,2 % 15 25,3 % 24,2 % Acquired 0 Locka
Slide 21: Strong revenue growth in Sweden
21 Strong revenue growth in Sweden (mNOK) Sweden +29% o Strong growth o Acquisition of Locka o All-time high new sales, but organic growth 50,8 29,6 65,6 32,2 hampered by churn and downgrades, and headwind from lower price adjustments than last year Q4'23 Q4'24 Revenue EBITDA Revenue growth o Positi
Slide 22: Challenging market in Norway
22 Challenging market in Norway (mNOK) Norway +7% o Decreased growth in revenue o Challenging new sales in the quarter, many delayed decisions 43,5 16,2 46,7 16,8 o Growth hampered by increasing churn and Q4'23 Q4'24 downgrades Revenue EBITDA Revenue growth o Headwind from lower price adjustments th
Slide 23: Positive signals in a challenging Finnish market
23 Positive signals in a Finland (mNOK) challenging Finnish market +3% o Growth improved from -1% in Q3 and -2% in Q4 last year 12,6 3,5 12,9 4,2 o Expecting continued improvements Q4'23 Q4'24 o The previously expected rapid bounce-back likely at a slower pace due to a large customer downgrade Reven
Slide 24: Solid financial position and strong cash flow
24 Solid financial position Balance sheet, Dec 31, 2024 and strong cash flow mNOK Cash and cash equivalents Deferred revenue - to support growth strategy and M&A activity Current assets Current liabilities Non-current assets Non-current liabilities Goodwill and intangible assets Equity Operating cas
Slide 25: Key focus to drive continued profitable growth
25 Medium-term financial targets Key focus to drive continued profitable growth o Continue with marketing and sales excellence to build solid new customer pipeline 15-20% Bolt on M&A o Capitalize on investment in SmartCraft Core, firstly Organic growth with SmartCraft Spark o Realize synergies and u
Slide 26: We continue on our profitable growth journey
26 We continue on our profitable growth journey o Continue our strategy to build a great and solid company o Reduced operational risk o Consistent strong operational cash flow Make sure to follow us for the latest news!
Slide 27: SmartCraft
vllo SmartCraft e BETTER DIGITAL TOOLS