Slides
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2 Martin Stenström CEO B3 Consulting Group Katarina Lundqvist Head of Communications & IR
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The fact that zebra stripes have gradually become part of B3's culture has a clear explanation: Just as B3 elevates diversity as a core value, the pattern is unique to each zebra. 3 We aim to be Sweden’s best consulting company B3’s vision and values B3’s vision Is to be Sweden's best consulting company - for our employees, clients, and shareholders. Experiences Competence and continuous learning are important for building trust and confidence among customers and employees Energy With enthusiasm, commitment, and drive, B3, together with its employees, creates a culture of innovation, encouragement, and well-being. Differences It is proven that diverse backgrounds, education, and interests lead to better results in a team. But it also makes the job more enjoyable. eNPS 45 Ai
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A challenging year, preparing for better times • Revenue 1 129.3 (1 140.8) MSEK, -1.0% growth and -5.7% organic • EBITDA 57.5 (107.3) MSEK, EBITDA margin 5.1 (9.4)% o One-off related to Webstep, Polish transaction and other accumulates to 17,4 MSEK. Adjusted EBITDA 6,6% • Profit after tax 85.2 (68.4) MSEK,Earnings per share after dilution 9.56 (7.12) SEK • Proposed dividend per share 0 SEK, capital priority onM&A's • Growth is back in H2, but Sweden and the Swedish market is still challenging • Poland is doing very well (7.4% growth excl. currency effects and 14,3% EBITDA margin) • Successful cost saving programme in HQ (Hedgehog) deliveredsavings of 41 MSEK/year • Recruitment, efficiency improvement and hourly pricesis still on the agenda entering 2025 Highlights FY 2024
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Continued growth in the quarter – restructuring costs for future efficiency • Revenue 336.2 (293.6) MSEK, 14.5% growthand organic growth 4.4% • EBITDA 17.8 (18.6) MSEK, EBITDA margin 5.3% (6.3%) • Profit after tax -1.0 (8.4) MSEK, Earnings per share after dilution -0.34 (0.99) SEK o One-off restructuring cost impacted the result by -6.2 (-3.8) MSEK adjusted EBITDA 24.0 (22.4) MSEK,margin 7.1% (7.6%) • Average number of co-workers in Sweden is 772 • The market has probably reachedits low point and is starting to recover. • Continued improvement in the utilization rate but still not good enough. • Ongoing focus on operational improvements, with expected results during 2025. Highlights in Q4 2024
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7 A weak year ends with 14.5 % growth (4.4% organic) in Q4 Financial overview Q4 2024 – Group FY 2024 highlights • Revaluation of the previous minority interest in B3 Poland resulted in a positive net financial impact of 77.8 MSEK. The revaluation does not affect cash flow and is required under IFRS. Earnings per share adjusted is 0,63 SEK FY. • One-off acquisition costs impacted the result by -4.3 MSEK and restructuring costs (office) by -3.0 MSEK 1 With B3 Poland included: 996 headcount Q4 2024 and 996 headcount jan-dec 2024 ² With B3 Poland included from September: 1 005 avg. headcount Q4 2024 and 854 avg. headcount jan-dec 2024 Extract of B3's key figures 2024 2023 Δ% 2024 2023 Δ% Net Sales, SEK million 336,2 293,6 14,5% 1 129,3 1 140,8 -1,0% EBITDA, SEK million 17,8 18,6 -4,3% 57,5 107,3 -46,4% EBITDA margin, % 5,3% 6,3% 5,1% 9,4% Operating profit (EBIT), SEK million 8,8 13,2 -33,3% 26,3 86,1 -69,5% Operating margin (EBIT), % 2,6% 4,5% 2,3% 7,5% Profit after tax, SEK million -1,0 8,4 -111,9% 85,2 68,4 24,6% Cash flow from operating activities, MSEK 28,4 46,8 -39,4% -14,7 67,8 -121,7% Earnings per share before dilution, SEK -0,34 0,97 -135,1% 9,56 7,12 34,3% Earnings per share after dilution, SEK -0,34 0,99 -134,3% 9,56 7,12 34,3% Closing number of co-workers¹ 996 809 23,1% 996 809 23,1% Average number of co-workers² 1 005 798 25,9% 854 799 6,9% Q4 Jan-Dec
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8 The integration of Webstep is proceeding according to plan • The integration has continued to be successful, with positive effects observed in several areas of the business. • Three new companies have been formed: B3 Link, B3 Beyond, and B3 Engage, strengthening our offerings and creating new growth opportunities. • Operations in Umeå have been incorporated into B3 Vibe, creating a more unified structure. • Synergies have led to a reduction of OH costs, approx. 16 MSEK • Continued focus on strengthening the financial performance. Webstep
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8 It’s time to enter the Norwegian market • B3 have signed a deal to acquire 51% of the shares in Habberstad AS, a Norwegian consulting company within digital transformation with around 40 employees. • The purchase price amounts to 15.8 MNOK for the 51%. Revenue and EBIT in 2024 was 78.6 and 5.6 MNOK. It's afour year “earn-out” 2025-2028 for the remaining 49% shares. • New growth opportunities is a potential upside to running business • The company will remain intact withcurrent management, branding and own internal functions. No cost initiatives will betaken. • The largest customers include a significant share within the defence sector. B3 acquires Habberstad AS Jostein Kvinnesland & Harald Mæhle
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The revenue breakdown is an estimate, uncertainties in the figures presented could exist and should be taken into consideration.10 Positive impact on revenue due to Webstep and Poland Revenue breakdown • The negative impact of the reduced number of FTEs will gradually start to turn around in 2025. 40 10 47 30 FTE 5 Hourly rates 1 Product/ Licenses Sub- contractors 4 Working days 5 Net Sales Q4 2024 M&AOrganic Poland Utilization 294 336 Net Sales Q4 2023 14.5%
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Definition utilization rate: Total invoiced hours / (total available hours – total vacation hours) *Webstep is included in the calculations for the entire quarter Q3-Q4 2024, while Poland only included in Q411 Q4 is the first quarter with and q/q and y/y increase, still not good enough Utilization rate Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q4-24 Koncern 87,8% 86,7% 80,3% 81,2% 78,4% 82,7% 79,1%* 82,7% 85,5% Q3-24 Q4-24 Sverige Q1-23 +1,8% • The gap in QoQ* now increasingfor the first time in 9 quarters • Q4 utilization ex. Poland at 82.7% • Utilization rate still not good enough *
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12 The differences in performance remain significant B3 operates across multiple markets 4 of our companies (approx. 12% of B3CGs total revenue YTD) with very poor results has been excluded to make the scale of the picture more visually proper. Chart is based on YTD numbers (Sep). EBITDA% is an estimate, not 100% accurate. Poland presented as proforma in the picture -5 0 5 10 15 20 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 Growth% EBITDA% • Several subsidiaries are facing significant challenges • We are implementing actions to quickly improve • Slow market in Sweden makes growth challenging
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YYYY-MM-DD Footer goes here13 The program ends after one year, transitioning the project into daily improvements. Cost saving program spot on 9 13 17 24 31 38 9 10 12 17 24 29 32 33 38 40 41 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Actuals Previous Target Q3-23 New Target Q4-23 • Moving according to plan • 41 MSEK Cost savings excl. one-off costs from acquisitions. • Focus on sales and revenue • Continued optimization in subsidiary • No further follow-up in 2025
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14 • Expanded collaboration agreement – Swedish Public Employment Service (Arbetsförmedlingen). • New large-scale assignments – Two of Sweden’s largest government agencies. • Continued growth within several of Sweden’s regions. • In-house team to an international company in southern Sweden. • Multiple expanded assignments within the banking and insurance sector. • New agreements for web development in Sitevision with The Swedish Authority for Privacy Protection's (IMY), Micasa Fastigheter, Simrishamn Municipality e.g. B3 gains new business and strengthens its positions with several existing clients. New assignments and extended contracts
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15 • B3 presents the 2024 employee survey: 86% satisfaction and eNPS 45. • B3 Next is launched and B3 expands to Västerås. • B3 Link emerges from former Webstep. • B3 deepens its IBM collaboration, joining IBM CREATE for AI-driven healthcare. • B3 becomes a Sitevision Platinum Partner, with three MVPs, and wins "Best Intranet" with Humana. • B3 is awarded Employer Branding Company of the Year. 86% Employee satisfaction and B3 establishes in Västerås Other important events in Q4
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A challenging year ended with Q4 revenue growth at 14.5% and organic 4.4% • The Swedish market stayed pretty poor for the whole year • EBITDA and EBIT levels have been unacceptably low • HQ cost saving delivered on target. More is needed on management costs in some subsidiaries • Continued improvement in the utilization over the year • Strengthened by expansion in Poland and acquisitions of Webstep and Habberstad • We are stronger entering a new year Summary
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Q&A
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APPENDIX
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19 The market is predicted to recover • B3 operates in many markets and industries through its 25 subsidiaries • The market has been weak for a long time, but analysts indicate that the market is starting to recover. • The Polish market outlookhas already turn to the better • Generative AI presents great opportunities but also involves significant risks, including legal and security concerns. These challenges create opportunities for us to assist our customers • The IT mega trend benefits us and are well-positioned. Market Outlook
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20 Development over the past five years Revenue and profit Revenue MSEK per quarter and R12 EBIT MSEK per quarter and R12 EBITDA MSEK per quarter and R12 247,8 218,6 163,5 221,5 227,8 233,5 189,0 271,6 290,5 289,5 235,8 332,3 324,6 299,3 223,3 293,6 281,3 266,4 245,4 336,2 851 922 1 148 1 141 1 129 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 2022 2023 2024 19,4 9,6 7,5 5,9 11,8 16,0 15,0 27,8 39,1 34,5 24,4 39,7 40,9 22,0 10,0 13,2 7,9 8,6 1,0 8,8 42 71 138 86 26 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 2022 2023 2024 26,3 16,4 14,3 13,0 17,4 22,0 20,4 31,1 44,1 40,1 29,4 44,7 46,0 27,2 15,5 18,6 14,1 15,0 10,6 17,8 70 91 158 107 58 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 2022 2023 2024
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21 B3 operates in several interesting industries driven by digitalization Distribution across different industries Revenue share per industry Jan-Dec 2024 (Jan-Dec 2023) Banking, finance, insurance 18% (20%) Industry 15% (15%) Government agencies, municipalities 16% (13%) Care 12% (12%) IT, media, entertainment 8% (8%) Membership organisations, associations 6% (6%) Retail 7% (7%) Transport/Logistics 7% (6%) Telecom 4% (4%) Other 7% (9%)
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22 Revenue evenly distributed across the business areas - negative profit development in BA DES Share per Business Area Revenue, share per business area Jan-Dec 2024 (Jan-Dec 2023) EBIT, share per business area Digital Experience & Solutions 36,7% (37,4%) Digital Management 37,6% (39,2%) Cloud & Technology Platforms 20,2% (23,4%) B3 Poland 5,5% (-%) -100% -50% 0% 50% 100% Digital Experience & Solutions -51,0% (35,4%) Digital Management 88,1% (35,3%) Cloud & Technology Platforms 35,9% (29,3%) B3 Poland 27,0% (-%)