Fubotv earnings beat by $0.10, revenue topped estimates
Priavas recently held its earnings call for the fourth quarter of 2024, revealing a year of significant growth and operational achievements. The company reported a 7% total growth for the full year, alongside a record turnover close to SEK 1.6 billion. According to InvestingPro data, the company currently maintains a market capitalization of $9.5M, with a relatively low beta of 0.81, indicating lower volatility compared to the broader market. Despite a competitive market environment, particularly in IT consultancy, Priavas showcased resilience and strategic progress, bolstered by strong performances in defense and energy sectors.
Key Takeaways
- Priavas achieved 7% total growth in 2024, with a record turnover near SEK 1.6 billion.
- EBITDA for the year stood at 9.4%, with an adjusted margin of 10% in Q4.
- The company successfully integrated acquisitions in Finland and Denmark, expanding its Nordic platform.
- Strong demand was noted in defense (60% growth) and energy (40% growth) sectors.
- Priavas aims for a 10% annual turnover growth and a 12% EBITDA over time.
Company Performance
Priavas demonstrated robust company performance in 2024, marking a 7% growth in total revenue. The company achieved its highest turnover ever, nearing SEK 1.6 billion. This growth was supported by strategic acquisitions and a focus on expanding its Nordic platform. Despite a flat market development in Q4, Priavas capitalized on strong demand in defense and energy sectors, which saw significant growth rates of 60% and 40%, respectively.
Financial Highlights
- Total (EPA:TTEF) Growth: 7% for the full year 2024
- EBITDA: 9.4% for the year; SEK 32.6 million in Q4
- Operating Cash Flow: SEK 137 million
- EBITDA Margin: 7.5% in Q4, adjusted to 10% excluding special effects
Outlook & Guidance
Looking ahead, Priavas maintains a positive outlook for 2025, targeting a 10% annual turnover growth and a 12% EBITDA. The company plans to continue focusing on defense, energy, and general industry segments, leveraging its strong customer relationships and adaptive strategies to navigate market changes. InvestingPro analysis reveals that the company currently faces some financial challenges, with an EBITDA of -$0.7M in the last twelve months. For deeper insights into Priavas’s financial health and growth potential, including exclusive ProTips and comprehensive analysis, investors can access the detailed Pro Research Report, available to InvestingPro subscribers.
Executive Commentary
Magnus Viljan, CEO of Priavas, expressed optimism about the company’s future, stating, "We grew with 7%. We delivered 9.4% EBITDA for the year." He highlighted the company’s transformation, adding, "We went from a Scandinavian company in 2023 to a true Nordic company in 2025." Viljan’s positive outlook was clear as he remarked, "I’m a very positive guy. I’m convinced that the best time is always ahead of us."
Risks and Challenges
- High competition in the IT consultancy sector could pressure margins.
- Market conditions in automotive and life sciences need careful navigation.
- Economic fluctuations in key regions may impact growth targets.
- The integration of acquisitions must continue smoothly to realize full benefits.
- Dependence on top customers, although strong, could pose concentration risks.
Q&A
During the earnings call, analysts raised questions about Finland’s profitability recovery and recruitment strategies. The management discussed market conditions in the automotive and life sciences sectors, emphasizing a stable outlook for the Swedish market.
Full transcript - PREVEST DENPRO LTD (PREV) Q4 2024:
Moderator: Hello and welcome to today’s presentation with the Pribas. With us presenting today, we have the CEO Magnus Viljan and CFO Helena Busstra. If you’re calling in and would like to ask a question, please press 9 to raise your hand and then 6 to mute yourself. You can also type in your questions using the form to the right. And with that said, please go ahead with your presentation.
Magnus Viljan, CEO, Priavas: Hello, everybody. My name is Magnus Viljan, and I’m the CEO of Priavas. With me today, I have our CFO, Helena. Hello. And we would like to present the year end report for Priavas and also, of course, how we have performed during Q4.
The agenda for this short meeting will be we start with a brief introduction. We will have a review of our financial performance. We will have a short discussion about the market and the market update. And we will finalize this meeting with all your interesting questions in the Q and A. All right.
Before we move into the Q4, I would like to start with a summary of the year because this is the Q4 report of 2024. All in all, I believe that Pravas is delivering a strong 2024 in our industry in this quite challenging market that we have seen during 2024. Overall, we are delivering 7% of growth, 9.4% of EBITDA and operating cash flow of SEK137 million. And during this year, our operational model has been tested. Our decentralized strategy has been tested by this challenging market and the situation that we all are in, especially I would say in the consultants industry.
And what we have seen during this year is that our model and strategy is resilient. We have been able to cope with the different challenges we have seen. And overall, I would say, being able to deliver in our industry a strong 2024. But it’s not only that. We have also been able to deliver on our long term plan plan to be a Nordic premium design and development house.
During the year, we have made a platform acquisition in Finland of the company Enmark. I will come back more to that later on in the presentation. But we have also acquired a small company, a niche acquisition in Denmark called DesignPeople. One thing is to actually make the acquisitions. Another thing is to make the company come into Pribas in a good way.
And I’m so pleased to see that integration of these companies runs according to plan, both for the major one in Finland, but also for the NIS acquisition in Denmark. That is very satisfying and a good sign for the future. The board is proposing unshamed dividend of SEK 4.75 for 2024. So all in all, I believe we have a very strong foundation moving into 2025 for Pribas. And then looking into the fourth quarter of twenty twenty four.
What we can see in the quarter is that we have made the highest turnover ever in the fourth quarter. And this growth was driven by acquisitions. Looking into the organic growth, we have a reduced organic growth. And this is due to the fact that we’ve been working intensively to optimize our operations in order to meet the very dynamic demands we see in the market. So that’s why also we see a reduced organic growth for the quarter.
I’m also happy to say that looking into the year, actually the turnover for the year was the highest turnover ever as well for three of us. Looking into the profit levels for this quarter, it was in line with the third quarter, although it was lower than 2023. We delivered EBITDA of SEK 32,600,000.0 and EBITDA margin of 7.5%. The main reasons that we have a lower result is due to the fact that we had a lower utilization rate, but also a negative calendar effect for this year compared to last year. The positive thing for this quarter, one of the positive things in the quarter is that Finland went from negative EBITDA in Q3 to a positive EBITDA in Q4.
So in Finland, we see a clearly positive trend. I will come back to more about that later on in this presentation. So if we adjust the quarter for the effect of Finland and the negative calendar effect, Pigavas is actually delivering an EBITDA margin of 10%, which I believe is a strong signal that we are succeeding in maintaining our underlying margins in our operations. Looking into the future, we continue with our sales focus, of course, And we continue to work mitigation actions in order to cope with the dynamic demands we see in the market. This work will continue also, of course, into 2025.
During the quarter, we have also consolidated Design People, the minor niche acquisition within Industrial Design and UX that was consolidated into PROS October one. But as you can see, for this quarter, we are not reaching our financial targets. And I’m not satisfied with not reaching our targets. I just want to be clear. We want and we will work hard to deliver on our financial targets.
Looking into more of the details, you can see that the EBIT and the profit is lower than the EBITDA. And the reason for that is that we have acquisition related costs, both for the quarter but also for the year. For the year of 2024, we had about SEK 25,000,000 of acquisition related items. And this was mainly, of course, what it was actually due to the acquisition in Finland, but also partly due to the acquisition we made in Denmark. What we see in this quarter as well is a strong operating cash flow.
We had SEK 53,300,000.0 in operating cash flow for this quarter compared to last year SEK 41,200,000.0, percent, which is strong. Looking into the year, you can see that we continue in Clearavas year by year to have a very high cash conversion rate. So we delivered SEK 136,800,000.0 in operative cash flow for this quarter, which I believe is a good signal for the future as well. So this is one quarter, this is one year. But looking into the broader picture, we zoom out a little bit.
How has Priyavas performed? I think this graph is quite interesting in many ways, but I would like to emphasize two things. One thing, if you look into the EBITDA, you can see that the EBITDA margin is if you take the average of 2017 up to 2020, the average is around 5% of EBITDA. If you look into 2021 until 2024, our average is around 11% of EBITDA. So we have actually been able to double the underlying EBITDA for Krievas if you compare these time periods.
You can also see in this graph that we actually doubled Krievas in the last five years. In 2020, we had a turnover around SEK800 million in Krievas. Twenty Twenty Four, it was close to SEK 1,600,000,000, SEK 1 point 6 billion. So we have doubled Pivasa in this time period. And but the most challenging, most interesting thing about this growth is actually what we don’t see It’s 25%, twenty six %, twenty seven % in the years to come and the development that we want to perform in Pribas.
We have very clear targets. We want to increase our turnover with 10% every year with a combination of organic growth and also acquired growth. And we are to reach 12% EBITDA in average over time and that is fully achievable with the three of us that we see today. So, Helena, a little bit about our financial position.
Helena Busstra, CFO, Priavas: Thank you, Magnus. As Magnus said previously, three of us had a strong cash flow in Q4 with an increase in cash flow from operating activities by 29% or 12,000,000 Swedish kronas compared to Q4 last year. During the quarter, the last amortization of the loan related to the acquisition of Evotec in 2021 was made, amounting to approximately SEK6 million. We also saw a decrease in the overall overdraft facility, approximately SEK11 million, leaving us with an unused overdraft facility at the year end. Privas is well below the financial target of maximum two times EBITDA with net debt in relation to EBITDA at 0.88 at year end.
Equity ratio amounted to 48.9% in Q4 twenty twenty four and cash at year end was SEK 44,000,000. Overall, we have a strong balance sheet and a solid financial situation, which will support us well in our future growth journey. Please Magnus, will you continue with an update regarding Finland?
Magnus Viljan, CEO, Priavas: Yes. Thank you very much, Helena, for this. Looking into Finland, a short update of what is happening in our Finnish operations. What we do right now is that we focus on building the Nordic platform together with the team in Finland, in Sweden, in Denmark, and in Norway, we now are building our common plan for future growth, which I believe is a very, very positive journey that we are on together with with the different teams. I’m very pleased to see that the integration is running according to plan and actually in some parts a little bit before plan.
You can see on this slide that the logo, Enmark, is now Priavas Oi. We have changed the branding in Finland during this quarter And we are moving at a very high pace in order to get the teams to get to know each other, in order to explore synergies and to build our future plan for growth. But as you are aware, we had a very weak market in Finland, and I’m very pleased to see that the negative result we had in Q3 is now a positive EBITDA in Q4. And the reasons behind this is increased sales focus and also that we have taken several mitigations actions in Finland that we now see clear results from. We also see positive signs.
The market in Finland is still weak, but we see positive signs. And last call, when I presented, I said that we have a record high offer stock, and that was true. And it’s also true that we now transform these offers into orders. And that is, of course, what we need in order to make a healthy profit in our Finnish operation. So during this quarter, we have actually signed some very, very nice orders.
One order is for the defense industry of SEK 30,000,000. And actually, with this customer, we are talking about additional orders on top of this order as well. Because as you know, there is a very high demand in the defense industry and our Finnish team has long experience working with defense customers. Within the pulp and paper industry, we also see positive signs. Some of our larger customers have received very big orders and that is also now influencing our order stock as well.
During the quarter, we received an order for a piping design to our very nice unit up in Oulu in the northern parts of Finland, around SEK 10,000,000 in that order. We signed a frame agreement with a steel manufacturing company, a global leader actually. And this frame agreement will make around SEK 20,000,000 in the forthcoming three years. And this is just a few of the different orders that we are receiving now in our Finnish operation. In order to cope with these orders, we are reducing the temporary layoffs.
Now as we speak, you can see a clear reduction. And we also have started to recruit in order to cope with the demand in some of our regions. So all in all, I’m very positive for the development in Finland. I’m looking forward truly, of course, to a strong EBITDA improvement in 2025 with our team in Finland. We have a super team in Finland.
We have the key personnel, the key resources. They are still on board. They are highly motivated and we’re working together within Piawast, which I believe is a very strong foundation moving into the year 2025. Then a little bit about the general market. The market in Q4 twenty twenty four was very similar to Q3.
I would say it’s a flat development. But what we see still is a very high competition on consultancy assignments That remains high in some of our areas where we are operating. And I would say one area that we see very strong competition is in the IT consultancy area. It’s not a big part of Priavas, but of course, it affects us in different ways. But we also see high demands in defense, in energy and cybersecurity.
I talked about that in the previous course as well. And then you might wonder, okay, but have Piaas actually been able to capitalize on these demands? And I would say yes to that because we are quite rapid to adapt to the market and which shows significant growth in Defense. One example is in Defense, where we actually have grown with almost 60% in invoicing the year of 2022 compared to 2024, almost 60% increase. That shows that we are able to change the way we do business to move towards where the demands are.
You can also say the same thing about the energy area. We have increased almost 40% in that area during this period as well. So we are an adaptive company working hard in order to change. In the general market, we see positive signs. We have good discussions, but I wouldn’t say that we see a big super upturn in Q1 in that sense.
Unfortunately, of course, I would be super happy to say that, but I would say it’s positive signs here and there and it’s a good discussions, but it’s not like a massive upturn from what we see at least for the first quarter of next year. Generally speaking, the demand for complex solutions where pre Avast is very strong, that remains strong as well. So we have good discussions with our customers on a general broader term. Then I would like to spend just a few minutes regarding how Privilege is working with customer relations. Privilege strategy is to build long term customer relationships.
The five largest customers we have had 2020 until 2024 is these companies that you see on this slide. ABB (ST:ABB), for example, has been three of us have been working with ABB since 1984 when the company was founded. So we have very, very long term relations with our customers. It’s relationships, but it’s also partnerships actually because we are very important for our customers and they are important for us. And one question you could raise, okay, are Pribas able to grow in these customers over time?
And I would say yes. What we see is that our existing customer base is growing year by year by year, of course with some ups and downs depending on the individual customer situation. But over time, we are able to grow with our existing customer base as well. The top five customers, they have actually had an average growth of 18% for the last five years, which I believe is very strong and it’s a good signal also if you look into 2025, ’20 ’20 ’6, ’20 ’20 ’7. We have strong customer relationships that are long term and our customers come back year after year, which of course is very, very positive from many different aspects.
During the quarter, we also signed several important orders. I can’t mention them all. But one example is that we signed a framework agreement with Odeholm, a global leading steel manufacturer. We signed a framework agreement with ESS, European Spallation Systems ESS. I can’t actually pronounce it, but it’s a facility in the South part of Sweden, a big research company.
We have signed orders for large automation projects, large pest systems for defense, which we are developing in our own premises for the defense as well, which is quite unique in our business. And of course, lots and lots of other different orders due in this quarter. So all in all, I believe three of us are very well positioned and looking forward to 2025 in terms of customer relations as well. With this, I would like to summarize this short presentation about the Q4 results. All in all, I think in our business we have developed strongly in a quite challenging 2024.
We grew with 7%. We delivered 9.4% EBITDA for the year. And if we exclude the effect of Finland that we all know has been a quite tough ride for us, Long term it will be super perfect, but it has affected us short term. But if we take out the effect of Finland, Three of us is delivering above 10% EBITDA even in a challenging 2024. Then looking into the giant leap we have taken strategically for Priavas during this year, we have actually made Priavas a Nordic company.
We went from a Scandinavian company in 2023. We come into 2025 as a true Nordic company, Nordic leader in our business areas. Of course, that was due to the platform acquisition in Finland and the niche acquisition in Denmark as well as supporting. And I’m very pleased to say that the integrations is running in line with the plans. Also positive for this quarter is that Finland has come into a positive trend in terms of EBITDA.
We went from negative EBITDA in Q3 to positive EBITDA in Q4. We have very good hopes for 2025 that we will see a strong contribution and a big improvement from our devoted Finnish team as well. Triabas has a solid financial platform. And our strategy is to grow both organically and also grow with acquisitions. And our strategy remains moving into the future as well.
We have shown that we are able to grow in the market segments where the demand is increasing. And I think that is also very important for a company like Piafas to be agile and to be quick in order to meet the different markets and the different changes that we see in the market. But all in all, I’m very excited to move into 2025. And this was, so say, the end of this presentation. And now we move on into the Q and A session.
And I hope that you have a lot of relevant questions for that Q and A session. So, Willis, thank you very much for listening.
Moderator: Thank you very much for that presentation. And yes, let’s dive into the Q and A section here. If you’re calling in and looked at a question, please press 9 to raise your hand and then 6 to mute yourself. You can also type in your questions using the form to the right. And we got a caller with a question with a phone number ending in 8637.
Please go ahead. You have the word.
Stefan, Analyst, ABG: Hi. Can you hear me? It’s Stefan from ABG.
Magnus Viljan, CEO, Priavas: Yes. We hear you.
Stefan, Analyst, ABG: Oh, perfect. I have a couple of questions. Firstly, on Enmark, how do you view the possibility for them to come back to historical profitability levels and how long of a process would you say that that is?
Magnus Viljan, CEO, Priavas: I’m fully convinced that our Finnish operations will come back to the profit levels that were shown in the past. And Mike has proven over the years, quite many years actually, that they are able to deliver good EBITDA margins. And I’m convinced that we will see that in the future as well. So that is one part. The other part is when.
Of course, we are in a positive trend, but we’re not giving forecast in that sense for three of us. Although as I said in the presentation, I’m very positive for the year of 2025 and we will see a good improvement. But I will not, so to say, promise that we will reach like the historical figures in 2025, although we are on a very positive path.
Stefan, Analyst, ABG: Perfect. Very comforting. Secondly, the weak market in Sweden is mostly seen in automotive and life science, at least from your perspective. What is your view on the market condition in these end markets?
Magnus Viljan, CEO, Priavas: What do you mean the view in these two markets, particularly?
Stefan, Analyst, ABG: Yeah. I just noticed that that’s where you tend to lose most of sales here in Q4.
Magnus Viljan, CEO, Priavas: But Life Science, I would say, had over the years quite flat development. And actually, we see some positive signs right now in Life Science. We see some of our customers that are increasing their investments in R and D also in the Life Science area, although it has been from a rather low level. But we see some positive signs in that area. In terms of Automotive, Priavas is very has quite low business in Automotive actually compared to the global share of customers in Piawas.
So that in that perspective, even though automotive has been quite low, the main effect for Piaas is not that big in that sense.
Stefan, Analyst, ABG: Okay. Thank you very much. And then lastly, just wonder about I saw that you have positive net recruitment here in Q4 and how we should view that given that you have negative organic growth. Is it a sign that you see demand returning in the near future? Or how should we view that you still employ people?
Magnus Viljan, CEO, Priavas: Actually, we are actually recruiting in areas where we see demands picking up. At the same time, in areas where we see that the demand is going down, actually our units are getting smaller. And so we are gassing putting the foot on the gas and the brake more or less at the same time. And of course, we will not employ people unless we see that there is demand for them in the future.
Stefan, Analyst, ABG: Okay, perfect. And then maybe finally, you talked about that you see a lot of positive developments in Finland. How is the general feeling of the Swedish market?
Magnus Viljan, CEO, Priavas: I would say my view upon the Swedish market is that is flat development. It’s a stable development, but I don’t see big upturn short term in the Swedish market, generally speaking. Of course, in defense, it’s a high demand energy, high demand, but generally, general industry is quite flat from our perspective.
Stefan, Analyst, ABG: Okay. Thank you very much for those answers. That was all for me.
Magnus Viljan, CEO, Priavas: Thank you.
Moderator: We’ll move on here with the Q and A with some other questions. Are you seeking a platform acquisitions in Denmark and in Norway similar to Finland?
Magnus Viljan, CEO, Priavas: Regarding acquisitions, our strategy is, as I said in the call, to grow organically and through acquisitions. And the way we look upon acquisitions moving into the future is that we need to have a good fit into Piavos from a culture point of view and we need to bring in companies that will add to our offering or could also strengthen our geography. And we are actively looking on a broad basis, so to say, but we don’t have any committed plan to make very large platform acquisitions in Denmark, in Norway in that sense. Although, as I said in the past, Norway is interesting for us because I believe that we need to have a stronger footprint in Norway given the operations we have there today. So of course, we’re looking into that as well.
Moderator: Thank you, Magnus, for that answer. And what is your current utilization rate? And how does this compare to one year ago?
Magnus Viljan, CEO, Priavas: Our utilization rate today, we don’t give that information in our reports. But looking into utilization, we have a lower utilization rate now compared to one year ago. So if you turn that around, you can see that we have a positive upside when we come back to more normal utilization rates in Plymouth. Actually, we are fighting in order to change Privas to meet the demands where they are. And of course, that also short term affects the utilization as well because people are transferred between different segments.
So we work quite intensively with optimization of our operations, which affects the utilization short term. But it is lower than last year, definitely, yes.
Moderator: Thank you. And you touched upon this when you talked about Norway and Denmark, but do you have what is your growth plans in those countries?
Magnus Viljan, CEO, Priavas: We don’t of course, we have a plan for each country, how we are to grow. But generally speaking, our our global target is to grow 10% on on the on the top line, so to say, and with a 12% EBITDA. That is what we communicate in terms of where we want to go. But all of our units, they have their own business plan with ambitions and targets. But I can’t communicate on the detail level regarding the different countries and segments in that sense.
Moderator: Has the new Agency Work Act Utunigslagen affected Pravas?
Magnus Viljan, CEO, Priavas: I put it like this. Of course, this our business, the consultancy industry in Sweden, this is a law that affects Sweden. It’s not the same in Finland and Denmark and Norway in that sense as well. So this is a Swedish legislation that I would like to start with. And this legislation is actually affecting our customers and all the whole industry I would say is affected because it changes the structure, so to say, how the business is made in one way of speaking.
So that is from a general point of view. Looking into the effect on Priavas, it’s not a very big effect on Priavas because we are working a lot with projects, with assignment, with expert services, etcetera. But of course, we have had an effect from this, although it has been quite minor for three of us during these two quarters, I would say, especially in Q4 then.
Moderator: Thank you for that answer. And what are the key growth areas that you are currently working in?
Magnus Viljan, CEO, Priavas: I would say that the key areas we’re working is was a lot like in the call. We’re aiming to grow continue to grow in the defense area, but also in the energy area. But generally speaking, our core customers is in the general industry. And I’m very convinced that we will see a growth in the general industry moving ahead as well. So there I see also growth there on top of these segments that has been growing during the difficult 2024.
But I’m very convinced that we will see an upturn. I don’t know when, but it will be an upturn in the engineering industry as well.
Moderator: Thank you. And you’ve already touched upon this, but how do you view acquisitions going forward? Will you continue to acquire companies?
Magnus Viljan, CEO, Priavas: As I said, our strategy remains. We our plan and strategy is to grow organically and combine that with acquisition. So that strategy will remain also into the future. So we will continue to look into acquisitions, although as I said, we are very, very picky. We one thing is to acquire a company.
I would say that is quite easy. I don’t know if everybody’s agree, but that part is one thing. Another thing is actually to make the integration and get the team committed and to grow together. So we’re working hard on both of these areas. But generally speaking, over time, yes, we will continue to have an acquisition again by Impreivas.
Moderator: I would take one final question here. How do you view the opportunities in 2025? Will it be a better year than in 2024?
Magnus Viljan, CEO, Priavas: I’m a very positive guy. I’m convinced that the best time is always ahead of us. So so, although I I I can’t promise, but I’m very convinced that 02/2025 would be a great year for for three of us. Definitely.
Moderator: Yes. Thank you very much for your presentation, but also answering all of our questions. And thank everyone to follow this presentation with Priavas. And I wish you all a great rest of the day, and thank you very much. Thank
Magnus Viljan, CEO, Priavas: you. Bye bye.
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