Release Date: November 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trifork Group AG (OCSE:TRIFOR, Financial) has successfully onboarded new customers, compensating for the revenue lost from long-term clients earlier in the year.
- The company has seen significant growth in the US market, with a 56% increase in Q3 compared to the previous year.
- Trifork's public sector business in Denmark grew by 15% in Q3, indicating a positive turnaround from previous quarters.
- The company's Labs segment has shown strong performance, with top lab companies exceeding budget expectations and contributing positively to overall results.
- Trifork has made strategic investments in IP and platforms, which are expected to provide a solid foundation for future growth and innovation.
Negative Points
- Trifork Group AG (OCSE:TRIFOR) anticipates ending the year with revenue similar to 2023, which is disappointing given previous growth expectations.
- The company's EBITDA is expected to be EUR10 million less than in 2023, reflecting challenges in maintaining growth.
- Major cost savings initiatives are necessary, including a reduction in management salaries and bonuses, to address financial shortfalls.
- The Build segment, a significant part of Trifork's business, experienced a notable decline in margins, impacting overall profitability.
- There has been an increase in sick leave and employee churn, which could affect operational efficiency and morale.
Q & A Highlights
Q: What gives you confidence in delivering a Q4 rebound despite tough market conditions?
A: Kristian Wulf-Andersen, CFO, explained that the confidence stems from a growing pipeline, particularly in the US and the public sector in Denmark. They have seen growth materializing and are engaging with new customers, which supports their forecast based on signed orders and business unit projections.
Q: Which private sector verticals are experiencing lower demand, and are there any sectors showing recovery?
A: Joern Larsen, CEO, noted that the car and construction industries are currently weak. However, manufacturing companies outside these sectors, especially in energy and consumer goods, are showing positive demand for Trifork's products.
Q: Are there risks of not meeting the guidance due to potential delays or cancellations?
A: Joern Larsen stated that while they haven't seen significant reductions from major customers recently, unforeseen global events could impact their ability to meet guidance. However, they are accustomed to actively pursuing business, which has diversified their customer base.
Q: Can you clarify the EUR10 million cost savings target and its timeline?
A: Kristian Wulf-Andersen clarified that the EUR10 million is an annual savings target for 2025, with some savings expected to begin in Q4 2024. The savings will come from various areas, including management salary reductions and increased use of contractors.
Q: What is the status of the deconsolidation of the cyber protection business, and what are the financial implications?
A: Joern Larsen mentioned that the cyber protection business is performing better, strengthening their negotiation position. Kristian Wulf-Andersen added that the expected deconsolidation effect is around EUR5 million in revenue and EUR1 million in EBITDA, with a potential one-off gain of EUR3 million to EUR5 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
