STLFF - Stillfront Group AB (STLFF) Q4 2023 Earnings Call Transcript

2024-02-07 16:58:05 ET

Stillfront Group AB (STLFF)

Q4 2023 Results Conference Call

February 7, 2024 04:00 AM ET

Company Participants

Jörgen Larsson - CEO

Andreas Uddman - CFO

Conference Call Participants

Simon Jönsson - ABG

Erik Larsson - SEB

Edward James - Cantor Fitzgerald

Rasmus Engberg - Handelsbanken

Nick Dempsey - Barclays

Presentation

Jörgen Larsson

Welcome to the Stillfront Group Full Year Report 2023. I will be presenting, CEO, Jorgen Larsson, together with my colleague, Andreas Uddman, CFO.

This is what we will talk about mainly today. We returned to organic growth in both November and December, which is what we aimed for in the beginning of the year. However, our net revenue declined 2% year-over-year in the fourth quarter, but we had a, as I said, organic uplift. The organic bookings declined by 2% as well despite being positive in November and December. Our gross profit grew by 1% in the fourth quarter. Gross margin increased by 2 percentage points year-over-year to 78%. We will go deeper into this during the presentation.

Looking at the full year, which is what we're presenting, the EBITDAC margin is up by 1.8% from 22.7% to 24.4%, which is very much in line with the trajectory or the path that we described at our Capital Markets Day February last year. The adjusted EBITDAC margin was down 4% year-over-year in the fourth quarter due to the massive UA push that we were able to push into our new Star product, Sunshine Island, which we also will go further into.

And that is also what's worth mentioning is that our free cash flow is down to 833% for the full year, the last 12 months. And that's a decrease, and that's mainly related to that. We do have lower financial net, higher interest rates, and we have some one-off costs related to our cost optimization project. On the right side, you can see how our revenues were distributed. So quite stable from previous periods. We increased slightly in Europe by 2 percentage points and lowered in Asia, North America and the other regions are intact.

Looking further into our revenue profile. You can see that on the right side of this slide, you can see how the quarter looked like. So we had the 3% lower revenues organically, as mentioned, FX was positive by 1%. We had no other significant impact on the bridge here. So that is what sums up to the SEK 742 million that we reported for the quarter. You can also see on the left side, the significant push in UA that we did by equaling 31% in UA in relation to net revenues.

And you can also see that rolling 12 months, it's very stable despite this significant push in Q4. So we are 26% plus/minus 1%, the last 5 quarters rolling 12 months. And that is important because that is showing the stability even though you will see and you shall always see significant differences between individual quarters and this is important, the normal pattern in our industry and the normal pattern hasn't been there for a couple of years. First, due to the pandemic uplift and then the bounce back the last couple of years. So it's very important and very good news that we see a pattern that is much more normal to our industry, which is higher UA typically in Q4 and Q1 and then higher margins in Q2 and Q3. So we are seeing the normal pattern of our industry coming back, which is satisfactory....

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