Hello, and welcome to this H1 presentation with Konsolidator. With us today, we have the CEO and the CFO. First, there will be a presentation, and afterwards, a Q&A, where the management team will answer questions submitted via Stokk.io. There have already been pre-submitted questions on Stokk.io, and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to Konsolidator to start the presentation. Jack and Claus, your line is now open.
Thank you.
Thank you.
My name is Claus. I'm the CEO of Konsolidator, and I will be the one who's starting this presentation. As always, we will go through both the numbers and some other news in the company fairly fast, 15-20 minutes, and then we will have enough time to answer some of your questions. The agenda today is that I, again, as always, will just give a short intro to what Konsolidator is. There is always some new participants in these webinars, and they, of course, need to understand what the Konsolidator is.
Before Jack, he will go through the numbers for the first half year of 2024, before I will take the mic back and go through some of these initiatives that we have initiated so we get updated on that. And then in the end, we'll have time for Q&A session. First, a little bit about Konsolidator. We have now been here for 10 years, and our vision and mission has actually always been the same.
Our vision is to become the preferred consolidation tool globally in the small and mid-size segment, and we do that because the founders, Jack and me, we have a background as CFO, and we believe that with Konsolidator to the right company, then we will make the CFOs better, both in preparing numbers and also adding strategic value to the business. So that has always been our mission, and that will also be in the future. As you know, we have headquarters here in Denmark, in Copenhagen, and then as from Q2, we also opened a sales office in Madrid to cover the Latin market. What we do, that is, we do proper financial consolidation.
That has always been our DNA, that we believe that CFOs are better off if they do a fully correct financial consolidation before they start to do analyzing on their numbers. So, and consolidation, that is, to say simply, adding subsidiaries to a set of group account. Again, that is what we've done for the last ten years, and we will probably also do that for the next ten years. We believe there's a huge value for any finance function to have fully correct numbers to work on. So, and that is what we do, and that we will also continue to do that. Okay, and now I will hand over the microphone to Jack, who will go through the financial for first half.
Thank you, Claus. Yes, I am, I'm Jack, and welcome to this meeting. I will go through, as I usually do, the financial and the sales metrics, and then our new outlook. We sent out an adjusted outlook a couple of days ago. It's no secret that the H1 did not live up to our expectations. Our sales and EBIT are lower than we expected, so we adjusted the expectation for the full year of 2024 . We know that we only can get growth of a maximum 10% on our direct sales. So the initiatives that we had going, we were hoping to get a little bit more out of that.
Our customer acquisitions are too high, which has led us to adjust our guidance for the full year, and where we are looking into at the moment on how to outsource our digital marketing, and we have also had to say goodbye to six employees, so we can get back on track in 2025 . Yes, Claus, but let's dig into the numbers, and as always, I start with our revenue. It's DKK 9.9 million, and it's an increase on year to year of 6%. And the subscription, like also last quarter, is a little higher than compared to the onboarding and consultancy.
If we go to EBIT, it's a loss of DKK 7 million, which is a lot higher than expected, as we had our guidance was a maximum of a loss of DKK 5 million. One of the initiatives that we had was Konsolidator Iberia, our Spanish office, and the cost for Q2 are included in the financial, which they were not in our guidance, the previous guidance, and then we had the cost initiatives because of this and came out with the adjusted guidance. If we go to further on to the cash flow. We did during the quarter, we got a capital increase of DKK 6 million, and we from investors and the board.
But as we can see, if you move on, Claus, to the next slide, we can see that we still need to get some cash for the situation, as our cash is only around DKK 300,000. We do have a credit line in the bank, which will help us, but we need to strengthen the capital structure and also look to reestablish the equity. So at the moment, we are talking to investors. We are also talking to loan providers in this regard. And when we know more, we will of course issue a new announcement in this regard, so you know about our capital situation. Going to the SaaS metrics.
Again, we've only had a net growth for the year since July 2023 of almost DKK 900,000, which is not satisfactory. And for the quarter, only a net increase of DKK 200,000. Our churn is 13.7%, which is not good, but it's not that we didn't expect it, which we did because of our termination policy. So, we know when we get the churn financially. Here, if you go a little above here, you can see our customer acquisition cost above the new AR. It's up to 57 months, excluding Iberia, which is saying that it takes 57 months in order to get our customer acquisition cost in, get the money from the customer acquisition cost.
If we go to our adjusted guidance, and we have this overview, we've adjusted our guidance to from 24-28 in AR to 21-23, and the same with revenue from 21, and now we expect an EBIT loss of DKK 10 million-12 million. This is not good enough, I know, but we, we're looking on a plan and in order for that to get a lot better. I will hand the microphone back to Claus. Thank you.
Thank you, and now I will spend the rest of the time talking a little bit about these initiatives that we have in Konsolidator. Before I do that, I will just start at another place, as Jack just said, that we will end our three-year strategy period here at the end of the year, and then we will launch a new strategy. Now, we've had two strategy periods on the Nasdaq Stock Exchange, where the first three-year strategy from 2019 to 2021 was where we delivered. We said we would deliver high growth, and we did deliver high growth, so to my end, that was a fairly success, and you could also see in our share prices that that was fairly high at that time.
Then we launched a new three-year strategy in January 2022 for 2022 to 2024. And as I said, we did that in January, and then in February of 2022, Russia invaded Ukraine, and the world has been a bit different since then. E ver since in this full three years period, we have kind of been running after the bus, so to speak, where we cut costs in March 2022, and then it has just been a little bit difficult for us since then. So now we are saying that finally, we can end this three years strategy period and then kind of making a new plan for the next three years.
We haven't finalized that strategy process yet at all, but of course, we have some good idea what is it that can take Konsolidator to the level where we want to be, and that is what I will spend some time on explaining here. There's nothing here that is new except the banking, but the other, that is something where we have been working on for one to two years, but let me go through it. First of all, we do have a core business, which Jack also said a little bit about, and that is how we have sold Konsolidator for the past 10 years. That is what we call direct sales. We are trying to get some meetings, and then we are getting some customers from these direct sales.
We believe that it's realistic that we can grow 5%-10% per year with this direct sales approach. That we have actually also done this year if it wasn't for the churn. Of course, churn has to be included, I know that, but our sales rep are actually has been able to grow these 5%-10% per year, and that we also believe that we can do in the future. A year ago, we started to focus much more on partner, especially Dynamics partners, but in general on partner and everybody who knows have been working in the partner sales segment before know that it takes time.
We definitely believed and had hoped that we could generate some customers in the past year through this channel, but that has been challenging, so we haven't delivered the result in this channel as we have expected, which is one of the reasons why we have adjusted our guidance, but we still believe that this is the right approach for a group like ours. M any of our customers today are working in a segment which will be obvious that is the partner that sells to them instead of us, and obviously, if you can get this partner channel to work, then you will have a much lower customer acquisition cost.
So we will continue with that, focusing on that, and believing and hoping that we will start to see some results, yeah, already this year, but more next year. Then, as you know, we started Iberia in Q2. So, of course, right now it's still an investment. They are not profitable, but we believe that the Spanish-speaking market is a market that definitely can benefit from a product like Konsolidator. So, we again do believe that this investment will repay a good return and also hopefully be able to be profitable fast. So, we can see the investments coming back again.
Even they have only been there for a couple of months, we can see that they are slightly ahead of that budget that we make together with them. We also started in Sweden. That is very, very new. Our former country manager, he has started as a partner, and he has started here in the summer. Obviously, we haven't seen any result. Again, we have also spent some cost on that to get him started on a good notion. There's been a fairly small investment in that segment as well. He has shown that he could grow the Swedish market before.
So we, of course, believe that we will start to see some result already here in the second half of the year, but again, mainly from next year. But hopefully, and we believe that he will be able to close customers in Sweden already this year. And then, the BI we have also talked about before. We do believe that many of our customers, they could benefit from having a BI tool on top of Konsolidator. And we had a lot of good talks both with the new customers and also with the existing customers.
That is not an ARR business. That is mainly a consultancy income, but it's both. I mean, yeah, more happy customers, and of course, also some money to us, and have a higher cash flow generation as consultancy, so the money is paid immediately and not as a subscription. Again, we have not seen a huge income yet, but we have good talks, and it only started in Q2, as you can see, so it's fairly new. But we do again also believe that we will see an income from this segment already in the second half of 2024. And then, probably the you can say the most exciting, at least this is a new. You haven't heard about this before.
We sent out a company announcement about it last week, and what it is all about is that there are some banks, they could use a product like ours to help them running the credit process in the banks. We have been working with Danish bank on this since Christmas on a prototype to some of the Danish bank, and the first version has been launched, and some banks are testing on that.
What is important for you to understand as an investor is that you can see to the right where we have here a figure that you probably have seen many times before, where we drag out numbers from ERP system, that is what we call collect, into Konsolidator, and then we do the consolidation there, and then through APIs, we send these numbers to either Excel or Power BI, wherever the customer want it. All these five you can see here, the core, I mean, the partners, Iberia, Sweden, and the BI, is all based on this product. There's not any new product development that is needed to this first growth initiative.
And then when the banks came, what is, of course, extremely important to understand is that we have not developed anything new to the banks in Konsolidator. What we have done is that you can see now the icon has changed up in the top right corner, and now there is a small circle called banking, and that is that we have built an app which the banks are using for their credit process. So that is what we have built, and it has not. Of course, it have taken some time for the developers to develop it, but it's not a huge new product that we are developing.
Let's see. Now it has been again. We have some banks are testing it, and if they like it, then that could be a new interesting segment for us. It is still too early to say how much and when. We are positive on that note, and the feedback we get from the banks is also fairly positive. That's an initiative. We have some core business which is doing well. Customers are happy, and we can continue to grow.
But in order for us to get back to the high numbers we are used to, we need to find some new segments, and that is what we have in these five other growth initiatives, which we also are working on. So, we are, as always, optimistic about the future. Thank you. Back to you, Anders.
Perfect. Thank you for that, Claus and Jack. Let's move directly into the Q&A and start with the first question here. When do you expect to be cash flow positive?
That's a very good question. I can say that, which we also said with our announcement on lowering expectations, we are looking all at our costs. We are trying to outsource our digital marketing. We are actually having meetings at the moment on this to see how much we can save going forward. And so there is nothing conclusive at the moment. We, both Claus and I, still believe that we will be cash flow positive in 2025 , not in 2024, because we have also said goodbye to some employees.
But when we get there with the funding and how we see the future, we are still working on a complete overview on where we can save some cost and figuring out how our growth initiatives will be, then we'll of course get back. But yeah, cannot say completely at the moment, but we're definitely working on 2025 .
The next question is, w hat specific measures are you taking to increase growth? What is not currently working in your model?
I can answer that, and I believe that we have some of the answers in this slide I just presented before. And it actually also give a little bit of an answer to the cash flow position. All our growth and all our income is coming from number one, the core business, where we have this 5%-10% growth. So, and the high growth, higher than 5%-10% growth should come from the other. When Jack presented the revenue growth, the before, what was that? The 7% growth, I think it was year on year.
So without any of these two to seven generating any income, Iberia did get some customers in Q2, but of course, that was the first quarter, so that's very low. So without the other generating any income, we do see these low growth number. So and as we believe that the number one, the core business, can continue to deliver 5%-10% growth, then of course, you don't need that much from the other before you get to higher number. So that is, of course, what we are working on to get these other to work. But when that is said, it's of course, also very important to understand we are a fairly small organization, and we need to stay focused.
The way we work is that the sales and the marketing department, they are working mainly on number one, because that's where we are generating our income from. With the additional time we have, we are also supporting the other areas. Our development department, they are of course doing a little bit on everything, and they have been working on this banking app. We are trying to focus still on number one, because that's where we get our bread and butter from, and then with all the additional time we have, we are trying to support the others, because that is where you can say the high growth should come from.
Sorry if that was a little bit of a long answer, but it is a little bit complicated, and also because we are a growth company in number one alone, but not as high growth rates as we want to be.
Yeah. Then the next question maybe falls a little bit in line with that. The question is, w hen do you expect to see growth return?
Hopefully rather, faster than late. Again, I mean, number two, D365 partners, we have been working now with partners for one year, and we will continue to do that. So we hopefully, not hopefully, we do expect a certain amount of growth from them every quarter. They haven't delivered that yet, but we are actually both optimistic, and we are also fairly patient. It does take time to build up a partner channel, so, but hopefully we will see some growth for them in Q3, and if not in Q3, then in Q4, and if not in Q4, then in Q1. So that is where it's most realistic to see some of the new growth initiatives coming in fast.
And then, of course, also Iberia, they are for a good reason, starting from small numbers, so hopefully we can see very high growth rates for them, also, if not from this year, then at least from next year, so each of them can deliver some solid growth numbers in themselves. Do they all come at the same time? No, probably not. Which come first? We don't know, but we are fairly optimistic in all of them, and they should definitely deliver some kind of return within a foreseeable future.
The next question is a little bit around Iberia, so let's take that now. When do you believe that Iberia will be profitable, or what will it take?
We hope that late 2025 they can be profitable. They won't be profitable for the whole 2025, but I would say hopefully Q3, Q4 2025. That's at least what we have worked on with them. Yeah, that's, b ut it's still yeah, so it's an investment, and like we said, we will still spend the money and the investment of DKK 1 million-2 million in which we also said in our previous announcement regarding Iberia of cash in 2024.
Yeah. CAC is usually a measure that have different parameters in one measure. Can you explain what part of the CAC is at the moment too high? Is anything to these parameters that you have plans for changing?
Yeah, CAC stands for customer acquisition cost, and it means that how much does it cost to acquire a new customer. The way we do it is we take the entire sales and marketing department, all costs in sales and marketing, so that's including salaries and subscription to software and of course events and everything we are doing in that. Also, all spent on paid and social, yeah.
Media.
Media. Paid media, I need that word. Yeah, so it's everything for us that's included in the CAC. And that is, you can say, has been a challenge for us the past three years, that the CAC has been high, also because we didn't meet those growth rate as we expected. So, what we have done is that we have decreased, as Jack also shortly mentioned, we have cut down cost a lot. We are right now in the process of outsourcing all our digital marketing, where we will see a huge saving, obviously, because we have had to say goodbye to some good colleagues, so that takes some months before their salary is not in our cost.
You will not see the full effect before next year, but we will see an immediate effect already from Q4 as we have started to cut down some subscription cost, for example. We have also reduced a bit in our sales department. We have reduced the CAC a lot. Then of course, it's up to us to then still deliver the same sales. Because that's of course the other thing in the CAC over AR ratio, that is, the AR. The CAC will definitely decrease soon.
Yeah. What is the reason for still quite high churn? You have explained that you have increased support and taken other measures, so why is it not yet kicking in in the churn?
You wanna go or should I go a little bit?
I can start it.
Yeah.
I mean, there's no doubt that the inflation that hit us in 2022 has an impact. First, we definitely had some onboarding issues where the onboarding process was maybe too long or too complicated. So we have some of, especially the smaller customers that they churn during the onboarding process. And that we will say that we have solved, we have changed the process, and we have talked with customers, so we do not see that much onboarding churn anymore. But we must also be realistic that some of the smaller customers that might be in having consolidated, I would not say nice to have, but at least were in a size where Konsolidator did not, maybe not give so much value as the large customer.
We must also admit that in this inflation scenario we have been in for the past couple of years, some of the smaller customers have simply cut away Konsolidator because of cost reason, because you would say that the Excel consolidation is cheaper than using a standardized software as us. So those churn we have seen for the past, let's say, six to 12 months, that has mainly been smaller customers and some where they couldn't see that the value for the moment was high enough for them. As Jack shortly mentioned, we have a fairly long termination period, so we can already now see that the future does look brighter than the past.
We do see lower churn in the next couple of months that we've seen in the past, so hopefully all those smaller customers that maybe couldn't defend the cost for Konsolidator, that hopefully they have been terminated now, so that we now only see what we call more normal churn when customers either reduce in size or increase in size or go bankrupt or something like that, so our goal has always been to be around 5%-7%, so hopefully we can get down to those numbers again, yeah.
I can add, as Claus said, we can see that our increased focus on the customer success, where they start getting in touch with all the customers on a more regular frequency, is also helping. But it takes time because of our termination policies. So when you see this, this is on a financial basis. These numbers actually came from companies resigning way back in 2023.
Yeah. And then we are actually at the last question now, and the last question is, i s your growth impacted due to more competition in your market?
I wouldn't say that. That's not what we are getting back from the sales rep. I mean, our biggest competitor has always been Excel. And of course, now, you also have the ERP system that can do some simple consolidation, but I will not use that as an excuse for the growth rates. So, of course, there are competitors out there, there are strong products out there, but the market is also big. I think that there is enough space for many of us. So, and I think the different competitors, they have different approaches. I still believe that our approach is, we are more or less the only one who has had that approach.
Some like us, some like others. It has always been like that. We still continue to have a fairly high conversion on our meetings to customer. We do not see a change in that. Some quarters just go a little bit up, some quarters go a little bit down. But by and large, I still believe that there is a right for us in our core market, and that's also the feedback we get. So, nope. And just to that, I mean, sometimes competitors is also an advantage because when we started ten years ago, when our competitor was Excel, we were the only one to convince customers that standardized consolidation software is better than Excel.
Now, there are more out there who are spending marketing power on explaining why software is better than Excel, so there can also be an advantage. So, I will not use that as an excuse for our fairly low growth number. No.
Yeah. Thank you for that, Jack and Claus. That was all the questions. So before we end the webcast, I will just hand over the word for you if you have any final remarks to end with.
Only, for me, just saying that I'm looking forward to present the new three-year strategy.
Yeah, agreed, and this process has slowly begun, and hopefully, we will finalize a new revised strategy back in Q4 this year for the coming three years, so thank you for listening and tuning in on the meeting.