Okay let's start. Welcome to the presentation of Trifork's first quarter results for 2024. My name is Frederik Svanholm, Head of Investor Relations at Trifork. Today, our CEO, Jørn Larsen, and our CFO, Kristian Wulf-Andersen, will be providing a presentation of approximately 35 minutes, followed by Q&A. Before we start, I have a bit of practical information. First, I would like to inform you that this presentation is recorded and will be made available in its full length on our investor webpage later today. Second, I would like to inform you that if you want to download the presentation for today's call, you will be able to find it on the front page of our Investor website. Third, we invite you to ask questions and engage with management after the presentation.
So how that works is, you raise your hand by clicking the Raise Hand button here in your Zoom client. I will announce your name, and then you can ask your question once you are making yourself unmuted. We will do our best to ensure that everyone gets a chance to ask their question within the allocated time, but already now, I would like to ask you to start with two questions and then get back in the queue so we ensure that everyone has the chance to ask a question. We have to present this disclaimer. Okay, let's jump to the presentation. I now hand over to our Group CEO, Jørn Larsen. Jørn please go ahead.
Thank you Frederik. Thank you for the introduction. Welcome everyone. My name is Jørn Larsen. I'm the CEO and Founder of Trifork. So here we see the front page, and we see two pictures. So Trifork is on an expansion into more countries, and we are consolidating our presence in the countries we are already established. Actually, the top picture you see here to the right is from us speaking to a healthcare, a digital healthcare audience in Switzerland, where two of our colleagues are presenting what we do in Digital Health. So if we look, you know, back five, 10 years, that would not really have been possible to be invited to these kind of events.
The lower right picture is a picture from San Jose earlier this year, where we attended the NVIDIA conference, and the guy to the right, Nicolai Stølum, he actually gave a presentation about how we helped Copenhagen Airport with their luggage system by means of an artificial intelligence and what we call Vision AI, and that was very well received. So thank you, Nicolai, for that presentation. In the middle, we have Karan. He is our CEO in the U.S. And in the U.S., we see a lot of good traction and pipeline building, and so hopefully, in the next quarters, we can start presenting cases and stories from the U.S. Let's move into the presentation, Kristian.
Okay, so Q1, compared to Q1 last year, was not a great quarter to look at. With a total growth of 1.4%, which is basically zero, we must say that we had a tough start to the year. We have been preparing for a few months now, few quarters, the organization, you know, from a tailwind environment to a headwind environment. So also mentioned in the last quarter report and before, we are ramping up on business development. We want to target markets we have not been present in before, and of course, we are still hunting for new business in the markets we are already in. And the reason for that being that we really see our, you can say, loyal customer base, making budget cuts.
That means that if we want to have a hope of growing in the future, and we do have a desire to do that, for the moment at least, we need to, we need to find a lot of new business. This is a result of being in the middle of such a transition, where you increase your sales cost, you still have the negative effect on present and loyal customers, reducing their business with us, and the new customers, and the pipeline has not yet really taken into effect and shown in the profit and the revenue. So this is where we are right now.
So let's move in to see how it is on earnings. And so also here, we see the effect that customers are pulling back work, sometimes a little surprising to us, and then also with these increased business developer costs. And so we see that the margins are also somehow down. If we then also add that we see that this will improve, I mean, the results will improve over the next quarters, leading to that, as far as we can see in our backlog and pipeline and outlook to the future, if everything stays more or less the same as it is now, regarding the business climate, we still maintain our guidance for the full year with the profit, as you see, and the revenue, as you see here.
So maybe let's move on... Okay, so an update on the group. We still grow the number of people in the companies. We are still in 15 countries, so no new countries to be expected to be onboarded. We are happy with where we are, and only if there is, you know, an opportunity that we cannot say no to, we will enter a new country or area in our business. We see we have 24 minority investments in labs, and what you will also see a little bit later is that we at least had a good quarter for labs again.
You remember Q4 was a really good quarter, where we adjusted upwards our fair value of our lab, and we did it again, because we do have a few of our lab companies that are doing extremely well. So they are kind of leading the what we experience in the travel segment and negative business climate. But we have some lab companies that have found their niches and are really growing very fast, and with good profits. Let's move on. Okay. So also last time I showed this, and every time we present, we show some of our work and where we are playing on the field right now. And this time I just wanna focus on the middle lower image; they are called digital twin.
So at Trifork, we have one of our strategic focus areas to build, you know, our own IP, and we have done so. You know, we do it in labs, but we also do it within the Trifork segment. And when we do it in the Trifork segment, it's because we can finance it with a few customers supporting our IP development. So it's still Trifork IP, but our customers support it through the work they buy from us. And the Digital Twin platform is a very interesting one. We have been working on this for a few years, and actually it's able to keep track on a large amount of physical assets around the world. Could be mobile or static assets, and collect all the data that can be accessed on these assets, and consolidated on this Digital Twin platform.
That gives a number of advantages, such as predictive maintenance, tracking the assets, tracking when it's time to have a look at this, and simply just know where your assets are. So that's a really good platform, and we are looking to grow the number of customers using this platform. So that was kind of what I wanted to highlight on this page, so we can move on. So when we look at our cockpit, it really reflects that revenue is not impressive. We are exactly at the same organic revenue as last year. We do have a little inorganic, so the result is +1.4%. But with a few less working days in the year, we have made a remark on that in the report.
So if we had had the same number of working days, we would've been around 7% or so, and that would, of course, come back later in the year, as a plus. We are still 72 business units, and if we look at our key statistics on our social medias, that is actually growing faster and faster. We are 66 million views, almost 1 million subscribers, combining GOTO and YouTube, and we have started some experiments on capitalizing on this presence on the social media platforms. But we are still quite relevant in what technologies we identify out there.
And I also want to highlight that the reducing, you can say the, the loss we realized in 2023, which was EUR 2.8 million, we also worked very hard to reduce this this year, and we expect it, it at least to be half of what it was last year, and maybe a little bit better, would be a positive result coming from where we are now. We can move on. Here we see that the distribution between Inspire, Build, and Run, and so what I want to highlight here, Build is still a reasonable margin, 15.7%, but it was 21% in the Q1 2023. It needs to improve, and we are working hard on that.
If we look at Run, then we are hit by the negative effect on another strategic area we are focusing on to improve, namely, as we will see in a moment, our cyber business. So what we have in our cyber business is that we have a platform that has been rather expensive to build. We have eyes on the glass 24/7, meaning that our customers can enjoy that we take care of monitoring our customers' systems 24/7. And it's not that you can just call us, we will proactively see if something is happening with our customer systems, and that is a rather expensive platform and system to maintain. So later this year, we will come up with a new strategy on how we believe we can grow the number of customers-...
So we will have a critical mass of customers comparing to the cost of maintaining this platform and this service to our customers. And that's actually the major part of the lower margin for Run in this quarter here. Let's move on. So the main events for the quarter is that the churn is still in a reasonable level, around these ±15%. Sick leave, more or less the same level as we have seen in the past quarters. Q4 was rather high, now it came down a little bit, and we would like it to, you know, be more like 2%, which would be ideal also for, you can say, profitability. It's not very profitable when people are home sick.
So, we’d like, yeah, everyone to stay healthy and eat their vitamins. So, in the partnerships, we had some really important events going on in Q1. So we participated in a number of partner events. So first of all, I already mentioned we were a part of NVIDIA GTC, a huge conference focusing on AI, and there we believe we get a really nice attention from NVIDIA of the work we do in Vision AI. And we have a strong Vision AI team in our company, and it’s something that our customers are very eager to explore, so we have a number of customer engagements going on at the moment.
Then also, Q1 was the release of the Apple Vision Pro, this device that you put on your head, and then everything changes. So if you haven't tried such a device, I urge you to do, and you can reach out to your local Trifork office, and they will, they will take you through some of the work we have done, but also some of the demos that are available in the App Store. It's... You are, you're not the same person after you have tried this as before, so look forward to that. And we are building some really interesting applications that we look forward to also showcase to you in, in the future here. We also organized. Maybe there's one more thing, Kristian. So we also organized a, an observability event, where we had, Splunk, Datadog, Dynatrace, and New Relic.
And us being able to pull those people to Copenhagen in our meeting facility there in Nordhavn Copenhagen, at Porten, we're quite proud that we were able to do that, and it was a full house that day. So we see that one change from 2023 is that the product companies in the world have started spending on marketing and sales, which was really hard for them to do in 2023. So that's the change from 2023- 2024, as we see, and that will help our Inspire business going forward. Then also we did participate in a conference with SAP, and we will be active on conferences in Q2. And then also, I mentioned our Future Health presence in Basel earlier this year. We can move on.
Okay, so the little case story, not a little one, it's something that affects a lot of Danish people, is that we upgraded the DSB application together with the team of DSB. When we work, it's always in a tight collaboration between us and the customer's team, and this has already some remarkable numbers, a lot of users, where you can ease your travel experience by swiping a ticket and making it a lot easier to do your morning or afternoon commute with a train. And this was also featured on LinkedIn, so please check out there, and you can read much more about it. But really good work.
The collaboration with DSB we started many years ago, and it has been a loyal customer for many years now. Let's move on. So when we dive into the business areas, we see FinTech actually performing quite well for the quarter. So had everyone just done that, we would have been just fine. Digital Health, you know, last year we saw rapid growth, and it can be hard to continue these growth rates. So here we see a modest growth of 3%. So here we need to land on our feet and get engaged in landing new business again, for sure. Smart Building as well had a -40% growth, so from EUR 1.7- EUR 1, which we need to fix as well.
So let's move on to the next three business areas. So here we see, again, the same trend, modest growth in Smart Enterprise, just short of 5%, which is half of our business, so that's something we really need to focus on. Cyber Protection being at a very low level and even declining, so that's the big attention point for us. Cloud Operation, we are landing some new business at the moment, and later this year this will take effect. So here I'm confident that we can show better numbers as we progress with the quarters. Let's move on. So in Q4, we introduced these four priorities for improving our business, and I already touched on some of them.
So the U.S. and Swiss market is really strategic to us that we succeed because it's new markets, and it's where we can win new business, easier than in the markets where we are more established, where we see a more contraction of the market. And then we need to sharpen the business model of Inspire, and we need to reduce the loss we saw in 2023, and we are on a good track to that. But there are some things that is very hard to change, and it will take some years to get some of those things out of our business. And then in Cyber Protection, as I also mentioned already, we do see a huge potential going forward, but we need to change probably from a more organic growth model to a inorganic and rapid growth model.
So to really scale up the platform we have now and multiply the number of customers we have by X's, not just a few percentages. So we're looking into how that might look like. And then I also already mentioned that we are focusing more and more our business on these platforms, that is Trifork IP. And of course, that's also something we need to be a little patient with before it actually materialize in, in revenue and, and profits. But we did see a good growth year over year on the business of these platforms. So that's that's a good trend. Let's move on. So the really good story about Trifork right now is our lab business. We see strong performance from the best lab companies. That's also why we increased the fair value a little bit.
And I don't wanna mention any of these today. That might be a question from some of you on specific ones. I'll see if I can answer. But we see really a good performance from our lab, and we like to update you later as the year goes on, on potential events in this area here. For the ESG, we already talked about that we are working very hard to expand our ESG reporting. We did submit a full ESG report. I don't know how many of you had a chance to study it. And in particular, as you also see on the pictures here, we can mention that our first developed building, Trifork Smart Building 1, is taken into use.
We have people there, and it's a wonderful building to sit in, and I had the pleasure of executing some of our workshops there already. And as you see on the picture there, we have a concept called OTTO, which is a dashboard for the energy consumption and ESG numbers like water usage for the building. And this is a building that also produces its own energy and is very effective with the insulation, but also we have installed the heat pumps and a lot of smart systems to make it environmental friendly, but also less costly to run. I think that's what I have on the ESG side. And I guess, Kristian, the word is over to you now.
Kristian, you need to unmute yourself.
Okay, thank you. So, Jørn already talked about the overall revenue numbers here. Just a little addition to this is that we also, as Jørn talked about, onboarded new customers in the cloud operation. This part is a low margin and low revenue when onboarding, but will contribute to more revenue later on. As usual, we have not included any of the revenue from the Trifork Labs companies, but that's more or less as usual. In relation to the Trifork segment performance and adjusted EBITDA, we also here see the more detailed numbers. The decrease in the EBITDA is also explained by the...
You could say, the low or the slow performance in the revenue, but also impacted by some one-off costs in relation to the organization adjustments that we did in the Inspire organization and the Cyber Protection of EUR 500,000. Then, in relation to the Contain cloud platform, we also invested additional EUR 300,000, which has not been capitalized here. The Trifork Group performance on EBIT is a direct result of the EBITDA, so also showing a lower EBIT than the year before in the second quarter. That said, the depreciations and amortizations that is shown for Q1 is the level that we're expecting for the remaining part of the year.
So now we have included all the new amortizations from latest acquisitions and also the effect from moving into new facilities in many different offices. So what you see here is what also to be expected for the future quarters. All amortizations accounted for 29% of the total depreciation and amortizations. Going a little bit more into the segment performance, then, as Jørn mentioned, we did see a loss in the Inspire business, as you see here in the margins to the right-hand side. This is the overall distribution, only to mention here that other was actually decreased from EUR 1 million in loss last year to EUR 700 thousand this year in the first quarter, so that was a positive impact on the overhead cost.
I'll deep dive a little more into each segment. Inspire performance here, as you see, a small increase in the revenue, but that is primarily related to Inspire workshops. And since we haven't got any major conferences in the first quarter, this is seasonal as expected, so we're also expecting a loss. But as said, we had an additional EUR 300,000 in impact from a one-off costs in the quarter. So that's why you see a little increase in the minus from Q1 2023. Going to the Build performance, then we see that the increase in revenue in Build was 1.7%, which was primarily inorganic in this quarter.
The impact of the fewer working days in the quarter compared to last year is primarily related to the time material-based revenue, which is then within the Build segment here. So this is where you have the highest impact of that part, and this is also where we would expect to see the normalization later on in the year. The margins, as Jørn talked about, was impacted by the increased investments in the business development. And we saw here a 15.7% margin. In relation to Run, we see that Run is more or less the same level as in 2023.
We did see a positive development in the sale of own IP, a 28% increase year-over-year. And in relation to the EBITDA, adjusted EBITDA, we saw a decrease related to the investment not capitalized in Cyber Protection, but also in the Cloud Operations, and also in these one-off costs that we had in relation to reorganize the teams in our Cyber Protection units. Overall, if you look into the details and the Run revenue split, then if you compare the Q1 2024 to Q1 2023, then you see the... There was a small decline in relation to third-party license and hardware.
And you see the increase in the license and support, which is then the, the license support related to Trifork own products, and this is, the positive development here. As said, we expect that the hosting security part will increase, more over the remaining part of the year. Looking into the Labs performance, then Jørn just talked briefly into this. All we saw an EBIT of EUR 1.3 million, that was, combined by a fair value adjustment of EUR 1.9 million, and, and exits from, from, investments, dividends of EUR 200,000. So that's why you see here to the, up to the right, you see that the accumulated net, profit, from exits and, and dividends is the 69.2, and you see the book value of EUR 71.2 million.
And the book value is then combined by investment, the EUR 7.8 million, which is cash investments. There were the deconsolidation effects, and then the fair value adjustments of unrealized gains of the EUR 29.4 million. Overall, we saw cash flow positive cash flow from financials from financial position here. We saw that we had investing activities a little lower than the quarter last year, and we saw that the financing activities was more or less the same. In that part, we did acquire some NCIs during the quarter of about EUR 5 million, so that's included in the financing activities. In the period, in the first quarter, we also bought back additional shares.
Overall, as you see here, we bought back a total amount of roughly EUR 2 million in shares, which we now has as treasury shares in the company. And now I'll hand over the word to Frederik to talk a little bit into our Capital Markets Day.
Thank you Kristian. Yeah, so, we are going to have this capital markets day on the 29th of May, and it's something we really look forward to. We are going to dive into our growth journey, our capabilities, our strategies, financial development, and talk about the future. And as Jørn said, if you've tried the Apple Vision Pro-
... you're not the same person after, and I agree with that. So I really hope to see a lot of you there, and you get the chance to try on the Apple Vision Pro and see why we talk so much about it, and what we think they can do for the enterprises out there. And just sign up with me on the email you see at the bottom of the screen if you want to come. The event will be recorded on video, and the slides will be made available on the website, too, for those that cannot attend physically. Okay, let's go to the Q&A.
I would like to limit yourself to two questions initially, and then get back in the queue so everyone has a chance to ask their questions. And to ask questions, please raise your hand by clicking the Raise Hand button. I will announce your name, and then you have to make sure to unmute yourself, and then you can ask your question. Let's start with Yiwei Zhou from SEB. Yiwei, please go ahead.
Hello can you hear me?
Yeah.
Perfect. Yiwei from SEB, and thank you for taking my question. First question is on the cloud operation. Could you put a bit more flavor on the new customer pipeline? The quarter looks very weak, and I think Jon has mentioned a little bit on the... You're quite confident about second half. Be nice to get a little bit quantified effect here.
I don't know, Kristian, if you can talk a little bit about how we measure up the business in operation, because I think that would be a good introduction.
Yes, so in operations, and what we comment here in relation to the first quarter is that when we onboard new customers, then the revenue from the new customers is quite low in the period of onboarding. And then it will be recurring revenue in the periods afterwards. In relation to Q1 versus Q1 in operation here, then some parts is also activity-based of the revenue that we have in the operations. So based on that, the decline in activity where activities were turned to the onboarding instead of other activities, then we saw this lower revenue in Q1 this year.
As we see, the Run-based revenue and operations, historically, if you remember the graph for the overall development, then we track that revenue also ongoing throughout the year, with a growth, usually, and this is also what we expect to see in this year.
So, maybe to explain that, and we're also talking about internally how we might be able to be more transparent on the nature of our operation. Because actually, when we see numbers like we see in Q1, it is a negative for the Q1, but it actually is a good sign because it means that we have. We are onboarding new customers, and we have an unusual high amount of those. And why is that a negative effect? Yeah, it's negative because we make a deal with the customer of a multi-year agreement, and then we onboard them, meaning that we move applications, and that is a lot of work. And that work is not fully paid by the customer.
It's an investment for us to take on that customer, and then it will be, you can say, be paid over multi-year. But also when we are and we are very busy on implementing these, then there are less focus on selling services to our customers that actually could maybe buy services because we simply don't have the manpower to do it, so that revenue will then drop. And so when we are onboarding new business for the future, we have this temporary negative effect, and in Q1, it's rather dramatic. But you can also see over the years, if you look at the Run distribution of profit and type of revenue, that it does bump up and down.
But I hope you appreciate the average trend that you see, because it's not like we lose customers, and the customers we have remains, and the margin on those customers remain. So I hope that is an explanation about this unusual... So Q1 was, in fact, the quarter where a lot of these you can say for the Q1 it isolated had negative on both revenue and profit.
Okay, and can we understand that this year is a bit more back and loaded in the Cloud Operation business-
Y- yes
... than the previous years?
As a consequence of this,
Yeah
... a clear yes, because we could also say now that, "Oh, we actually lost some Run-based customers, but in operation," but we didn't. We are onboarding new ones on top of the ones that we have.
Mm.
So there's no, you can say, totally negative thing to say about the operation. It is still in a positive growth mode.
Great, very helpful. And then my next question is on the cybersecurity. You have talked about the restructuring for, I think, the last quarter and a year-
Yeah
-actually both cost.
Yeah
... when do you expect to see the benefit? If you can, also-
I mean-
Get a bit more flavor here.
Yeah, so this is, you know, the way I would answer this. Please see it as a speculation or thinking different scenarios. So we could do, we could just invest in the business with a negative effect on our profit, and probably look into a rather slow growth. Or we could see how we might be able to attract, you can say, funds, to treat this activity not as a, you can say, a slow growth business, but a more like a startup scale-up model. If that gives a clear picture of the two modes we are in. That's why we have traffic segment and labs. So we are...
So with any business unit, whether it's a lab business unit or a traffic segment business unit, we all always thinking about, could we change gear from one to the other, okay? And I'm not saying we are going to do it, but I'm just saying we always have these two gears we can select from, and it has pros and cons, you know? And so, that's and since cyber has been a tough cookie for us to bite into, because we did expect the market to pull more. But, and we do have a lab company that is also in cyber that has strong growth, but there are different types of cyber. There are things that are important. It's important to protect your business with Cyber Protection, but is it urgent, is the question.
I can conclude from the market, and also from our competitors, that it seems like customers are willing to take a risk so that they don't... They probably see this as important, but not urgent. But the urgency, I think, will materialize once NIS2 and those sort of regulations for banking and other industries. And we estimate around + 1,000 companies that will have to upgrade seriously their Cyber Protection to comply with those new regulations. And I'm only talking about the Danish market here, so + 1,000 companies. And so far, they have just been waiting.
Okay very helpful t hank you. I'll jump back to the queue.
Thank you Yiwei . The next questions will come from Poul Jessen from Danske Bank. Poul please unmute yourself, and go ahead.
Yes thank you. I have a question first about the full year guidance. As I heard you saying, you expect that the, that the market or that you do not assume that the market shall improve in your guidance, but it's more based on the current activity levels. But could you also say a little more about what kind of clients as a general that that they are scaling down or stopping some projects ahead of time?
Yeah.
Uh, yeah.
Good, good, good question, and of course, I cannot mention exact brands or customers, but I can tell you why we are also sometimes a little surprised. So the two customers... I mean, there are three customers that negatively impacted Q1 in a material way, and it's three companies that are huge. I mean, they are multi-billion dollar companies. And their explanation to us is that the global economy and the geopolitical situation affects them in a material way, so that they have to do serious budget cuts. And for those three accounts that were rather big customers for Trifork, still—they're still customers, two of the three. The third one might come back, but the two are still a customer, but they just reduced scope dramatically.
So it's not because they don't make money, it's big customers, but they're living in the world that we all live in, and they have to adjust their business as well, and sometimes that has a negative effect on companies like Trifork.
Okay, but you are not expecting that there should be a market improvement to meet the full year guidance?
No, we don't, because whatever happens to the market is out of our control.
Mm.
We actually only guide based on how we see the market at present time. That has, you know, so we don't, we don't try to predict when there is an incident in the world that negatively impacts us, and we don't try to predict if there's something positive. We, we guide on the premise that things are as the way they are now, and then you can see if you think things are better or worse, but that's how we do it.
Okay.
But maybe to say there that, I mean, we do have all the positive signs that we see in relation to Vision AI and Vision Pro, and all the dialogues that we have, but that's more based on specific type of solutions that we address in the market, and not because we see a market improvement overall.
... Yeah, exactly. Yeah, so Trifork being Trifork, I mean, probably also one thing I didn't mention, we have never innovated on so many fronts that we have done in Q4 and Q1. And so it's like a, you can say, a perfect storm. But when you do that, it does also has a cost before you see the benefit and the revenue from it. So when you combine the Vision AI, the Vision Pro, our IP in the platforms, that we see already has some effects, that is something that we don't regret that we have done, but... But it's an investment, you can say.
Okay, and then the clarification on the ESA impact. You mentioned it's EUR 2.8 million estimated-
Mm
... on the quarter. But you mention it both when you discuss the group level and when you discuss the Build business. So is it Build only?
Oh, it's primarily related to Build. So you could say Inspire is not really impacted. And Run is only to a minor extent impacted. So it's primarily related to Build, yes.
So when you end up saying it's about 5.6% on group revenue, then it's more than 7% on the Build?
Yes, it's around that area.
Okay.
Oh, yeah, it's more. It's, Poul is right.
Yeah.
Yeah. It's because you mentioned the EUR 5.6 also on the Build. I just want to be certain.
Yeah. So that, that's the biggest... When we compare, yeah, then it's the biggest impact on the reduced margins for build.
And then the question is, are there any differences in your business or whatever that you are hit about more than 7% on the solutions business? Because when we look at other companies, they talk about a smaller number, let's say 4 or 5%.
Kristian?
No, I don't think so. You could say majority of the revenue is still in the Danish market, and Danish market, then the effect was highest, you could say, compared to other markets. But, I don't think you could say there would be any major differences.
Okay. Thank you. I'll step back in the queue.
Thank you, Poul. The next question comes from Mikkel Rasmussen from ABG. Mikkel, please unmute yourself and go ahead.
Yeah, thank you, Frederik, for the opportunity to ask some questions here. Mikkel from ABG here. In relation to what Poul already asked about, concerning these customers who have terminated their contracts, would you be able to quantify that in more details, just as you were able to quantify their working day impact?
We don't have those numbers to be disclosed. But as you can see in our numbers, they are. I mean, they are probably the main. I mean, there's this ESA thing, but the main thing is those customers stopping work on short notice. That is. I mean, we cannot adjust our company that fast, so that is a dramatic negative effect, and it's a major part of, of the, of you can say, of our disappointing results of Q1.
Okay sure t hanks. And the second question relate to these, extraordinary costs in Q1. Is there any chance that they would ripple into Q2 as well, or do you feel that you have good control over them now?
I would say that the one-off cost that we report for Q1 is isolated to Q1. As Jørn mentioned, we have plans for how we wanna go about the Cyber Protection business area, and if that would have any additional one-off costs, still to be seen. But in relation to the Inspire business area, we expect it to be done in the way that it is right now, and no additional one-off cost in the remaining part of the year.
Okay s ure t hank you so much. I'll jump back in the queue.
We currently do not have anyone with a raised hand, so I'll just give the opportunity. Mikkel, you are back online. Please unmute yourself and go ahead.
Last question is related to demand outlook, 'cause I think it's kind of different what you are saying compared to what Netcompany, for instance, is saying. So would it be possible for you to explain whether Netcompany is simply too optimistic, if you're lowballing, or is it because you have sort of different end market exposures? For instance, you know, the size of projects.
What I say about outlook is that we don't say anything about outlook. We think about the business climate as is. And what we can say about our perspective of the outlook is that we are investing heavily in business development, and I mentioned this. We have, you know, from 2021, 2022 and we saw, like, a tailwind environment, and you ask all the time, "Are you able to find the talent?" Now you don't ask that anymore because it's a different climate we have in the world, and there are, you can say, plenty of tech talent available. But then, of course, it's there is never a perfect world. Then the problem is, are there enough, you can say, customer challenges available now that you have access to talent?
To make that happen, we need to invest in business development. That has a short-term cost before we see the effect on pipeline backlog, and revenue, and profit. That's what we say. We don't disclose anything about market outlook. I just... We can just explain how we act on the current environment. If there is a returning back to, say, 2021, 2022, then we will, of course, benefit from that as well. But that's not what we... that we don't guide on that.
Okay s ure t hank you so much.
Thank you Mikkel. We have Yiwei from SEB back on the line. Yiwei, please unmute yourself and go ahead.
Hi, thank you for taking my question again. Here, I have a question regarding the High Court contract, which was also, which was canceled, and, and I recall that you also won the contract. Should we expect any change, or have seen any change, or impact to you? Sorry.
Kristian, you have a comment there?
No, I don't think you should see any change to what we say here. We still believe that we are in a good position in relation to this work, so not something that we will change anything here.
I'm a little bit confused. So the contract was canceled, and I was wondering, is there any sort of a work you have not delivered, but it has been contract, which is also being canceled, or it's just a... How should we understand this? I mean-
Okay, okay, I understand what you mean now, or maybe I do. So when we have a contract with a customer, they don't breach our contracts. I mean, that's only if they go bankrupt, but big companies normally don't do that. So we're not talking about those kind of engagement. So this is according to contract, so... But short-term for us can still be a rolling three months contract. That's not unusual. So if the customer, you know, maybe delay that response a little bit and then say, "Oh, by the way, we need to dramatically reduce the work for the next role," that may be for three, four years, they have had, like, a steady engagement with us, and all of a sudden it changes.
Of course, it's dangerous for us to rely on that the next quarter will be like the previous quarter, because we don't really know before they commit the new work. So that's how you should see that there is no breach of contract. All our customers are very. They honor all the contracts we have with them. So it's simply just that they work accordingly to the contract we have with them, but just don't follow the pattern they have had for years.
Are you talking about the general contract pattern or is relating to specifically?
No this is these few exceptions. I'm only talking about these few exceptions.
And so it's, that's also the case with the High Court contract, which is being canceled?
Say one more time.
Is it also-
Yiwei is asking about High Court. There was a-
Ah
... a tender there that was,
Ah
... rolled back.
Ah, okay. No, those kind of things, we never... So we never guide or expect any, any, you know, any work really coming from tenders. Tenders we treat as positive news when they come, and, so it's not like we are leaning very much into a tender process, you know, by allocating manpower, et cetera. So no, they don't-
But-
... that's just business as usual, that we have a X% win rate, which is actually rather high for us in the tenders we bid on, because we are quite selective on what we bid on. And so that, no, that was not an unusual thing for us.
But it was not-
... Maybe I can add some color on this one. So-
Yeah
Yes, it was rolled back. Publicly, there's still decisions ongoing, and since we obviously are involved in this, we cannot publicly talk about this to any further detail.
Oh, no. I mean, no, but no, no, no drama there as I see it.
Okay. Okay fair enough m aybe we should take this off the line.
Mm-hmm.
Yes. Thanks.
Thank you Yiwei . There is time for one last question if anyone wants. Let's just see if anyone has their hand up. Okay, that does not seem to be the case, then we will conclude the session here. Thank you so much for your questions and your interest in Trifork, and we hope to see you again on the 29th of May in Copenhagen at our Capital Markets Day. Thank you, and have a great day.
Thank you.