Okay, let's start the presentation. My name is Frederik Svanholm. I am the Investor Relations Director 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 web page later today. Second, I would like to inform you that if you want to download the presentation for today's call, you'll 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. Before we get started, we have to present this disclaimer. You are all very smart people, so you can read fast.
I think we can jump ahead. I will now hand it over to Group CEO, Jørn Larsen. Jørn, please go ahead.
Thank you, Frederik. First of all, thank you so much for listening in. I can see we have a lot of participants today, and I hope we will get through a lot of interesting questions later on. First, you know, I want to talk about how we ended 2024 and how we are already looking into 2025 with the guidance of 2025. I am very grateful for everyone at Trifork for fighting very hard in 2024. 2024 was not the easiest year in our career. I am proud to say that we almost broke the revenue record, but we did not make it at the end, even though we had some good acceleration towards the end of 2024. I also want to thank our customers and partners because without them, we would not be here today. With this, I would like to open the presentation here.
The Trifork Group, as you know, is Trifork and Trifork Labs. Also in 2024, this combination of having Labs and Trifork proved to be something I think saved the year in a few different levels that I will talk about later. We have more or less the same distribution between Inspire Build Run. We have a private part of business of 62% and the rest in public. It is our aim going forward that we'd like to be even stronger on public business. We have a number of initiatives that goes in that direction, as well as continue our growth in private. In Labs, we have 24 companies, and we will talk about them later on. We have an all-time high book value for the lab companies, and some of these lab companies are doing very well. Let's move on.
What I mentioned here before is that if you compare the '23 and the '24, then '24 was a disappointment. Let me be clear. We did not win two quarters, Q2 and Q3. Those two quarters pulled down the expectation from what we anticipated going into '24 to where we ended. I apologize for this towards our investors and shareholders. However, we are hopeful. When we look forward, as you can see, we already here indicate what we expect for '25. '24 ended being back in growth, nevertheless a small growth, but a growth. We see good traction and reasonable good pipeline and backlog for '25. Our CFO and all our number of people have really been careful when we have done this estimation.
We know that we do not want to repeat if we can avoid it what we did last year with downgrade on guidance. This is something we have spent a lot of time on, and this is how we guide. On the result, the difficulties of 2024 can be seen in the low profit EBITDA of 2027. Here I want to also mention, because we will look at it later on in the presentation, that actually our net result, we were better than 2023. That may be counterintuitive, but Kristian will explain how that happened again. Let us move forward. Kristian, I would like you to explain our guidance because we changed a few things in our guidance looking forward. Please go ahead, Kristian.
Yes, thank you, Jørn. What you see here is the overall guidance for 2025 for the Trifork Group with the guidance and revenue, Trifork segment adjusted EBITDA, and the Trifork Group EBIT. Overall, these are the expectations as you see here. We have here supplied also the corresponding margins on the different items. Jørn already talked into the guidance for 2025. In relation to the midterm target, that is, of course, we cannot go through a year as 2024 with a flat development and then expect that we will end on net the same results in 2026, which the midterm guidance was covering. Now we have 2024 as the base year in relation to what we guide on midterm.
We have then adjusted to 10%-15% annual growth, taking into account the difficulties in the current economical environment, and still expecting that we can grow in this environment, but that it is not, say, as easy as it would be in a normal environment. The 10%-15% annual growth, whereas 5%-10% is organic growth as we see. We have not changed the expectations to where we would be in relation to margins. EBITDA and EBIT margins are still the same we guide, and we also still guide on the same approach towards leverage of 1.5 in the period. That is unchanged as before.
Thank you, Kristian, for explaining that. Here we go into the details of the full year and for the Q4. First, in Q4 compared to Q4 2023, we see that we are net up by 1.8%. Q4 2023 was a quite good quarter in that year. I do not know if you remember, but that was where we had a lot of healthcare revenue and our extra revenue coming from Switzerland. It is good to see that we are actually net up by 2%. Of course, it is not a double-digit number, but nevertheless, it is very nice to see. When we compare the 12 months, we can certainly see the impact from Q2, Q3 that disappointed. We were not able to catch up. We are down by 0.9 in total. That, as I said before, was not satisfactory.
What we see is now we are in a better trend. Also, what I want to highlight is the revenue of 2024 and the adjusted EBITDA and the margin of Q4. All these three numbers actually look quite okay. If we up that with a few percent, it is where we want to head into 2025 and then improve from there. The basic underlying metrics are healthy. Let's move on. As you know, we are operating in this go-to-market model Inspire, Build, and Run. For Inspire, I will also touch on later, we improved our overall business in Inspire, but not as much as we anticipated. We have continued to optimize the business in Q4 and in going into the new year. We know that we will continue to improve the numbers in Inspire.
I want to highlight here that on the last bullet, we are still growing our awareness in the world. You know, we have plus 1 million online subscribers. We are nominated one of the best video channels. As you can see in this bullet, we are very popular when it comes to inspiring our tech community. That is, of course, something I'm very proud of, that we are able to do that with the limited resources we, however, put into this. Next. Build was okay. As you can see, the margins are not quite where they should be. I would like to see the margins go up a little bit. That is reflected still in Q4, that we had some capacity that was not utilized. Plus, we invest in business development and sales. These have to continue to kick in before we can improve.
If we then move to Run, here we have some very good news. It is good news on multiple levels, because a part of our build is still selling consultant hours to our customers. A number of the acquisitions that we made over the years have been purely consultant businesses where we sell hours to our customers. What happened in 2024 was that the unemployment in tech increased, and a lot of companies had to cut down. Also, with the invasion of AI, where it is anticipated that AI can do a lot of the work that developers can do, this has the effect that consulting companies need to look for different markets if they want to grow. We are one of those companies that are looking to increase a different market. What is the different market?
How can we outcompete, you can say, that companies can hire themselves and where we have to work in this environment where we have unemployment? The way we can do that is to sell IP and products. It is with great pleasure that I see here that I can show you here that we have good margin. We all know that when you do product sales, you have better margins than if you sell hours in a hard market. The game changer for us going forward is just to keep pushing on our run to sell products, but also that the services that we have in build will be on top of our products. We will bundle, you can say, product revenue and service revenue. Thereby, we will eliminate ourselves for some of the competition that you have if you just sell service.
Because if you do the bundle, then it's a stronger offering towards the market. When we sell this bundle to our customers, they save money compared to if they have to develop themselves or with freelancers or consultants. That's the way forward for Trifork. We call it product-led business. We will talk more about it a little bit later. What we also saw in 2024 is that we were able to continue our, you can say, the risk of having few big customers. The customer concentration has developed in a healthy way. What we also can see is that we have a very loyal customer base. Because when we did the IPO, we still have 18 of our top 20 customers as customers. I'm very proud about that.
I would like to thank our organization for maintaining a really healthy relationship to our biggest customers. I can tell you that the two customers that disappeared are unfortunately no longer with us. It's simply companies that went out of business. They didn't start buying from another place. Main events in Q4 are in the Trifork Labs segment. The win in Switzerland for Swiss Post is one of the companies that are going to facilitate the whole Swiss population with an electronic patient record. That's a revolution in Switzerland. It's something that in Denmark and in other countries, we have had for a long time. Maybe not one. Actually, Switzerland here goes a little bit forward by setting a foundation for everyone that we can each have a record.
In labs, the big news was the collaboration with an investor into our lab company, XEI. XEI is one of our fastest growing and best companies in labs. Not the only one, but a very good one where we reduced our stake. It is not like we exited, but we went from 20% shareholding to 14.3%. That, I think, is a very strong signal towards XEI, but also very beneficial for Trifork. Let's move on. With the organization, we still grew because the people we hire and the people we acquire through acquisitions are core to our future growth. We are a more lean company now than we were in the mid-summer of 2024. It does take a little time to adjust an organization to have another profile. We also see sick leave downtrending.
However, I would like to see it going closer to 2% than these 3%. It seems like COVID kind of never ended. We have a higher sick leave now than prior to COVID, unfortunately. That also cost on margin. With trade shows, we had a very good year in 2024. Never before were we so much, you can say, extroverted and on the scene of big tech conferences. Our logo and our case stories were seen by a lot more people in 2024 than ever before. I am very happy about that as well. Let's move on. Also, like a proof case, we have a number of new case stories in our report, and I hope you will take a look at them. You can find them all on our trifork.com. Here is one.
This is a very good example of when our lab company produces products, and we help that product company implement this product at a customer. This is a customer in the U.S. It is one of the biggest companies in America and ranked at 51 on the Fortune 500 by revenue. It is an energy transfer company. They transfer things like gas from A to B. They have thousands of miles of pipes. They have 8,000 field technicians. If you recall a case story a few years ago from Vestas, this is very much like that. Any company that has assets in the real world and where they have an army of field technicians that needs to maintain these assets for them to work, we can support them with very effective tools.
You see here, Randall, he states that working with our tools has been really a positive thing. The good thing about this company is that they have a very aggressive M&A strategy. They buy two to three big companies every year. Every time they buy a company, they have more and more field technicians. This is a very good customer for us. On top of that, they also want to work with us in other things that we can provide. This is a good example of this land with some IP, and then you get a lot of service on top of that. Let's move on. Going into 2024, with all the things that happened in 2024, we had four main strategic priorities. We have worked very hard through the year with all of these.
As I mentioned already, the optimization of Inspire, we partly succeeded with that, but that's probably the one we were least good at. The one where we really had a positive trend is our Run business. Not only did we sell more of the IP we already had that was just shown in the case story just before with Energy Transfer, but we also innovated new products. In the year of 2024, we launched our new Corax AI platform that is very popular in the market. We have a lot of meetings with customers who want to take advantage of our platform because it's a jungle when you want to work with AI. If you work with our Corax data and Corax AI, you have a safe garden where you can utilize the full power of AI no matter where it's from.
You have a very structured way of using AI. We can also make sure that you execute AI in a very safe environment. We have GPUs in our server centers. If you have some very secret stuff you want to use AI on, we can make sure that this information and the data analysis do not leave the premise. That is probably more important than ever before. Two years ago, everyone was just happy to do whatever computing in the public cloud. Today, that is not the case. Let's move on. The strategic priorities for 2025. I just want to mention one, but here you can see a number. I want to mention the top one because the top one is to double down on selling more IP, more products, having this IP-first strategy towards the market. There are many reasons for that.
I want to mention another one that I did not mention before. That is if you have something a customer can really benefit from when they want to do their business. Let me use aviation as an example. For more than 10 years, we have been working to develop custom solutions for a number of airlines. Now all these airlines need to continue their innovation, but they also need to maintain the whole software stack. In reality, all these airlines more or less have invented the wheel 100 times. We are looking into the top 100 airlines in the world. We have a good communication with at least 25% of these at present. We want to expand that more into 2025. We see that they need the same thing. They made all these custom platforms.
There is no idea in them to continue to maintain these platforms. What we offer is a product suite that can replace the custom-built software that they have. That is a very good way for us to get our product in. It is also a very good way for the customers to save a lot of money. That is a good match. Let us move on. Here, there are some interesting things because Trifork has always been a company that is very curious about new technologies. The orange dots are some of these new technologies that we have been following over the years. Still, quantum computing is very interesting. We are still observing and following very closely. What I want to talk about here is GenAI and digital twins. Sometimes, and also spatial computing, sometimes you follow one technology trend.
When you combine a few of them, you actually have almost a superpower. Recently, I was on one of my favorite ride-alongs where I followed the leadership of a company in their production facilities and in the workshops. I saw a pattern that we are working on now. That is to create digital twins of individual experts. Imagine that a person who has 40 years of experience, and imagine a group of people who have a lot of experience. Imagine that you could create a digital twin, like a human or like an artificial copy of these people, but in one digital twin. Then less experienced people can access this, you can say, virtual or spatial person and consult that. It is what you all are used to do with ChatGPT or whatever you use nowadays.
Imagine you can take experience in because experience today is something that is undocumented on the internet. Therefore, there will never be like a general available AI to ask. We can build this model if we can capture the experience of people into a digital twin using GenAI and maybe also spatial computing. We call that assisted work in the field. That is something we are working hard on to bring to the market in 2025. Let's move on. Trifork has always been about a combination of organic growth and M&A. We made three acquisitions in 2024. We are very happy with the traction of all of them. We are working hard to also find very interesting companies in 2025 to include in the Trifork Group. Let's move on.
As I said, I think Kristian, he can explain more about the consequences of the development in our lab company, in our lab group. First of all, the book value is up again. We have some very strong traction in the top five, but also in the six to ten place in lab. These, as you remember, they are not places one to five. They are randomly ordered, but grouped in two. Some of these companies are showing good profit, good growth. In the combination of all of our lab companies, they actually have more than EUR 100 million in combined revenue. You know that we do not consolidate that revenue. We only consolidate, you can say, the profit and the dividends from them.
Kristian, I'd like to hand it over to you now because now we see a lot of bars and numbers, and you're very good at that.
Yes. All details, of course, are supplied in the annual report, but I'll just go through some of the details. As Jørn said here in relation to the lab companies, last year, we started also providing a little bit more inside information in the average for the top 10 companies. This is what you see here. Seeing the development in the revenue, as Jørn talked into, but also seeing the development in the margins and in the growth of the companies. Overall, what we've done here in the way that we show it to you is that we also then have accounted for our ownership ratio in the different companies.
That is what you see here in the weighted by current lab ownership because, of course, we do not own 100% of all the companies. Overall, you could say the development that we have tried to nurture and to support in general in our lab companies is that instead of just focusing on burn and development of growth, that they also improve profitability. This is what you see here in this slide, how that has developed the last two years. Also, if you look into the annual report, you see that the number of pages has more than almost doubled compared to last year. Last year, we reported a separate ESG reporting. This year, we have included the CSRD reporting as required by the legislation in Denmark. That is why you see a lot of additional pages here.
We're happy to report all of this and follow, you could say, the development within CSRD. There's a lot of things happening right now, also in the legislation in the EU, etc. How that will be in the coming years, we don't know. This is the status that we have right here. Of course, environment is very important. We have, in our past ESG reporting as well, reported a lot on this. What we have focused on in this report is the scope one, two, and three, meaning and how we want to reduce on the different scopes, but very much focused on creating the baseline for following the future transitions that Trifork will live up to in the future. On the social part, you could say business as usual for Trifork.
It's like we really are concerned about the employees we have and the well-being of the employees we have. Of course, we can also improve. As a company that does grow, and we believe that we want to grow in the future, we will also do much more in how we support our employees in the future. In relation to governance, of course, we have to live up to governance, but we also improve governance all the time. Here we also go the next step in relation to actually going to our suppliers, etc., and start evaluating our suppliers in relation to not only governance, but also in relation to the environmental and the emission criteria, etc., moving forward. Overall, if we look back and distribute on quarters, we see, as Jørn talked into, that Q4 was once again up compared.
Here is just to show a longer trend line including the quarters. All positive trend in Q4. Of course, as Jørn also mentioned, we're not happy with the flat development and especially Q2 and Q3 being low in 2024. The Trifork Group's end equal to the Trifork segment revenue, as we do not include any revenue from any lab companies in what we report, Jørn already talked into. I'll just mention here that, of course, this is a mix of the different countries that we operate in and where we saw an active development in the U.K. and more flat development in Denmark, our biggest market. We saw a very nice improvement in the U.S. with a 69.9% in Q4. Also for the year, U.S. has been driving new revenue as part of the Trifork Group.
Looking into Trifork segment performance on EBITDA or adjusted EBITDA, then for the year, the 13.1 was disappointing overall seen for the year. Improvements in Q4 with the 16.1 was on the right track, you could say. Despite, you could say, the initiatives that we've been doing with the cost-saving programs that were launched or communicated about back in November. Some of the cost savings already started saving costs in Q4. Of course, that's positive. Other initiatives had an increased impact on cost. This is then a combination. In the long run, we actually well off, we believe, in the track of these initiatives and believe this to improve the coming quarters. If we look into the Trifork segment performance and on Inspire Build Run, then as Jørn talked into, we were really not satisfied with the development in Q4 in Inspire.
That cost us to do some changes. I'll come back to that. Build already talked into and then Run, the average for the year was 24.5% in EBITDA margin, which was at a satisfying level for the year. The cost-saving program, not talk much more into this. It's following the plan. We still have the same target with the EUR 10 million saving on the same activity level as in 2024. That's progressing well. Looking into Trifork Group performance on EBIT, then it's impacted by the same, you could say, parameters as EBITDA. The result of that is then an increased margin in Q4 compared to the rest of the year. If we look into the Trifork segment Inspire and look at a timeline, what you see here is a positive development in revenue, but negative development on the EBITDA level.
Next year, since we have done more actions on the Inspire segment here, is that most likely we'll see a decline in revenue, but improvement on EBITDA level. That's the game plan based on the initiatives that we now are in progress on to lower the risk on EBITDA, but then maybe also not including as much revenue from this as in the past. This is just to follow up here on the quality level. No more comments here. In the Build-based segment, in the same way and same way of showing this, is the bar showing the revenue and the margins being the light blue here. We saw the drop in the margins during Q2, Q3, and now an improvement again in Q4.
We believe that we are on the right track in relation to where to go now and that this growth is starting again. This is the way we see this moving forward. Overall, we here saw more or less the same revenue as in Q4 as last year, so the flat development here. This is from where, you could say, Q2, Q3, we saw a decrease, but now we are at par again in the Build. The initiatives that Jørn talked about in relation to supporting the run-based business with the services here, in additional services in Build, that's the plan for the growth in the future. The run-based segment here, we saw a small increase in, but from being flat to being an increase from 2023 to 2024.
Overall for the year, we saw the decline, the impact that we saw in Q2, Q3, but now in a better place. We saw the margins in Q4 being high. That to some extent is also seasonality. Usually we would see better margins in Q4. Also overall for the year, we are satisfied with the margins here. Once again, just to show the historical development to follow the margins over the quarters and to follow the revenue development. When we're looking into the run-based segment, we also always look into how it's distributed in relation to own license support, to hosting securities, which are the two most important parts for us. Then we have the third-party licenses and hardware coming on top.
What we see here is that we have a good trend, we believe now in the two first parts, hosting security and license support on own licenses. This is where we focus moving forward. Going back to the lab segment and a little more details here. What you see in the left is the development on EBIT in the lab companies. We've seen that since 2016, where we had an active EBIT, we have had a positive EBIT in all the years. This EBIT is a combination of realized and unrealized gains. What we saw in 2024, if we look out to the right, is that we increased the realized gains.
Even if we divested or if we impaired some smaller investment, then the positive development, both in realized and unrealized gains in the lab companies that are doing well, had the positive impact, as you see here. The reason for us to believe that this dual strength or dual strategy of both having a Trifork segment and Trifork Labs segment is that we believe that this is a more healthy model for us or a good model for us in relation to when looking into the total profit for the company. What we see here is that 2023 and 2024 actually on net income is more or less on par.
Despite that we actually lost business or had challenges in the Trifork segment, then by adding on the positive impact from the Labs segment, then they're equal to be on the same net income level, which is positive seen from our part. In 2024, we also acquired some NCIs, and that increased the earnings per share as Trifork now more of the profit in the company now belongs to Trifork shareholders. Overall on the Trifork Group cash flow and financial position, then we see that the leverage was a little higher in the end of the year. That was to some extent due to delays in receiving exit proceeds from some of our exits, but also that we had some large deals just in the end of the year, which caused our amount of debtors, the balance of debtors to be somewhat higher than what we usually see.
End of January, the net debt ratio has already now decreased. Net debt reduced by just about EUR 9 million from December ending into January ending. Just then also talking to here that we initiated a share buyback program of EUR 2 million, which will run in the first half of 2025. Now we move on to questions.
Thank you, Kristian. Yes, let's start the Q&A session. I will ask anyone who would like to ask a question to limit themselves to two questions initially and then get back in the queue so that we hopefully give everyone a chance to ask their questions. To ask a question, make sure to click the raise hand button. I will announce your name, and then you should unmute yourself, and then you can ask your questions. We will have the first questions from Wei Su from SEB.
Wei, please go ahead.
Yes, thank you for taking my question. I have several questions, and I'll do one at a time. Firstly, on looking at the guidance, EBITDA guidance for 2025, it suggests that EUR 5 million to EUR 10 million absolute EBITDA growth here in the Trifork segment. You also mentioned that the cost savings expect to generate a EUR 10 million here also in 2025. In relation to this, I mean, is the guidance here just reflecting a caution or am I missing anything here?
In relation to the guidance, then of course, you can always be very optimistic and say everything will go right, or you can look into 2024 and see what happened there. Of course, I mean, we trust that the cost saving program will turn out as we expect and in the end give an annual saving of EUR 10 million.
On the other hand, we also know that part of that is not taking effect until maybe mid-year, etc. We also know that in order to initiate that program, we have some costs initial in the year. Some was carried in 2024. Some was carried here initial in the year, which is additional cost. We do see that the majority of effect to kick in in 2025 and in the guidance that we have. That said, in relation to, you could say, we also see that we need to continue to invest in business development as we also communicated earlier or during 2024. We do see improvements, you could say, as Jørn also said, in relation to pipeline and improvements in the pipeline, etc. We still believe that we need to invest even more there.
Depending on how fast that kicks in, you could say the impact from those investments, potentially, you could say, you could then say whether it's cautious or if it's optimistic or conservative, you could say that that's the reality we're looking into. We believe it's a solid guidance for what we can achieve in 2025.
Okay. Is it possible for you to elaborate a bit more on the amount of the special items or severance payments here in 2024 and also your expectation for the special items here in 2025? I know you have not sort of separated as one line, but if you can help me to understand.
I think you could say if we do too much in that, I mean, we rather would like to see this as an ongoing part of the business because we also see that moving on, that from time to time, we'll have to adjust the organization, you could say. As Jørn talked into, we see there is a change in the market to how we can sell and how we should sell. Meaning that the competencies and the services that we provide to our customers in the past might not be the same as in the future. We have been transforming in 2024, but if that is, you could say, one-off and special item that way, we believe it's better to keep it as part of the business and then include it in the guidance.
Okay. Okay. Thanks.
The next question is on the Danish private segment. You had double-digit growth here in Q4. Could you elaborate a bit on which business lines or customer vertical have driven the growth here? Also, on the public segment here in Denmark, as I recall, you had some nice contract wins, framework wins here in the summertime, but Q4 performance of growth was more or less muted. Is there any sort of change here in the market dynamics or the customer activities here?
Maybe I can start answering, Kristian, so you can chip in. You started talking about the private sector. What I see clearly is a shift from manufacturing into other kinds of businesses such as trading companies, financial banks, etc. Not surprisingly, because as you know, the banks have benefited from the rising interest rates.
We were, you can say, negatively impacted when the interest rates were low, but we are, on the other hand, positively impacted now that they are higher. Okay. Also, trading, so trading of various things, energy trading, you know, the past years in the world, there has been a lot of changes in energy prices. When there are big changes in that, there will be companies that specialize in optimizing their business or benefiting, profiting from that. Some of these companies have been very successful and now need more structured systems. They might also be regulated. They are preparing for those situations. We're helping them with that. These energy trading companies are also heavy on data because it's a lot of trades, a lot of exchanges they trade on. They use a lot of different banks.
All that, we can help with, you can say, getting lower risk and better dashboarding, better monitoring of that kind of business.
Okay. Thank you. To my last question, I'll jump out of the queue and give opportunity to others. You also mentioned here you're seeing the opportunities here in the cyber protection business. As I recall, you are also on the way to divest this business. Don't you see that the change of the ownership or involve external investors will sort of impact here to capitalize this opportunity? Yes.
Yeah.
I think that if I have to mention just one, you can say, downside of being a listed company where we feel the pressure from guys like you and investors to do strong performance from quarter to quarter, I think that the cyber business that we foresaw like five, seven years ago would be trending up. A year ago, we saw that the market was lacking behind our expectation. You were like, "Oh, that's not good, Trifork. Why did you do that?" We said, "Okay, we have to do something about that. We might have to divest this business." Now, as the world has been moving into being much more in need for cyber protection and also bringing things to Europe.
Now we saw at the end of the year that security for us and security operations center was in higher need, finally, because we were betting on the right trend, but our timing was not right. Of course, we constantly need to readjust what we want to do and balance the quarter-to-quarter numbers by the long-trend potential. That is what I can say about that now. In just 12 months, that changed quite radical from our side, what we saw.
What we can say is that we had a good trend in the last part of the year. That part of the business actually then became break-even, where we in last year saw more investments in that area. That is a positive trend, you could say.
Of course, as Jørn is saying, we want to do what makes sense to our investors in the end and how we create the highest, you could say, profit in the end, whether it is divesting or it is keeping or whatever. This is an ongoing process. In the guidance we have for 2025, we have not included any divestments or any new potential acquisitions. That is how you should look at that in the guidance.
Okay. Just want to clarify. We cannot rule out that you will continue to keep it.
Wei, sorry, but it is difficult to counter too, I am sure, but we have a long list of other people on the line. If I can ask you to step back in the queue, then we will take questions from the other people.
Yeah, this was my last question, as I said.
Thank you so much.
Thank you. We will take the next questions from Mikkel Rasmussen from APG. Mikkel, please go ahead.
Yeah, thank you, Jørn, and Kristian for the presentation. Just two from us, I'll take one by one. First one goes to the license sales, which you saw being delayed from 2024 into 2025. I was just curious to see if you could actually operate on whether these have already been recognized so far in Q1, or is there still some uncertainty regarding these licenses?
I mean, that's, of course, Q1 numbers you're talking about now. I guess we cannot say exactly, but just say that what we communicated earlier is still valid.
Sure. Second one goes to guidance for the year. I just noticed that it's still quite narrow.
Looking at your guidance history, last four years only landed within the initial guidance range on the top line one time. I was just curious to see or to hear what your assumptions here, if it's sort of valid to say that the lower end of the sales guidance is more conservative than the higher end is optimistic, and also maybe elaborate a bit on the revenue visibility backlog because you had quite short duration IT contracts compared to some of your peers, at least.
Yeah, I mean, since we don't disclose any backlog information, we can say, as Jørn said, that we are building up the pipeline, and that we are now at a much better place than we have been ever before in relation to the pipeline.
In relation to if guidance is more conservative or optimistic in the higher end, I mean, that's more or less maybe answered by the answer to one of the other questions that I did just before. I think we guide here what we believe is, you could say, conservative and trustworthy from us, from our side.
Okay. That's all I wanted to hear. Thank you so much.
Thank you, Mikkel. Our next questions will come from the line of Poul Jessen from Danske Bank. Poul, please go ahead.
Yes. Thank you. Two questions. One is just to be certain about the cost cutting. You are reducing the cost annualized by EUR 10 million. How much of that did we see in Q4 already? Secondly, the run rate is then EUR 10 million by mid-next year, or is it a total EUR 10 million impact on, sorry, 2025?
Maybe I can answer from an overview.
Please mute yourself while Jørn is speaking. Thank you.
Thank you for the question, Poul. I'm sure Kristian will have some comment as well. As I see it, a few of the cost savings had effect in Q4, such as my reduction in my personal pay that goes immediately, and my colleagues in the leadership would do the same. A lot of the other cost savings actually come with an extra cost in the beginning. Also, when you want to move from a bigger office to a smaller office, you actually also have double cost. As you know, the EBITDA mechanism we have in IFRS also has somehow a negative impact on that initially. As Kristian already said, we will be at mid-year before the office reduction cost actually kicks in.
We will have to be in Q3, Q4 before we see the full impact on the cost saving.
Yeah. I can just add, maybe Jørn should be the CFO because he said more or less what I would say.
Okay. That means that the total cost savings aggregated for 2025 will be less than 10%.
Yes.
Okay. The extra cost you talk about will be reported as ordinary and not a special item?
Yes, that's right.
To the performance, now you once a year give the split on the customers on size. The largest one is down 17%. The next nine is down 25%. Is that one or two customers driving that, is it equally split? The growth that you then have from customer number 21 and onwards, is that because you are signing up new clients or selling into existing smaller clients?
I can start by saying that, Poul. We have a lot more customers now than we had a year ago. When we start doing IP sales to a customer, it typically starts small because a lot of the licenses and the way we do business will increase by when they implement and the number of users on a platform. The users, it could be also volume of data and other things. We will see a number of smaller customers in the beginning that will grow gradually over time. Back to the story I had with Energy Transfer in the U.S., they have onboarded half of the 9,000 or something like that. Their cap on the first is 9,000. When they buy more businesses, they onboard more seats, you can say, on the system.
If we sell more systems to them, more IP to them, then that will grow as well in two dimensions. It starts with a number of new customers, and then they will mechanically grow.
I can maybe also just add a little bit of color to your question specifically on the top 10 and 20 poll. First of all, the number one customer is a Danish public customer, and it actually consists of several sort of different engagements. We do not see that as one engagement per se. It is hard to sort of conclude necessarily on the dynamics underlying there. As you saw on the top 10 and 20 slides that Kristian and Jørn showed earlier, these customers as well that Jørn talked about, I mean, it is a couple of customers where we can see the revenue contribution has declined in 2024 in there.
In terms of the revenue from the remaining companies in the top 10 and 20, there is no sort of significant decline as such. This is more in line with, you can say, the revenue picture we see across the group.
Those reducing, is that because that project has come to an end, or is it because they are in a cost savings mode themselves or has left Jørn?
We have obviously talked a lot about that earlier in the year, both on these calls and in the reports. In terms of, you can say, the overall engagements in the top 10 and 20, you can say that there's nothing you can infer about that. Actually, the concentration is also a result of business development across the group below the top 10 and 20, right?
There we have been quite successful landing new customers in 2024.
Okay. Thank you.
Thank you, Poul. Next question comes from Mats Kvieskov from Carnegie. Mats, please go ahead.
Yeah, thank you for taking my questions. I also have two. First, Jørn, you mentioned some initiatives on how to improve the performance in the public sector. Could you maybe elaborate on the initiatives you're going to launch in 2025?
Yes. I mean, back to COVID, it's not long ago. There we were flat out hiring everyone we could get a hold of. If you remember, it was really difficult to hire. Our customers were buying because of necessity, everything they could from us. We delivered everything we could to mainly the business area of the public sector and healthcare.
We did not really have any energy in the organization to serve maybe the 90% other public customers. Now that is different. Now we have a strong appetite to grow our muscle into delivering to public. One agenda point I have is that I think the public sector in general should reuse a lot more than they do because a lot of agencies and customers develop their own technology on different technology stacks. I think there is a lot for them to win by sharing technology across. In this way, we hope to help to reduce the budget demand for the public sector, getting the same functionality.
Very clear. Thank you. Maybe on the U.S., very strong growth in the quarter. I also know that this is impacted by acquisitions.
Could you maybe just explain what is starting to work in the U.S. or what has been the main driver in the U.S. in the quarter at least?
Yeah. That is a number of product areas. In the U.S., we have a reduced, you can say, catalog of services and products. Karen and his team have selected a few what we call SRIM lanes. That is spatial computing, Arkyn, Vision AI, and AI. For those, we are quite successful building pipeline and also making contracts and backlog from the pipeline. It is mainly these four or five areas that we are focusing on in the U.S.
All the leads you had in the U.S. in the past are starting to convert into actual contracts now?
Yes.
Okay. Good. Thank you.
Thanks for your questions, Mats.
Thanks for all the questions from the analysts. To anyone listening in, thanks for your time. We will close it here and hope to see you guys around soon. Have a nice day.