Welcome to today's presentation, where we have the pleasure to present Inderes to help us through today's presentation. We are joined by you, CEO Mikael Rautanen. Of course, the topic of today, Q4, Q4 and full year report and outlook for 2025, that will be the main focus point on the call today. Of course, the main achievements you have seen during last year. Always, you're welcome to ask questions in the box down below, do it during the presentation or after, but I think we will take the main part of the Q&A session in the end. For now, I'll hand the call over to you, Mikael.
Thank you, Mikael, and welcome everyone on my behalf as well. Yeah, 2024 financial statements, how did the year go? Looking at it in the big picture, we grew 7%, we grew revenue on each of the product areas and particularly in the software. That's where we made the most progress and I could call them a few breakthroughs as well. That business is now on a very solid track, while the two biggest revenue lines, equity research and events, more modest growth, but still, our target markets declined last year. It was a shrinking market last year. Given that we were able to grow in these conditions, we can be pleased with that. At the same time, we continue to improve our profitability, to 11.6%.
One thing to highlight here was the extremely strong operating cash flow. Cash flow after investments, up by 106% to EUR 2.8 million, euros, demonstrating, I always say this is a company founded by the equity analyst. Cash flow has a special place in our hearts. We understand how to do cash conversion and what's the value of generating strong cash flow. The second part of the year or the second half overall improved compared with the last year. As we highlighted in the Q3 release, the last quarter of the year was fairly weak. It is partly due to timing issues. We had a lot of revenue booked for Q3 and not much cost booked for Q3, while Q4 was basically the opposite.
The Q4 numbers were weak from that perspective. I'd recommend to look at the second half in total. Going more detail to each business unit. If we start from equity research, by the way, we are now publishing for the first time the revenue numbers of each of these business lines. So equity research, EUR 7.2 million revenue last year, up by 3%, strong profitability. We did unfortunately end the year with one contract less than what we had when starting the year. This was the first year in history that the contract base declined, which we are of course not happy with. It's a very tough market. If we look at the market conditions, we are seeing this as a trend across the board.
Long term, we believe this is a structurally growing market as commissioned research is the way to bring equity research for all listed companies and all investors. The market conditions are now such that it's fairly difficult to win new customers because this is not a must-have product for the listed companies. We are doing very well in the must-have products like press release system, investor relations websites, AGMs. In these conditions, equity research is a bit more tough sell also given that we are covering so big part of the Finnish market. In Sweden, we haven't yet been able to create the market for our product.
Do you have the number that was delisted, you know, that is unavoidable that equity research stops on? I don't know whether you have that number.
We, on top of my mind, I don't have the split on how many of the churn was based on delistings. Obviously, it was a big part of the contract cancellations were because of delistings during previous years, especially in Finland. We have been able to replace those by winning more companies in Finland quite successfully. Then again, Sweden, a year ago we landed a bunch of contracts there. Last year, it didn't go as expected. We didn't win as much deals as we targeted, and we did lose some of the customers that came in during the first contract period.
Given kind of like now it's been two years, learning the Swedish market, we have fairly good sense now on what we need to do, how we need to refine our sales tactics and strategies. We are doing some adjustments to our go to market to find the right model. To sum it up, I'd say that we're going more from tactical sales into building the Inderes name, building the relationships towards the companies, and trying to getting through that way. Actually pretty much the same recipe we used in Finland, back in the day. Looking at the reach of our platform, how many investors we reach. This is a new data point we are now publishing. We had 19.1 million site visits on the platform last year.
Fairly flat number, while the number of active members declined to 66,000 from 74,000. Now, why is this declining? It is because we migrated to a new technology platform one year and four months ago. In the new platform, the content has been kept open, so you do not need to log in to access the content that much. This has been a choice we have made. That is why the number of logged in users is declining. We can show a hard data point that the platform is still vibrant and very active. Of course, this 19.1 million does not count in the partner channels that we have, meaning Nordnet, Kauppalehti in Finland, Avanza, Bloomberg, Reuters, FactSet, Capital IQ, and so on.
Neither does it account for the social media channels that play a significant role in our investor or B2C reach. Now I'd say like now that we have this metric in addition to the number of active users, it does give a bit more broader and better perspective on the reach of our platform because that reach is also crucial for winning the equity research. When you do commissioned research, you need two things. You need to reach the investors. The second part is that you need to reach investors that also trust what they read. If the investors do not trust the research, then it is basically useless. It needs to be independent. It needs to be critical.
We need to be able to also lose customers because our research is critical. Of course, we do see that in this business model, that's part of the game and we accept it. Moving to events business, revenue wise, this is actually our biggest business right now. Events growing by 4% to EUR 8.6 million last year. Good profitability level. This has been because of the pandemic. The story here has been, it's been a super tough market since the pandemic. What happened during the pandemic, massive tailwind, like you grow 100%, and then post pandemic, a terrible hangover throughout the whole industry. We are now seeing, like last year we saw, that the hangover after the pandemic is resulting in some players struggling. We've seen some bankruptcies.
It's been a tough, tough market for many. What I'm proud of is that we doubled this business during the pandemic and after it we have been able to maintain that volume that we reached. Yes, some product lines have been declining sharply, but we've been able to offset that with our strong focus on investor relations, building up the AGM capabilities, building up the hybrid event capabilities on top of the online events, and so on. I think our team has done quite a great job in this business area with so rapidly changing conditions.
We do have quite strong competitive advantages and strengths in the investor relations category, given our expertise in this segment, given our reach and distribution channels in this segment, and also our technology platform, Videos ync. Of course, this business also has been suffering a bit from the churn because of delistings. Also, Sweden, I want to be fully transparent that we acquired a business two years ago in Sweden in the events area that has grown since the acquisition. Our ambition level on the growth is way higher, and we are doing hard work to get that business to a growth track.
Is that more, is that client or is it the upselling to the existing client that has disappointed you a little bit? It's the number of clients, I meant, or the upselling for higher quality productions.
Yeah. I'd say, I'd say both. The churn has been also a disappointment, mainly because of delistings. There were over 60 delistings in Sweden.
Yeah.
Sweden last year. Actually, last year we had some 30-something IPOs in Stockholm. Everyone is cheering like Stockholm, over 30 IPOs. Well done. They had over 60, Stockholm had over 60 delistings at the same time, while Finland was five and five, for example. It is also the other side of the coin. There are signs that the IPO window is slowly opening, both in Finland and Sweden. Hopefully at some point in Denmark as well. Some projects that are kind of like, that have actually started and we have a signed contract. Moving on to software business, this was the highlight of last year. 40% growth to EUR 2.4 million, still negative on profitability wise.
This is because of the development stage of this business. It's going from R&D phase into commercializing and growing the business, but significantly improving the profitability as well. I wanna highlight here that this business has been more or less built from scratch over the past four to five years. I can be quite proud of the innovation capability of this organization that this demonstrates really our ability to build up new businesses that match the Inderes concept, where we also have clear competitive advantages and synergies to the other product areas. The IR software, there we are growing the number of customers, strong growth there, both in Finland and Denmark, thanks to our partnership with you guys in AGA.
That's been a positive thing. One big highlight of last year was the Video Sync sales. We landed a significant deal with a significant European event producer. They are starting to run their event operation on Inderes Video Sync platform. That is commercially an important deal for us, but it's also strategically an important deal for us. In practice, it means that Video Sync is the key platform in running investor relations events already in Nordic. If you watch any of these quarterly events, it's extremely likely that it's run on Inderes technology. Going forward, this will be the case more and more across Europe. It's our technology under the hood, connecting investors and listed companies, making investor information transparent and accessible for all.
I mean, that's at the core of Inderes. Video Sync also growing. The AGM software part of the AGM product also, we kept strengthening our position in the market in Finland and particularly landing several new big clients, extremely complex projects with companies that are listed in multiple countries. Our team's ability, and the technology that we can handle these complex projects and productions, is a great demonstration that we are extremely competitive in this product area. Looking at things, and summing it up, from a geographical point of view. With Finland, I'd just like to highlight that we have a very solid base in Finland.
And we are seeing some signs of recovering in the IPO market that we look forward to a lot. In Sweden, it has been now two years since we made the acquisition in that market. We are not happy with the growth we have achieved so far, and we are reorganizing internally, adjusting our sales strategy. We are a bit increasing the autonomy of the product lines, meaning that instead of going in with the type of end-to-end offering, we are going in with more of a product-by-product approach, trying to get into the customers. We are doing these changes because the results have not been what we wanted them to be. If they are not there, then we need to adjust and change. That is going on full speed. There is nothing new.
When we start building new business from scratch, that's part of the game. You need to find the model that works. Denmark. Now I'm speaking a bit on behalf of H.C. Andersen Capital. A bit of this disclaimer here, but I'm also proud of what you have achieved there. I mean, Denmark has been an absolutely horrible market for the past two years. The fact that you have been able to grow over 20% in those conditions does tell something about the team, about the energy that you have. Also, you have built a product portfolio and a concept that has a good fit in the market.
On Inderes behalf, I can say that our collaboration has played one part in this. We are now live with paying customers in Denmark, through HCA, on each and every product that we have. We have investor relations website live. We have the press release system. We are running these deep dive equity research contracts. We've done the pilots on first AGMs. We've done the press conferences, the IR events. Each and every product is now kind of like opened and, you know, the first sale is always the hardest.
I know, I know. As you said, the need to have and the nice to have, that is the business right now. You need to have the software that is need to have to really have success currently.
Yeah. If you really think about the life of a small cap company like us, Inderes, I mean, we need to make the life of small caps easier and it has to be cheaper to be publicly listed. What we are seeing looking at this market internationally, there are inefficient structures. There's not enough competition in many of these areas. I still very strongly believe that there is a need for what we are doing. We need to help the life of the listed companies, so that it can be cheaper and more easy to be a publicly listed company. Also, we need these information services for them to solve the liquidity problem that so many of the small companies have.
How you solve the liquidity problem long-term, information is the key because if investors don't have information on the companies, then they won't trade. That's at the core of what we do. Highlighting just the deal we had, which is basically a European deal, touching several countries in Europe. This is also like going into this, this was not in our books when we did our strategy, but the opportunity came up and we were able to shift our focus there and build a great partnership with this new partner where we unfortunately have not yet disclosed the name. That's now live and ongoing and ramping up.
From an international growth perspective, that was a milestone for us. Alright, let's dive a bit deeper into the figures. A lot of numbers here. Maybe I'll just highlight and pick a few highlights here. Recurring revenue, now 60%, the base of the recurring revenue grew by 6% last year. Sweden and Finland, basically both of them grew by 7%. Cost structure has been fairly stable. That's why we improved the profitability slightly. Adjusted EPS, EUR 0.95, compared with EUR 0.8 last year. I want to highlight that the only adjustment we make there is purely accounting items that have no cash flow effect. Basically goodwill amortizations because of the Finnish accounting standard. Q4 numbers, not that good numbers on that quarter, just 1% growth and break even profitability.
Like I explained earlier, this was mainly due to some deals landing to Q3 instead of Q4. Then we had some projects that were postponed, some capital markets days postponed from Q4 to 2025. We had a lot of, some smaller and some bigger, one-time cost items such as moving the offices both in Helsinki and Stockholm that put a bit extra pressure on the cost structure as well at the same time. That's the explanation behind these numbers. Balance sheet is very strong. It's a bit lighter compared with a year ago. One significant reason is that we paid the second part of the acquisition payment last year. In the Finnish accounting standard, we amortized the goodwill from the acquisition.
That's, that makes the balance sheet a bit more light every year. Cash flow, very strong, EUR 3 million plus, doubling the operating cash flow. I think this just reflects that the financial foundation of the company is rock solid. Given that we generate strong cash flow, that's part of the business model. That enables us to first continue and accelerate the investments to international growth. That's the name of the game, international growth for us, but also to continue the increasing profit sharing. We are proposing EUR 0.02 increase to the annual dividend paid in two installments. Alright, then to the outlook.
Basically, the same as last year, revenue to grow from previous year, and profitability measured by EBITDA %, excluding non-recurring items, improves from last year. The background here, last year we said the market is gonna be declining or stable. Now we're saying that it's gonna be stable or growing slightly. We're gonna grow faster than the market, and we're gonna accelerate our investments to international growth. Financial targets. These are the long-term targets we have, revenue growth and profitability, 30%-50% and annually increasing payout. Last year we missed the target. It was, the market conditions were tough. Given those market conditions, it is very tough to reach the level of 30%. Last year we missed it.
That said, still, we want to give, we want to set the bar high for ourselves. We want to have ambition in the targets. The target level should not be such that you kind of like reach it very easily, especially in hard conditions. Working every day to build the structure and products that take us to those levels. Alright, quickly summing up the big picture where we are going as a company. This is the evolution of Inderes. Historically, eight years, compounded annual growth rate 34%. The past years have been a story of transformation from 2019. It is a transformation from one product company into a product suite, still maintaining a laser sharp focus on the investor relations segment and category. That was a good strategic choice.
We've been able to grow significantly because that product portfolio really works. Then we started to reach levels that kind of like we are running out of space in Finland to grow. We need to ask ourselves, do we want to grow? Yes, we want to grow. We want to challenge ourselves. We were so beyond that, that the next phase is international growth. For that, we did IPO three and a half years ago. I can already say that kind of like doing the IPO was the right thing. That was the stepping stone for us to take this company to the international growth. That's the path that we've been taking.
It has been a transformation from a private company to a public company, a transformation from a very local Finnish company into an international company, transformation after transformation. That is the name of the game for us. That is what we enjoy, and that is what we like to do, challenge ourselves to the next ventures. It has been an exciting journey so far. It has been a learning journey, turning this into an international organization. Some of the hypotheses we made when we started this journey have been very relevant, and some of the hypotheses we have had, we need to challenge based on our learning so far. This spring, we are doing a strategy work. It is an open strategy process we do internally, involving all the 120 employees.
We're doing the strategy work as we speak, and we're gonna present the new strategy in a capital markets day in May. I would say there will be some updates to it. The foundation we set two years ago, I think that's a good foundation. You don't need to expect that we're gonna make a U-turn in our strategy, but some refining to it obviously expected because we, I can tell that now we know and understand the game way better than we did two years ago. That's it. I'll leave it for the questions.
Perfect. Let's jump into some questions. Cash flow, is there something exceptional in 2024? Why the growth is so much higher than your earnings growth?
Should we also expect that to stay strong, you know, and growing maybe not faster than earnings, but stay at this level and move up with earnings? How should we think about the cash flow? Was there anything exceptional or is that your business model with, of course, a lot of the depreciations and so on that you might see on the bottom line in the P&L, but of course it's not a cash flow.
There were no significant one-time items, some very minor one-time items like some receivables that had been amortized that we were able to collect at the end of the day, but nothing significant. I think more significant is that our financial processes are just getting more and more efficient.
It is a lean and efficient machine that, that,
it is a good base level to think and to grow with the earnings growth. If we should think about it a little bit like an analyst.
Like an analyst, potentially, yes. Investments kind of, it depends, it varies year from year. Like does the payments land the last day of the year or early January? Of course there is seasonality in that. Overall, I would give quite a big part of the credit to our financial team.
Perfect.
Increasing software teams you mentioned in your report, is that to make new products or to make sure you get more out of potential license deals like, the last European one you announced?
Yes, it is to tap on the growth that we are seeing. Of course we need stronger organization to deliver the growth, and not new products, but investing and improving the existing products. For example, as we go to these bigger and bigger deals, more of an enterprise grade, customers, there are bigger demands when it comes to information security, for example, and those on. So there are also areas that we need to invest in to make sure that our products are capable to serve extremely demanding enterprise grade clients, internationally.
A lot of areas where we do want to invest, and of course we want to make the products better all the time.
With this European license deal you made, has that changed your focus? I know I probably need to wait until the capital markets day, but are you looking for more like such license deals, trying to piggyback on this one and have this as a potential showcase in the future and trying to reach out further? Are you already identifying some license partner? Because I guess that must be pretty, as an old analyst, I guess that is pretty good margin business, licensing software out there.
A little bit about whether you see more potential there or you're already looking for other potential partners.
It, in a way, this was a type of deal that we have had also in the history, but they have been mainly like very small event agencies that start using our platform. This was kind of like the major one in Europe. There are not many of these type of players in the market. Very, very happy with that. The deal is based on white labeling solution, so this partner can also resell our software to third parties.
That makes it, in a way, scalable, because there's the focus of the model
on making this successful because they have such large potential. Should I understand it like that?
Yeah, that's definitely
a big way to, yeah, you get a lot of contact points, and it has a lot of potential if you make this license deal successful for both companies.
That's a great way to put it. That, I would say, has the bigger opportunity making this successful, compared with trying to find new partners. Others.
A last question, Share buyBack has been used as a distribution tool for you lately. I think it's almost ending, this program.
Should we expect that also in the future that excess cash, I know you can't say whether you start a new one until you do it, but should we expect that to be used as a tool to distribute excess cash, besides the dividends also in the future?
Yeah, the current program is, I think it's ending as we speak, maybe this week or next week. I can say that it's in our toolbox and the board evaluates it case by case depending on the situation and the context whether we use that tool or not.
Check. That was the last question I had on my paper and from the audience. Thank you, Mikael, for taking us through your results and answering questions.
Thank you for the audience listening in.
Thank you, Mikael. See you next time.
See you.