Welcome, everyone. Today we have the honor of speaking with the CEO, Olav Kalve, of the publicly listed company My Beat. It's a real pleasure to have you here, Olav.
Thank you. It's great to be here.
Now it's time to dive into My Beat and all the exciting things that have happened and are about to happen. I know our viewers are eager to hear more, so I won't keep you waiting. Let's get started. You launched My Beat Security, a completely new business area with the alarm services in June. What was the driving force behind this expansion into security services? How do you see this complementing your existing telecom operations?
My Beat's uniqueness is our offering to help customers achieve significant savings on best-of-breed subscriptions while still having the advantage of high-quality personal customer service. We offer this service within the area of mobile subscriptions, including security products against fraud and identification theft, as well as subscriptions to electric power. Our customers will now also get the opportunity to achieve further savings and high-quality customer service in home security. Again, we offer best-of-breed products and services at a savings-oriented cost structure for the customers. Business-wise, for My Beat, these offerings will deliver excellent margins and synergies in several directions. We can cross-sell and upsell to existing customers and new customers within all product areas, and customers achieve savings across a broader range of their most important subscriptions.
With these customer-focused operations, how has the response been from customers, both private and business, regarding your new security offering since the launch in June?
We are still missing a few pieces in the puzzle for a fully optimized volume-based launch of the service. As mentioned in the press release, the service will be completely launched later this summer. We have tested the interest and potential by including this offer in the customer dialogue for cross-sell and upsell. This has led to the development of a solid pipeline of interested customers. I think we can conclude that the customers really take interest in this offering.
That's great to hear. Going into more financials, you have made adjustments to your accounting principles for one-time revenues, resulting in estimated write-downs of approximately SEK 1 million and delayed financial reporting from May until July. What has been the reason behind this decision? How does this change hopefully improve your internal performance tracking and external communication?
The reason behind the changes is that the previous model for accounting for these revenues required a lot of administrative follow-up to handle the correct accrual of the revenues. Also, as a result of staffing changes in December and January, we were, for a short period, not able to follow up on the collection of parts of these revenues. We must now write off these revenues if we are not successful in collecting them. During the transition period for changing the accounting principles, it will be difficult to state correct partial revenues until the entire transition period has been completed. Therefore, we will postpone publication until we can show the whole correct picture for Q1. The change will mean that some of our people will free up time to focus even more on sales work.
We will continue to actively communicate to the market about our business development and the results of our initiatives. The market will thus continue to be well-informed.
That's great. With this change, preliminary results for May, June, and July will be published in conjunction with the Q1 presentation on September 15th. How do you plan to manage market expectations and maintain transparency regarding this?
We highly respect and highly appreciate the fact that the market needs to stay well-informed. That is why we have gone to the unusual step of providing monthly preliminary results. We cannot do that unless the information is precise. During the period of changing accounting principles, we will not be able to deliver this preliminary results information at a precise level high enough. Therefore, we need to wait for the end of the transition period. As mentioned previously, we will inform the market about our business development and the results of our initiatives. I think the market will be well-informed of our progress during the first quarter.
Looking back a little bit, in the Q4 reports, you noted a revenue increase of over 100% and a gross margin of 314%, ending at SEK 3.6 million. What do you see as the most significant drivers behind this growth? How do you plan to maintain the growth rate going forward?
Our growth is driven by the fact that every person and every household in Sweden is in need of these services. We have very attractive offerings to the market. Mobile phone and electric power are services that people cannot live without. My Beat offers these services in a way where people can get it at a very attractive price without sacrificing personal customer support and high-quality services. The market is very, very big. We talk about several hundred billion krona in market revenue. As long as My Beat effectively reaches out to this market with unique and attractive offerings, we can grow at a very high speed for a very long time. When we pass SEK 100 million in revenue, we still have less than 1% market share and still will grow at a rapid pace.
Wow. Looking a bit ahead, early in June, you communicated My Beat delivered a positive EBITDA for the second consecutive month, while also setting a sales record in April of 127%. How do you balance rapid growth with maintaining a sustainable level of profitability?
Yeah, our business is a volume-based business. The larger our customer base gets on the various products, the better our total margin gets. We can share the cost on more subscribers and deliver profitability at a very attractive price level. Just now, we are taking some extra cost in changing our system platform and harmonizing across B2B and business to consumer so that all services are delivered based on the same system portfolio and in cooperation with the same business partner for invoicing. We are therefore taking some extra one-time costs during this quarter to manage this transition and migration. Going forward, this change will again drive even better profits and better financial liquidity for My Beat.
That sounds great. In May, an expansion in retail presence was reported, along with preparations for a major rollout during the summer. Can you describe the strategy for physical presence and how you plan to use it to reach new customer segments?
The expansion in sales works very well for us. Expansion continues. Today, the shops are selling mobile subscriptions for us. We are now evaluating to take even more of our offerings out through these channels. The strategy for these channels works well since the people in the shop can offer their customers significant savings by just switching subscriptions for their mobile services currently and later on also with other subscription areas.
You recently entered into a strategic agreement for cloud-based PBX solutions to strengthen your business-to-business offering. What does this mean for your business offering to corporate customers, and how do you expect it to impact the business-to-business revenue?
The strategic agreement regarding cloud-based PBX solutions means that we can offer a comprehensive telephony solution to corporate customers. It strengthens our B2B offer considerably and makes it more competitive in a market where the need for flexible and scalable solutions is growing rapidly. We see an important opportunity to take market shares within the B2B segment and at the same time drive stable growth in turnover going forward.
We have a lot to look forward to. With this, we want to thank you so much, Olav Kalve, for joining us here today.
Thank you for having me.
It has been truly inspiring to hear how you work, your vision, and to learn more about this incredible journey that My Beat is on. I am really convinced there's a lot to look forward to from My Beat. To all of you watching, we'll see you again. Bye.