Good morning and welcome to Strongpoint's Third Quarter Presentation. My name is Jakob Twaravak. I am the CEO of Strongpoint. And with me as always, I have Hilde Hoon Jiln, our CFO, to present some additional financial figures. We have an agenda that looks like this.
I am going to give a short introduction, maybe in particular to our new shareholders about Strongpoint. Then secondly, we are going into the Q3 results and highlights, and then Hilde will take over to go through additional financial figures. So StrongPoint, we are a retail technology company and we keep reemphasizing the double opportunity for StrongPoint. And this double opportunity stems, really out of e commerce. So the growth in e commerce in retail and grocery retail specifically are driving two trends that provides two solution or opportunities for Strong Point.
Number one is that the e commerce growth in grocery retail is taking more and more of the store revenue moving outside the store and hence putting pressure on the margins in store. That provides an opportunity for Strongpoint to provide its in store productivity and efficiency solutions to stores. So that's number one. Number two is the fact that both companies that have started their e commerce journey, but not least companies that have not yet started their e commerce journey are embarking on a new set of business opportunities out there. And to do that, there are solutions needed on both fulfillment and last mile solutions and Strongpoint we delivered now for the full end to end opportunities solutions for grocery retailers.
So those are the double or the two opportunities in broad sense for Strongpoint stemming out of e commerce. So our purpose really here in Life is to provide retail technology for smarter and better life. So we are supporting our customers, our grocery retail customers in achieving exactly that with our consumers. And we are immensely proud to be working with, so to speak, all grocery retailers there are in our home markets, Norway, Sweden, The Baltics, the three Baltic countries and in Spain. And increasingly so, we are seeing a number of pilots and proof of concepts in countries outside our home turf, that we hopefully, of course, will be seeing, going into larger scale rollouts.
So we are predominantly focusing on the grocery sector and there are some very interesting spillovers as well to that. Lastly, before heading into the Q3 highlights, I really want to reemphasize our strategic financial ambitions. Billion revenue in 2025 and an EBITDA margin of 13% to 15%. This ambition stands, it still stands, and despite I'd say the figures that we're showing now for Q3. That's very important for us.
The long term financial ambitions still stand. So then to the highlights of Q3. I'd say as always, we have three points, the financial figures, we will talk about secondly some of the customer success and then thirdly, some of the more longer term enablers to get to the strategic ambitions we have set for 2025. So two numbers. Looking at the third quarter revenue, we are seeing a decline of 9%.
This is clearly a development I am not pleased with. However, it does have some very distinct explanations. Number one is a reason that you probably have heard with many others, namely tightening global supply chains. We have been working with ensuring smooth supply chains across the board and we have to the most extent been able to withstand any component container shortages. However, in this quarter, we are seeing that the cash card deliveries in Norway are being hampered by a lack of certain components.
So lack of certain components are making some of the orders we're supposed to be delivering now in Q3 being pushed out in time to later quarters. And to give us sort of the magnitude of the size here, if we have not had these component shortages, our revenue would have been approximately at the same level as last year. So that is number one. Number two is, we have to be honest that we are seeing the global market in general for grocery lockers having longer lead times than we would have anticipated and expected to be honest. We still remain very, very confident about grocery lockers being an important part of ensuring the efficient delivery of the last mile for our customers.
And also, if you are looking at the number of pilots that we are currently running with some of the premier or most premier European and North American grocery retailers, are at an unprecedented level. We have 10 significant pilots running at the moment, which is a number we have yet to see elsewhere or earlier, but we have to sort of also acknowledge that when grocery retailers, large as such, embark on something that is new, it also takes time to make them comfortable about the decision to do larger scale rollouts. So that is number two. And then there is number three, which is as we are comparing with third quarter last year, it is useful to remind ourselves about the large ESL order we had last year of SEK75 million, but not least that this order was delivered in record quick time. So about one third of this order was delivered in Q3 last year, two thirds in Q4 and normally we are attempting with our customers to do this over a longer period of time.
So we are working on making strong points to revenue base more recurring and stable of nature. So, if you're looking back at the orders received this year, both, with regards to electronic shelf labels, or with cash guards, we have taken a conscious decision in making those rollouts last over longer periods of time. And most of the orders we have announced this year are actually being delivered now and throughout Q4 twenty twenty two. And that is number one, because we have been wanting not to get in an unnecessarily component shortage as described earlier, but secondly also because we want to avoid unnecessary volatility in the business and straining on the internal resources. That said, 9% down is not something I am pleased with, but more importantly I am still very confident about the long term strategic financial ambition of DKK2.5 billion revenue in 2025.
Then looking at the bottom line or EBITDA. EBITDA is down from NOK21 million or 9.9% margin last year to NOK8 million and four 0.1% EBITDA margin this quarter, Again, from the figures where we should be. Some of this is of course explained by the temporary decline in revenue, but part of this is also because of conscious investments in our e commerce logistics solutions, both when it comes to product development, marketing, sales and not least IT security, is very high on the list of our customers. These obviously investments that we are expecting will have a payoff in the future and we remain confident about that payoff. So consequently, when looking at the revenue share per segment, most notably the e commerce logistics is now down to 8% of the total revenue we have in the quarter.
That is down from the double digits we've seen earlier this year and it's quite far away from the ambitions that we have set forth, 25% or more. And again, I am very confident we are on the path underlying to get to exactly that figure. So two other highlights with a more, how should I put it, positive spin. And firstly or the first two points here are about Spain honestly. And as the investors that have been following Strongpoint for some time would have seen, we are, undergoing a restructuring of our Spanish business that is slowly starting to, recover.
And in that aspect, it's, of course, very satisfactory to see that the new managing director is putting with her team in place the right measures to start winning some important deals. So firstly, we have in this quarter, won a very important order picking contract with one of the top 10 grocery retailers in Spain in a very record time. And number two, we have also the very first pilot of our self checkout solution with GM Foods in Spain. So really, really compliments to the Spanish team for making these transactions or these deals come through whilst restructuring the business in Spain. And lastly, we also have and are receiving cash out orders, both in South Africa with friends at IT Bullion, but also here in Norway with a framework agreement with Rematus.
These deliveries will not start until both of these will not start until 2022 and we will of course be very closely monitoring the component situation as we are delivering on these orders. So lastly, before leaving the word to Hilde, we see and believe we have a steady progress on the 2025 strategic ambitions. And maybe in particular as a Norwegian, I'm just so proud and humble that we, in this quarter, signed an agreement with, with Oytoster to become their partner. Oytoster, that, yesterday had their IPO here in in Oslo, the largest IPO in Norway this year. I believe it's the second largest after Staphtol in history, and a very significant IPO in the European context.
And just the fact that Autostor is partnering with Strongpoint, we take as a testimony of the solutions and the relations we have with grocery retailers. I can say, personally, prior to joining Stromford, was a customer of Oytoster, when being the CEO of Bavaria, the car dealership group of BMW and Porsches. We have then invested in, Oytostor for car parts. And I can honestly say that is the first automated and robotized solution that ever reached the business case. So I'm very, very pleased and have seen hands on the O2Stor solution.
That said, groceries are different. There's an immensely higher volume of transactions and picking that needs to be done. And that is what makes the Strongpoint and O2Store partnership so exciting. We are now developing picking strategies, integrating with our order picking solution or last mile solutions to be able to provide in the future the solutions, the fully end to end solution for our grocery retail customers. So we're just very, very pleased, proud and humbled for that confidence.
And lastly, and now we can sort of finally say that we are a pure retail technology company. We finalized the sale of our Labels division. And as you will have seen, the EPS would have been severely positively impacted by the cash coming in after this transaction. So with that, Hilde?
Thank you, Jacob. I will present some other financial figures for you, starting off with the same slide that I have used the previous quarters, where we are looking at the Rolling 12 revenue. We are still seeing a growth of almost 5% on the Rolling 12 revenue despite the low Q3 revenue this year. It is to repeat the component issues, the lack of roll off within Click and Collect lockers and also the very large ESL project in Norway that constitutes the change in the revenue figures. Looking at the EBITDA, we see a quite thorough decline on the rolling 12 from NOK69 million to NOK54 million.
That's a deviation of NOK15 million. Just to remember you all that we in Q2 had a negative write down of the inventory in Spain of NOK 14,000,000. So that obviously hits the figures when we are looking at the rolling 12. Looking at Q3, we have a conscious investments within e commerce and IT security, where we see a substantial increase in the effort of reaching our development work within the software. We have increased our sales and resources by 17 compared to the same quarter last year.
We are heavily investing in marketing activities and IT security becomes more and more important as we are dealing with software and software integrated with our customer. So we are calling it conscious investments, which are really important for the long term growth. And again, remind you all that we are costing every expense within R and D. We are not putting that into intangibles. This EBITDA and further down in the profit and loss, we see the earnings per share with a very minimum contribution from the Q3, only zero approximately zero actually, bringing the rolling 12 down to 0.49 or 0.66 when we are looking at continued operations.
We have included also in the slide two figures up in the air above the quarter figures, where you can see that we in Q4 had an EPS of €2.21 in Q4 that came from the divestment of cash security. And this quarter we had the divestment of labels constituting a total earnings per share of SEK3.74. Looking at the cash flow, we started off by €75,000,000 at the year start with the add on of our operational EBITDA of €34,000,000 There are only minimum changes from the normal operational activities. A change in working capital of positively nine is unfortunately influenced by the component issue, meaning that we are lacking some inventory for the deliveries that Jacob just told you about. The CapEx online in decline is also just a normal business change, some investments in tangible assets and also rentals in Spain as you know are presenting within the CapEx.
Looking to the right in this slide, you see the discontinued operation profit and gain of 169,000,000 that's the largest blue column. We are not allowed to share the enterprise value of the labels divestments, but we reported a financial gain of 164,000,000 in the period. So that leads us to a very good financial position of EUR186 million as our cash position at the end of Q3. Net interest bearing debt and leverages, we have usually reported on this slide. I was thinking about changing this because we are now in a positive cash position.
And you can see that our IFRS liabilities has gone down and we are in a positive or negative positive net interest bearing debt. So it's kind of hard to understand, but we are in a positive situation at least. We are obliged to use this into funding the growth of investments that we see coming forward to enable the growth and also for further M and A activities. That was the financial figures. The financial calendar of 2022 was published yesterday.
And I would like to welcome you all to our strategy update session at the February 15, the same time as we present the Q4 figures for 2021. We are also annual meeting April 28 next year. So that's the activities going forward. So that was the presentation from my side. I think that we might have some questions.
So Jacob, will you join me on stage?
Absolutely. Thank you. Okay, we stand closer now.
Can we do?
Yes, we are happy to can.
All right. So we have some questions sent in. First of all, with the Q3 numbers being what they are, what do you expect for Q4? Okay.
Maybe I can say, first of all, we don't we have never guided, and we will not guide. But you will have heard from some of the distinct reasons for the decline in revenue. Some of these are also applicable in Q4. The global supply chain issues are not going to be resolved in a matter of days or weeks, and that goes for, I think, more than more than just a strong point. And and also, as we said, last year, we had a unprecedented, not large, but quickly deployed ESL project.
So when comparing Q4 this year with last year, it's important to have that in mind. So short term, think that's if you're looking at quarters, that's what you should bear in mind. But of course, and I would like to reiterate that again, we are standing by our financial ambitions for 2025 of 2,500,000,000.0 revenue and 13% to 15% EBITDA margin.
All right. And the second question here, when will the first out of store facility be sold?
That's a good question. Well, first of all, it's important to say that we are now, with Outostor, developing the picking strategies, integrating our solutions, and of course, going out to customers and customer prospects in The Nordics and The Baltics. And there's a huge difference between, the different countries, on how mature the ecommerce markets are. I think, one of the first things you would like to start if you haven't started yet is, with ecommerce, as a as a grocery retailer is to, do augment the manual picking with with StrawPoint's order picking solution. And once you have sufficient volumes, auto store is the natural next step.
So, I I wish I could give sort of one answer. There are lead times to both develop the picking strategies. There are lead times to to sell these, opportunities, and then, of course, deliver. So I wouldn't put a timeline on it, but but just say that we are confident that we will be seeing something in in the years to come and in particular towards the long term 2025.
Okay. We have a few more questions here. This one says that Spain has been a difficult region. How do you see the development here going forward?
So maybe I can start here, but, I mean, you know, we have a restructuring process ongoing. And as part of restructuring, it it takes time. I think we have reason to say there are some lights happening there. We have a new MD in place. We have a, increasingly, a very, very strong team.
We're building on the resources we have. We have added new, resources, which have been necessary to win amongst others some of the, deals we, we highlighted today, both the order picking, and the self checkout solutions. I I'm very positive about the trajectory of how the Spanish, business is is going.
Maybe I can add on there as well. It might be a question that we have not seen during the quarter any additional need for write downs. So what we did in Q2 was what we had to do to get the figures correct. And we do see that the things have come under control when it comes to the inventory in Spain.
Great. I have another question here. You mentioned that you have 10 major pilots ongoing. When do you expect that some of these could result in firm orders?
So always difficult to say. Right? You know, pilots are pilots. And some of these pilots have been ongoing for nine months. Some of them are going on on for six, some just a few months.
Of course, we wouldn't be doing pilots if we didn't truly believe that that would result in major sales and and rollouts. So, again, we're not guiding here on on on when rollouts are will happen, but what I can say is that we have an unprecedented high number of pilots, both in order picking and in Click and Connect. And I can also say this much that, you know, the the quality, if I may say so, of the customers or customer prospects is unprecedented. These are some of the finest and largest grocery retailers out there. So obviously, potential is huge.
But so are also the lead times typically when you're dealing with very large organizations.
Maybe add on to the quality, we have also very proof in the Swedish market where our lockers is operating every day. And to our knowledge, our customers and the end customers of the retailers are very happy with the solutions. It's very efficient and it takes very little time for the customer to pick up their groceries. And the communication around it with the QR codes and all that is also supporting. So is at least a proof that we have in the market.
Okay, fantastic. And we have one more question here. Would you say the company is closer to its financial target today compared to the start of the year? And is it possible to get a hint on how big the order backlog is? Okay.
So so I'll do the first part, you can do the second.
Thank you.
So going back to the beginning of the year, it's it's almost difficult to to go back nine months, but but let me try. I mean, going back nine months, we had a pandemic ongoing, where we all, knew, and saw that this could be a pivotal moment for ecommerce logistics and ecommerce in groceries in general. At that point in time, we we we didn't we didn't yet have landed any, major partners or or or or customers beyond the ones we have had already from earlier. But in retrospect, right, you know, we have landed the global deal that we announced in in February, which is hugely important, not just for for Spain, but but in general. It's getting a lot of attention, and, it's almost possible to sort of, take the global deal and and draw a line directly to some of the pilots we're running now.
Secondly, what I would also like to pull out is the Oiltu store partnership. We had at the beginning of the year started very early discussions, but it was pretty unclear at that point in time whether we would be reaching an agreement or not. So I think, you know, there there are some fundamentals here which are very, very different in a positive way now than they were at the beginning, of the year. So, so that makes me, of course, very, very positive. And at the same time, quarterly results like like this with a sort of 9% decline is not is not is not fun.
But, I think underlying the underlying belief in Strongpoint and its solutions is is, if anything, at least as strong, if not stronger, than it was at the beginning of the year. So I'll give you the order backlog question.
You hear that? Well, we actually we do not present the order backlog, and there is a reason for that. A very high share of our revenue is not stemming from big large orders. A lot of our orders coming by our salespeople selling solutions to one and one retail store. So that would, we think, give a not the correct view of Strongpoint if we started to share this.
That said, the large orders that we have received during the year are going to be delivered over time. Actually, all one of them is even to 2023. And that situation we did not have a year ago. So that is a positive situation now compared to a year ago.
Okay. So I think, with those questions, I think we'd like to say thank you from StrongPoint, and we wish you all a good day forward. Thank you.