So, dear all, I will take this in English, and the reason for that is that we have a lot of viewers, hopefully, out there as well, that don't understand Swedish. But I will try to talk slowly and try to articulate as good as I can. So, to start off first, my name is Jeremias Jansson. I'm a guy coming from Småland from the beginning. I spent my whole life, which is now a very long time, in the software industry. Mostly in PE-backed companies, and through 23 years, I was at Unit4, which is an ERP provider. Then, after that, I was three years at a company called Quinyx, which is a Swedish company, but not at the stock exchange. And now, since the 5th of January, I am the CEO at SmartCraft.
So with that said, what I will try to do first for all of you is to basically summarize the whole presentation and the company in three slides. So if you think that's very well done, you have the chance to leave after those three slides, of course. But I hope you will stay, but let's go with that first. Okay. So what is then SmartCraft? Well, that's also the name on the slide, of course. This is SmartCraft. So basically, it's a software company, and what we basically are doing, what we go up every morning to try to achieve, is to help craftsmen and make their every day easier.
The fact is that craftsmen, as you might know or might not know, of course, has extremely busy schedule every day, where they also move around a lot, normally with a car, sometimes walking, I guess, and through different types of sites. How to get their lives more effective for them, with use of a software, has, for many years, been something that they have been working very hard on. The reason for that is that our end customer, which is small SME customers, to up to 75%, so someone around 5-49 people in the company, they basically, many times, are not super interested about softwares either. They have other interest, helping us with electricity, plumbing, and construction work. Now, being a software company in this space is extremely interesting, I think, because it gives true value to the end customer.
Now, what we achieved so far is a high recurring revenue. Basically, we are a true SaaS company, and we've been in the stock exchange for many, many years, of course, in Norway. I will come back to you today why we move also to the Swedish stock exchange. Around SEK 522 million of ARR, good share numbers, and we are a company that exists in four countries: Sweden, Norway, Finland, and the U.K., and we entered the U.K. about two years ago. What we've been very good at, historically wise, is to grow. As you might or might not know, the construction sector has maybe not been super charming the last two years.
But despite that, we have continued to grow, even in those times when our end customers needs to be very cautious about their cost and also think about what they invest into. I think that is a little bit of one of the things that we are very proud of, that we can help our customers in good time, but also in bad times. If you look at the growth factor, we have also, on the journey, of course, made a couple of acquisitions. When we thinking acquisition, which I will also allude to a little bit more in detail, we think about the same sector. So primarily, SME construction. That's what we want to be good at.
Now, because of this, and for many other reasons that I will go into, we have also decided to have a company who's basically split in four business areas. To start with the one that is enterprise, where we have our sort of proptech solutions. So we have some solutions also for bigger companies, primarily around how to handle rebuilds of apartments and how to sell new builds. But again, the main of our turnover is in the three SME parts. And why do we have three different business areas for electro, for HVAC, and for SME construction? Well, this is actually the core, one of the core differentiators. We want to be an expert into these different segments. It's extremely big differences between how a day looks for an electrician and a plumber.
You might not think about that, that much, but it is a very big difference. How they work is very different. When you can specialize on the solution on their working day, which I will also allude a little bit more in detail to, you basically get the real facts of how much that is important for them. Basically, that was SmartCraft in basically three slides. High recurrent revenue, very solid customer base, a Nordic company to the biggest extent today, continuously growing, and every morning when I go up, since then, the fifth of January, when I started, I think about how can I make the life better for those end customers that is out there fixing our plumbing and our electricity, and that's basically SmartCraft. Okay, let's try to go in a little bit deeper into this then.
So again, if we just look at where we are and who we serve. We serve about 14,000 customers today. It's actually 14,100, but let, let us simplify it. And when you look at that, which I will come back to, it's just a small portion of the total market already within those years we are in. The fact is that I normally say that our biggest competitor is not one of our competitors. It is the competitor, "I have it in my head." So when you meet a customer or potential customer, and they say, "I don't need a solution," they will tell you this, "I have it in my head," or in a small piece of paper that they carry around, and they write on, and then they drop it halfway through the day, and they take up a hammer instead.
But the good thing for us is that more and more of them understands this, and it's also a generational shift that is happening in this industry, where sons and daughters to founders are taking over the firms, and they are brought up with a fantastic invention that all of us calls the mobile phone. And in that mobile phone, they can handle their day, and they're actually used to, if you have kids, as I have, to handle everything in that one, except talking into it. So we really want to stay deeply involved with the daily routine. We want to think about, okay, what happens when they take their cup of coffee in the morning and sit down, normally in their car, as I say, and drive to the site? What happens then? What happens after their daily hard work?
And remember, if you have four or five people employed, which many of our customer has, the fact is that you're doing two things or actually three. You're running a company, you're doing all the admin work in many cases, and you're out there working, doing actual, if I call it like that, then work as well. Maybe fixing things electrician-wise or as a plumber yourself. So that basically mean that you have to handle things out in the field the whole day, and even if you only have three, four people working for you, sometimes they are at three, four different locations geographically. All these different things makes it a excellent space for using software to simplify the day. As I talked about, there are a massive amount of customers that we have today, 14,000, but the TAM is huge.
You have different numbers, but let's simplify it and say about 700,000 potential companies, all the only in Sweden, Norway, Finland, and U.K. Since we are one of the top three, whatever way you calculate, minimum, in Sweden and Norway and Finland today, combined, it's a very low %, as you can imagine, then, that actually has a solution. I would say that there are numbers saying that over 50% doesn't have a solution of these ones at all. It's not about changing out something else. It is taking these ones from a piece of paper into something new. When you look at the this into the market segment, you put it into other markets, you could see that the construction industry is extremely under-digitalized.
This also goes for the biggest company, and then you can imagine how it looks for someone who has two, three people working with them. I come from Gränna, as I said, maybe, or did not say, but I come from Gränna, and in Gränna, I have a house, and I have a construction firm that helps me a lot, the local one, of course. I will not say the name of that because I haven't asked for permission. Anyhow, the man who's owning that company, he's normally on site as well, doing some work for me. There are a couple of people, and he's actually using one of our products, which I didn't know until the 15th of January, when he realized that I started at SmartCraft.
And the interesting thing is, of course, the enormous potential it is for someone like him of taking control of the daily life. Now, as I also alluded to, however, the fact is that the construction sector has been pretty tough the last years. It is, of course, affected by interest rate changes and many other factors. Despite this fact, we have managed to grow through this sort of, I wouldn't call it a crisis, but down period then for the construction industry. And again, I think that looking ahead, the trend of being digitalized as someone running a company in construction sector, it's just the way it's gonna be. So the old way of doing it will change, and when it's changing, we will benefit as a company from this as well.
Now, another thing that is important is, of course, when you have an offering and you look at it, can you scale with the offering? And the fact is that since we're covering the whole daily life of a person, we make sure to also integrate with other types of system as an ecosystem. So the idea would be that our customer is using our solution for everything during the day, and then they might have a finance system, or in most cases, someone helping them with the pure bookkeeping in the background. But the idea is that they don't have to use double entries in any way. They're using us and only us. That's also important when we come in and talk about the AI era, which you maybe have not missed, is something that people have reacted on in the last month.
Even if I'm 51, and I couldn't say that I've been thinking about AI for 51 years, but being in international companies, I for sure have been thinking about it for at least 5-10 years. So it hasn't happened now, and I will come back to that, why we think it's a benefit for us. And there you go. There are basically two things for, for a company like ours with AI. One thing is the internal view of things, which is basically how can we get more efficient? And what has been up a lot in media, but I think it's just a portion of it, is everything around how you can develop code faster. Now, let's simplify this.
It is true that in the U.S., which I've been a lot in, in my working career, there are companies today that create new code without any kind of developers. But what do they do instead? They control the code. They go through the code after it's created. So my opinion, anyway, is the developers will only change to someone who controls different things. But when you have local products like we have, that is targeting a segment of customers, where basically the importance is that you follow them through a workflow, it is very good when it comes to the AI creation of code to have that. The other part with AI is, of course, the whole part about how can you basically reach and help your customers in the product, as I said.
And when you think about the product, the more data you have in the product that you store, that you can use, that is not public data, but your data or yours and the customers, depending on how it looks, the more interesting that capital also becomes for the future. Now, we have products that has collected data for 30 years in our products of the construction business. So think about this, that data is not public. So when you want to help someone to do a better offer in the system, when you want to help someone to have their day better structured, and you want to do that with AI, what do you need? You need knowledge about it, and that's the data. So for us, with all those new trends coming up, we see a big positive impact on all the functionalities.
We already started with this. Our two new products that started last year, Spark and Flow. Spark for electricians. Spark is a term in the U.K. for electrician, and Flow for HVAC plumbing, has been built with the help of AI from the beginning and are using the data that we have in the systems that we have had on the market for a longer period of time. Now, what has this sort of—for investor, what has this become through the years because of this growth, because of everything? An increased ARR growth the whole time. And of course, being a techie, if I put myself into that space, lived my life in software the whole life, this is it. The ARR growth is the interesting thing. Constantly be able to, in plus and minus, rain and sun, to always increase the ARR.
As you can see, we have managed to do that a lot through the years. I showed you a slide back to, you know, 15 years back, and it's constant. Once you get up to a situation in a SaaS business where you have an offering that is used by the end customer and liked by the end customer, then you get this effect. How do I know that our customer likes our products? Well, this is interesting when it comes to smaller businesses in this segment. Unfortunately, for them, a lot of them get into bankruptcies at the latest year. Because they're small, they don't have capital on the bank, so they go into bankruptcy. Just to put a weekend in between, I normally say that, okay, they go in bankruptcy on Friday. On Monday, they call us to buy the product again.
Now, it's not that funny, of course, because it's not fun to have a bankruptcy. But why would they call us on a Monday again if they weren't happy with the product? And then they start up a new company. Through this good growth that we have had throughout the years, we have also managed to have very good margins. And I, many times in the first month of my new work here at SmartCraft, got the question: "But Jeremias, are you going to trade off the margin for growth?" At this moment, we don't see the necessity of that. Of course, we're always ready to take new decisions, but as it looks right now, we're gonna keep the margins around the 26%-27%, a little bit up every year, and we're gonna continue to be minimum a Rule of 40 company.
My ambitions are higher, but it's not a promise. But at least Rule of 40, we can show that we've been for a very long time. We also have possibilities to expand outside this TAM that we talked about with the 700,000 people globally. Now, I have expanded software companies a couple of time in my career, and you always have to be careful. So for example, a primary target that we have is to expand more into U.K. About two years plus from in the past, we bought a company called Clixifix outside of Newcastle, with a fantastic product. And then we have, of course, worked on looking at the Nordic products that we have and how we can go in and enter U.K. with them. Again, when you enter a new market like U.K., you have to be smart.
It's very important that you have a good product market fit from the beginning, 'cause believe it or not, the word of mouth in this segment between electricians, for example, is extremely high. Again, the good thing with our product is it's used the whole time in their daily life, so it's very important for them. If it doesn't work, it directly affects their margins and their costs, and how they get the work done to the end customer. That's good. That means it's an important software for them. It's not something that can just go away in bad times when they're stressed on margin. That's why we continue to have the growth during this period of time. It also means that if it doesn't work, you get an instant reaction from these customers.
They don't have a waste IT department with a couple of thousand people sitting somewhere. They need to fix this every day themself. Now, if you then look at our possibilities to continue this growth, 'cause, of course, you could have a thinking and say, "Well, okay, great, you've been growing in the past, but how will you continue to grow?" We, of course, have the M&A track that you can see that we historically have done. We will continue to do M&A, but again, we will be very, very direct on the fact that we will do M&A when we are in the right segment and with the right solutions that fits into our portfolio. We'll not just buy something for the sake of buying.
We'll buy something that we know fits in and where we can continue in the vertical that we are, and there are several possibilities to do that. Then, looking at the two organic parts, basically, through a bad cycle in the construction sector, we're talking about, you know, a soft market. The basic growth that we have had historically is built basically on us selling the products as we're doing today. That has shown to give 5%-10% growth every year. What we started to build on top of that is, as I said, a couple of new products. So especially, that is Spark and Flow. Spark for electricians, Flow for HVAC.
The Spark and Flow products are built from the beginning, as I said, with the newest technology, and they can do two things: one, they can be sold totally net new. But two, they can also be sold on the existing products that we have. So, for example, in electricity, we have one product in Norway, one product in Sweden today, and then we have Spark, and we can use Spark to upsell on these existing customer bases. That basically means that you get, like a kind of, three things in one. You get net new sales, you get churn and downgrade reduction, because basically, the existing customers get something new, and you get more money from the existing customers or their total share of wallet. So basically, three things: the organic growth, more or less selling the products as we have today.
Second part, cross-sell, upsell, and then we have the M&A track as well. On top of that, as I talked about, we're also pushing for the geo expansion, and the first target on that is the U.K., where we started, and we announced some sales of our Nordics products into that market already. Why should you invest in us? It's not because only of me, but in the team. Well, basically, it's a company that has shown a track record over many, many years on the Norwegian Stock Exchange to be a good investment. It's a solid company, good margin, good products, good growth, in good and bad time, and it has some really good products for the future that is pretty new as well.
It's a mixture of products that's been in the market for a long time, giving stability, and some new products which would give us the edge for the future. That was it. Thank you for the great time to present to you, and now I guess I'm gonna stand right here, as Lars said, and I'm gonna take some questions.
Thank you. Thank you. Okay, so your core market is Finland, Sweden, Norway, Denmark, and also the U.K.?
Except Denmark, you're correct. I would say about 50% of our turnover is in Sweden, and that one is one of the main reasons for the relisting as well.
Yes. So you're moving from Oslo Børs to Stockholm?
Stockholm. Yes.
Welcome.
Thank you. It's gonna happen in March, so that's great. I think that the first, the last trading day in Oslo is the 19th of March, according to the plan, and the first one in Sweden, where we're gonna ring the bell here, is the 24th of March.
Okay. Great. So why not Denmark, but U.K.? I, I realize it's a bigger market, so that's, that's one reason, but yeah.
I think that, you're right on that. I think that normally when you look at a software company, especially a Nordic one, what you're trying to do is to reach in the end, in Europe, two out of three markets. So you want to reach U.K., Germany, and France, and preferably two of them. If you manage to get good base in the Nordics, add on with U.K., Germany, France, two of them, then you're truly a European software company, and then you have a huge TAM to go after.
Yes. So, did you, did you have the number of SMEs in your primary markets?
Yeah, it's 700,000 companies in those four countries that we have in, and we have about 14,000 of them today as a customer.
Yeah, 2%.
Yeah. Of course, it's higher in Sweden and Norway, as you can figure out, and when you look at that split, you could say that U.K. is probably, you know, 400,000 of them.
Okay.
That's a huge TAM, of course.
Yeah. I'll go big theme and then small theme. The big theme first. OpenAI's defectors started Anthropic AI company, and they put out, everybody should know this, Claude 4.6, Claude Code. They must have help from the pride of Sweden. You're gonna be the pride of Sweden, I guess, in a few years, but now it's Spotify, and they brag about not write-- they haven't written a single line of code since December, they say, in Dagens Industri.
Yeah.
They say their developers just,
The senior developers-
Yes
He said.
Yeah.
Just to quote him right.
Yeah. They said they can just sit in their car and tell Claude to do an addition on the information on the artist and so on. And when Claude Code 4.6 came, their finance love new words, so the new word is SaaSPocalypse.
Yes.
That's apocalypse for Software as a Service, the hottest thing for 10 years. Now, it's bad because Claude is so good, he will kill all verticals, and you are a vertical. So talk a little bit about that, the pros and cons of AI and how it fits with you.
Yeah, sure. So first and foremost, for SmartCraft, AI didn't start in one month ago. As I said, when we started development of Spark and Flow, we already started with that. Now, those type of solutions that you're talking about has improved a lot, so that's why it's been a big thing, and connected to not only launching this Claude 4.6, but they also launched a software in the legal space in the U.S. And that was actually the big thing that started the big debate about this. Now, so the first question is then, if I'm a little bit tough towards myself because you were so nice, okay, what's the threat here, then? Well, if you think about this, of course, the threat would be that someone could just copy what you're doing very, very easily and put that on the market.
Okay, why is that not something I think will happen for SmartCraft? Well, the first base is, it's all about data and workflows. To be able to create something good in this space, you need the data and the workflow. Now, if the data is public, then it's much easier, but it's not public. The data that you use for these type of systems are kept within different software spaces. That's number one. Number two, the other thing that people are scared about when it comes to AI, if I put it like that, and I use the word scared on purpose, is that their end customer will disappear because of this. For example, a legal firm, how many legal advices do you need if you can check everything with someone on the space? Everyone is worried that that will affect the end customer.
Now, the fact is, when it comes to the end customer, do you think tomorrow that the electrician will go away? No, because they're doing actual physical work. There are robots coming out in this for new build construction, but our customers is mostly in smaller works, where I think for the foreseeable future, and I'm an old man at 51, so probably before I happen, it will not changed out. The third thing with it that I think is important is, okay, who would build this then? Who would do this? The fear there has been that the end customer will build it and start competing with you. Do you think the end customer with four employees will build it and maintain it over time? Because even if the code can be created automatically, you still have to maintain it, and you have to control it.
That's the thing. Now, what's the benefit if we start the other way around instead? The benefit is that code will go faster to create, which is great for us. Then some people will say, "Well, that's the first time in history." No, it's not. The last 15 years, a developer has increased their productivity, depending on who you ask, between 20-50 times already, before we're talking about AI. For me, being in the software industry for a long time, this is what it is. This is why I like software industry. New things come up. If you use it correctly, your company will win. If you use it badly or not at all, yeah, probably you're gonna be in problem, but that's not gonna happen on SmartCraft.
Yeah, that would be. Everybody believes in the future a lot, so maybe some point in the future, you can tell Claude 8.7 to build a copy of SmartCraft and sell it to 700,000 SMEs.
You never know. That's how it is. Maybe in the future, you know, someone could ask Claude to replace me. What do I know? But, okay, joke aside, the thing is like this, it's new technology, you have to embrace it. If you don't embrace it, you're gonna get problems. Luckily for us, we already started to embrace it way before this became a big thing in media.
Yes. Okay, thank you.
The gentleman here have a question.
I'll run one more.
Yeah.
Mias, before I forget it, the small question—
Yeah
W ould be role play. I run a plumbing firm. It's me, I'm head plumber, and then we have six more plumbers, and we have some freelance guys also. I'm busy, I don't like administration. Sell the SmartCraft solution to me.
Okay, cool. Do you want to have a better profitability?
Yes.
Yeah. Do you have problems sometimes of keeping up and keeping track with what your five other persons are doing in your firm?
Yeah, I never know that, but Ole knows. He's the head accountant.
Yeah, exactly. We were gonna help you and Ole to make sure that you know where they are, and that you can plan their work, and that you're gonna bill more of their hours correctly. That's why you should buy our solution.
How much does it cost?
It costs on average, for a company like you, about SEK 25,000-SEK 35,000 per year.
That's kind of expensive.
I think it's very cheap. Given the fact of what you get, we should probably charge more, but we're very nice, so we give it only for you today.
Here's a question from the audience.
Yeah. I think you more or less stole my question. In the day of an electrician, walk me through how he uses your software from morning to night.
Yeah. So I would say, I mean, without having a long one where I talk about everything, in essence, it's about how you can look at your work, plan it, so offer it from the beginning. You know, you can send offers into it. And when you do that as an electrician, you normally go out on site, you look how it looks, you talk to the customer, and what our customer does then is that they write that down on notes. We have had big discussions with all of our customers about, could we do that in a different ways? But they like, when they're talking with the customer, to still write it down. So they do that, then they want to do a offering. And what they did in the past was they were sitting, checking things online, checking different numbers and everything.
Instead, they have that in the system. So they can basically put in and say, "Hey, I want to offer this type of work for this type of customer." And then they get the offer, and a lot of things more easily done for them. Then we create the quote and send it out, basically, through the system, and then the customer can, like, say, "I accept," and go back. And now you have the work, and then you can plan the work in the system. How do I do this in a more effective way? Who's doing the work? Where should they be? When should they be there? And so on and so forth. Then you can keep track of what they're doing there.
If you're adding, you know, extra things to the work, because I want to have different light bulbs in or something simple, or I want to do something more, you can add that. And then you can follow all these things up and package all of that and send it away to your finance system. And then you can reuse this data the next time you do the same process. Yeah, that's basically it.
Okay. Anyone else? Question for SmartCraft?
It's a Swedish audience. It's hard done. In the U.S., everyone would be screaming, yes? Great.
But the software, your solution for SMEs-
Yeah
I t's not- it doesn't contain invoicing, or it's not a core feature?
Yes, it does as well. Actually, we have, as I showed, several different products, and of course, they look a little bit different. But now we talked about the electrician product, and of course, if I would talk about the SME construction product, it looks a little bit different. And the reason for that is, as I said, that the daily work for an electrician or a plumber or, or, you know, a construction firm is actually very different. Oh, sorry.
Maybe you could say a few things about your financials. You mentioned the EBITDA, but also the bottom line and the balance sheet. Just give us an idea of how-
Solid
... your financials are.
Yeah. So the good thing with SmartCraft is we are not in debt at all. We have not loaned a single euro, I would say. So basically, I would say that's a strong point also in the finance. We have a very good cash flow. We've been cash flow positive for forever. Even if the cash flow went down a little bit in Q4 because of two one-off items. One was AP thing that we paid off, and another one was some extra taxes that we prepaid. But in general, it's very good cash from the business as well.
Can we pull up the growth slide?
Yeah, maybe.
It looked so even.
It looks even. Let me see. Yeah, this one.
Yeah.
Yeah, the line was even because it's an average, of course, but it is a little bit different every-
Yeah, you smoothed it out there.
Yeah, yeah.
But you have organic 15, and you have some... You bought some smaller companies.
Yeah, you can see that, you know, it's a journey where you see all the different brands that we bought through the years as well.
Yeah.
Yes.
Okay.
That has been the situation, that normally when we buy companies as well, because I think it's a good point that you're taking out that I didn't mention, we buy it from an entrepreneur, which, of course, also when I talked about the M&A today, you have to then get the entrepreneur to reflect the value as the market stands. I mean, you can look at me every day, and, you can look into the Norwegian Stock Exchange, and then you see what the fair market value according to the market is. But as entrepreneur, when you want to sell your company that you've been working for a long time, you have to find the right timing with it.
Y ou actually announced a share buyback program even-
Yes!
Just a few weeks ago.
Well, it was actually on, I think we went out with the information that it is about this week, that you get the chance to do that. We have had a share buyback program, actually, for a long period of time, but it's been constrained, of course, as most of them are, to a certain percent of the turnover of the share, which has been 25%. Therefore, last week, when we saw the possibility of investing even more in ourselves, we went out and announced that we are open to buy back for a value of about NOK 75 million.
Yeah. So you choose that path instead of adding more salesmen to hit the rest of those, the 700,000 SME crowd?
Well, we're doing both, I would say, and even one more thing as well. I got also a question from someone: "Does this mean no M&A?" Again, the good thing is, we haven't borrowed any money. So we have huge possibilities, if we want to, to do it in another way. And of course, we're always looking at, can we add more people on the ground as well? At the same time, we want to keep a good margin as well.
Yeah. For market size, you're in the right bracket. I looked at a very simple statistic, this fall, and I took July 1st, 2024, to June 30, 2025, and looked at market cap, end of that period, and who increased best when you look at the share price, and that's 1.5-5 MSEK, so you're in the middle there.
Oh, perfect.
But if you do too well, you're out of that.
I have to think about that again.
But that's a pleasant problem.
Yeah.
We thank you very much. SmartCraft.
Thank you so much. Have a great day!