Hello everyone. There are still seven more minutes until we start, but I have admitted you into the Google Meeting. Please set your microphones on mute, and I will get back to you one minute past 2:00 P.M. Thank you. Ladies and gentlemen, the time is one minute past, and I'm very respectful of your time. Can I please ask those who have not their microphones muted to do so? Maybe someone who isn't muted can just give me a thumbs up or shout out that I'm heard at the moment.
Yes, Peter, you are heard.
You can hear me. Great. My name is Peter Ejemyr, and I have the privilege to serve as Vice President, Investor Relations for White Pearl Technology Group AB. We call this meeting today following this morning's publication of our six-month report. We will do two short presentations, and after that, we will open up for your questions. In the meantime, you can write the questions in the meeting chat, and we will address them after our CEO and our founder have held their presentations. I should mention that we are recording this, and we don't require you to give away any personal details unless you put a question up. Then we would like to hear your name and your organization. Just checking, so I don't have to let anyone more in. With that, I will start by giving the floor to Mr.
Marco Marangoni, who is our CEO of the group. I will just do like this.
Okay, thank you.
We hope that you all can see.
Yeah, we can, maybe.
Yeah. Wait a second.
Yeah, now it's better.
There we are, right?
Okay, perfect.
Super. Marco, please go ahead.
Okay. Thank you. Thank you for joining this meeting. I think it's a really nice opportunity to share with all of you the results because I think we consider it really important to do this kind of event as soon as we are doing our announcements, especially for the reports, the quarterly reports. A short screenshot related to the situation in terms of organization of White Pearl Technology Group AB today. We are really proud to say that today we have definitely a more extended presence in more countries. Basically, we are today present in all the continents and the main regions, around 800 persons working actively for our organization and 20 countries where we have a presence, but we are working also in closely countries and 32 subsidiaries. This is, in a nutshell, what we are today after two years of listings.
We can move to the next slide, please. Okay. Probably you already downloaded the report. We had the first six months, I guess, I think a really huge, huge result in these first six months. What is absolutely stunning is how we increased the revenue and the main indicators. 76% of revenue increased in six months is definitely not usual in our sector. A bit 85% earning per shares, 94%. This is also, I think, a really, really nice result. The most important is also how we improved our cash in terms of cash flow in operations. It's pretty much visible how much we improved. Today, we have a stronger cash flow, and we are absolutely able to move in a different way. Of course, it's a journey. It's an evolution, but we were, and we are also always sure about what we are doing.
This is the result of our planning, basically. No need to say that the star is this quarter. This quarter, we had a stunning 130% year-over-year in comparison with the Q2 of the last year. Of course, we are following the same trend, talking about the EBITDA. No need to say how we improved and increased the earnings per share. In my opinion, these numbers are pretty much clear, and there is no need to make specific comments on the results. We are really happy, really happy. I think it's also important to say how we are, we care in terms to provide more and more and more information about our journey, evolution, about our improvements. This is something that we will do quarter by quarter. We will improve this communication with our shareholders and investors.
This is a clear example of what we are doing, but we will be better, better and better. You can see this slide, for instance, present this information in the report, how we are changing and improving our strategy. We are going into the more we are selling and improving our presence in the Digital & Emerging Technologies thanks to our acquisitions. Of course, our current service, we are also increasing what is the segment related to the People Solutions/BPO. BPOs and services related, that is an integration with our current projects with big customers. The last one, last line is related to the Smart Technologies where we have today also a presence. Thank you. I think it's important for every person, every shareholder, investor to understand that we issued a plan until 2028. In 2024, we achieved, overachieved the plan.
We will do the same for this year because we are in track. We consider that we are absolutely in the right direction. We are doing and complying with the expectation, internal expectation of the management, of the board, and of course, with our commitment with our shareholders. This is just to let you know that we are absolutely on track, and we will do the same also. I am absolutely sure about that because we have all the signs. We will do the same for the next few years. I think this is my humble snapshot. Of course, together with my colleagues, I will be available to answer every question from your side. Thank you.
Thank you very much, Marco. If you have any questions to Marco or the things that he presented, preferably you write them in the meeting chat while I leave the floor over to Mr. Ebrahim Laher, who is the Founder of White Pearl Technology Group AB and currently serves as a Strategic Adviser to the company. Ebrahim, please go ahead.
Thank you, Peter. Thanks, thanks everybody. I think it's basically my honor to talk a bit about the strategic outlook of our organization as well as where White Pearl Technology Group AB is going into the future. Next slide, please, Peter. Fundamentally, we've got three clusters of business offerings in the group: the traditional IT services and solutions, which has been the area which has served us greatest over the last couple of years. Over the last three to four years, we've been investing in two additional areas. When we started White Pearl Technology Group AB, our view was to understand that the world of IT and business was changing fundamentally, whereby digital transformation was more becoming the norms by which all organizations now carry out their business. This is why we've had very specific kind of growth areas within White Pearl Technology Group AB.
Hence, we've been growing the digital transformation business over the last couple of years. The third part of our business, a very exciting part of our business, is the smart infrastructure area, simply the Internet of Things. It's basically connecting infrastructure globally around being able to utilize the latest technologies. I think this is an area which we'll see grow more into the future of White Pearl Technology Group AB. Thanks, Peter. Next slide. In terms of strategic focuses, there's basically five areas where we are focused and have been focused since inception. One is providing leading-edge technology and digital solutions to our customers. These customers generally tend to be large customers. We obviously have a tremendous geographic spread in our company where we started off originally focusing primarily on emerging markets.
Hence, things like cross-sells, upsells, as well as then the various acquisitions and startups we do are based on this. Driving recurring revenue through our own IP, through our own solutions. I think, as Marco put up, you can see significant growth in the areas of digital, some of our own IP, our own solutions, which is fundamentally driving the way our margins in the business are improving. Number four, we want to enhance investor value through, as Marco said, significant transparency as well as scalability and integration. We understand sometimes our business comes across as pretty complicated. It's not complicated. I guess our business, through these discussions with you, through the various communications we put out into the press and the interviews we do, is to make it more clear to the investment community and to our shareholders in terms of what White Pearl Technology Group AB does.
Lastly, to utilize the vehicle of the listing to facilitate both our organic and our inorganic growth. As you can see from H1, the company has been significantly successful in terms of driving that, which ultimately should then continue driving shareholder value. That's simply what we focused on as a company. Thanks, Peter. To again touch upon the slide, as you can see, growth continues to happen in our business. What I want to pick up on is Digital & Emerging Technologies. This is where our AI solutions, some of our big data solutions, are coming more and more to the front. Fundamentally, this trend is what's driving our increased margins as well as our increased profitability, if not significant revenue growth as well. The traditional businesses of System Integration and Managed Services are not decreasing. I think that's the point to make. They're not decreasing. They are still growing.
They're still increasing. It's just the other areas are significantly growing. I think that's what we're seeing. People Solutions/BPO has grown in the last six months, and that primarily has been driven by the Swedish business Lumin4ry AB, which we acquired during Q1. I think that has driven some of that growth, even though there is growth in other regions on there as well. Smart Infrastructure is an area that I would expect to grow and grow aggressively over the next while. I think a lot of acquisitive discussions and action is basically looking at that area, given that primarily our geography is emerging markets. There's significant value in terms of bringing those technologies both to emerging markets as well as then to developed economies. Thanks, Peter.
In terms of strategic activities over the last while, as well as in the last month, I think we've had some significant wins throughout the world. I think our acquisition of Top4 Digital Marketing is a very, very exciting acquisition. Not only does it have over 200,000 customers that have subscription contracts with the business, but I think also gives us significant solutions to take into the Nordics, into the U.S., into Canada, into some of our existing geographies. Certainly, the whole concept of cross-sell, upsell, I think it's really a super, super exciting business. We've recently concluded exclusive distribution rights for Pericent, which is a document management solution in the Middle East. Very excitingly, we've just concluded the exclusive partnership or distributorship for cybersecurity software, It's Mine, for Africa. We really see these technologies driving significant growth for us into the future as we basically move forward. Yeah, Peter.
Future strategic initiatives for us, I think there's a lot of projects underway in the group. I think we'll be announcing that over the next while as they basically come to fruition. I think the improved cash position allows us to focus on our acquisition targets significantly without affecting the existing operations within the business. I mean, as a rule, we publish all the acquisitions and partnerships no matter how big or small. I want to say that sometimes it comes across that some of our acquisitions are small. You need to understand that we are filling a solution stack. We are filling significant opportunities we're seeing in existing customers or in regions. Hence, sometimes we may choose to make very, very small acquisitions. Without a doubt, each one of them are strategic in nature and drive specific growth for us. Peter?
As you can see, we are very, very much on track in terms of the growth, as Marco was saying. The last quarter saw more growth coming out, a Lumin4ry AB acquisition. It's probably like 75/25 in terms of the growth that we've seen in the last quarter. 75% inorganic because of Lumin4ry AB, 25% organic, which is still significant given the base. We see trends like that continuing into the future. Thank you, Peter. I want to end just with two discussions, two clarification points. We've had a lot of questions around the AEMA acquisition. We've tried to address it through various things. Our view on it is that we were basically misrepresented on significant parts of that acquisition. However, we dealt with it. We dealt with it very clearly, very categorically, both financially and from a governance perspective.
Since then, we've significantly improved our governance compliance as well as due diligence processes. Hence, acquisitions that we see coming through significantly show that. The second topic is basically around, I guess, my information, which has basically been in the press. I'm obviously aware and cognizant of the fact that there was concern regarding the legal dispute with my previous employer. What I can disclose is that I was involved in a civil dispute with them. This matter has now since been settled completely. It was a civil dispute, and it's been completely settled. I can also confirm that the settlement was on the basis of no admission of any liability on either party's side. It's very important. A term of the settlement was a strict confidentiality clause, which binds me from basically disclosing any further aspects.
In fact, I may have gone too far by, I mean, disclosing this, but I think that's a different matter. What I can tell you is that my legal team is currently engaged with my previous employer's legal team in an effort to perhaps relax those strenuous terms of the confidentiality so I can continue giving the market and our investors significant confidence to say that all of those matters are in the past. They're gone. We are basically here to drive White Pearl Technology Group AB together with the management and the business into the future. Thank you, Peter. That's it from my side.
Thank you very much, Ebrahim, and thank you, Marco. We will now open up to your questions. I will take at least we have one in the meeting chat at the moment. Without dwelling too much on ancient history, there has been one question coming into me that is rather interesting. Have the AEMA thing changed our way of doing due diligence? What have we learned? I pass that back to Ebrahim.
Yeah. I mean, look, like I said, Peter, absolutely, it's changed the way we do due diligence on our acquisitions. I think we've got a significant checklist that we now follow. I mean, that we always did follow, but I think significantly more. We're also asking for more detailed information from the acquisitions that we are engaging with. I mean, our view is to protect our shareholders. That's what we're doing. The process of us acquiring businesses is becoming a little bit more difficult for the acquired party. That's because now we have to protect. I think we've learned from the AEMA example. Absolutely, Peter, for sure.
Thank you very much.
Sorry, Peter. I would like to add something important.
Yes, Marco, please.
Depending on the entity of the business we are acquiring, we are also engaging with third-party entities that are actively working in the process of the due diligence. The last few acquisitions, we also engaged with third-party consulting companies. They are neutral, and they are analyzing in a neutral way the quality of the business we are acquiring. There is a double check also.
Thank you very much. I will continue with a few questions that I have received prior to this meeting by email, and it's on the theme of acquisitions. One of our shareholders has asked us, what has been the average multiple White Pearl Technology Group AB spent on previous acquisitions on an EV over EBITDA basis? What is the limit management will spend? I don't know if it's Ebrahim Laher or maybe it's Vikas Gupta who wants to answer that question.
I can answer this question. Hi, everyone. Thank you, Peter. Thank you, Ebrahim and Marco. I think there's no fixed formula for an acquisition. Sometimes it depends what we are trying to chase in the acquisitions. Sometimes when we acquire, let's take an example of AEMA. I think the revenue-to-value was 0.3, 0.2. This only gives you, and from an EBITDA perspective, it was probably about 3 to 4 EBITDA from a value to EBITDA. That's just one example. Depending on what profitability the target company is offering, what market is being offered to us, what the product suite is being added to our portfolio, it can vary. It can definitely vary, but we always try and make it less than our valuation so that our shareholders can gain more from the transaction.
As an example, if my EBITDA multiple is, as an example, 6, let's take an example, then I would definitely not go above 6. I would definitely stay below 6 so that when the integration happens, when the consolidation happens, the White Pearl shareholders gain more value from the transaction than the acquired party. I hope this answers the question. Sorry, and one more point I wanted to add to the due diligence process. I'd like to quote the recent example of our acquisition. The two senior executives spent one week trying to understand the business, trying to understand the market, trying to understand what synergies could be placed. We spent more than a week in Indonesia trying to understand the dynamics.
To answer one of the aspects of the question, the due diligence process has actually become much more stringent from our side also, and also it's become more difficult for the acquired party. Thank you.
Thank you very much, Vikas. I have two questions that I want to pass on to Chettan Ottam, our Group CFO. Chetan, you're on the call. I heard you before.
Yes, I am.
The first of the two questions is how much of the Q2 growth was organic and how much was from acquisitions? Can you give us at least a rough estimate of that?
Okay. Thanks, Peter. In terms of the growth in Q2, it was about an 80/20 in terms of organic and fluid acquisition. 80% was through the acquisition that we had done, and we had a full period of reporting the results, and 20% was organic growth.
Okay. 20% organic growth and 80% contributed by acquisitions, where I think the Lumin4ry AB is the lion part of that, right?
Correct.
Yeah. The second question is if we can give a gross margin breakdown for each revenue segment. I don't think we can answer exactly, but can you give a rough estimate regarding the six business segments where the gross margins are high and where they are maybe a little bit lower?
On the BPO and on the People Solutions, the margins are generally lower. It constitutes high revenue to the group. It allows us to penetrate certain strategic clients. A strategic client through the acquisition of Lumin4ry AB was Handelsbanken. In Sweden, it's a well-known bank in the territory, in the region. Well-established. Lumin4ry AB has been servicing that business for many years. Those tend to be on the slightly lower side of the gross margin. The Licensing and SaaS, where we've got our own solutions out there, the gross margins tend to be a bit higher. I think those are the two extreme ends of the spectrum in terms of where we see low margins to where we tend to see higher margins.
Thank you very much. The next question, sorry.
You go. Sorry, Peter.
The next question will also bounce back to you. I'm now starting to take the questions in the meeting chat from top downwards. The question is from Stian Linde. Since you operate in many countries, how do you decide where revenue is reported? Is it based on where the work is done or where the client is?
It is based on the subsidiary that's contracting with the client because in order to do work, it's quite a formal process in terms of contractual agreements between us as a service provider and the client. It is purely based on which entity is contracting, and revenue is then recognized through that subsidiary.
Okay. I hope that answered the question. Next question is one that unfortunately is impossible for us as a company to answer. I hear a lot of talk about fair value, etc., was around 800 million SEK when the market cap was around 250 million SEK. Following this report, where would you consider the fair value to be now? It is not up to the company to have any opinion on valuation. That's your job to value, see if we have a fair valuation or if you consider the valuation to be attractive or unattractive. I must stop there. Answering the question more precisely than that would open up a host of a big bunch of liabilities left and right. Again, Stian Linde asked, several of the companies within the group appear to have minimal or no online presence.
Could you elaborate on how these entities fit into White Pearl Technology Group AB's current strategic and operational model and where there is an international rationale between maintaining such low external visibility? Basically, the question is why don't all our subsidiaries in all countries have excellent websites? Which one of my colleagues wants to comment on that?
I don't know if Stephen is on the call, could answer, or I can do that.
I'm sorry, I don't think Stephen is on.
Okay. Yeah.
You are?
I'm here. I'm here.
Very good.
It's a good question. I think if one has to look at perhaps our top or at least our largest subsidiaries in the group, Omnitell Tech as an example, ECC in Egypt, obviously our own White Pearl Technology Group AB. Then there's others like ERPST in Ethiopia, Brontobyte in India as an example, Top4. A lot of these are perhaps the sort of jewels in the crown, as it were. Although, as Ebrahim Laher said, all of our acquisitions are strategic and are obviously important from that perspective, all of those have fairly significant web presence. I think certainly with the acquisition of Top4 Digital Marketing, one of the things we are looking to do is to expand, utilize the very excellent work that Top4 do around SEO optimization, etc., and obviously to reinforce and to grow our web presence on the back of that.
There are certain of our companies that have perhaps less than stellar web presence. That's certainly something we are looking to improve. I think that question was obviously pointed to the answer to a degree, which basically says that those entities that perhaps aren't, or at least are more internally focused and provide services to the group or are perhaps not as key when it comes to reporting profitability and revenue, those perhaps we haven't spent as much time getting those websites back up to where they need to be. Certainly, we are going through an exercise at the moment where we are revamping a lot of our websites. We are combining some of them.
I think, you know, being a large entity like ourselves and having a number of obviously subsidiaries, it becomes a little bit more difficult to maintain a holistic and perhaps more of a standardized web presence. We are certainly looking to work on that. I see my colleague Michael is on the call as well. Michael is the CMO of Top4 Digital Marketing. I think, Michael, perhaps if you could just bounce me on the back of that. As I said, we are obviously looking to utilize your significant experience in this space to rebuild and revamp some of those subsidiaries.
Yeah, mate. I mean, I've been in this job 25 years, guys, so I understand the digital website. It's a little bit like a painter not being able to paint his own house, if you look at it that way. A lot of the IT companies didn't really focus on the web. They focused more on customer, customer acquisition, looking after the customers. Whereas now in today's technology, I think as we're moving forward, the website is really the first point of contact that the customer gets. I think part of our strategic move now is making sure that all of the group websites are aligned and up to date.
As we move forward with content strategies, etc., making sure that everybody, investors, and staff alike are sharing knowledge between the group and also a consistent look and feel and making sure that potential investors or current investors know who we are and what we do as a group. I think that's probably, but I think you can have answered most of that question. At the end of the day, it's work in production. We've just been taking on as a group. Now my task now is to make sure we start working on each of those. We had that discussion this afternoon, actually, with my team as well. Yeah, it's in progress. Maybe see the next quarter, I think.
Great. We will improve. Thank you for reminding us. That is one of the closest questions. I should have mentioned that Stephen Thorn is our Senior Vice President for AI, Data Science, and Blockchain. Vikas Gupta, who you heard previously, is now our COO and has previously been very much involved in investment and acquisitions. Michael Doyle is a newcomer in the group, and he's the Managing Director of Top4 Digital Marketing. Going further down the list, Jorgen Dahlén has written, "Can you give examples of projects in the expanding areas like People Solutions/BPO and Digital & Emerging Technologies?" I mean, I guess Ebrahim can comment on that with the acquisitions of Belay and so on.
Sure. Yeah. I mean, look, I think examples of various People Solutions, Handelsbanken is definitely one that we have in Sweden. The point I wanted to make on the previous point on Stian's question is that one of the companies with the worst websites is actually Lumin4ry AB, which we're currently working on. Lumin4ry AB is a significant business, as those of you from Sweden will know. I think we've got some projects throughout Africa as well, Ethiopian Rail in the People Solutions area. I think digital technology is where the big stuff is happening around AI, big data. We're doing some interesting business transformation work for Egypt Air in Egypt. Another example is the work that we're doing at the City of Johannesburg in the area of fraud management in South Africa. I think these are examples of where we're basically seeing significant areas like this.
Vikas, are there any other customers that you think we can basically add into the discussion? Yeah.
There are a lot of them. I mean, alone in India, there is Infosys, there is YASH Technology, there is Punjab Electricity. In the Philippines, we did a project. We just finished Aboitiz. That's the electricity producer in the Philippines. In Saudi, we are doing for MIS. In Oman, we did it for Ministry of Happiness and Satisfaction. A couple of them, but most of them were in System Integration and Digital. For Infosys, we do a lot of work for BPO and Manpower Solution, though. In Dubai, we are doing for [Feva]. The list is long, Brian.
Okay. Thank you very much. I hope that answered your question, Jorgen. I am going further to Yuvan Srid, who writes, "Congratulations to a fantastic Q2." Thank you very much. Is there any company in the portfolio that overperforms? I guess the answer is most of them, but I pass this to Marco if there are some of the companies in the group that have been especially successful in recent times.
In my opinion, we have different companies doing and having a really good performance. My opinion is we are always analyzing the performance of the region or the global. I consider it's not, I consider it's unfair to talk about the performance of one company or we are more or less, if we take the results in terms of the regions, we have a 30% around 30% in Africa continent, 24% in Asia, 18% in Europe. There are very different entities performing in an excellent way. They are contributing in the same way, I would like to say, because they are pretty much focused in achieving their own results.
I don't want to give a special award to one company when I would like to talk better about the region because this is something that I think in this organization, every person, every company is contributing in the same way to do the best to achieve our results. I don't like to see that there is one, and actually, there is not one. There are different companies that are doing, they're having an excellent performance. Peter, I would like to answer to the last two questions. I can see in the list here in the messages. There is not any.
Let me just reiterate what Marissa, it's a participant name, Solisay, that are asking, "Are you seeing continued strong demand in Q2 so far or any early signals of slowdown in certain markets?" That is actually asking for guidance, which we should refrain from more than we have communicated publicly to the entire investment community. The guidance that you have been given is this one, that we see our trajectory going forward.
Yeah.
I think maybe Ebrahim, you have a comment here.
I'm sorry, Peter. I was answering you. I was answering you these two questions.
Okay.
The point is, first of all, we are absolutely on track. This is what we shared before. The second point, a really important point, is based on the markets where we are working. These markets are growing and growing more than the classical markets, Europe, North America. We have all the opportunities. By the way, what we are doing today is not working for the present. This result that we had and we are having today is the result of the work we did in the past. We are really working for the future. This is the reason because I'm really, really sure that this year we will close achieving the target that we planned. Also, it's connected with the last question. Peter, if you could please read the last question, it's because there is a strong connection between the two questions.
Yeah. Final question I have on the list now, and then we probably say thank you, is that what message would you give to shareholders following this report, especially those looking for long-term value creation? The answer is on the same slide. We have repeated over and over again for most of this year that our financial goal is to reach a revenue of SEK 827 million by 2028 with an EBITDA margin over 17%. That is the continued reiterated message. Please go ahead, Marco.
What I would like to say is that we are working at building a pipe, not for only the next few months. We are working for building, and we are building a pipe for the next few years. We are creating opportunities and extending our also portfolio and starting a strategy in terms of cross-selling and upselling with new solutions and services. What we will expect is really to comply with this vision. We will do that because we are sure about what we have today. We have a clear sign in terms of internal sign in terms of potential. We are working in special markets where we can see a growth for the next few years. In a nutshell, we are absolutely sure that our shareholders will be happy.
This is what, and by the way, we are also the main shareholders here altogether because the management is also the first one who believes in this journey and in the performance for the next few years. The message is we are really happy to say that we will have a really nice journey in the next few years. I cannot say more because, of course, it could be a problem, but we are really optimistic that it's a really nice opportunity.
Yeah, caution is also always the method, and underpromise and overdeliver is a strategy. Ebrahim, do you have any final closing comments?
I think we just want to thank our investors for continued interest in the company and for your interest in what we're doing. Hopefully, we hope to continue sharing relevant information with you as we go forward. I think that's the message, Peter.
Thank you very much. I thank Ebrahim Laher and Marco Marangoni and all the other of my colleagues for providing information. I thank everyone who's joined this call. We are always welcoming feedback, both on content and on this format for the meeting. Does it work to have it as simple as that, as simple Google Meet, or do we need to do other things, a little bit more complicated? Please keep in touch. The email address is ir@whitepearltech.com, and you also find my phone number in all our press releases. With that, I bid you farewell for this time and hope that you will have a lovely Wednesday afternoon. Thank you very much.
Thank you, everyone.
Thank you.
Thanks, Peter. Thanks, everyone. Cheers, guys.
Thank you. Bye.
Thank you, everyone. Bye-bye.
Thank you.