Knowit (KNOW) Q4 2024 earnings summary

Executive summary

• Net sales for 2024 decreased by 9.6% to SEK 6,415.7 million, with Q4 sales at SEK 1.6 billion, down 10% year-over-year, reflecting weak demand and a 10% reduction in headcount.

• Adjusted EBITDA for Q4 was SEK 107 million (margin 6.5%), and full-year adjusted EBITA was SEK 395.0 million, impacted by a SEK 28 million COVID-19 support provision.

• Cost optimization, organizational changes, and increased sales activities remain priorities, with a focus on margin improvement and readiness for growth as the market recovers.

• Dividend proposed at SEK 2.3 per share, totaling SEK 62.8 million, in the higher range of the 40%-60% payout policy.

• Workforce reduced by 10% year-over-year to 3,860 employees as part of efficiency measures.

Financial highlights

• Q4 2024 net sales declined by 10% year-over-year to SEK 1,641.9 million; adjusted EBITDA margin was 6.5% (down from 8.1%).

• Full-year EBITA margin was 5.7% (7.0% prior year); adjusted EBITA margin was 6.2%.

• Net debt at SEK 624 million at year-end, leverage ratio at 1.2, well below the target of 2.

• Cash flow from operating activities increased to SEK 626.1 million for the year.

• Earnings per share for 2024 were SEK 3.88 (8.74 prior year); Q4 EPS was SEK 1.43.

Outlook and guidance

• Early signs of market improvement in Sweden, especially in retail and public sector, but overall recovery remains slow and uncertainty persists.

• Q1 2025 expected to have a slow start due to seasonality and tough market conditions.

• Focus will shift from staff reductions to margin improvement and growth, with price increases and salary inflation of 3%-4% expected in 2025.

• Management remains optimistic about future growth, citing structural changes and cost adaptations.