BIMobject AB (BIM) Earnings Call Transcript & Summary

BIMobject is a global marketplace for the construction industry, serving thousands of building product manufacturers, reach, influence and understand building designers in the millions worldwide. This is our prime core as a business. Some of our building product manufacturers, such as the company here, VELUX. VELUX is a global manufacturer of specialized in providing roof windows, skylights, and related accessories to customers in over 40 countries. The company has been an early adopter of BIM and joined BIMobject all the way back in 2013. When we're hearing from the VELUX BIM manager, Martin Hansen, who states that our purpose of being on BIM Board is to reach out to as many architects and engineers as possible. And with BIMobject solution, that gives them the possibility to reach millions of users in several markets from one single platform. And we are super happy to work together with VELUX and growing their business. At BIMobject, we continue to develop new features for our building product manufacturers. We have, just recently, developed search ads. The ability to grow your business with BIMobject search ads. It allows you to position your products in front of millions of architects on top of our search bar. This is very similar to Google Ads and we're extremely excited to have this in the market and growing the business. Highlights in the Q4 report. ARR in constant currencies is close to SEK 100 million, ending at SEK 99.3 million at the end of the quarter. Net sales from recurring revenue is 78% of total net sales. We're very much a SaaS company today than in the past. The operating earnings improved 24% during the quarter. We're proud to say that we are slimming up and tightening up the business. And also, very proud that we now have passed and accumulated downloads of 100 million downloads on the BIMobject platform. Looking ahead, we can say that BIMobject has 3 strategic pillars. The first pillar for us is to the user side, maintain leadership when it comes to architects, engineers, and constructors on our platform. The strategy for this one is to grow our traffic and enable the network effects we have. Secondly is to track the top 100 AC firms and lock them into our platform on the user side. And thirdly, it's a software integration with the major architectural software out there. The second pillar of BIMobject is the customer. The SEK 100 million business. Our goal here is to continue being the first choice for manufacturer when it comes to reach designers globally. The strategy is to retain leadership, improved offering, we have the BPMs continuously. And as you mentioned earlier on, search ad is one of those things. And thirdly, it's about increased the share of wallet of existing customers. The third pillar is new to many of you, and it's a sustainability platform. For us, it's about acquiring a platform. And as we're going to walk into a minute and as we mentioned, is that we just recently acquired a platform in the sustainability space. I'm going to talk more about that in just a second. The second part of the strategy is to leverage our market position. We have millions of architects on our platform that are very much in need of the tools in order to create sustainable constructions. And we also have thousands of building product manufacturers that needs to reach out to the audience with their sustainable products. So we think this is a fantastic third leg to grow our business. I wanted to take the opportunity to introduce Martin, our CFO, as well as he will walk you through the new acquisition, we've done with Prodikt. Over to you, Martin.

Thank you, Carl. Prodikt, a newly established digital platform has strong similarities to BIMobject but is niched towards the ESG sector. As Carl just mentioned, BIMobject's vision is to improve the construction process and nonetheless, in regards to climate impact. The challenge of building sustainable is an industry-wide issue, and it's not a small issue since around 40% of all global CO2 emissions comes from this particular industry. The challenge of today comes from a couple of things. Climate information or data is typically decentralized, scattered and surprisingly nonuser oriented. That leads to sustainable building being expensive as well as complex. Climate information is, therefore, rarely integrated in digital building processes today. Prodikt solves this issue. While it collects structures and compares data, it also, is architect friendly and can significantly improve workflows. It also enables the usage of environmental data in digital construction processes. In short, we see Prodikt as an enabler of sustainable construction. The platform, which collects data from EPVs and supplier product data, among other things, also allows its AC users to do CO2 declarations on project level. This is increasingly important as new legislations are being introduced around the world. There is still lots to build for Prodikt, as it currently only operates in the Swedish market, but the platform is internationally scalable, and we expect continuous increase in demand over the next decade. And now, we move on to the financials of the last quarter. As we earlier informed about, our sales organization has been renegotiating with our existing customers over the past year. Upgrading agreements into SaaS contracts has been their mission. This has been impacting our sales performance throughout the year. And these effects, we also saw during the fourth quarter, where churn remained at elevated levels. In the quarter, we had a steady flow of orders coming in, which could have a positive effect on next quarter. Annual growth in ARR volumes for the year landed at 2% per year. Net sales was on par versus last quarter and landed at SEK 30.7 million. This was a minus 6% drop versus last year, mainly due to lower levels of service-related revenues. For the platform revenues, we saw a 5% increase versus the same period last year. As Carl earlier mentioned, we saw an improvement in the result in the quarter, which is the result of our cost level coming back to a more normal level. This is in line with earlier communication, where we highlighted the reasons for the increase in nonrecurring costs during the second and third quarters of 2021. And finally, the cash flow landed at minus SEK 22.9 million during the quarter, although being more negative than the EBITDA for the period, we see this as a seasonality effect as we have a large share of contracts being renewed in connection to the year-end. Thank you very much. And this was the end of the presentation. And we now open up for questions.

Okay. So we got a question here. The first question is what is the current temperature of the market? So I'm reading that into judging from our perspective, it's difficult. The market we are in is the construction industry, and I think that refers to that market primarily. Okay. So we look at the inflow from building product manufacturers in the last quarter as well as in January, we have had -- we experienced a very positive trend. So just from that, it looks pretty strong at the moment.

Here is another question. It's regarding our view on and when to generate ARR from the increase in downloading users? And to provide a background on this topic, our current ARR is related to sales to building manufacturers, which displaced their products on our platform. whereas downloads are related to architects and engineers downloading BIMobjects from our site, and we refer to them as users. And today, our site is free for new users to use. But the question of whether we could offer premium service to our users is one we commonly get. Here we see a Prodikt as one step in this direction as it do offers payable services to the architects and engineers within climate data. But we also, of course, are exploring and working on providing similar services to other segments in the market.

Another question has come in, and it's regarding customers on the new commercial agreements. And first of all, I have to say that it should be clarified that the statement in the Q4 report, it's not related to churn or net retention rate. What the text refers to is that by mid-February, 96% of BIMobject's customers were on a renewed price plans.

Yes. And then we have received a couple of questions regarding the acquisition of Prodikt, and how we see that would be a valuable investment for us in addition to the shares that we typically -- that you get. And -- I mean, all in all, I mean, we are quite impressed by the Prodikt platform and especially, how it's enabling analysis of climate data in projects and how it's integrated in digital workflow. And Prodikt, it serves like a fast-growing market or a fast-growing segment of our market. Today, they do that in Sweden. And for other countries to follow. And what we see in Sweden right now is there is coming legislation that is driving the market forward in requiring climate analysis to be made, but also, other countries to follow. And one of the reasons why we see it as a great match between the 2 companies is there are strong similarities between them. And also, BIMobject has a long experience of scaling such platforms internationally. And we also see ourselves as the most suited owner for this company and platform in their continued growth.

Thank you very much, Martin. I think that concludes all the questions we have.

Okay. Let's see if we...

Wait a second. We perhaps have another incoming question.

Yes, it's also related to the acquisition of Prodikt. And it's regarding the size of the company. And obviously, it's not a large company at the moment, but it has -- we see it as a growth platform that we will expand going forward, first in Sweden and then to neighboring markets and going forward. Also, when it comes to synergies, we see that there is synergies both on the user side as well as the building manufacturer side from our platform.

And I think we have covered all the questions here for now that we have in inbound. Worth mentioning here on Prodikt acquisition. We see that Sweden is here leading the way when it comes to life cycle analysis, but this is an exploding market globally. In Sweden, it's today, compels, as Martin mentioned, in any construction, new project construction to have provide climate declaration. And this will continue to spread. So in that perspective, Prodikt enables us to develop a lot of services towards our architects that were 3 million of today. Right. Thank you very much. I would like to thank you, Martin. And I would like to thank you all of you for participating and listening in to our Q4 report. And I wish you all have a great day. Thank you very much.