Continued revenue growth
Solwers Plc, Company release, February 27, 2025, at 09:00 a.m. EET
This release is a summary of Solwers Plc's financial statements release January-December 2024.The full financial statements bulletin is attached to this company release and available on the company's website at https://solwers.com/for-investors/reports-and-presentations/
The figures for the financial year (1 January-31 December 2024) are unaudited (IFRS)
The figures in brackets refer to the corresponding period in 2023 and are expressed in the same unit, except where otherwise noted.
July-December 2024 in brief
- Revenue increased by 17.0% and amounted to EUR 38.4 (32.8) million
- EBITA was EUR 2.2 (3.5) million, which is 5.9% (10.7) of revenue
- EBIT was EUR 0.8 (2.4) million which is 2.0% (7.2) of revenue
- The billing rate was 78.5% (81.3)
- Earnings per share (EPS) was EUR 0.04 (0.17)
- Net cash flow from operating activities was EUR 3.2 (4.6) million
- Headcount at the end of the reporting period was 724 (635)
- Q4: Revenue EUR 21.7 (19.0), EBIT EUR 0.3 (1.45)
January-December 2024 in brief
- Revenue increased by 18.6% showing year-on-year increase of EUR 12.3 million totaling EUR 78.3 (66.0) million
- EBITA reached EUR 5.5 (7.0) million, which is 7.0% (10.7) of revenue
- EBIT landed at EUR 2.7 (4.8) million, which is 3.5% (7.3) of revenue
- Billing rate was 79.9% (81.5)
- Equity ratio was 43.6% (46.4)
- Equity ratio was above the mid-term target (above 40%), revenue growth was close to the target of 20% whereas EBITA-profitability was below the mid-term target of 12%
- Earnings per share (EPS) was EUR 0.11 (0.32)
- Net cash flow from operating activities amounted to EUR 4.3 (4.7) million. Financial position remains at a good level to facilitate the company's continuous acquisition strategy.
- Headcount at the end of the reporting period was 724 (635)
- The execution of the growth strategy continued with acquisitions of six operative companies: four in Sweden and two in Finland. Moreover, the Company acquired strategic know-how and a minority stake of 33% in an environmental consulting company.
- A decision was made on the geographical expansion into Poland and establishing a country subsidiary
- The Board of Directors proposes to the Annual General Meeting, planned for April 15, a dividend distribution of EUR 0.024 per share to be paid, corresponding to EUR 244,092.19 in total.
Key Figures
CEO Stefan Nyström's review
The year 2024 showed signs of improvement in the consultancy and planning sector, yet a significant market turnaround is still awaited. Our order backlog improved towards the end of the year and the billing rate remained at a good level. Profitability was impacted especially towards the end of the year by one-off costs and investments for future growth.
Solwers' core business continued to perform well considering the market challenges. The revenue grew by nearly 19 per cent and exceeded EUR 78 million. We are happy to see the operative business in Finland picking up with the investment activities slowly starting to kick off. We are particularly happy to see improvement in the performance of such subsidiaries that have had challenges in previous years.
Overall, the business climate is still more favorable in Sweden and for the most part, our subsidiaries in Sweden have a positive impact on business.
The preparations for being listed on the main list of Nasdaq Helsinki stock exchange have advanced well in 2024. The Board of Directors carefully evaluates the transfer schedule and prevailing market, ensuring that the decision aligns with the long-term strategic goals of the Company and the best interests of the shareholders.
Profitability decreased
The last quarter of the year was impacted by continued intense price competition and the low number of billable hours in December.
The group level governance costs were up by EUR 1.2 million from the previous year. Most of this is tied to development projects now close to completion. We believe these investments add value to the business and are necessary as we continue the growth journey.
Other costs include write-downs of doubtful receivables and repayment of government subsidies related to reduction of employer social costs for research and development (FOU) of one subsidiary. These items combined have EUR 1.1 million negative impact on the IFRS EBIT. Additionally, a major client suspending the purchase of consultancy services has taken its toll on the operations at three of our Swedish subsidiaries. The estimated impact is around EUR 0.5 million.
Acquisitions and plans for geographical expansion
Execution of the acquisition-based growth strategy has continued. During 2024, six new operational companies joined Solwers: WiseGate Consulting, DEMAB, Relitor and Spectra Consult in Sweden, Finexplo and Siren Architects in Finland. All companies support our existing operations and expand the client base. In addition, Solwers partnered with One Planet Partners (prev. Kari & Pantsar Co.) of which Solwers own one third of the company shares.
As a new initiative, we are now mapping potential acquisition targets also in Poland that is expecting to have significant investments in e.g. infrastructure construction and the renewal of the energy industry. All three markets, Finland, Sweden and Poland, are on the radar for future acquisitions. We continue to manage business risk by operating in multiple locations and countries.
Order backlog developing positively
Solwers companies had over 5,500 ongoing projects in 2024, 70 per cent of which are below EUR 10,000 of sales value. Over 60 per cent of the sales is running price work.
Some of the biggest clients included Trafikverket - Swedish Transport Administration, Väylävirasto - Finnish Transport Infrastructure Agency, Työyhteenliittymä Laakson LATU, HUS Kiinteistöt and KPO-Kiinteistöt. The price competition has remained tough, with more companies showing interest towards small projects. Our strengths include strong local presence in 28 locations across Sweden and Finland and well-established network of clients.
As in the previous years, around half of the revenue came from the public sector where infra projects represent around half. In 2024 our subsidiary Finnmap Infra continued working with Haukipudas-Laurila railway project, estimated to last until the end of 2025. The company is also involved in the next phase of Helsinki Central Railway Station renovation and GeoUnion is involved in Vantaa tramway project. In addition, our subsidiaries work with multiple hospital projects such as Laakso Joint Hospital (LYS), Oulu University Hospital (OYS) and Malmi hospital along with many ongoing school renovation planning projects. In Sweden, our subsidiary Wisegate Consulting is working as an initial technical consultant in VA SYD Maxima sustainable wastewater treatment project through an 8-year framework agreement.
In 2024 our Swedish subsidiary ELE Engineering was included in Fingrid's framework agreement as a subcontractor of our Finnish subsidiary Finnmap Infra. In total we had around 250 framework agreements.
Increasing subsidiary collaboration
Solwers' concept of light integration is among the decisive factors for companies to join the group. We enable subsidiaries to maintain independence and agility while being part of a bigger group of experts with diverse competences. We are now more than 700 experts in two countries.
To promote innovation and business collaboration, Solwers organizes annual strategy meetings for subsidiary management and key personnel. We have established working groups such as the industrial group in Sweden and ESG group to leverage business synergies among the subsidiaries. We have also increased country-based subsidiary collaboration both in Sweden and Finland. For supporting competence development, Solwers initiated 360 leadership evaluations in selected subsidiaries.
In 2024, we introduced the performance share plan for key employees to align interests and ensure the retention of top talent.
Drivers for growth
We continue to implement the acquisition-based growth strategy in at least three countries but also focus heavily on profitability and organic growth. Some adjustment measures such as layoffs and redundancies can still be initiated in a few subsidiaries. The positive order backlog and increasing requests for quotations from construction companies and the energy sector are signs of a market turnaround. We anticipate that the impact of new investments will start being seen in the second half of 2025 at the latest.
Country-based collaboration between the subsidiaries is strengthened with common sales and marketing activities. Hereby we ensure that, once the turnaround hits, we are already on the go.
Market outlook
We anticipate that the weakest phase of the business cycle is behind us both in Finland and Sweden. The market recovery is likely to be modest in the first months of the year. Nevertheless, the consultancy and planning sector is the first to see positive impacts of the recovery.
With the postponement of large-scale projects as well as housing and office projects in the past years, we can see an increasing number of companies competing for smaller-scale projects both in Finland and Sweden. This shift has led to tough price competition in the market.
In recent months, Finland has experienced an encouraging upswing in new orders across house construction, community planning, and industrial sectors. However, it is projected that the revenue for the consultancy and planning sector will maintain a steady course, with no significant changes anticipated during the first half of 2025.1
The business climate continues to be more favorable in Sweden where also the interest rates have decreased more.
We expect the transition to fossil-free energy and industrial production to continue growing. This will lead to increased demand for project management services in various areas such as new energy production, energy storage, power transmission grids, and automation solutions. The industrial investments are also anticipated to increase especially in the northern part of Sweden where shortage of skilled professionals remains to be a challenge.
Our business sector has suffered from a chronic shortage of skilled professionals over the past decade. However, due to the challenging market climate, some layoffs continue to take place. Yet, the share of laid off professionals is still relatively low in the consultancy and planning sector.
Overall, planning and consultancy sector continues to be supported by the megatrend of urbanization, the green transition in Europe, tightening regulation on biodiversity, self-sufficiency in energy production, and the increased orders of the defense equipment industry.
Source: 1) SKOL Business Cycle Review 1/2025
Solwers' Outlook
Market uncertainty is limiting future visibility. As Solwers' operations depend on investments, the Company benefits from the general market recovery that is anticipated to strengthen towards the end of the year 2025. In its operations, the Company focuses on growth through acquisitions in at least three countries, improving organic growth where possible, increasing profitability and cutting costs.
Strategy and Mid-term targets
Solwers' vision is to be the preferred partner for its customers in the visionary and sustainable design and engineering. The company's goal is to continue to grow and expand in at least three countries.
The growth strategy is based on acquisitions, organic growth, and the attractiveness as a good employer for professionals in various fields as well as continuous development and competence. The company aims to balance its sources of revenue so that significant part of its revenue comes from public and infrastructure projects.
The company maintains its mid-term financial targets as follows:
- Growth: Revenue growth over 20% (12 months)
- Profitability: EBITA margin over 12%
- Equity ratio: Over 40%
The Board's proposal for the distribution of profit
At the end of the financial year 2024, the distributable assets of the group's parent company Solwers Plc's distributable funds amounted to EUR 37,798,201.49, of which the profit for the financial year was EUR 36,152.34.
The Board of Directors proposes to the Annual General Meeting that the profit for the financial year be transferred to the retained earnings and that a dividend of EUR 0.024 per share, corresponding to EUR 244,092.19 in total, be paid from retained earnings.
Financial reporting
The Annual Report 2024, Financial Statements and the Report of the Board of Directors for 2024 will be published as a company release latest on March 21, 2025 and will be available digitally on the company website at https://solwers.com/for-investors/reports-and-presentations.
The Annual General Meeting is planned to take place on April 15, 2025. The official notice of the AGM will be presented later.
Solwers publishes two business reviews and a half-year report in 2025:
- 28.5.2025 Q1 Business Review January-March
- 26.8.2025 Half-year Report for January-June
- 21.11.2025 Q3 Business Review January-September
Q1 and Q3 business reports are not interim reports in accordance with IAS 34.
Webcast
The company will hold a briefing in English for investors, media, and analysts on February 27, 2025, at 11:00 am EET. The webcast can be followed at https://solwers.videosync.fi/2025-02-27-q4. Audience may submit questions through the webcast chat.
A recording of the webcast and the presentation materials will be subsequently available at https://solwers.com/for-investors/reports-and-presentations/.
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Espoo, February 27, 2025
Solwers Plc
Board of Directors
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Certified Advisor: UB Corporate Finance Oy, ubcf@unitedbankers.fi
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For further information, please contact:
Jasmine Jussila, Head of Group Communications, Solwers Plc, jasmine.jussila@solwers.fi, tel. +358 40 500 4760
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Distribution:
- Nasdaq Helsinki
- Key media
- www.solwers.com
Solwers Plc in brief:
Solwers is a group of consultancy companies that offer architectural design, technical and other consulting as well as project management services locally, close to clients. Solwers' strategy is based on acquisitions and organic growth, the group's attractiveness as a good employer for professionals in different fields and the continuous development of expertise. 29 operative Solwers companies employ around 700 experts in Finland and Sweden. The Company has established a country subsidiary in Poland and is exploring potential acquisition targets in the region.
www.solwers.com
