BTS Group AB (FRA:BX1B) Q2 2024 Earnings Call Highlights: Strategic Acquisitions and AI Gains ...

GuruFocus News
4 min read

In This Article:

  • Revenue Growth: Overall sales grew by 3%.

  • EBITDA: Improved by 4% to SEK110 million.

  • EBITDA Growth in North America and Other Markets: Combined increase of 23%.

  • Revenue Decline in Europe: Decreased by 23%.

  • Margins: Group margins remained solid at 15.1%.

  • North America Margin Improvement: Increased from 14.5% to 15.5%.

  • Other Markets Margin Improvement: Increased from 15.4% to 18.2%.

  • Acquisitions: Acquired Wonderway Group and a leading organizational development company in Thailand.

  • AI Productivity Gains: 6.5% FTE savings reported by 170 BTS employees.

Release Date: August 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • BTS North America and BTS Other markets experienced significant growth, with North America growing by 12% and Other markets by 8%.

  • Combined EBITDA increased by 23%, indicating strong operational performance in key markets.

  • The acquisition of The Boda Group has strengthened BTS Group AB's leadership coaching business, contributing to faster growth in this segment.

  • BTS Group AB made strategic acquisitions, including Wonderway, which enhances their AI capabilities and offers innovative products like Verity.

  • The company is seeing productivity gains through AI experimentation, with a reported 6.5% FTE savings among employees utilizing AI tools.

Negative Points

  • BTS Europe faced a challenging quarter with a 23% revenue decline, impacting overall group sales growth.

  • Approximately 30% of BTS Europe's revenues were delayed, canceled, or disappeared, affecting financial performance.

  • The European market showed signs of conservatism, with project delays and cancellations impacting revenue.

  • Despite efforts, BTS Europe did not have a sufficient pipeline to offset the revenue shortfall.

  • The newly acquired business in Thailand is expected to have slightly lower margins than BTS Group AB, requiring improvement efforts.

Q & A Highlights

Q: How much of the growth in North America is due to market improvement versus BTS taking market share? A: Jessica Skon, President & CEO: It's a combination of both. We feel less conservatism than a year ago, and our win rates are up. Confidence is growing, and average deal sizes are progressing nicely.

Q: Are you seeing any signs of recession fears affecting your business in the US? A: Jessica Skon, President & CEO: We are not seeing any signs of recession fears affecting us. The US news has been quite hyperbolic recently, but we are experiencing good success in sectors like pharma and biotech.

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