Strong fourth quarter improves a year affected by recession and external factors

Fourth quarter October 1–December 31, 2024, Group

• Net sales for the period amounted to SEK 105,049 thousand (SEK 93,951 thousand), an increase of 12%.
• Gross profit (agency income) amounted to SEK 21,715 thousand (SEK 21,896 thousand) and the gross profit margin decreased to 20,7% (23,3%).
• Operating profit before depreciation, EBITDA, increased to SEK 6,590 thousand (SEK 3,366 thousand).
• The EBITDA margin for the period decreased to 3,7% (4,1%).
• Profit after net financial items for the period amounted to SEK 4,638 thousand (SEK 1,532 thousand).
• Net earnings per share after tax amounted to SEK 0,02 (SEK 0,01).
• Cash flow from operating activities amounted to SEK 4,792 thousand (SEK 17,904 thousand).
• Equity as of December 31, 2024 amounted to SEK 50,072 thousand (SEK 53,910 thousand).
• Cash and cash equivalents as of December 31 amounted to SEK 10,169 thousand (SEK 17,531 thousand).

The period 1 January–31 December 2024, the Group

• Net sales for the period amounted to SEK 326,549 thousand (SEK 298,921 thousand), which corresponds to an increase of 9%.
• Gross profit (agency income) decreased 3% to SEK 76,453 thousand (SEK 78,452 thousand). Gross margin decreased to 23,4% (26,2%).
• Operating profit before depreciation, EBITDA, decreased to SEK 8,183 thousand (SEK 12,890 thousand).
• The EBITDA margin for the period decreased to 2,5% (4,3%).
• Profit after net financial items for the period amounted to SEK 846 thousand (SEK 7,666 thousand).
• Net income per share after tax amounted to SEK -0,04 (SEK 0,35).
• Cash flow from operating activities amounted to SEK 4,792 thousand (SEK 17,904 thousand).
• The board of directors does not propose any dividend to shareholders for the 2024 financial year.

Important events October 1–December 31, 2024

• Thinc Collective company BANG Agency wins assignment for Business Region Stockholm regarding event services with an estimated sales value of SEK 50 million during the contract period.
• The Swedish Armed Forces renews agreement with BANG Agency. Estimated volume for the framework agreement is SEK 30 million per year.
• Thinc Collective AB (publ) applies for listing on NGM Nordic SME. First trading day December 23, 2024.
• Thinc Collective will change its accounting principles to IFRS starting with the reporting of the year-end report in 2024.

Important events after the end of the period

• Thinc Collective wins assignment for Södertörn University with an estimated sales value of SEK 5 million during the contract period.
• Thinc Collective wins assignment for the Swedish Debt Office with an estimated sales value of SEK 2,5 million during the contract period.

Dividend proposal

The board of directors of Thinc Collective has proposed that no dividend be paid. This is in line with the dividend policy and the reference to the need to retain liquid funds to be used to finance completed acquisitions and strengthen the group's position for future value-creating initiatives, including opportunities for further acquisitions. In 2024, the dividend amounted to SEK 0,25/share, corresponding to SEK 4,3 million.

CEO has the floor

• Strong quarter ends the year with sales growth of +12%.

• EBITDA at a record high in the fourth quarter of SEK 3,9 million.

• Most companies are moving in the right direction, but a weak start and investments are dragging down the full year.

During the quarter, sales increased by 12% to SEK 105 million (93), agency income (gross profit) amounted to SEK 21,7 million (21,9) and EBITDA increased to SEK 3,9 million (3,8).

The fourth quarter came in strong as expected. The recession, elections in the US, war in Ukraine and other concerns have characterized 2024, with the result that many assignments have been delayed. In the communications industry, projects are rarely completely canceled even if they are delayed, which means that the year tends to end with a strong last quarter. So this year too, and taking into account the weak market, I am very pleased that we have managed to turn around sales trends and profitability in the fourth quarter. At the same time, I have a positive feeling about the current quarter and 2025.

In view of our dividend policy and the amortizations and investments that have affected Thinc's cash flow and liquidity, the board has decided not to propose a dividend for 2024. It is always disappointing to have to cancel the dividend that our shareholders probably wanted. However, my hope and that of the board is that in 2025 we will be able to create a strong cash flow that will allow us to distribute funds again next year in accordance with our dividend policy.

The Market and the Thinc Collective

The communications industry has been hit by the recession. Thinc has also been affected, but through our group model we have the opportunity to directly strengthen the parts that are experiencing increased demand as well as to quickly scale down the parts that are doing worse. We are our own internal labor market and this makes us less vulnerable. The offering that covers everything from legal trademark issues to technical innovation means that we are no longer only in the communications industry, which makes us even more secure in our raison d'être.

Despite a tough year, Thinc is stronger than before. Both our entrepreneurial-driven model and the fact that we have all the tools in our toolbox have meant that during a somewhat weaker year we have managed to remain as strong as before. In the meantime, we have developed our own solutions in senior strategic consulting as well as digital and AI-based technology, which will make us even stronger when we launch them shortly. Our task in the Nordics is to guide Nordic customers out into the world and to guide foreign players who want to enter the Nordics. To further strengthen our global presence, we have deepened collaborations with international agencies and partners during the year. In addition, we have invested in developing our employees' understanding of international markets through internships and collaboration with our global partners. This makes our work for large groups and global players such as Picadeli, Global Business Gate, Salinity, Anex and others successful. And not least because we can now take responsibility for the customer experience in a broad, global perspective.

The fact that we are an entrepreneurial company also means that the drive forward, the sales force and that last push are always there. At Thinc, we are quick to take cost measures when necessary but also vigilant in order to be able to deliver on new, large assignments. Many customers are now ready to appoint someone responsible for the entire customer experience; be it operations, support, strategy, legal, customer service, campaigns or interior design and signage. We call this the Chief Experience Officer (CXO), and it is Thinc that will fill that role. We have the expertise to take full responsibility for the customer experience. The role of the consultant will look different soon and we are ready. We are the CXO of the future.

Our immediate future

December ended the quarter with the strongest performance and January looks good. In order to strengthen the result and become more profitable, we are now moving from a model where we had few resources in the parent company to strengthening the group's ability to take on larger customers. We have therefore added additional resources at a central level that will help the group's "specialist companies". As I mentioned above, we will present our own products such as "Edge" (senior strategic consulting outside of communications) and "Solutions" (technical and digital products such as AI, account based marketing (ABM) and others). This will allow us to add another gear with 150 well-coordinated and committed employees. We are making the journey without taking on additional costs or creating new structures. The superstructure needed to create a common offering has been made possible in collaboration with all the group's companies. It has proven itself and is now ready to strengthen the group and the common customer offering.

Anders Wallqvist, CEO
Gothenburg in February 2025

This information is information that Thinc Collective AB is required to disclose pursuant to the EU Market Abuse Regulation (EU No 596/2014). The information was submitted, through the agency of the specified contact person, for publication on 2025-02-27 08:30 CET.