• Net sales amounted to MSEK 93.8 (49.1), rendering a net sales growth of 91% (-39%)
• The FX adjusted net sales growth for the quarter was 93% (-42%)
• Software revenue amounted to MSEK 72.3 (26.2). The share of total sales reached 77% (53%)
• Adjusted EBIT amounted to MSEK 16.3 (-34.2)
• Adjusted EBIT margin of 17% (-70%)
• Cash flow from operating activities amounted to MSEK -17.8 (-18.5)
• Net income amounted to MSEK 11.1 (-34.2)
• Earnings per share before dilution amounted to SEK 0.32 (-1.01) and diluted to SEK 0.32 (-1.01)

A word from the CEO:

During the third quarter, we experienced a clear turning point in North America. Alongside a major operational contract for a previously project-funded product, we secured agreements to deliver our standard software to defence clients. Together, these contracts pave the way for future business opportunities in the region. At the same time, we began seeing the benefits of the organizational restructuring and operational efficiency measures initiated in Q2. Now, our focus remains on realizing returns from previous investments and aligning our organization toward profitable growth.

Market Overview
We have continued to reinforce our position in the military training and exercise market, with particularly positive developments in North America. In addition to a production contract with an initial value of approximately SEK 101 million over three years, plus an option for an additional SEK 100 million for two more years, we are seeing growing interest in our standardized software within the defence sector – an area previously dominated by bespoke solutions.

In APAC, the quarter was marked by delivery of previously sold projects and the pursuit of new business, including our participation in the Land Forces event in Melbourne. In EMEA, seasonal factors influenced the quarter, but interest at several market events confirmed that our defence offerings remain in demand across the UK, Continental Europe, and NATO. Although these markets remain focused on material investments over software, we are beginning to see this trend shift.

During the quarter, we also attended several major market events within the Resilience sector. While growth has been somewhat slower, we are seeing positive market trends and increased interest from organizations aiming to strengthen their preparedness and resilience. This interest is reflected in demand for both our services and software solutions.

Quarter Highlights
Net sales for the third quarter reached SEK 93.8 million, marking a 91% increase compared to the same period in 2023. Operating income totaled SEK 16.3 million, with a margin of 17%.

Our new operational structure has improved internal processes, laying the foundation for more efficient business management. OPEX decreased, both year-on-year and compared to previous quarters, thanks to completed optimization efforts. We expect these changes to yield positive effects in upcoming quarters. Although we saw continued negative cash flow during this quarter, we now believe that the trend has reversed, and we anticipate improvements moving forward.

Our North American operations saw substantial revenue growth compared to the same period last year, with increased interest in our standardized software for the defence sector, further strengthening our position in this critical market. Meanwhile, we continue building our Resilience presence in North America, where we are still in the early stages of establishment.

In APAC, revenue increased year-over-year, albeit from a low base, driven primarily by deliveries of previously sold projects. Since establishing a local presence in Australia in 2022, we have secured several key defence contracts, expanding our role with Army clients as well as with the Air Force and Joint Commands. These contracts position us as a central player in training and exercises in Australia and provide a strong foundation for continued growth in the region. However, we still expect individual quarters to reflect modest sales figures, given the market’s structure.

In EMEA, third-quarter revenue reached SEK 15.2 million, influenced by seasonally lower activity during the summer. We anticipate increased activity in the upcoming quarter.

In the Expert Services segment, revenue totaled SEK 12.5 million, in line with the previous year. Demand for our consulting services in resilience and readiness remains strong, and we see growing need for support in addressing raised readiness requirements in a increasingly uncertain world.

Looking Forward
With a turning point in North America behind us and steady progress among our other defence clients, we continue strengthening our position as a leading provider of training, exercise, and capability-building solutions in the global defence market. Our product offerings are already strong, and we have taken several promising steps to enhance our solutions with the latest AI and ML technologies, which are rapidly advancing.

Technology is improving quickly, and many players are striving to find their footing. Our strength lies in our already-deployed platform with several leading defence forces and our ability to operate in environments that require on-premises solutions without internet connectivity – a critical factor for deploying AI technology in sensitive applications. We are today in a nearly unmatched market position to advance further within the defence segment.

During 2024 we have undertaken extensive work to clarify and optimize the packaging of our Resilience products. With a clear aim to simplify purchasing and implementation for our clients, our goal in the fourth quarter is to drive growth through our improved product portfolio and strong client relationships.

After my first six months as CEO at 4C, I am starting to see the impact of our renewed focus on product sales, a more efficient operational structure, and our initiatives to strengthen our position in North America’s defence sector. Our global organization is fully engaged in this transformation, and I feel a strong drive for our continued development. Our task now is to stay on course and continue executing our focused strategy to deliver long-term value to our customers, employees, and shareholders.

Jonas Jonsson
CEO

Invitation to webinar for the presentation of 4C Strategies’ Interim report, January - September 2024:

4C Strategies' interim report for Q3 2024 will be published on Thursday, October 31, 2024, at 07:50 CET.

The same day at 09:30 CET, a presentation will be held where analysts, investors, media and other stakeholders are invited to participate. The presentation will be a webinar where 4C Strategies’ Jonas Jonsson (CEO) and Anders Nordgren (CFO) will comment on the published report and answer questions. The presentation will be in English.

Afterwards, the presentation material will be available on 4C Strategies’ website under 'Reports and Presentations'.

For participation at the presentation:
Sign up here