Preliminary Q3 2023 financial results and revised expectations for 2023

Company announcement no. 26/2023
24 November 2023

 This announcement contains inside information

The Board of Directors for Wirtek A/S has reviewed the preliminary and non-audited financial results for Q3 2023. During Q3 2023 revenue was DKK 17.5m and EBITDA was DKK 1,2m. For the period Q1-Q3 2023 revenue was DKK 52.9m (up 10% from Q1-Q3 2022) and EBITDA was DKK 4.8m (down 24% from Q1-Q3 2022).

Revised expectations for 2023

Based on these financial results and an updated prognosis for the fiscal year 2023, the Board of Directors revises the 2023 expectations as follows:

• Revenue is expected in the range DKK 70.0m – 72.0m, down from previously announced DKK 73.0m – 78.0m.
• EBITDA is expected in the range DKK 6.0m – 7.0m, in the lower end of the previously communicated range DKK 6.0m – 9.0m.

We have seen an inflow of new orders from both existing and new clients, having full revenue effect from 2024, which makes us confident about an increasing activity level in 2024. That said, the market condition in Q3 2023 has been challenging for a few of our clients, which is why we must revise our expectations for 2023.

We have experienced revenue growth in our Wireless Communication & Automation business unit in line with expectations and strong revenue growth in our Energy business unit. However, the performance of our remaining three business units Digitalization, Trade & E-commerce, and Workforce & Facility Management has been lower than expected, with a few clients having to reduce their business with Wirtek. Our Workforce & Facility Management business unit was particularly negatively impacted by the extraordinary situation of the financial collapse of one of our clients, reducing full-year revenue expectations for this business unit as well as realising a financial loss on the client. The full impact of this loss is included in the Q3 2023 financial results.  

Foundation for profitable growth remains intact

When Wirtek gains a new client, the client partnership almost always continues for many years, often with growing revenue streams year after year. Consequently, Wirtek has a very robust revenue base, with approx. 80% of the expected revenue in place at the beginning of a new fiscal year. This provides a strong foundation for revenue growth, as Wirtek does not have to resell all or most of the revenue each year. Even though the market condition is expected to remain challenging, Wirtek expects a FY2024 revenue base of approx. DKK 70m to be in place beginning of 2024.

Maintaining our Accelerate25XL strategic goals

In our Q2 2023 financial report we presented a halfway status on our 5-year Accelerate25XL strategy. We are on track to reach our two major financial goals, targeting revenue of DKK 130m and EBITDA of DKK 18m in 2025.

We continue to expect double-digit organic revenue growth in both 2024 and 2025 based on our sales pipeline and our ongoing sales efforts.

Additionally, Wirtek also has a growing pipeline of potential acquisition targets, and we anticipate completing at least one acquisition in the strategy period as part of accelerating the revenue growth and reaching our 2025 revenue target of DKK 130m.

After significant investments in transforming the organisation of Wirtek to continue supporting high growth as well as managing cost pressure due to high inflation rate, focus in 2024 and 2025 will be on operational efficiency. Wirtek is now geared to grow the revenue-generating part of the business without significant increases in overhead costs, enabling us to reach the 2025 EBITDA target of DKK 18m.

Thus, Wirtek maintains the financial and operational goals from our Accelerate25XL strategy.

Wirtek will, as planned, publish the Q3 2023 interim report on 8 November.

Further information

• Michael Aaen, CEO, Wirtek A/S, Phone: +45 2529 7575, E-mail: ir@wirtek.com
  Niels Jernes Vej 10, 9220 Aalborg Ø, www.wirtek.com
• Kent Mousten Sørensen, Chairman, Wirtek A/S, Phone: +45 2125 9001
• Per Vestergaard, Certified Advisor, CDI Global, Phone: +45 2176 4317

About Wirtek

Wirtek A/S is a Danish IT consultancy company that provides software development, testing, and consultancy services to help clients worldwide. With a team of more than 200 talented professionals, Wirtek specializes in Digitalization, Energy, Workforce & Facility Management, Wireless Communication & Automation, and Trade & E-commerce.

At Wirtek, we prioritize building long-term client relationships, with some lasting over a decade. We believe that quality partnerships are just as important as software quality in achieving our client's goals. Established in 2001, we have offices in Denmark and Romania and have been listed on Nasdaq First North Copenhagen since 2006. 

Ticker Code: WIRTEK (DK0060040913)