SNP Schneider Neureither & Partner SE Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Lukas Spang - Tigris Capital GmbH - Analyst : Yes, good afternoon, gentlemen. I would do my questions one by one. Let's start with the revenue guidance. And I think we had the same discussion one year ago when we discussed, let's say, the conversion from order entry into revenue for the next year. If we take the EUR310 million in order entry and compare it to your guidance of EUR270 million to EUR280 million for 2025, there seems to be some room. So is it like in the last year that you maybe start a little bit cautious concerning your revenue guidance and see how the year will develop? Or is there, let's say, a bigger portion in your order entry and order book compared to last year for the years after 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 1:00PM, SHFG.DE - Q4 2024 SNP Schneider Neureither & Partner SE Earnings Call Jens Amail - SNP Schneider Neureither & Partner SE - Chief Executive Officer, Managing Director, Member of the Executive Board Yeah, I think, Lukas -- Jens speaking here. It's a little bit the same situation as in the last couple of years that we want to be conservative. But on the other side, also looking at the macroeconomics right now, I believe there may be more reasons to be conservative this year versus last year. So there are no red flags in terms of the backlog structure. But I believe, first, it's always prudent to be a little bit more conservative. And second, when you look around the world, I believe there are quite a few reasons why it makes even more sense this year this year to be conservative.

Question: Lukas Spang - Tigris Capital GmbH - Analyst : Okay. Then coming from top line to bottom line, if we take your bridge and put the EUR3.4 million of negative effect on the EBIT, we already result in EUR32 million of EBIT, adjusted for these one-offs in 2024. So it's already the midpoint of the new guidance. And now we can say, okay, you made a big jump in 2024 on the margin side. But I think on the other hand, your ambition is not to make a decline in margin because if we take the adjusted EBIT of EUR32 million, we would result in 12.6% EBIT margin. And now the new midpoint is 11.6%, so 100 basis points lower. So why should we assume a margin decline in 2025 based on your EBIT guidance? Andreas Roederer - SNP Schneider Neureither & Partner SE - Chief Financial Officer, Managing Director, Member of the Executive Board It's Andreas speaking. Lukas. I think your calculation is, from a theoretical point of view, fully correct. But you need to keep in mind that we are a growing company, and we also need to do certain investments.

Question: Lukas Spang - Tigris Capital GmbH - Analyst : And then lastly on the pipeline -- on the current pipeline, can you share a little bit how is it developing? How is the customer behavior? Maybe also a little bit different concerning the countries and regions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 1:00PM, SHFG.DE - Q4 2024 SNP Schneider Neureither & Partner SE Earnings Call Jens Amail - SNP Schneider Neureither & Partner SE - Chief Executive Officer, Managing Director, Member of the Executive Board So also here, no structural or systemic changes compared to the last two years. We are happy with the pipeline. We see the multiples developing as they did in the last two years. What we do like, what you see also when you think back to the slides with the deal bands, that we see more run rate business from existing customers. What we do like and what is encouraging that once a customer has bought from us, we -- I don't want to say have a customer for life. That's of course the ambition. But the likelihood that they buy again from us is very high. So this is a very healthy base from my perspective on which we can build.

Question: Lukas Spang - Tigris Capital GmbH - Analyst : And last, maybe a quick follow up on that. Regarding the seasonality, do you expect any seasonality for the order entry or rather similar than in the past? Jens Amail - SNP Schneider Neureither & Partner SE - Chief Executive Officer, Managing Director, Member of the Executive Board As in the past, everything as in the past. And that's -- Lukas, sorry for the boring answers, but that's what we are aiming for. And we're working so hard that we have predictable, balanced business throughout the years. But again, we expect that the linearity and the seasonality, quarter by quarter, develops as in the past couple of years.

Question: Wolfgang Specht - Berenberg, Gossler & Co. KG - Analyst : Yes, hello. Good afternoon. Some follow ups on the ones from Lukas. Probably first on the one-offs, is the delta between the payment received from the widow of Mr. Schneider-Neureither and the total of minus EUR3.4 million is around EUR7 million? Is this purely impairment on receivables, or are there any other larger amounts that are worth mentioning? That would be the first one. Jens Amail - SNP Schneider Neureither & Partner SE - Chief Executive Officer, Managing Director, Member of the Executive Board Yeah, so we still had to deal with channel staffing issues out of the past where we had partner deals with no end customer, and we now fixed all of them. We were hoping to be able to resolve a few of them, but it was not possible. So here we have around EUR3.8 million. And then we have another portion where we basically needed to do an adjustment for the purchase price obligation to EXA and then we have EUR500,000 other.

Question: Wolfgang Specht - Berenberg, Gossler & Co. KG - Analyst : Okay, you see no risk for devaluation of the margins you're making with the partners? Jens Amail - SNP Schneider Neureither & Partner SE - Chief Executive Officer, Managing Director, Member of the Executive Board No, the opportunity is on the Software side, so the relative will improve. So if we can scale our Software through partners, the relative profitability will go up. The Software ratio go up. Still, we also have a very clear plan to increase the headcount on the Services side. We will grow our Services business. We will make it more profitable. But it's part of our strategy, Mr. Specht, that the partners take on more and more service delivery work for our joint customers.

Question: Wolfgang Specht - Berenberg, Gossler & Co. KG - Analyst : Thanks a lot.