Siili Solutions (SIILI) CMD 2024 summary

Strategic direction and market positioning

• Focused on leveraging AI to drive client transformation and deliver investor value, with a strategy built on a solid foundation and a proven track record of over 20% annual growth since 2010 and 21% CAGR in revenue since 2016.

• International expansion is a key growth driver, with over 30% annual growth internationally, 28% of revenue from outside Finland, and a focus on the UK and Germany for faster market growth.

• Differentiation comes from industry focus, embedding AI at the core of services, and offering a full spectrum of digital transformation solutions.

• ESG and responsible AI are integral, with significant indirect sustainability impact through client solutions.

• Recent acquisition of Integrations Group strengthens capabilities in system integration, supporting both organic and inorganic growth.

Evolving business model and AI strategy

• Strategic shift to become the preferred AI partner, aiming to lead clients through their AI journeys and become an AI transformation leader.

• Data and AI now represent a significant and growing business segment, with 10% of consultants focused on these areas and concrete KPIs for Data & AI growth.

• Three-pronged client offering: AI advisory, AI-powered development, and AI transformation support, covering the full journey from strategy to implementation.

• New revenue models are being introduced, shifting from time-based to value-based and recurring models, including fixed-fee advisory and AI agent solutions.

• AI is used internally to improve software development speed (up to 37.5% faster) and code quality (improved by 40%).

Financial targets and operational efficiency

• Ambitious long-term targets: 20% annual revenue growth and 12% adjusted EBITDA/EBITA margin by 2028, with a focus on operational efficiency and capacity management.

• Dividend policy remains at 30%-70% of net result, with a net debt/EBITDA target below 2.

• Q3 2024 interim results show revenue decline (-9%) and adj. EBITA at 5.4%, reflecting market headwinds but ongoing efficiency actions.

• Operational model enhancements include new leadership structures, data-driven decision-making, and proactive talent management.

• Nearshore delivery in Poland and Hungary provides cost advantages and scalability.