Trifork Group (TRIFOR) Q3 2024 earnings summary

Executive summary

• Revenue for 2024 is expected to be flat or slightly down compared to 2023, breaking a long-standing growth trend and disappointing management expectations.

• EBITDA and EBIT are both anticipated to be around EUR 10 million lower than 2023, with adjusted EBITDA guidance for 2024 at EUR 25–27m and EBIT at EUR 8–10m.

• Major cost-saving initiatives have been launched, including a 10% reduction in top management salaries, no bonuses, and workforce reductions, targeting EUR 10 million in annual savings.

• The company has compensated for lost revenue from major customers by onboarding new clients and expanding its pipeline, with strong growth in the US and public sector Denmark.

• Guidance for 2024 was downgraded due to continued delays, weak private sector demand, and a challenging business climate.

Financial highlights

• Q3 2024 revenue was EUR 47.1m, a 1.8% year-over-year decline, with organic revenue down 1.9% and inorganic growth of 2.6%.

• Margins decreased, with adjusted EBITDA margin at 11.3% in Q3 and 10.9% for 9M/2024, down from 14.3% in 9M/2023.

• EBIT margin for Q3 2024 was 2.4%, and for 9M/2024 was 3.0%, both down significantly year-over-year.

• Net interest-bearing debt stood at EUR 49.7m, with a leverage ratio of 1.8x NIBD/adj. EBITDA.

• Free cash flow for 9M/2024 was EUR 4.2m, down from EUR 16.5m in 9M/2023.

Outlook and guidance

• 2024 revenue guidance is EUR 205–208m, representing -1.4% to 0.0% total growth, with adjusted EBITDA guidance of EUR 25–27m and EBIT of EUR 8–10m.

• EUR 10 million in annual cost savings are targeted, with the full EBITDA effect expected in 2025.

• Management is confident in a Q4 rebound due to a strong pipeline, especially in the US and public sector Denmark.

• Mid-term targets (2026): 15–25% annual growth, 10–15% organic growth, and 16–20% adjusted EBITDA margin.