2022 proved to be a challenging year for most of the world – including Trifork. Therefore I am very grateful for the collaboration with our customers, partners, and investors. I would also like to show the deepest appreciation and gratitude to our more than thousand colleagues around the world.
After most of the Covid lockdown restrictions were lifted in the beginning of the year, we could begin to have in person workshops and conferences again. The networking and social aspects of people gathering cannot be overestimated. However, we do not believe the world will ever be quite the same again. We see that in a recession, companies tend to cut training and conference budgets. So we now make our events smaller than before Covid and we plan to increase the number of events rather than the size of them.
We managed to host events for 6,800 at- tendees in total and in November 2022 we acquired the YOW! conferences with new activities in Australia. Our largest YouTube channel GOTO totalled 40 million views at the end of the year. All of this provides a good starting point for our Inspire business in 2023.
Another positive change is that it has gener- ally become more accepted to work remotely when developing solutions for our customers. Most of our customers have now learned and adapted to the fact that we can deliver great quality software from remote locations.
The tragic invasion of Ukraine challenged the world. The economic and political environ- ment is still impacted by the resulting global instability. In the period after the outbreak of the war, some customers were only able to plan and act on a short-term basis and had to delay tasks with short notice because of logistical challenges, or cancel tasks due to lack of fi- nancing. This made it difficult for us to plan and optimize the use of our resources, and it had a negative impact on our profit margins in the Trifork segment.
On the macroeconomic level we still see and expect global instability with high inflation and interest rates in 2023. I believe that our flat agile organization with now 66 business units have coped very well with adopting to this changing environment.
This, I believe, is why we have managed to maintain a high organic growth in 2022 and, once again, been able to increase both revenue and profit. In 2022, we reached EURm 184.9 in revenue, equal to 16.7% growth compared to 2021. Adjusting for the deconsolidation of Dawn Health, total growth was 20.0% (19.0% organic). Since 2007, where we started reporting according to IFRS, our revenue CAGR has been 24%, and we remain comfort- able with maintaining our mid-term target of 15-25% annual revenue growth. Overall, in 2022 we saw the highest growth in the Digital Health and Cyber Protection business areas.
Despite the above-mentioned challenges, adjusted EBITDA in the Trifork segment reached a new record of EURm 31.9 in 2022. This equals a margin of 17.3% which we deem acceptable when considering our non-capi- talized investments in new operation centers and in Cyber Protection solutions.
Our total sick leave in 2022 was 2.7% (compared to 3.0% in the first six months). Isolated in the second half of 2022 sick leave was 2.3%, which is close to the normal level. At the end of 2022, we had 1,062 colleagues, compared to 950 at the end of 2021.
The employee LTM churn rate at the end of 2022 was 15.4% compared to 15.6% in 2021.
We continue our strong focus on innovating new solutions within Digital Health. In 2022, we grew this business area by 66%. We started the development of a new and modern eHealth platform in the Swiss market together with our customer
Compassana. This is very promising and we look forward to bringing the first versions of the new platform to the market with Compassana and their partners during 2023.
Trifork continues to pursue an active investment strategy. In December 2022, we acquired 60% of the Swiss IT company IBE. IBE has for many years worked within the area of educational measurement and methods of item response theory. This has been used as a foundation for the development of computer-based adaptive testing and learning, which is aligned with Trifork’s strategy to digitalize education and improve user experiences for all users. IBE is based in Zürich and has 15 employees.
Trifork has for several years been an active partner in the development of IBE’s software. By combining Trifork’s ecosystem of technological competencies with IBE’s talented team and solid reputation in digital assessment and learning, the acquisition is expected to strengthen the position for both companies in the Swiss market. IBE will be consolidated in the Trifork Group from January 2023.
In Trifork Labs, we primarily spent 2022 focusing on supporting our existing investments and scouting for new strategic partnerships.
Overall we see a lot of organic growth opportunities for Trifork. These include:
- Enterprise Mobility adoption
Within this area, we currently see a very low adoption and, at the same time, enterprises until now have only been using a small fraction of the capabilities in mobile devices. We can bring a fast ROI to our customers, especially in our Smart Enterprise business area, by saving resources and improving functionality, usability, and quality of solutions. Both increased adoption and intelligent use of mobile capabilities will drive growth.
- Innovation needs in Healthcare
The healthcare sector in most countries is constantly challenged with higher demands for quality, increased costs, and shortage of labor. Our solutions focus on intuitive user experiences and optimized backend systems which ease the workflow between staff and towards patients. They also provide decision support to doctors with the help of AI which leads to improved patient safety.
- Sustainability movement
The building industry’s productivity per CO2 emission has not improved over the last 25 years. This has to change. In addition, the industry needs to reduce the amount of resources used in the daily operations of buildings. We believe there is a huge potential for improvement by focusing on upcycling, building smarter, and digitalizing buildings. We are developing our own Smart Buildings and we are now ready to deliver such solutions to both existing and new customers. We are receiving great inbound interest for this concept from architects, construction companies, and real estate investors.
- Increased Cyber Protection demand Through 2022, we saw an increasing demand for our security solutions. Digital solutions have become business critical for all organizations and meanwhile cyber crime, geopolitical tensions, and international terrorism has been on the rise. We believe this demand trend will continue in 2023 and we are doing all we can to grow our organization and solutions within Cyber Protection to be able to support our customers.
Combining these growth drivers with our decen- tralized and agile organizational model means that we expect to grow our business in the com- ing year despite an uncertain economic outlook.
In 2023, Trifork targets total revenue of EURm 205-215 equal to a growth between 11-16%, Trifork Segment adj. EBITDA of EURm 34-37 and Trifork Group EBIT of EURm 20-23.
Trifork had a net debt to adjusted EBITDA leverage of -0.1 at the end of 2022. In 2023, we will continue to pursue our M&A strategy and also buy out of non-controlling interests. No effect from potential new acquisitions is included in the current guidance for 2023.
Read the full annual report here