About Søren Knudsen
In interviews covering Columbus’s 2024 full-year and quarterly results, CEO Søren Krogh Knudsen has described the company’s performance as being driven by its largest ERP business lines, which he said benefit from long planning horizons and large corporate customers who continue projects despite market concerns. He noted that the company saw a slowdown in its M3 division beginning in Q2 2024, with other units performing strongly through the first half, while overall organic growth reached 7% for the full year, slightly below guidance. Knudsen stated that the company is in a defined strategy process that could lead to outcomes including consolidation or a sale, but declined to elaborate beyond saying the process is following a stage-gate plan.
Knudsen has attributed margin improvements to better contribution margins, higher hourly rates, improved project quality, and more efficient use of subcontractors, rather than cost-cutting, which he said he prefers to avoid in favor of growth. He has pointed to a pickup in the pipeline in Sweden’s digital commerce unit as a positive indicator, but cautioned that macroeconomic and geopolitical uncertainties remain challenging and have informed the company’s expectations. Despite headwinds in utilization and isolated weakness in security and e-commerce, Knudsen expressed confidence in the company’s ability to continue optimizing project contributions and strengthening its junior resource layers.
Source: AI-verified profile updated from Søren Knudsen's recent appearances.
Browse all interviews →
Transcript (11 segments)
I
Interviewer0:00
I'm here with Søren Knudsen, CEO of Columbus. You just released your Q3 24 figures this morning: 8% growth, kept your guidance. Actually quite good, if we look at the Nordic IT sector, to be able to deliver that. Can you tell me about what is driving that? Because if I look at it, it looks like a little bit of a different composition on what was driving your strong momentum in the first half.
S
Søren Knudsen0:19
Yeah, some things remain the same and some things are a little bit new. I would say in terms of a geographical split, we still continue to see some of the same themes developing. We have a very strong performance in Denmark and the UK, and we are slightly more challenged in Sweden and Norway. That remains, although we actually do start to see some positive signs of a market recovery, particularly in Sweden, which will be interesting to follow in Q4 and Q1 next year. Some of the new things that have developed relate to our efficiency – the measure we use to say how much of our time is customer-facing. Since 2021 we had continuous improvement, but that stopped in Q1 2024. We went a little bit backwards in Q1 and Q2, but we've now stabilized and are on par with Q3 last year. I'm expecting us to improve further in Q4. That's the new thing for me in Q3 compared to Q2. I also saw that the data and AI segment was one of the high growers, though a bit down after a strong period. The data and AI segment, companies are starting to...
I
Interviewer1:49
Adopt AI, and is this a precursor for bigger projects? I guess data analysis is a segment where you might be analyzing and trying to figure out how you could help companies, and then maybe bigger projects later, or is that correct?
S
Søren Knudsen2:04
Yeah, so they're doing well. We added some new leadership, and the new leadership team is performing well. It consists of different parts – more old school automation and business intelligence, as well as new elements of generative AI. The interesting thing is to see the role we play when big software partners like Microsoft and Infor release new functionality, but it still doesn't get adopted by itself. There's effort needed, and we are a big part of that effort. I expect that business unit to grow further.
I
Interviewer3:00
You just a little bit on the efficiency. The most important measure: how much can you send your employees out to build customers? That was actually a little bit flat. You're stabilizing it, but your margin went almost 200 basis points, 7.9% versus 6% last year. Are you seeing some of the levers or the measures you took in your new height strategy plan that is focused on that? Is that what you are starting to see?
S
Søren Knudsen3:28
Yeah, so some of the levers are definitely working. Despite the efficiency being flat, we've increased our ABA margin. That is from a better contribution margin – direct costs per project have decreased. Our hourly rates are improving by working with the right customers, industry verticals, project sizes. Quality has improved, reducing rework. Use of subcontractors has improved. Now we need to combine that with a true improvement in efficiency to see the full effect.
I
Interviewer4:37
You kept your guidance. You're well within it in your first nine months, but you kept your guidance. And it looks like a little bit of a tough market out there. Why are you so comfortable that you're not seeing anything in the end of year? And what are the drivers into end year?
S
Søren Knudsen4:55
I'm never comfortable, but what drives some level of comfortability is the continued performance of Denmark and the UK. What makes Q4 more exciting is that we see turnaround signs and increased activity level. However, it's a timing question – how much we can achieve in Q4 versus Q1. For big projects, there is a mobilization time from decision to full team, so it takes a while. The question is how much of that effect we see in Q4 and how much spills into Q1.
I
Interviewer6:27
So it's not that you are seeing the business climate suddenly getting better, or it is the same? Are you also talking about prolonged decision processes by clients? You sounded a bit optimistic last quarter about Sweden, but in this reporting you still talk about prolonged decision processes.
S
Søren Knudsen6:49
Yeah, we have to look at the data. The business climate is still like it has been, but we see more indicators. My primary barometer for Sweden is our digital commerce department. They are very exposed to the retail industry, which has been hardest hit but is also most susceptible to interest rate cuts. We see a definite pickup in our pipeline with early-stage activity. The more early-stage projects, the better the indicators for an upswing. The question remains whether we can convert some of this in Q4 or if it will pertain to Q1.
I
Interviewer8:33
Thank you, sir.
