Better Collective CEO: We will use “attractive and important” M&A to hit 2027 targets
Jesper Søgaard says future in Brazil and US remains bright despite current headwinds, with inorganic growth still an option for the business
Better Collective CEO Jesper Søgaard has said the affiliate will continue to sanction M&A over the coming years as it prepares to meet its unchanged 2027 guidance following a streamlining of operations.
The Danish affiliate confirmed more than 300 employees, equating to over 15% of its workforce, were made redundant as part of a restructuring, which saw the firm lower its full-year 2024 guidance.
The confirmation of the number of staff impacted came in Better Collective’s Q3 earnings report, as the firm posted an 8% year-on-year (YoY) rise in revenue to €81.2m (£67.5m).
The headcount reduction and adjusted guidance came amid a slowdown in activity in both the US and Brazil markets.
Søgaard’s commentary attached to the earnings report also noted that the redundancies came “against the backdrop of 35 acquisitions” as he explained the “complexity” of the business meant it was “essential to find efficiencies”.
However, the Better Collective boss said further inorganic growth was not off the table as the affiliate retained its 2027 targets.
The long-term targets are for a revenue CAGR of more than 20%, with EBITDA margin to land between 35% and 40% and net debt to EBITDA ratio to be below 3x.
The earnings report stated: “The long-term targets include M&A funded by own cash flow and debt and not capital increases. After the changes to the short-term 2024 guidance and uncertainties relating to selected markets, the targets remain intact.”
Speaking on the analyst call following the release of the report, Søgaard added further colour to the plans to use M&A and said the US still represented a positive opportunity.
Revenue from North America slipped 12% YoY for the quarter, down to €8.9m, with organic growth falling 24%.
And on M&A, Better Collective confirmed it had parted with $7m to snap up an unnamed “smaller social media asset” in North America during the quarter.
Better Collective is also sitting on around €145m derived from a new share offering which it has earmarked to fund acquisitions.
Søgaard said: “We still see the same kind of long-term potential for these markets. Obviously, with the headwinds we are experiencing in the US right now, it’s of course not making things easier, but we believe long term that this market will present a great opportunity for us.
“On M&A, when we look historically at the development of Better Collective, M&A has been completely instrumental to the position we have in this market and also a big part of the growth we have achieved, and nothing has changed there.
“For the long-term targets, we definitely believe that we will be executing attractive and important M&A for the company leading up to the 2027 [financial] year.”
Better Collective shares are up almost 3%, at the time of writing, with the earnings report having been released post-market close yesterday.