IM Cannabis (US:IMCC)2025-03-31 16:40Financial Data and Key Metrics Changes - The company reported a total revenue of $54 million for 2024, an increase of $5.2 million or 11% compared to $48.8 million in 2023 [25] - Adjusted EBITDA in Q4 2024 was a profit of $0.5 million, a significant improvement of almost $5 million from a loss of $4.3 million in Q4 2023 [13][35] - The net loss for 2024 was $11.8 million compared to $10.2 million in 2023, while the net loss in Q4 2024 was $1.2 million compared to $3.5 million in Q4 2023 [35][36] Business Line Data and Key Metrics Changes - Sales in Germany increased by over 183% in 2024, reaching $15.5 million, with Germany accounting for 40% of total revenue in the second half of 2024 compared to 11% in all of 2023 [15][25] - In Israel, revenue decreased by $4.8 million net, primarily due to the cancellation of the Oranim deal, which resulted in a revenue decrease of approximately $8.5 million compared to 2023 [25][27] - Excluding the Oranim revenue in 2023, there was a 12% increase in revenue in Israel, amounting to approximately $3.7 million [25] Market Data and Key Metrics Changes - The German market has shown extraordinary growth since the partial legalization in April 2024, with a significant increase in sales velocity [8][15] - The company imported 11 new strains in Germany in the second half of 2024, contributing to an expected sales increase of about 14% [12] - The Israeli market is expected to remain stable with no significant growth anticipated unless regulatory changes occur [57] Company Strategy and Development Direction - The company focused on full integration and active cost management to drive efficiencies, reducing overall operating expenses by 17% to $18.7 million in 2024 [11] - A strong supply chain is being built to support growth in Germany for 2025, with a strategic shift towards external growth while maintaining operational efficiency [20][39] - The company aims to leverage its integrated supply chain to achieve the best sales quarter in Germany in Q1 2025 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory in Germany, despite some delays in Q4 2024, with Q1 2025 expected to show strong performance [46] - The competitive landscape in Germany is dynamic, with ongoing price compression anticipated, but management does not foresee a significant decline in margins [50][52] - The Israeli market is viewed as stable, with a focus on growth primarily in Germany [57] Other Important Information - The company has reduced its total operating expenses significantly, achieving a 42% decrease in Q4 2024 compared to Q4 2023 [34] - The company plans to finance its operations through existing and future working capital resources and available credit facilities [39] Q&A Session Summary Question: What dynamics slowed growth in Germany in Q4? - Management indicated that Q4 saw some delays but expects a strong Q1 2025, attributing the slowdown to the ongoing process of building a stable supply chain [46] Question: How is the competitive dynamic in Germany changing? - Management noted that the German market is very dynamic with ongoing competition, but they do not foresee significant changes among leading competitors [49] Question: What is the outlook for margins given price compression? - Management believes margins will not decline significantly and may even improve, despite the price compression in the market [52][54] Question: How is the Israeli market expected to evolve? - Management does not foresee significant growth in the Israeli market, expecting it to remain stable unless regulatory changes occur [57]