Zalaris ASA · OSL:ZAL
Zalaris ASA — Q2 2021 Earnings Presentation
26 slides from Zalaris ASA's earnings presentation, Aug 26, 2021
Slide 1: Presentation of interim financial results | Q2 2021
Presentation of interim financial results | Q2 2021 26 August 2021
Slide 2: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 2
Slide 3: Second quarter 2021: Continuing the significant ARR build-up
Highlights Q2 Presentation 2021 Second quarter 2021: Continuing the significant ARR build-up • Revenue of NOK 185.4 million for Q2 • Adjusted EBIT of NOK 11.4 million • New BPO contracts awarded year-to-date with expected ARR of NOK 71 million • Completed the acquisition of ba.se GmbH providing a pl
Slide 4: Revenue for the quarter negatively impacted by currency changes and sold projects in ramp-up
Highlights Q2 Presentation 2021 Revenue for the quarter negatively impacted by currency changes and sold projects in ramp-up phase not recognizing revenue Revenue Adj. EBIT* Adj. EBIT margin #FTEs* NOK 185m (-6.5%) NOK 11.4m (-10.2%) 6.2% (-0.2pp) 714 (-1.2%) 825 198.4 187.5 185.4 723 714 6,4% 12.7
Slide 5: Payroll & HR Solutions that Enable Fully Digital Organizations
Highlights Q2 Presentation 2021 Payroll & HR Solutions that Enable Fully Digital Organizations Zalaris – Local presence with one global IT platform • Zalaris is a leading European provider of Payroll and Human Capital Management Solutions delivered through Software as a Service, Outsourcing, or Cons
Slide 6: Diversified customer base with Germany largest market facing unit
Highlights Q2 Presentation 2021 Diversified customer base with Germany largest market facing unit Diversified across industries and sectors Revenue per country Q2 2021 (%) Health UK Other Industry Retail Poland Not for profit 4,9% organizations 6,9% 1,8% Germany and Public Finland Bank & sector Insu
Slide 7: Acquisition of ba.se service & consulting GmbH completed - platform for further growth
Q2 Presentation 2021 Acquisition of ba.se service & consulting GmbH completed - platform for further growth in Germany and Central Europe • Leading provider of payroll and HR services within the German retail sector • Considerable customer base in Germany, Austria, Switzerland and France, including
Slide 8: Managed Services with all time high new signings currently in the implementation phase
Highlights Q2 Presentation 2021 Managed Services with all time high new signings currently in the implementation phase with no revenue recognized Revenue EBIT NOK 125.8m (-8.2%) NOK 16.1m (+NOK 0.1m) ▪ Lower revenue mainly due to currency movements 16.1 (-NOK 5.4m) and some lower volume of travel *
Slide 9: Continued strong development in new signings and pipeline
Highlights Q2 Presentation 2021 Continued strong development in new signings and pipeline • Several new BPO contracts and extensions signed during Q2 and recent weeks • Platform based deals utilizing 5-year expanded agreement with 5-year agreement with Nordic Felleskjøpet for delivery of cloud- insu
Slide 10: Significant ARR build-up YTD in MS
Q2 Presentation 2021 Significant ARR build-up YTD in MS Expected ARR in MS (NOKm) • High sales activity within Managed Services, resulting in 60 a continued build-up of future ARR through several new 68 BPO agreements and extensions during the second 17 quarter 550 490 439 • Total new BPO contracts
Slide 11: Professional services delivered revenue in line with the same quarter last year
Highlights Q2 Presentation 2021 Professional services delivered revenue in line with the same quarter last year when adjusted for currency movements Revenue EBIT NOK 59.6m (-2.8%) NOK 3.6m (-NOK 0.5m) 65.1 * ▪ Most of the variance in revenue vs. Q2’20 59.6 (NOK 5.3m) due to currency movements 56.1 ▪
Slide 12: Majority of Professional Services revenue is recurring
Highlights Q2 Presentation 2021 Majority of Professional Services revenue is recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue • ~51 % of Professional Services revenue is recurring, or recurring like, and based Projects 38% 44% 46% 45
Slide 13: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 13
Slide 14: Currency related reduction in revenue YoY
Financial Review Q2 Presentation 2021 Currency related reduction in revenue YoY Revenue Adj. EBIT* Adj. EBIT margin NOK 185m (-6.5%) NOK 11.4m (-10.2%) 6.2% (-0.2pp) 198.4 187.5 • Lower revenue for the quarter vs. last 185.4 year, mainly due to currency 6,4% 12.7 6,2% movements (-NOK 10.7m) 11.4 • S
Slide 15: Marginally lower EBIT YoY – margins expected to improve with scale
Financial Review Q2 Presentation 2021 Marginally lower EBIT YoY – margins expected to improve with scale Adj. EBIT (NOKm) and margin (%), quarterly Adj. EBIT (NOKm) and margin (%), LTM • EBIT and EBIT margin approx. in line with last year when adj. for currency 7,8% 7,0% 7,1% 7,1% effects (~NOK 1m)
Slide 16: Significant investment in future revenue through transformation projects for new BPO contracts
Q2 Presentation 2021 Significant investment in future revenue through transformation projects for new BPO contracts Employee hours capitalised, Employee hours capitalised, LTM quarterly (NOKm) (NOKm) • Significant potential revenue generating capacity utilised on implementing new BPO contracts, whic
Slide 17: Condensed Profit and Loss
Financial Review Q2 Presentation 2021 Condensed Profit and Loss 2021 2020 2021 2020 2020 • Lower personnel expenses, as (NOK 1 000) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec more personnel are utilized on 185 415 198 445 378 194 399 056 792 326 customer implementation projects Revenue 16 188 16 237 31
Slide 18: Equity issue providing strong cash balance for further expansion
Financial Review Q2 Presentation 2021 Equity issue providing strong cash balance for further expansion NOK million 212,0 -0,1 8,2 • Cash balance at 30 June of NOK 212m following NOK 120.7m private placement 115,9 • Operating cash flow for the quarter 117,6 includes NOK 7m in cash settlement -3,4 -4,
Slide 19: Condensed Balance Sheet
Financial Review Q2 Presentation 2021 Condensed Balance Sheet 2021 2020 2020 • Cash and cash equivalents of NOK (NOK 1 000) 30. Jun 30. Jun 31. Dec 212m 343 992 372 205 358 008 Fixed and intangible assets • Equity issue of NOK 120.7m at NOK Trade accounts receivable 145 174 138 118 148 651 60 per sh
Slide 20: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 20
Slide 21: Roadmap to >10% EBIT with Q2 as basis
Q2 Presentation 2021 With Q2 as basis - implementing contracted net revenue growth and ba.se are key drivers in our roadmap to >10% EBIT Managed Services • Addition of net revenue of NOK 111 mill (ACV* of ba.se + full effect of H1 net signings with incremental margin) • Implement Zalaris 4.0 and fin
Slide 22: Four structured processes resulted in the signing of ba.se GmbH
Q2 Presentation 2021 Through Q2 and H1 we have been involved in four structured processes that resulted in the signing of ba.se GmbH High 1 1 • Companies with portfolio of long-term • Companies located in new European countries or own HR payroll contracts within Zalaris’ target size Tech that can st
Slide 23: With funding secured through NOK 120 mill issue we seek inorganic growth
Q2 Presentation 2021 With funding successfully secured through NOK 120 mill issue - we actively seek inorganic growth opportunities • Target pure play HR BPO and combinations of HR Tech and HR BPO in existing and new geographies • Capacity to finance acquisitions with existing cash/balance sheet • L
Slide 24: Journey to become the leading European provider of Payroll and HR services
Summary Q2 Presentation 2021 We continue our journey to become the leading European provider of Payroll and HR services • Creating more Net Promoting Customers - and Employees • Realizing our roadmap to EBIT >10% through adding volume, implementing Zalaris 4.0, automation and improve Professional Se
Slide 25: Agenda
Agenda 1. Highlights 2. Financials 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 25
Slide 26: Thank you!
“ We simplify HR and payroll administration, and empower you with useful information so that you can invest more in people. Hans-Petter Mellerud, CEO & Founder Thank you! Gunnar.Manum@zalaris.com Hans-Petter.Mellerud@zalaris.com Zalaris ASA | +47 4000 3300 | www.zalaris.com