Exclusive Networks SA — H1 2022 Earnings Presentation
34 slides from Exclusive Networks SA's earnings presentation, Sep 14, 2022
Slide 1: H1-22 Earnings call
#WeAreExclusive H1-22 Earnings call
Slide 2: Disclaimer
Disclaimer #WeAreExclusive IMPORTANT: Please read the following before continuing. This document has been prepared by and is the responsibility of Exclusive Networks SA (the “Company”). It comprises information concerning the Company and its subsidiaries (together, the “Group”). What follows applies
Slide 3: H1-22 key messages
#WeAreExclusive Strong momentum with Gross Sales increasing by +33.8% y-o-y, and Adj. EBITA growing +39.3% year on year Continued outperformance vs. the market in all core segments thanks to EXN strategy and execution capabilities Very strong profitability with Adj. EBITA at 35.4% over Net Margin su
Slide 4: Jesper Trolle, CEO
#WeAreExclusive Jesper Trolle CEO
Slide 5: Growth drivers and incremental accelerators
#WeAreExclusive GROWTH DRIVERS INCREMENTAL ACCELERATORS 1 2 3 4 5 LEVERAGE UNDERLYING ADD NEW ENABLE NEW EXTEND PURSUE VALUE GROWTH OF EXISTING GEOGRAPHIES ON VENDORS ACROSS SERVICES ADD M&A BY ACQUIRING VENDORS IN CURRENT EXISTING VENDORS OUR FOOTPRINT OFFERING NEW OR UNDERWEIGHT GEOGRAPHIES GEOGRA
Slide 6: Cybersecurity serviceable addressable market and TAM
#WeAreExclusive >EUR2.5bn of additional SAM CYBER SECURITY GLOBAL TAM opportunity captured >$60B Upside from Expansion of SERVICEABLE existing vendors ADDRESSABLE MARKET Upside from >$40B Net new vendors Geographical expansion EXCLUSIVE’S “SWEET-SPOT” expansion2 Service Growth with current vendor po
Slide 7: Top tier cybersecurity segments growth in H1-22
#WeAreExclusive TOP TIER CYBERSECURITY SEGMENTS GROWTH IN H1-22 1 Market growth Exclusive Networks Growth 2 273% 58% 38% 51% 43% 31% 33% 25% 20% 18% 18% 11% 13% 12% IDENTITY VULNERABILITY ENDPOINT DATA WEB & EMAIL NETWORK DEVSECOPS ACCESS & SECURITY SECURITY SECURITY SECURITY SECURITY MANAGEMENT ANA
Slide 8: Fortinet geographical and services expansion with Exclusive Networks
#WeAreExclusive Fortinet geographical and services expansion with Exclusive Networks Geographical expansion and Fortinet revenue growth FTNT IPO Start of partnership Nov 2009 FTNT- E N Fortinet foundation ATC in North America 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 9: Evolution of Exclusive Networks business with Tenable
#WeAreExclusive H1-22 EVOLUTION OF EXCLUSIVE NETWORKS BUSINESS WITH TENABLE Gross sales, EURm Consolidation of the European market H2-21 Expansion into +116% UK/Ireland, Benelux, Italy, Spain, Portugal H1-21 and Germany Using our Networks Unlimited platform to Start of partnership with expand in Afr
Slide 10: X-OD platform partners, transactions and cloud sales
#WeAreExclusive NUMBER OF PARTNERS NUMBER OF TRANSACTIONS % OF CLOUD-BASED SALES ON OUR X-OD PLATFORM ON OUR X-OD PLATFORM +51%1/+2p.p. +363% +614% 27% 24% H1-21 H1-22 H1-21 H1-21 H1-21 H1-22 (1) Year over year growth of cloud-based business
Slide 11: Pierre Boccon-Liaudet, CFO
#WeAreExclusive Pierre Boccon-Liaudet CFO
Slide 12: Record scale, accelerating growth, increased profitability
#WeAreExclusive RECORD SCALE ACCELERATING GROWTH INCREASED PROFITABILITY €1.9 bn +33.8% €66.5m Gross Sales in H1-22 H1-22 reported Gross Sales vs H1-21 Adj. EBITA, up 39.3% y-o-y All-time high half-year sales +31.2% at constant currency Adj. EBITA over Net margin 35.4% STRONG CASH GENERATION HIGH VA
Slide 13: H1-22 gross sales and drivers of growth
#WeAreExclusive H1-22 GROSS SALES H1-22 DRIVERS OF GROWTH EURm Contribution to Gross Sales growth(2) +33.8% +33.8% +31.2% 1 947 14% 14% 1 455 72% H1-21 H1-22 Same vendors, Vendor expansion (3) M&A H1-22 same geographies Growth % Reported % Constant Currency (1) 1. Variation at constant currency is c
Slide 14: Gross sales breakdown by geography and deal size
#WeAreExclusive H1-22 Gross Sales Breakdown by Geography H1-22 Gross Sales Breakdown by Deal Size1 APAC (-2 Pts) Deals >€1m (+3 Pts) 11% 12% 21% Deals <€20k (-2 Pts) Americas (+1 Pts) Deals €500k-€1m 9% 10% 13% (+1 Pts) 9% 23% 8% 9% H1-21 H1-21 Inner pie Inner pie chart chart 31% 29% 78% 28% 31% Dea
Slide 15: Net Margin growth and Adj. EBITA
Continued acceleration of Net Margin growth Improved profitability of the business EURm 187.6 +29.0% 145.4 10.1% 10.0% +22.1% 9.6% 119.0 H1-20 H1-21 H1-22 35.4% Operational leverage fuels Adj. EBITA growth EURm 32.8% 66.5 31.3% +39.3% 47.7 Increasing Adj. EBITA margin +28.0% 37,3 H1-20 H1-21 H1-22 H
Slide 16: Positive jaws effect on operating expenses
Continued acceleration of Net Margin growth EURm +24.1% Positive Jaws effect as operating expenses increase +24.1% 121.4 at a lower pace than top line+33.8% driven by financial 5% discipline and operating leverage 97.8 21% 6% 18% Personnel costs Decreased below 75% of total operating costs 73% Highe
Slide 17: Results by region: EMEA, APAC, Americas
GROSS SALES REVENUE ADJ. EBITA(1) EURm EURm EURm +34.6% +34.9% +42.4% EMEA +35.1% +35.0% • Strong growth in all EMEA 1 528 countries with an increasing EMEA 1 131 1 162 861 70 share of large deals, particularly 49 in the UK and Germany 79% of H1-22 • Improved profitability thanks to a Gross Sales po
Slide 18: H1 2022 key figures
Change in € million H1 2021 H1 2022 Constant Reported Currency1 Gross sales 1,455.1 1,947.4 33.8% 31.2% Revenue 1,105.9 1,473.7 33.3% 31.0% Net Margin 145.4 187.6 29.0% % Gross Sales 10.0% 9.6% -0.4 pt Adj. EBITA 47.7 66.5 39.3% % Net Margin 32.8% 35.4% +2.6 pt Adj. Net Income 31.8 47.4 49.0% 1. Var
Slide 19: Net working capital
EURm Jun-21 Dec-21 Jun-22 Trade receivables 610 893 836 % of Gross Sales 21% 27% 22% Other receivables 62 63 59 Inventories 101 150 184 % of Gross Sales 4% 5% 5% Trade payables -548 -790 -860 % of Gross Sales -19% -24% -22% Other liabilities -134 -160 -166 Net Working Capital 91 155 53 % of Gross Sa
Slide 20: Operating free cash flow and cash conversion
In €m H1-20 H1-211 H1-22 (-) Change in NWC 51 21 103 Operating Free Cash Flow Before Tax 85 60 166 Adjusted EBITDA4 Conversion % 203.7% 111.7% 227.7% 137% 140% Normalized3 Normalized2 Free Cash Flow 80 47 156 Source: H1-22 IFRS accounts 1. Restated to reflect new reporting methodology 2. €15m normal
Slide 21: Net debt and leverage
Bank Borrowings EURm Dec-21 Jun-22 • Financing as put in place at IPO • No utilisation of the EUR120m RCF as of 30 June 2022 Bank Borrowings 454 451 Bank overdraft & Short term Loans Bank Overdraft 5 11 • Slight increase in Bank Overdraft offset by the slight reduction in short-term loans Short-term
Slide 22: Revised 2022 Outlook
2022 Outlook Revised 2022 Outlook (March 29, 2022) (September 14, 2022) Gross Sales incl. M&A Above €3,800m Above €4,200m Net Margin €362 - €368m €392 - €400m Adj. EBITA €133 – €138m €146 – €152m Operating FCF Before 80% of Adj. EBITDA1 160% of Adj. EBITDA1 Tax 1. Adjusted EBITDA defined as Adjusted
Slide 23: Key takeaways
#WeAreExclusive 1 Outstanding H1 2022 financial performance 2 Cybersecurity market showing no signs of slowdown Strong confidence in our strategy and superior 3 execution capabilities to continue outperforming 4 Outlook raised for 2022 23
Slide 24: We welcome any questions you may have
#WeAreExclusive We welcome any questions you may have
Slide 25: #WeAreExclusive
#WeAreExclusive
Slide 26: Gross Sales reporting methodology change
#WeAreExclusive • Up to Q1 2022 Gross Sales publication, Exclusive Networks Gross Sales KPI was defined as follows: “Gross Sales represent revenue recognized by the Group on a gross basis for each revenue stream (i.e. Solutions and Support/Maintenance) and before intra and inter segment intercompany
Slide 27: Gross sales before and after intercompany elimination
#WeAreExclusive GROSS SALES PUBLISHED BEFORE INTERCOMPANY ELIMINATION EURm Q1-21 Q2-21 Q3-21 Q4-21 FY-21 Q1-22 Q2-22 EMEA 585.3 567.9 608.3 817.9 2,579.5 742.3 828.4 APAC 103.5 89.8 103.0 98.0 394.3 96.6 122.7 AMERICAS 57.8 73.0 93.6 122.3 346.7 93.4 106.7 TOTAL 746.7 730.7 804.9 1,038.2 3,320.4 932
Slide 28: Personnel and other operating costs reconciliation
#WeAreExclusive Personnel costs Other operating costs In €m H1 2021 H1 2022 In €m H1 2021 H1 2022 Reported Personnel Costs 72.4 90.3 Reported Other Operating Costs 23.5 29.1 Project Core (1) - Personnel costs -0.8 -1.2 Project Core (1) - Other Operating Costs -0.6 -0.5 Other items (2) -2.3 -2.5 Othe
Slide 29: EBITA adjustments and adjusted net income
#WeAreExclusive 1 EBITA adjustments include: Reported Adjustments Adjusted Amortisation of Intangible Assets € in millions H1 2021 H1 2022 H1 2021 H1 2022 H1 2021 H1 2022 Non-recurring Operating Income & Expenses under IFRS 1 Others includes the implementation costs Operating Profit / Adj. EBITA 11.
Slide 30: Income statement
(in € million) 30 June 22 30 June 21 Revenue 1,474 1,106 Costs of purchased goods and services -1,283 -958 Freight on sales -3 -3 Net Margin 188 145 Personnel costs -90 -72 Other operating costs -29 -23 Depreciation and amortization -36 -34 Recurring operating profit 32 16 Non-recurring operating in
Slide 31: Balance sheet
(in € million) 30 June 22 31 Dec 21 30 June 21 ASSETS #WeAreExclusive Goodwill 294 314 289 Other intangible assets 1,159 1,154 1,163 Property, plant and equipment 7 7 8 Right-of-use assets 21 19 20 Non-current other financial assets 38 35 38 Deferred tax assets 10 11 24 TOTAL NON-CURRENT ASSETS 1,52
Slide 32: Cash flow statement
(in € million) 30 June 22 30 June 21 #WeAreExclusive OPERATING ACTIVITIES Profit/(loss) for the period 11 -19 Adjustments for: - Depreciation, amortization, impairment and change in provisions 36 34 - Financial debt costs & interests on lease liabilities 8 15 - Share-based expenses 2 2 - Income tax
Slide 33: Operating free cash flow reconciliation
In €m H1-20 H1-211 H1-22 Net Income (5) (19) 11 (+) Financial Debt Costs & Interests on Lease Liabilities2 18 15 8 (+) Income Tax (6) 15 8 (+) Depreciation, Amortisation, Impairment and Provisions 32 34 36 (+) Gains/Losses on Disposal of Fixed Assets (0) 0 0 (+) Share based expenses - 2 2 (-) Change
Slide 34: Investors & Analysts
#WeAreExclusive Investors & Analysts Hacene BOUMENDJEL , Head of IR ir@exclusive-networks.com