Zalaris Asa · OSL:ZAL
Zalaris Asa — Q4 2020 Earnings Presentation
27 slides from Zalaris Asa's earnings presentation, Feb 19, 2021
Slide 1: Presentation of interim and preliminary full-year financial results | Q4 2020
Presentation of interim and preliminary full-year financial results | Q4 2020 19 February 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: Fourth quarter 2020: All time high adj. EBIT
Highlights Q4 Presentation 2020 Fourth quarter 2020: All time high adj. EBIT • Revenue of NOK 203.5 million for Q4 (-1.3%) and NOK 792.3 million for the full-year (+2.0%) – the 20th year of uninterrupted growth • Strong positive development in EBIT resulting in all time high adj. EBIT for the quarte
Slide 4: Positive margin development continuing during the quarter
Highlights Q4 Presentation 2020 Positive margin development continuing during the quarter Revenue Adj. EBIT* Adj. EBIT margin #FTEs NOK 204m (-1.3%) NOK 15.9m (+218%) 7.8% (+5.4pp) 71 (-5.4%) 206.2 203.5 15.9 7,8% 194.2 799 753 6,5% 712 12.7 5.0 2,4% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 5: European Payroll & HR Solutions that Value People
Highlights Q4 Presentation 2020 European Payroll & HR Solutions that Value People Zalaris – Local presence with one global platform • Zalaris is a leading European provider of Payroll and Human Capital Management Solutions delivered through Software as a Service, Business Process as a Service, or Co
Slide 6: Diversified customer base with Germany largest market facing unit
Highlights Q4 Presentation 2020 Diversified customer base with Germany largest market facing unit Diversified across industries and sectors Revenue per country Q4 2020 (NOKm) Health Other Industry Retail Not for profit UK 21,0 organizations 7,1 Germany and Public Poland 63,7 Bank & sector Insurance
Slide 7: Signed Multi-Country Payroll agreement with Metsä
Highlights Q4 Presentation 2020 Signed Multi-Country Payroll agreement with Metsä • Five-year agreement with Metsä Group to deliver Multi-Country Payroll technology and outsourcing services based on the Zalaris PeopleHub platform • Outsourcing services covering 10,000+ employees operating in 28 coun
Slide 8: Several other new agreements and renewals
Highlights Q4 Presentation 2020 Several other new agreements and renewals • Several other new BPO contracts and extensions signed during Q4 and recent weeks 5-year agreement with Lindorff for Agreement with Elkjøp Nordic to payroll and transactional HR Services deliver Nordic Managed Payroll and HR
Slide 9: Strong margin improvement in Managed Services
Highlights Q4 Presentation 2020 Strong margin improvement in Managed Services Revenue EBIT NOK 137.5m (-5.1%) NOK 15.6m (+7.6%) 144.1 144.9 ▪ ~NOK 3-4 reduction in revenue due to lower 137.5 15.6 volume of travel expense processing and change 14.9 14.5 orders due to Covid-19. Expect to recoup majori
Slide 10: Grew Professional Services in Poland during the quarter
Highlights Q4 Presentation 2020 Grew Professional Services in Poland during the quarter Revenue EBIT NOK 66.0m (+7.7%) NOK 8.2m (+NOK 8.5m) ▪ Revenue in Poland grew by ~57% (+NOK 66.0 10.8 4.8m YOY) through new and existing customers 61.3 ▪ Reducing management layer and operational 50.1 8.2 efficien
Slide 11: More than 60% of Professional Services revenue is recurring
Highlights Q4 Presentation 2020 More than 60% of Professional Services revenue is recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue • ~55% of Professional Services revenue is recurring and based on long term agreements and relationshi
Slide 12: 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 12
Slide 13: Stable revenue y-o-y and large EBIT improvement
Financial Review Q4 Presentation 2020 Stable revenue y-o-y and large EBIT improvement Revenue Adj. EBIT* Adj. EBIT margin NOK 204m (-1.3%) NOK 15.9m (+218%) 7.8% (+5.4pp) • Revenue for the quarter marginally 206.2 15.9 7,8% 203.5 lower than last year, with some lower 194.2 volumes (e.g. travel expen
Slide 14: EBIT margins gradually improving
Financial Review Q4 Presentation 2020 EBIT margins gradually improving Adj. EBIT (NOKm) and margin (%), quarterly Adj. EBIT (NOKm) and margin (%), LTM • Adj. EBIT increased by 218% compared to last year 7,0% 7,8% • Adj. EBIT margin (%) increased by 5.4 7,0% 6,7% 6,4% 5,5% percentage points compared
Slide 15: Condensed Profit and Loss
Financial Review Q4 Presentation 2020 Condensed Profit and Loss 2020 2019 2020 2019 • Significant improvement in adj. (NOK 1 000) Oct-Dec Oct-Dec Jan-Dec Jan-Dec EBIT margin (%) compared to last year – 7.8% vs. 2.4% Revenue 203 522 206 220 792 326 776 792 License costs 20 944 23 911 72 517 67 981 10
Slide 16: Positive operating cash flow during the quarter
Financial Review Q4 Presentation 2020 Positive operating cash flow during the quarter NOK million -0,8 -5,2 0,4 124,8 • Operating cash flow for the quarter 14,1 of NOK 14.1m 116,3 • Cash balance at 31 December 2020 is NOK 42.3m higher than last year, after repayment of debt of NOK 17.5m (Q4’20: NOK
Slide 17: Condensed Balance Sheet
Financial Review Q4 Presentation 2020 Condensed Balance Sheet 2020 2019 • Cash and cash equivalents of NOK (NOK 1 000) 31. Dec 31. Dec 124.8m 334 608 354 184 Fixed and intangible assets • Lease liabilities relate to right-of-use Trade accounts receivable 148 651 148 614 assets, and primarily rental
Slide 18: 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 18
Slide 19: 57% of European senior stakeholders expect the use of HR BPO to grow
Q4 Presentation 2020 57% of European senior stakeholders from global enterprises expect the use of HR BPO to grow - according to a recent survey by industry analyst Everest Group © zalaris 2021 Page 19
Slide 20: Market for Multi-Country payroll is growing at 10%+
Q4 Presentation 2020 Market for Multi-Country payroll is growing at 10%+ according to leading industry analyst Nelson Hall Source: Nelson-Hall, “Next Generation Payroll Services” © zalaris 2021 Page 20
Slide 21: Zalaris cover the whole spectrum of HR Tech, Multi-Country Payroll and Multi Process HR
Q4 Presentation 2020 Zalaris cover the whole spectrum of HR Tech, Multi-Country Payroll and Multi Process HR Outsourcing services Packages Market Opportunity Technology & Services Technology Only Services Only “The Complete Zalaris Package” “Software as a Service (SaaS)” “Transactional HR & Payroll”
Slide 22: Zalaris' PeopleHub is robust platform for multi-country payroll and multi process HR
Q4 Presentation 2020 Zalaris’ PeopleHub is robust platform for multi-country payroll and multi process HR outsourcing with common processes, unified analytics and business continuity Mobile and Portal High frequency synchronization of User friendly digital workflows for updating • Time and Absence m
Slide 23: Aiming at delivering our 21st year of consecutive growth
Q4 Presentation 2020 Aiming at delivering our 21st year of consecutive growth European Market for Multi Process HR Outsourcing • Healthy pipeline and high ambitions. Continue our streak and deliver our 21st year of continuous growth. • Markets are growing as customers are looking for new solutions c
Slide 24: Moving into 2021 we continue #BestingOurselves
Summary Q4 Presentation 2020 Moving into 2021 we continue #BestingOurselves • Creating more Net Promoting Customers - and Employees • Continue improving margins towards our communicated 10% target through organizational simplification, increased productivity, automation and utilization of our near-
Slide 25: Support #teamZalarisNorseman raising funds to combat cancer
Q4 Presentation 2020 Support #teamZalarisNorseman raising funds to combat cancer in support of #AktivMotKreft and #5KYourWay The sponsorship of #teamZalaris for Norseman supports key Zalaris’ values – Aiming High and Team Spirit! Together, our eight-member team will help to raise funds for Aktiv mot
Slide 26: 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 26
Slide 27: 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