Loihde Oyj · OMXHEX:LOIHDE
Loihde Oyj — Investor Day (November 2023)
63 slides from Loihde Oyj's investor day presentation, Nov 16, 2023
Slide 1: Number One Partner in Digitalisation and Security
Capital Markets Day 16 November 2023 Number One Partner in Digitalisation and Security
Slide 2: Disclaimer
© Loihde Disclaimer This presentation contains forward-looking statements that reflect the current views and assumptions of Loihde Plc (“Loihde”). They include statements about future strategies and anticipated benefits of these strategies. These statements are not based on historical facts but rela
Slide 3: Our speakers today
© Loihde Samu Konttinen Marko Järvinen CEO Security Solutions Our 3 speakers Jarno Mäki Cyber, Cloud and Tomi Bergman today Data and AI Connections Host Jere Teutari Juha Meronen Pirjo Suhonen CMO Digital Services CFO
Slide 4: Agenda
© Loihde Agenda 9:00 Strategy update highlights Samu Konttinen Q&A 9:40 Security Solutions Marko Järvinen 9.50 Video Jarno Limnell, Member of parliament 9.55 Cyber, Cloud and Connect Jarno Mäki 4 10.10 Video Mervi Airaksinen, CEO, Microsoft Finland 10.15 Data and AI Tomi Bergman 10.25 Video Taru Ras
Slide 5: Strategy Update Highlights
Strategy Update Highlights Samu Konttinen
Slide 6: Loihde – a solid investment into rapidly evolving critical areas
© Loihde Loihde – a solid investment into rapidly evolving critical areas 1 Evolving, dynamic markets with ample room to grow 6 2 Client-centric portfolio to match market needs 3 Significant EBITDA improvement potential 4 Balance sheet optimisation & improving ROI
Slide 7: Loihde journey
© Loihde Loihde journey • Revenue 123 M€, EBITDA 10 M€ (2022) • 885 employees (2022) • 24 locations in Finland Vaasa Telephone • Operates domestically Company was founded in 1882 • Loihde with 3 sub-brands • Unrivalled experience from Listing on First North combining physical and 2009 2017 2021 digi
Slide 8: We reached 123 M€ in revenue in 2022, with 8.4% EBITDA
© Loihde We reached 123 M€ in revenue in 2022, with 8.4% EBITDA Revenue and adjusted EBITDA development 2017-2022 Current targets 2021–2024 M€ and % Annual revenue growth Adjusted EBITDA margin on average at the end of the period M€ % >10% >10% FAS IFRS 140 12 123 8 taking acquisitions into account
Slide 9: Global trends favour Loihde domains
© Loihde Global trends favour Loihde domains Increased activity and Nation-state players with Converging physical and sophistication from cyber nearly unlimited resources digital security Security criminals Every company a digital Increasing usability Digital everything enterprise demands 9 Digital
Slide 10: We have a large addressable market with attractive growth pockets
© Loihde We have a large addressable market with attractive growth pockets Loihde target market sizes in Finland, M€ (2023) CAGR forecast 2024–2026 Cyber services & network security 550 6% 2% 1 10 Security Solutions and Services 1 100 -3% 2 Cloud 1 200 12% Digital Development & Consulting Incl. Anal
Slide 11: Strategy 2024–2027
Strategy 2024–2027
Slide 12: This is Loihde
@Loihde This is Loihde EVERYTHING DIGITAL 12 SECURITY ARTIFICIAL CLOUDIFICATION CONVERGENCE INTELLIGENCE DATA REVOLUTION
Slide 13: Key areas of our new strategy
© Loihde Key areas of our new strategy Customer Strategy needs at Five service One Loihde building the focus of blocks areas brand portfolio 13 renewal Significant More effective Continuous profit Performance use of aspiration services to improvement: balance sheet >30% +200% in & ROI > 10% 4 years
Slide 14: Loihde offering areas match our key client personas
© Loihde Loihde offering areas match our key client personas CDO, CIO, Data & AI business CIO, Cloud & ICT Connect 14 Digital CDO, Services business CISO, Cyber CSO, ICT Security Facility Solutions management, security org, CSO
Slide 15: Loihde at its best – utilising synergies to benefit customers
© Loihde Loihde at its best – utilising synergies to benefit customers Cloud transformation Data & analytical Data & AI Data strategy Hybrid connections Data & AI platforms Hybrid Cloud & Solutions Cloud & Solutions Connections Connect Connect 15 Digital Digital Services Services CSOC Cyber Cyber Co
Slide 16: Focus industries a growth engine for us
© Loihde Focus industries a growth engine for us Finance Healthcare Currently focus industries represent ~30% of Loihde 16 revenue • Full Loihde offering relevant • Several growth trajectories • Excellent customer satisfaction and longevity Manufacturing Energy
Slide 17: We organise Loihde in 4 business units with centralised back-office functions
© Loihde We organise Loihde in 4 business units with centralised back-office functions Loihde clients Security Cyber, Cloud Data Digital Solutions & Connect & AI Services 17 Business Development Marketing HR IT Finance Partner ecosystems
Slide 18: Our people are the key to our continuous development and value creation
Our people are the key to our continuous development and value creation
Slide 19: We are proud of our employees’ deep and versatile expertise, strong commitment, and culture
© Loihde ~150 We are proud of our employees’ experts in data and AI deep and versatile expertise, strong commitment, and culture ~150 of sharing and caring experts in digital services Share of women is 20%, our target is 19 ~100 to raise it to 30%. experts in cloud and connect 50% of employees have
Slide 20: Our business is sustainable and promotes the wellbeing of both people and the planet
© Loihde Our business is sustainable and promotes the wellbeing of both people and the planet 20 We utilise data and digital We protect people, solutions to promote We create a workplace that information, assets and wellbeing and conserve always puts people first. critical infrastructure. natural re
Slide 21: Loihde scores well in Upright net impact
© Loihde Loihde scores well in Upright net impact Loihde net impact* The result implicates that 56% Loihde’s positive impact 21 exceeds negative impact by 56 per cent. Nasdaq Helsinki 26% average 43% Peer average *Upright Project analysis
Slide 22: We are targeting 200 M€ in revenue and 15% EBITDA at the end of the strategy period
We are targeting 200 M€ in revenue and 15% EBITDA at the end of the strategy period.
Slide 23: Growth and profit targets for 2024–2027
© Loihde Growth and profit targets for 2024–2027 2027 min. 200 ~25 M&A* 10% 2022 CAGR Organic 123 23 ~175 Implied market growth 6% 30 10 15% 8% Revenue EBITDA Revenue EBITDA 3X * 15– 30 M€ depending on target availability and balance sheet
Slide 24: Continuous services a growth and profit driver
© Loihde Continuous services a growth and profit driver Continuous services share of revenue* 200 M€ (IFRS) Key drivers 2x in • Offering development and 30% M€ further productisation 123 M€ • Sales and marketing focus Cont. on service commercialisation services 25% 24 • M&A focus area Other revenue
Slide 25: Return on investment (ROI) target
© Loihde Return on investment (ROI) target 12 We are optimising the use of Loihde’s >10% strong balance sheet and targeting a 10 significant improvement of ROI by the end of the strategy period. 8 Key improvement areas: 25 - Improved operational 6 profitability - Use of debt in M&A 4 2.7% 2 0 2022 2
Slide 26: Our financial aspirations
© Loihde Our financial 200 M€ ~10% CAGR aspirations Revenue 2027 for the strategy 30 M€ EBITDA period adjusted Current target >10% 15% 2024–2027 2027 26 EBITA adjusted 12% 24 M€ 2027 ROI >10% All figures including M&A – estimated to be 15-30 M€ 0–2x in revenue Net debt/EBITDA
Slide 27: Loihde is your all-in-one partner for security convergence, data, cloud and digital services
Loihde is your all-in-one partner for security convergence, data, cloud and digital services. Loihde is your one-stop shop for security convergence, data, cloud and digital services. We connect the dots in an We connect the dots in an increasingly interconnected world. increasingly interconnected wo
Slide 28: Modern Security Solutions for a Digitalised World
Modern Security Solutions for a Digitalised World Marko Järvinen
Slide 29: Market trends in security
© Loihde Market trends in security Change in the security situation in Europe 29 Slowdown in the construction sector Modern security technologies are increasingly connected and digitalised
Slide 30: We ensure that the people and premises of our clients are safe and secure
© Loihde We ensure that the Data & AI Cloud & Connect people and premises of our clients are Digital safe and secure Cyber Services 30 Security Solutions Security Structural Security technologies security services and and systems maintenance
Slide 31: We are one of the top players in Finland
© Loihde We are one of the top players in Finland Leading position with nationwide presence 31 Continuous services as our backbone Technology independent
Slide 32: Digitising security
© Loihde Digitising security Combining Loihde expertise in 32 data, cyber, cloud and digital services to create novel value for customers
Slide 33: One Security
© Loihde One Security Combining physical and digital security – our unique 33 concept as a response to the convergence of security, Yksi turvallisuus®
Slide 34: Cyber Security
Cyber Security Jarno Maki LOIHDE
Slide 35: Global trends in cyber security
© Loihde Global trends in cyber security Increased activity and 35 Nation-state players sophistication from cyber with nearly unlimited resources criminals AI an asset for both sides IAM importance due to cloudification + remote work Converging physical and digital security
Slide 36: We are alert and safeguard our clients in digital realm
© Loihde Data & AI We are alert and Cloud & Connect safeguard our clients in digital realm Digital Services Cyber 36 Security Solutions Cyber Identity and Security security access consulting operations management centre
Slide 37: We are present with continuous operations in critical domains
© Loihde We are present with continuous operations in critical domains IAM Increased importance of controlling access to networks and systems, our core in cyber 37 Safeguarding critical infrastructure, e.g. OT energy, finance and manufacturing, from environments emerging threats Combining prevention
Slide 38: Requirements on our Cyber Security Operations Centre are increasing
Requirements on our Cyber Security Operations Centre are increasing 24/7 detection capability and ability to respond hastily are Detection crucial as prevention may fail. Our professionals deal with attacks and safeguard clients Know-how 24/7. Only practice makes perfect, since cyber criminals are b
Slide 39: Cloud & Connect
Cloud & Connect Jarno Maki LOIHDE
Slide 40: Market trends in cloud and connect
© Loihde Market trends in cloud and connect IT service modernisation & Data & AI drive cloud 40 cloudification transformation Network modernisation & hybrid networks Regional approach and geopolitics
Slide 41: The ultimate well-managed, secure and connected cloud and hybrid infrastructure
© Loihde Data & AI Cloud & Connect The ultimate well- managed, secure and connected cloud and Digital Services hybrid infrastructure Cyber 41 Security Solutions Transformation Cloud Modern and Managed and modernisation infrastructure secure networks 24/7
Slide 42: Cloud & Connect is positioned to deliver the best of both worlds
© Loihde Cloud & Connect is positioned to deliver the best of both worlds Cloud • Cloud transformation accelerating, we have the offering to perfectly match this – PilvipolkuTM 42 • Microsoft Azure Region Espoo further escalating cloud transformation • We have expertise across full cloud, hybrid clo
Slide 43: Cloud & Connect is positioned to deliver the best of both worlds
© Loihde Cloud & Connect is positioned to deliver the best of both worlds Connect • The importance of connections increases further with cloudification, and we are experts in this area. 43 • Modern software-defined networks (SD-WAN) and hybrid networks are a must for several industries, such as fina
Slide 44: Intelligent Data Solutions
Intelligent Data Solutions Tomi Bergman
Slide 45: Market trends in data & AI
© Loihde Market trends in data & AI Data is the capital of a modern company, a requisite for running a business 45 AI is exponentially increasing needs for high-quality and managed data AI everywhere
Slide 46: Our solutions establish a robust foundation for generating business value through data
© Loihde Data & Cloud & AI'i Connect Our solutions establish a robust foundation for generating business Digital Services value through data Cyber 46 Security Solutions Data Management Data Solutions Analytics & AI Solutions & & Transformation & Platforms Reporting Generative AI Continuous services
Slide 47: We are one of biggest data & AI players in Finland
© Loihde We are one of biggest data & AI players in Finland • More than 20 years' experience and solid track record 47 • Comprehensive data offering • Pioneer in sustainable & secure AI, and GenAI • Strong industry expertise and 150 top-notch professionals
Slide 48: Combined with Loihde’s other offering and deep partnerships we are even stronger
© Loihde Combined with Loihde’s other offering and deep partnerships we are even stronger • Extended value-add with Loihde cloud, security and digital service areas 48 • Biggest domestic SAS integrator • Deep collaboration with Microsoft
Slide 49: Design-Driven Digital Services
Design-Driven Digital Services Juha Meronen
Slide 50: Digitalisation and AI are the current mega trends in digital services
© Loihde Digitalisation and AI are the current mega trends in digital services 50 AI increases Digital everything. expectations related to Every company a digital digital services and user enterprise. interaction.
Slide 51: We have three different methods to partner our clients in digital services
© Loihde We have three different methods to partner our clients in digital services Strategic Data Cloud & Strategic advisory for Connect digital business 51 Digital Digital solutions Services and projects Cyber Security Digital talent: Architects, Solutions designers, developers, testers, change pr
Slide 52: We are specialists in design-driven digital service development
© Loihde We are specialists in design-driven digital service development • Holistic approach to digital services • Design-driven digital services for vast 52 numbers of users • We excel in customer online systems, content management, web and backend • AWS and Azure
Slide 53: Our aim is client focus and excellency
© Loihde Our aim is client focus and excellency • In today’s market situation many clients seek ways to improve operational efficiency and 53 achieve savings. • Our focus industries: finance, manufacturing and energy • Our consultants are entrepreneur-minded experts, and we aim at excellency and sat
Slide 54: Delivering Shareholder Value
Delivering Shareholder Value Pirjo Suhonen
Slide 55: Ample room to improve and support growth via support functions
© Loihde Ample room to improve and support growth via support functions Scalable support & back office 55 Centralising Legal the remaining structure support streamlining functions
Slide 56: Dividend history
© Loihde Dividend history (including additional dividends and returns of capital) Dividend history per payment year, €/share 3 In 2018–2023, Loihde has paid dividends of on average 30% of 2,5 the adjusted profit. 0,9 Moreover, Loihde has paid 56 2 additional dividends based on capital gains of on av
Slide 57: Balance sheet 30 June 2023, M€
© Loihde Balance sheet 30 June 2023, M€ Assets Equity and liabilities 147,1 M€ 147,1 M€ 160 160 Cash and cash Cash after dividend 140 equivalents announced on 140 19,3 13 November: 33 Other current 13.5 M€ 57 120 120 assets Non-interest 42,1 10,1 bearing 100 Other non- 100 liabilities current assets
Slide 58: Distributing value to owners
© Loihde Distributing value to owners Share buybacks 2023–2024 Dividend • Additional dividend 1.00 € per share 58 in November 2023 • Dividend policy renewal
Slide 59: New dividend policy
New dividend policy Loihde aims to distribute dividends annually in an amount representing at least 50 per cent of the Loihde Group’s profit for the financial period. Previously: Loihde aims to distribute dividends annually in an amount representing at least 30 per cent of the Loihde Group’s profit
Slide 60: Balance sheet enabling inorganic options
© Loihde Balance sheet enabling inorganic options Strategic acquisitions 60 supporting the growth Debt component to be utilised up to 2 x net debt / EBITDA
Slide 61: Our financial aspirations
© Loihde Our financial 200 M€ ~10% CAGR aspirations Revenue 2027 for the strategy 30 M€ EBITDA period adjusted Current >10% 15% 2024–2027 2027 61 EBITA adjusted 12% 24 M€ 2027 ROI >10% All figures including M&A – estimated to be Net debt/EBITDA 0–2x 15-30 M€ in revenue
Slide 62: Loihde – a solid investment into rapidly evolving critical areas
© Loihde Loihde – a solid investment into rapidly evolving critical areas 1 Evolving, dynamic markets with ample room to grow 62 2 Client-centric portfolio to match market needs 3 Significant EBITDA improvement potential 4 Balance sheet optimisation & improving ROI
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