Zalaris Asa · OSL:ZAL
Zalaris Asa — Q4 2017 Earnings Presentation
23 slides from Zalaris Asa's earnings presentation, Feb 28, 2018
Slide 1: Interim report | Full year and fourth quarter 2017
Interim report | Full year and fourth quarter 2017 28 February 2018
Slide 2: Presenters and agenda
Presenters and agenda 1. Highlights 2. Financial performance in the fourth quarter and full year 2017 3. Market trends 4. Outlook Hans-Petter Mellerud Nina Stemshaug Founder and CEO CFO © zalaris 2018 Page: 2
Slide 3: Highlights | Strategy and operations
Highlights | Strategy and operations Well placed for continued organic growth ▪ A year of change: From mostly Nordic player to broad presence across Northern and Central Europe, and with activities in India and Thailand ▪ Secured position as leading provider of multi- process human resources outsour
Slide 4: Highlights | Financial
Highlights | Financial Strong growth through acquisitions Key figures ▪ Growth through acquisitions and organically. New businesses NOK million Q4/17 Q4/16 FY17 FY16 included with full revenue effect Revenues 193.5 105.2 577.3 396.6 in Q4/17 Operating profit 1 12.4 12.4 37.0 38.0 Profit before tax2
Slide 5: Revenues split
Revenues split Broadened geographical presence Distribution of revenues by geography (in per cent) ▪ Growth through acquisitions reflected in more balanced geographic presence across 4 5 Europe 14 19 14 30 36 DACH ▪ DACH now largest in Zalaris in 4 15 (Germany (D), Austria (A), and terms of revenues
Slide 6: Customer reach
Customer reach Number of employees served by HR Outsourcing Number of employees served (1000’) ▪ Number of customer employees served by HR Outsourcing is an indication of the volume of transactions and services delivered 272 266 271 ▪ Scope of services provided varies for each customer 200 201 203 ▪
Slide 7: Key financials
Key financials Fourth quarter 2017
Slide 8: Group operating revenues
Group operating revenues Organic growth and through acquisitions Operating revenues (in NOK million) ▪ Total revenue for Zalaris Group in Q4/17 was NOK 193.5 million, up 84 % compared to 194 Q4/16 200 ▪ Revenues in acquired businesses was NOK 81.6 million in Q4/17 151 150 ▪ Group revenue increased 3
Slide 9: Revenues by segment
Revenues by segment Growth in Consulting and Cloud through acquisitions HR Outsourcing Consulting Cloud Services (amounts in NOK million) (amounts in NOK million) (amounts in NOK million) ▪ HR Outsourcing revenue in ▪ Consulting revenues in ▪ Increase in Cloud revenues increased 14.5% compared Q4/17
Slide 10: Group operating profit
Group operating profit | Temporary lower margins because of transactions and integration activities Group operating profit1 (in NOK million) ▪ Q4/17 operating profit for the group was NOK 12.4 million excluding other costs, which amounted to NOK 9.3 million, mainly related to 12,4 12,4 transactions
Slide 11: Profit by business segment
Profit by business segment HR Outsourcing performing well in Q4 HR Outsourcing Consulting Cloud Services (amounts in NOK million) (amounts in NOK million) (amounts in NOK million) ▪ Q4/17 operating margin was ▪ Operating margin in the ▪ Operating margin in Cloud 11.3%, 3.9 points higher than segment
Slide 12: Financial position
Financial position Balance sheet marked by integration and investments Cash and cash flows Q4/17 Changes in balance sheet and cash flows (in NOK million) ▪ Total assets of 31.12.17 was NOK 563 million. Total 20,9 20,2 equity was NOK 115 and equity ratio was 20.3 %, down 80 from 52.4 % one year befor
Slide 13: Financial position will be carefully managed
Financial position will be carefully managed, aiming at strengthening the capital structure Changes in balance sheet through 2017 + + = Assets 31.12.16 30.06.17 30.09.17 31.12.17 Increase in goodwill reflecting transaction values Goodwill, other intangible assets 39 054 219 286 281 160 293 582 Total
Slide 14: Concluding remarks
As 2ALARIS Concluding remarks
Slide 15: Digital pillars in future HR
Digital pillars in future HR The sophistication of analytics SaaS platforms such as systems is increasing with Workday, SuccessFactors predictive and prescriptive and Oracle HCM Cloud capabilities that have have been witnessing high applications across several adoption rates. processes MPHRO service
Slide 16: Trends in MPHRO deals
Trends in MPHRO deals Organisations take a more selective approach to talent management components compared to transaction-intensive processes Talent management Transaction intensive Source: Everest Group (2017) © zalaris 2018 Page: 16
Slide 17: Key market trends
Key market trends Multi-process HR Outsourcing continue growing ▪ Multi-process human resources outsourcing (MPHRO) market growth 6-7% ▪ Zalaris with a strong footprint in North and Central Europe with 9 % share of the European market Source: Everest Group (2017) ▪ Strong demand for products and ser
Slide 18: Multi-country payroll outsourcing market growing rapidly
Multi-country payroll outsourcing market growing rapidly Market size of multi-country payroll outsourcing market (USD billion) ▪ Multi-country payroll outsourcing market has had compound annual growth rates around 21% in 2014- 2016 ▪ Global market exceeds USD 1.5 billion ▪ Momentum is expected to co
Slide 19: Cloud and Multi Country International
Cloud and Multi Country Consulting & International Outsourcing Advisory In second quarter 2018 ROC and sumarum will be rolled into the Zalaris brand, reflecting our ambition as a one-stop shop for the HR function in enterprises and organisations across Europe © zalaris 2018 Page: 19
Slide 20: Concluding remarks
Concluding remarks Priority to margin improvement and organic growth ▪ Through recent acquisitions Zalaris has built a significantly stronger platform for continued organic growth ▪ While transactions have been formally concluded and the company is already offering its broader range of services in n
Slide 21: Important notice
Important notice This Presentation includes certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements relate to future circumstances and results and other statements that are not
Slide 22: We open for questions
As 2ALARIS We open for questions
Slide 23: Thank you!
Zalaris ASA Thank you! PO Box 1053 NO-0218 Oslo Hans-Petter Nina Stemshaug Mellerud CEO & Founder CFO +47 4000 3300 hans-petter.mellerud@zalaris.com nina.stemshaug@zalaris.com www.zalaris.com