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Nagarro — Berenberg Pan-European Discovery Conference USA 2022
27 slides from Nagarro's conference presentation, Nov 16, 2022
Slide 1: Nagarro: Thinking Breakthroughs
@® nagarro Thinking Breakthroughs
Slide 2: Disclaimer
The information contained in this document is provided as of the date of its publication and is subject to change without notice. This presentation contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management of Nag
Slide 3: FY 2021 overview and FY 2022 guidance
• Fast-growing, scaled, diversified, digital engineering leader FY 2021 with a full-service portfolio • €546 million revenue • A global company domiciled in Germany • 26.9% YoY revenue growth • 18,000+ Nagarrians across 33 countries • 28.3% gross margin • Differentiated organization design based on
Slide 4: Our Mission Statement
Our Mission Statement To make distance irrelevant between intelligent people
Slide 5: Countries with registered offices and nationalities
Americas EMEA Asia Canada Austria Australia Colombia Bahrain China Ecuador Denmark India Mexico Finland Japan US France Malaysia Germany Philippines Malta Singapore Mauritius Sri Lanka Norway Thailand Poland Portugal Romania Saudi Arabia Spain Sweden countries with Switzerland registered offices Sou
Slide 6: Our core values: a magnet for talent
Our core values: a magnet for talent NS) Caring is our superpower ® %7wr &K @ Client-centric Agile Responsible Intelligent Non-hierarchical Global
Slide 7: Growing spend on digital IT services, supported by structural tailwinds
Growing spend on digital IT services, supported by structural tailwinds $543 billion Automotive, Manufacturing Connected Everything 2024 and Industrial Telecom, Media and Entertainment Immersive Experiences CAGR 12% 2020-24 Travel and Aviation Dynamic Pricing $346 billion 2020 Financial Services and
Slide 8: Nagarro's differentiated position
Engineering DNA Consulting DNA Nagarro’s differentiated position: Excellence in digital product engineering combined with a portfolio of enterprise services Excellence in digital product engineering to Services DNA “change the business” Excellence in enterprise services to “run the business” 8
Slide 9: Revenue by industry and client concentration
6% 6% Telecom, Media and Life Sciences and Entertainment 11% 19% Healthcare Automotive, Manufacturing Top 6–10 and Industrial 7% Energy, Utilities and 15% Bldg. Automation Top 5 7% Public, Non-profit and Education 15% Financial Services and Insurance 8% Mgmt. Consulting and Business Information 74%
Slide 10: Revenue by region and professionals
22% Rest of World 26% 18,087 Central Europe total professionals, of which... (Germany is 19%) 16,849 professionals in engineering 11% Rest of Europe 41% North America 10
Slide 11: Industries served
Automotive, Manufacturing and Industrial Energy, Utilities and Building Automation Travel and Logistics Public, Non-profit and Education Telecom, Media and Entertainment Life Sciences and Healthcare Retail and CPG Horizontal Tech Financial Services and Insurance Management Consulting and Business In
Slide 12: Enterprise Agile mindset and organization design
Nagarro’s “Enterprise Agile” mindset, processes and organization design deliver: • Enterprise-class robust engineering • Agility in projects, agility in adapting to changing business and technology environments • Expertise across industries and regions 12
Slide 13: Powered by a unique org design and culture
€ y +X S| Dall v Powered by a unique org design and culture
Slide 14: Organization design features
• Virtual, global organization rather than a federation of national orgs or legal entities • Emphasis on autonomy and choice via internal marketplaces, not top-down decision making • Flat, entrepreneurial management 50+ top-level leaders, >25% of them entrepreneurs • Proprietary “business operating
Slide 15: Bringing capabilities to the world and to target clients
Bringing the target’s capabilities to the world… …and bringing global capabilities to the target’s clients 15
Slide 16: Social and environmental initiatives
Testing Pro for people with autism Saving lives via road safety Incubating a university Making art accessible With WWF against single-use plastic Organizing car-free days 16
Slide 17: Q3 2022
Q3 2022
Slide 18: Highlights and milestones
Highlights Milestones • Revenue growth momentum continued • 63.0% YoY revenue growth • Wage inflation and attrition reverted towards pre-Covid levels in our largest service region • 50.9% YoY revenue growth in constant currency • Added legal entities in Portugal and Spain • 30.4% gross margin • Aimi
Slide 19: Q3 2022 key figures and guidance
€230m 63.0% 9.4% 30.4% €48.4m revenue YoY revenue growth QoQ revenue growth gross margin adjusted EBITDA INDUSTRIES’ YoY GROWTH RANGE SEGMENTS’ YoY GROWTH RANGE 116% 22% 97% 31% 15% mgmt. consulting & telecom, media & rest of world rest of europe top 5 clients’ revenue business information entertain
Slide 20: Q3 2022 revenue by industry
6% (PY 7%) 6% (PY 7%) Telecom, Media and Life Sciences and Entertainment 11% 19% (PY 18%) Healthcare Automotive, Manufacturing Top 6–10 and Industrial 7% (PY 8%) Energy, Utilities and 15% Bldg. Automation Top 5 7% (PY 7%) Public, Non-profit and Education €230m 15% (PY 12%) €230m Q3 ’22 Financial Ser
Slide 21: Q3 2022 revenue by region
22% (PY 18%) Rest of World 26% (PY 32%) 18,087 Central Europe total professionals, of which... (Germany is 19%) €230m Q3’22 16,849 professionals in engineering 11% (PY 14%) Rest of Europe 41% (PY 36%) North America 21
Slide 22: Growth and margin by region
27% 31% 28% 29% 31% 34% 31% 29% Q3 ’21 Q3 ’22 Q3 ’21 Q3 ’22 Q3 ’21 Q3 ’22 Q3 ’21 Q3 ’22 North America Central Europe Rest of Europe Rest of World 22
Slide 23: Net leverage and cash flow
Net leverage 1.7x 2.1x 1.4x Total cash flow -0.8 -7.3 Net liabilities 130.0 166.0 187.6 Lease liabilities Net cash flow from operating activities Financial liabilities Net cash flow from investing activities Net cash flow from financing activities Cash 23
Slide 24: Revenue and adjusted EBITDA 2017-2022E
12% 12% 14% 18% 15% 16% 850 CAGR 32% CAGR 40% 2017-22E 2017-22E 546 430 76 80 402 58 287 211 34 26 2017 2018 2019 2020 2021 2022E 2017 2018 2019 2020 2021 2022E 24
Slide 25: 2022 target
2022 target ~€850m Revenue (~56% growth) Gross Margin ~28% Adjusted EBITDA ~16% 25
Slide 26: Positioning, clients, organization, financials, growth
1. Positioning “Engineering DNA” digital leader with a special “Enterprise Agile” approach 2. Clients Large, global, blue-chip customer base 3. Organization Agile, entrepreneurial and global org design and culture 4. Financials Strong revenue growth, attractive margins and upside potential 5. Growth
Slide 27: c S | |
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