Gofore Plc · OMXHEX:GOFORE
Gofore — Q1 2021 Earnings Presentation
41 slides from Gofore's earnings presentation, 2021
Slide 1: Gofore – Pure-play digital transformation consultancy
Gofore – Pure-play digital transformation consultancy Q1 2021 Investor Presentation
Slide 2: Presenting today
Presenting today Mikael Nylund, CEO Teppo Talvinko, CFO 2
Slide 3: Gofore Q1 2021 Business Review
Gofore Q1 2021 Business Review
Slide 4: Gofore is a growing and profitable digital transformation consultancy
Gofore is a growing and profitable digital transformation consultancy 4
Slide 5: Our aim is always to be
Low-risk business model with visibility to recurring revenues Our aim is always to be Growing and Constantly renewing Impactful and International Offering exceptional profitable responsible customer and employee experience 5
Slide 6: Key recent highlights
Key recent highlights • Strong operative and financial performance continued with year on year net sales growth of 34.1% and adjusted EBITA margin reaching 13.9% • New framework agreements with The City of Helsinki (up to EUR 2.95m)1 and The City of Espoo (EUR ~25m, 7 years)2 • Agreement extension w
Slide 7: Financial highlights of Q1/2021
Financial highlights of Q1/2021 NET SALES EBITA, ADJUSTED Employees 25.2 MEUR 3.5 MEUR EBITA-%, ADJUSTED 790 (18.8 MEUR) (3.2 MEUR) 13.9% (585) Growth 34.1% Growth 10.7% (16.8%) Growth 35.0% 7
Slide 8: Solid growth track continued in Q1 2021
Solid growth track continued in Q1 2021 Growth 49.0% 26.7% 21.7% 12.8% 34.1% Sales CAGR 2018-2020 Total 24% 78,0 Finland 24% 64,1 50,6 International 28% €m 25,2 Public sector 32% 18,8 Private sector 7% 2018 2019 2020 Q1 2020 Q1 2021 FAS figures IFRS figures 8
Slide 9: Strong net sales growth in recent months vs. comparison period
Strong net sales growth in recent months vs. comparison period €m Qentinel included CCEA included since September since March 2021 9,7 2020 8,7 8,5 8,1 8,3 7,5 7,1 6,8 6,6 6,1 6,1 6,4 6,26,0 6,1 5,9 5,9 6,0 5,2 5,3 5,5 5,1 5,35,6 4,6 2,22,4 January February March April May June July August September
Slide 10: Profitability continues to be strong
Profitability continues to be strong Adjusted 13.4% 12.5% 13.8% 16.8% 13.9% EBITA-% • Profitability in Q1 2021 impacted by: 12.0% • 1 working day less compared to Q1 2020 • Billing rate did not fully 10,8 meet the expected level 8,0 • Agreement period Adjusted 6,8 change of our biggest customer caus
Slide 11: Q4 2020 financial position has been solid
Q4 2020 financial position has been solid EURm (unless stated otherwise) Q4 2020 • 90% of CCEA purchase price of EUR Cash and cash equivalents 21.4 6.4m was paid on 1 March 2021 • Qentinel Finland earn-out Net debt -3.8 considerations of approximately EUR 3.4m paid in March 2021 Equity ratio 47.0% •
Slide 12: Financial guidance 2021 (unchanged)
Financial guidance 2021 (unchanged) Gofore estimates that, for the full year 2021, net sales will increase compared to 2020, and Adjusted EBITA will increase compared to 2020. Gofore will continue to report and comment on its net sales development on a monthly basis. 12
Slide 13: Long-term target to continue rapid and profitable growth
Long-term target to continue rapid and profitable growth Gofore financial targets and dividend policy Growth Profitability Dividend >20% annual net sales growth, 15% EBITA margin At least 40% of annual of which organic growth net profit accounts for approximately half 13
Slide 14: Gofore Positioning, Strategy and Targets
Gofore Positioning, Strategy and Targets
Slide 15: The world is turning digital at an increasing pace
The world is turning digital at an increasing pace IT-market predictions 500M 30% >50% >50% transformed of Global GDP of all IT spend Industry-specific to future solutions workplace By 2023, digitally By 2024, over 50% of By 2023, over 500 million By 2022, 30% of Nordic transformed enterprises globa
Slide 16: We deliver digital solutions with positive societal impact
We deliver digital solutions with positive societal impact Selected examples Digitalizing national Building a smarter Protecting the service architecture education sector Archipelago Sea Revolutionizing services Accelerating the switch to for the labor market electric cars Creating a single point of
Slide 17: Growing and profitable
Growing and profitable Net sales growth CAGR 2012 – 2017: 56% CAGR 2017 – 2020: 32% €m 78,0 64,1 50,6 34,0 18,6 9,2 12,4 3,7 6,0 2012 2013 2014 2015 2016 2017 1) 2018 2) 2019 3) 2020 4) FAS IFRS Adjusted 11.6% 14.8% 14.9% 12.5% 14.1% 16.8% 13.4% 12.0% 13.8% EBITA-% Note: 2012-2018 figures presented
Slide 18: Gofore key investment highlights
Gofore key investment highlights 1 Gofore ideally positioned as a digi-native in the accelerating digital transformation 2 Pure-play next-gen offering with strong customer satisfaction 3 Tech-native culture supports scalability and efficiency 4 Resilient client base and strong revenue visibility 5 O
Slide 19: Gofore ideally positioned as a digi-native in the accelerating digital transformation
1 Gofore ideallymodel Low-risk business positioned as atodigi-native with visibility in the accelerating digital recurring revenue transformation Traditional IT services New digital services Business support Business development 10% 2-4% Market growth1) Market growth1) Long implementation cycles Agi
Slide 20: Pure-play next-gen offering for agile digital transformation
2 Pure-play next-gen offering for agile digital transformation 100% legacy-free consulting and development services Lead Create Assure ADVISORY SERVICE AGILE CLOUD, QUALITY DESIGN DEVELOPMENT DATA & ASSURANCE ANALYTICS Digitally native Automated Design and technology development services advisory te
Slide 21: Long-term relationships with a diverse and growing client base
2 Long-term relationships with a diverse and growing client base Public (74% of sales1)) Private (26% of sales1)) 26%1) 74%1) Sales CAGR Sales CAGR +39%2) +17%2) 2017-20: 2017-20: 1) 2020 figure; 2) 2017 public vs. private sales split percentages based on pro-forma net sales and applied to reported
Slide 22: Tech-native platform underpinning scalability and efficiency
Low-risk business model with visibility to recurring revenues 3 Tech-native platform underpinning scalability and efficiency Shared values and communality Daily data collection Low hierarchy and self-organisation Real-time forward-looking analytics Transparency and rich communication Human- Data-dri
Slide 23: Strong employer brand further supports talent acquisition and retention
3 Strong employer Low-risk business brand model further with visibility supports to recurring talent acquisition revenues and retention # 2019 2020 1 Supercell 6 Reaktor 2 Futurice 7 Microsoft 3 Google 8 Fazer #1 Finland (Medium) 4 KONE 9 Vincit #2 Europe (Small & Medium) 5 10 Konecranes 724 582 495
Slide 24: Resilient client base and strong revenue visibility
Low-risk business model with visibility to recurring revenues 4 Resilient client base and strong revenue visibility 74% public share with ~90% of revenue from returning 91% of revenue is time-and-material2): ~3-5 year average contract length1): customers3): Limited execution risk Resilient client ba
Slide 25: Strong track record in delivering strong profitable growth
5 Strong track record in delivering strong profitable growth 35% 2017-2020 Sales CAGR 30% 25% Net sales CAGR 20% 2017-2020 32% 15% 10% EBITA-% Cash conversion3) 5% 2020 1) 2020 2) 13.8% 94% 0% -5% 2017-2020 average EBITA margin -10% 0% 5% 10% 15% 20% 25% 30% Note: 1) Adjusted for EVRY merger; 2) 201
Slide 26: Long-term target to continue rapid and profitable growth
6 Long-term target to continue rapid and profitable growth Gofore financial targets and dividend policy Growth Profitability Dividend >20% annual net sales growth, 15% EBITA margin At least 40% of annual of which organic growth net profit accounts for approximately half 26
Slide 27: Avenues to reach the growth targets
6 Avenues to reach the growth targets Growth in Finland International growth Disciplined M&A 1. Become #1 in digital 1. Grow with international 1. Keep up M&A growth at transformation business clients served from Finland least at the historical pace for the public sector 2. Expand physical presence
Slide 28: The Finnish market remains a sizeable opportunity for Gofore
Growth in Finland International growth Disciplined M&A 6 The Finnish market remains a sizeable opportunity for Gofore Public sector clients Private sector clients ~3.3bn3) ~1bn1) Market size 2019 Gofore ~4% Gofore ~1% 39%2) 17%2) Gofore CAGR 2017-2020 Need for higher efficiency and improved service
Slide 29: Gofore is one of the leading players among public sector clients
Growth in Finland International growth Disciplined M&A 6 Gofore is one of the leading players among public sector clients Rapid public sector sales growth… …outplaying competition… …to become top-5 IT service provider Gofore’s public sector sales growth (€m) Finnish public sector sales development o
Slide 30: Gofore is a fast growing challenger within private sector clients
Growth in Finland International growth Disciplined M&A 6 Gofore is a fast growing challenger within private sector clients …driven by increasing number of significant Rapid net sales growth… …and a large market opportunity customers… Gofore’s private sector sales growth (€m) # of private sector cust
Slide 31: Gofore international growth strategy
Growth in Finland International growth Disciplined M&A 6 Gofore international growth strategy Grow with international clients Gofore net sales outside Finland Expand presence in Germany 2020 (€m) • Gofore existing platform enables • Utilise Finnish operating model – growth with international clients
Slide 32: Germany represents a huge opportunity with room to grow for agile digitalization experts
Growth in Finland International growth Disciplined M&A Germany represents a huge opportunity with room to grow for agile 6 digitalization experts Finland Germany • Industrial sector the largest sector with 35% of the total 40.9bn market, followed by Financial services 24% • Focus shifting from inter
Slide 33: Gofore has followed a disciplined M&A strategy over the past years
Growth in Finland International growth Disciplined M&A 6 Gofore has followed a disciplined M&A strategy over the past years 2017-2021YTD total Leadin 4/2017 Qentinel Finland state-of-the-art Silver Planet 8/2020 added 6 acquired companies design capability, 2/2019 boosted digital quality internation
Slide 34: Acquisition of CCEA strengthens Gofore's digital transformation advisory services
Growth in Finland International growth Disciplined M&A 6 Acquisition of CCEA1) strengthens Gofore’s digital transformation advisory services CCEA is Finland’s largest change management company CCEA key financials (2020)2) and deal parameters • ~50 employees located in Espoo (HQ) and Singapore EURm C
Slide 35: Human-centric digital transformation
Growth in Finland International growth Disciplined M&A 6 Human-centric digital transformation Human-centric People-driven Leading human-centric digital technology change digital transformation offering for all organisations 35
Slide 36: Scalable M&A platform and a systematic integration approach
Growth in Finland International growth Disciplined M&A 6 Scalable M&A platform and a systematic integration approach Gofore integration model Digital transformation services Platform Customer base Cultural integration and cross-selling integration Financial profile supporting Gofore’s targets • Buil
Slide 37: Q&A
GOFORE Q&A
Slide 38: Appendix
APPENDIX
Slide 39: Profitability building blocks
Profitability building Low-risk business blocks model with visibility to recurring revenues Gofore 2020 (% of net sales) • Operational excellence, market knowledge and advisory business create opportunities in pricing Net sales 100% • Room for improvement in billing rate (69% in 2020 including all o
Slide 40: Quarterly development
Quarterly development Q1/20211 Group (consolidated) Q2/2021 Q3/2021 Q4/2021 Net sales, MEUR 25.2 EBITA, MEUR, adjusted2 3.5 EBITA-%, adjusted 13.9% Group (consolidated) Q1/2020 Q2/2020 Q3/2020 Q4/2020 Net sales, MEUR 18.8 18.6 16.3 24.3 EBITA, MEUR, adjusted 3.2 2.5 1.9 3.3 EBITA-%, adjusted 16.8% 1
Slide 41: Thank you.
Thank you. InvestorRelations@gofore.com