Nordhealth As · OSL:NORDH
Nordhealth As — Q1 2024 Earnings Presentation
41 slides from Nordhealth As's earnings presentation, May 14, 2024
Slide 1: Nordhealth
(X] nordhealth
Slide 2: Q1 2024 presentation
Q1 2024 presentation 14 May 2024
Slide 3: Today's presenters
Today’s presenters Charles MacBain Mari Orttenvuori CEO CFO Nordhealth 3
Slide 4: Agenda
Agenda 1.0 Company Update 2.0 Veterinary BU Update 3.0 Therapy BU Update 4.0 Financial Update 5.0 Q&A Nordhealth 4
Slide 5: Company Update
01 Company Update Charles MacBain, CEO Nordhealth 5
Slide 6: Q4 2023 and Q1 2023 implemented ARR bridges
Q4 2023 and Q1 2023 implemented ARR bridges • Impact of FX revaluations to 2023 end currency rates impact was (mostly due to weakening of NOK vs EUR): • Q4 2023: -€0.9M • Q1 2023: -€0.8M • New implemented ARR reporting logic: Quarter’s last month revenue x 12 instead of quarter revenue x 4: • Q4 202
Slide 7: Q1 2024 KPIs
Q1 2024 KPIs 15.1% 108% 6.6% 1.3 Organic ARR growth Net retention rate Gross churn CAC / new ARR1 LTM Q1 2024 LTM Q1 2024 LTM Q1 2024 LTM Q1 2024 8.5 LTV / CAC1 €36.5M €40.0M €0.46 LTM Q1 2024 Implemented ARR Signed ARR ARR per share2 March 2024 Annualised Q1 2024 Q1 2024 Annualised 1. Excluding Vet
Slide 8: Strong track record of organic and acquisition-led growth
Strong track record of organic and acquisition-led growth Signed ARR Excludes Vets4Pets post-pilot % : 60 rollout AGR e dC u alis Ann * €38.6M reported in Signed ARR Q4/23 adjusted for year-end 2023 currency rate (-€0.9M) + New ARR reporting logic: Dec 23 revenue x 12 instead of Q4 23 revenue x 4 (-
Slide 9: 2.6% QoQ implemented ARR growth in Q1 2024
2.6% QoQ implemented ARR growth in Q1 2024 Implemented ARR • Implemented ARR grew 2.6% QoQ • Net upsell in Q1/24 primarily driven by price increases • 2.3% ARR churn QoQ higher than previous quarters due to sunsetting of Provet Win and Vetserve €36.6M reported implemented ARR in Q4/23 adjusted for y
Slide 10: 15.1% YoY implemented ARR growth and €40M Signed ARR
15.1% YoY implemented ARR growth and €40M Signed ARR Implemented ARR • Implemented ARR grew 15.1% • Over 70% of new customer ARR came from Provet Cloud and EasyPractice • Net upsell primarily driven by Provet Cloud ARPU and user growth • 6.6% ARR churn • Provet Cloud Signed but not implemented ARR i
Slide 11: Adj. EBITDA - CAPEX margins improved from -23% to -9%
Adj. EBITDA - CAPEX margins improved from -23% to -9% EBITDA - CAPEX (adjusted) • Adjusted EBITDA - CAPEX adjusted for: • Q1/22 - no adjustments • Q1/23 - primarily restructuring costs (€0.4M) • Q1/24 - restructuring costs (€0.3M) Nordhealth 11
Slide 12: Small increase in Veterinary headcount to support growth
Small increase in Veterinary headcount to support growth Headcount At the end of Q1/24 total number of employees amounted to 392 (385 at the end of previous quarter) of which 132 (130) work in Therapy, 231 (226) in Veterinary and 29 (29) in HQ G&A. 404 400 392 392 385 378 381 377 332 Q1/2022 Q2/2022
Slide 13: Veterinary Update
02 Veterinary Update Charles MacBain, CEO Nordhealth 13
Slide 14: Veterinary update
Veterinary update Growth - Pilot program with CVS has been successful - implementing over 50 practices per week — a feat previously unachieved. As of yesterday, CVS has 142 clinics on Provet Cloud - Excluding CVS, we signed over €400k in new ARR in Q1 Migration ● Provet Win is scheduled to end its s
Slide 15: 21.3% YoY veterinary implemented ARR growth
21.3% YoY veterinary implemented ARR growth Implemented ARR • Implemented ARR grew 21.3% YoY • Net retention rate 114.4%, primarily driven by Provet Cloud user growth and new add-on sales • Churn of 4.0% • New customer acquisition accounted for 32% of the growth • CVS rollout for majority of their s
Slide 16: 4.7% QoQ Veterinary implemented ARR growth
4.7% QoQ Veterinary implemented ARR growth Implemented ARR • Implemented ARR growth in was 4.7% in the first quarter • New customer acquisition accounted for 50% of the growth • The sunset of Provet Win and Vetserve products increased churn rate Reported in constant currency (using year 2023 end cur
Slide 17: Adj. EBITDA - CAPEX improved by €1.2M in 12 months
Adj. EBITDA - CAPEX improved by €1.2M in 12 months EBITDA - CAPEX (adjusted) Drivers of result improvement Q1/24 vs Q1/23: ● 24% recurring revenue growth (€0.9M) ● Decrease in CAC due to reorganisation and higher implementation revenues (€0.4M) ● Other costs have remained relatively stable Excluding
Slide 18: Average churn close to 2% and net retention above 115%
Average churn close to 2% and net retention above 115% over the last 5 years Churn rate Net retention rate ● Churn in Q1/24 impacted by sunsetting of Vetserve and Provet ● Average net retention above 115% - driven primarily by growth Win. This will have an effect also in Q2/24. in enterprise clients
Slide 19: Therapy Update
03 Therapy Update Charles MacBain, CEO Nordhealth 19
Slide 20: Therapy update
Therapy update Growth ● Price increases for all products except EasyPractice - Price increase in Q3 2024 ● User count has declined by 75 users ● Physica (legacy) signed Oslo municipality for 4 year deal (60 users) Migration ● Targeted single users private therapist for initial pilot - 28 pilot Aspit
Slide 21: 9.0% YoY therapy implemented ARR growth
9.0% YoY therapy implemented ARR growth Implemented ARR • ARR growth at 9.0% in LTM ending Q1/24 • Net retention rate (including price increases) 101.1% • Churn of 9.5% • New customer acquisition accounted for 88% of the growth Reported in constant currency (using year 2023 end currency rates). Q1 2
Slide 22: 0.7% QoQ Therapy ARR growth
0.7% QoQ Therapy ARR growth Implemented ARR • Growth in the first quarter was 0.7% • Churn rate high due to loss of one enterprise customer (impacted also in previous quarters) Reported in constant currency (using year 2023 end currency rates). Q1 2023 ARR has been revised to exclude “Other Business
Slide 23: Growth in revenue improved profitability modestly
Growth in revenue improved profitability modestly EBITDA - CAPEX (adjusted) Drivers of result improvement between Q1/24 vs Q1/23: ● 4% recurring revenue growth (€0.2M) ● Other costs are are relatively stable Excluding group cost allocations. Therapy Q1/22 and Q1/23 have been revised to exclude “Othe
Slide 24: Churn and net retention impacted by one-off churn event
Churn and net retention impacted by one-off churn event Churn rate Net retention rate ● Churn increased in 2023 and Q1/24 due to losing our 2nd ● Average net retention rate 110% impacted by largest therapy customer following their acquisition by a EasyPractice self-service model and focus on 1-2 hea
Slide 25: Financial Update
04 Financial Update Mari Orttenvuori, CFO Nordhealth 25
Slide 26: Revenue growth driving profitability, despite weak NOK and SEK
Revenue growth driving profitability, despite significant impact of weak NOK and SEK 90% 91% 10.0 +17% • Total reported revenues Q1/24 grew 17% YoY from 8.0 € 8.7M to € 10.1M • On constant currency growth in total reported 6.0 revenues 18% 4.0 • Share of recurring revenue in Q1/24 was 91% vs 90% in
Slide 27: Recurring revenue on constant currency basis growing at 16%
Recurring revenue on constant currency basis growing at 16% +14% • Reported recurring revenues Q1/24 9.0 grew 14% YoY from €7.9M to €9.0M 9.0 8.7 8.5 10% • On a constant currency basis Q1/24 YoY growth in recurring revenue would 8.0 5% have been 16% vs 14% as reported 8.2 8.3 3% 7.5 0% • Despite of
Slide 28: Free Cash Flow positive and strong financial position
Free Cash Flow positive and strong financial position Free cash flow 0.8 2.1 • €3.0M improvement in free cash flow from Q1/23 to Q1/24 • Change in Aspit bi-annual (June and December) billing cycle to a monthly cycle in Q1/24 - first invoicing under the new billing schedule in January 2024 (instead o
Slide 29: Strong cash position and no debt
Strong cash position and no debt Balance sheet 31 March 2024 5.8 Assets 100 13.6 ● Cash, cash equivalents and money 22.8 3.6 market funds increased from €22.2M 80 at the end of 2023 to €22.8M 7.9 60 10.5 ● Intangible assets primarily consist of 12.8 capitalised R&D expenses 78.8 40 Liabilities and e
Slide 30: Financial calendar
Financial calendar Q2 2024 results presentation on 20 August 2024. Full year financial calendar can be found on company website.
Slide 31: Conclusion
Conclusion Veterinary ● CVS pilot and rollout success is a big milestone in UK expansion and proves implementation and architecture scalability ● Excluding CVS, we signed over €400k in new ARR in Q1 ● More aggressive approach to Nordic migration to Provet Cloud has led to some churn but will dramati
Slide 32: Q&A
05 Q&A Nordhealth 32
Slide 33: Appendix
(X) nordhealth Appendix ay
Slide 34: Profit & Loss statement
Profit & Loss statement Consolidated Income Statement Unaudited Unaudited Audited EUR in thousands Q1 2024 Q1 2023 FY 2023 Recurring revenue 9 159 7 889 33 085 Other revenue 988 782 3 740 Total revenue 10 147 8 671 36 825 Other operating income 37 25 102 Total operating income 10 184 8 696 36 927 Ma
Slide 35: Balance Sheet
Balance Sheet Consolidated Balance Sheet Unaudited Unaudited Audited EUR in thousands 31-Mar-24 31-Mar-23 31-Dec-23 Intangible assets 12 756 11 440 12 480 Deferred tax assets 526 540 547 Other capitalized long-term expenses 92 26 101 Goodwill 46 265 53 425 49 008 Machinery and Equipment 445 652 498
Slide 36: Cashflow
Cashflow Consolidated Cash Flow Statement Unaudited Unaudited Audited EUR in thousands Q1 2024 Q1 2023*/** FY 2023 Cash flow from operations Profit before income taxes (2 348) (3 327) (10 806) Taxes paid in the period (27) (9) (51) Other non-cash items 183 433 749 Depreciation and amortization 2 697
Slide 37: Business Segments
Business Segments 🐶Veterinary Therapy Other Businesses Cloud Hosted Cloud Hosted Cloud Non-Cloud Products Provet Cloud Provet Net EasyPractice Physica Navisec IT Operations Provet Pay (Finland) Diarium Psykbase Sanimalis (Norway) Vetserve (Norway) Vetvision(Denmark) Vetera (DACH) Share of ARR…
Slide 38: Strong organic growth accelerated by acquisition and migration strategy
Strong organic growth accelerated by acquisition and migration strategy 9 acquisitions completed since 2005, 7 in last 5 years Migrated Migrated Migrated In Progress In Progress 2005 2009 2019 2019 2019 Acquired Praktiikka Vetserve In Progress In Progress In Progress Flagship 2021…
Slide 39: Expanded product offering to solve additional customer pain points
Expanded product offering to solve additional customer pain points Practice Management Appointment Calendar & Electronic Health Inventory management Invoicing Software Online Booking Records Payments Terminal Payments Online payments Recurring payments Pay by email or SMS link Telemedicine Imaging A
Slide 40: Key definitions
Key definitions Recurring revenue includes revenues from software subscriptions as well as revenues from of volume-based transactions (e.g., SMS messages) as well as rebates from third parties (e.g. payment solution providers). ARR is implemented ARR that is recurring revenue annualised by multiplyi
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