Zalaris Asa · OSL:ZAL
Zalaris Asa — Q4 2021 Earnings Presentation
28 slides from Zalaris Asa's earnings presentation, Feb 18, 2022
Slide 1: Presentation of financial results Q4 2021
18 February 2022 Presentation of financial results Q4 2021 Simplify work life. Achieve more.
Slide 2: Agenda
Agenda • Highlights • Financial Review • Markets and Outlook • Q&A Hans-Petter Mellerud Gunnar Manum Founder and CEO CFO © zalaris 2022 Page 2
Slide 3: Fourth quarter 2021: Record level of new BPO contracts awarded for 2021
Fourth quarter 2021: Record level of new BPO contracts awarded for 2021 Revenue of NOK 201.7 million for Q4 (+4.1% - constant currency) Adjusted EBIT of NOK 10.2 million (-36.8%) Adjusted EBIT margin of 5.1% (-2.7pp) New BPO contracts awarded with expected ARR of NOK 37 million in Q4 and NOK 115 mil
Slide 4: New BPO contracts will result in significant revenue increase going forward
New BPO contracts will result in significant revenue increase going forward Total annual revenue expected to increase by NOK 246 125m (+16%) by Q1 2023, based on signed contracts 60 Increase in estimated total revenue vs. 2021 from new contracts signed and the full annual effect of ba.se 94 5 900 An
Slide 5: Revenue increased by 4.1% for the quarter in local currency
Revenue increased by 4.1% for the quarter in local currency Revenue Adj. EBIT* Adj. EBIT margin #FTEs* NOK 202m (-0.8%) NOK 10.2m (-36.8%) 5.1% (-2.7pp) 768 (+2.0%) 206.2 203.5 15.8 7,8% 201.7 753 768 712 10.2 5,1% 5.0 2,4% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 6: Payroll & HR Solutions that Enable Fully Digital Organizations
Payroll & HR Solutions that Enable Fully Digital Organizations Zalaris – Local presence with one global IT platform Zalaris is a leading European provider of Payroll and Human Capital Management Solutions delivered through Software as a Service, Outsourcing, or Consulting delivery models Supporting
Slide 7: Significant European player with Germany largest market facing unit
Significant European player with Germany largest market facing unit Revenue per country Q4 2021 (%) UK Other Poland 3,6% 2,0% 7,6% Finland 6,4% Germany 34,9% Denmark 8,2% 12,4% Sweden 25,0% Norway © zalaris 2022 Page 7
Slide 8: Diversified customer base
Diversified customer base BAN K, INSUR AN CE & HEALT H AND LIFE INFR AST RU CT U RE & FINAN CI AL SERVICES SCIENCES T RANS PO RT AT IO N IT , T ECHNO LO G Y & PRO DUCT S & O FFSHO RE & ENERG Y T EL ECO M INDUST RI ALS PUBLIC SERVICES AN D RET AIL SERVICE INDUST RIES O T HER INST IT UT IO NS © zalari
Slide 9: Delivering services based on solutions from SAP has been a key element of our success
Delivering services based on solutions from SAP has been a key element of our success • SAP – worlds largest supplier of enterprise SW • Zalaris has been partner with SAP since 2001 with more than 450’000 customers in 180 countries; nearly 80% of all multi-nationals use • Leading BPO partner since 2
Slide 10: Managed Services grew by 8% in the fourth quarter (in local currency)
Managed Services grew by 8% in the fourth quarter (in local currency) Revenue NOK 143.1m (+4.1%) 148.7 +8% higher revenue when adj. for currency movements, mainly 144.9 143.0 due to the inclusion of ba.se 136.6 137.5 133.3 132.5 127.4 128.4 125.8 Net new signings (net of churn) with annual recurring
Slide 11: Continued strong development in new signings
Continued strong development in new signings Several new BPO contracts and extensions signed during Q4 Platform based deals utilizing existing capacity with higher incremental margin Pipeline of BPO opportunities still strong in all geographies as companies are reevaluating their business continuity
Slide 12: Professional Services had a reduction in revenue of 4% when adjusted for currency movements
Professional Services had a reduction in revenue of 4% when adjusted for currency movements Revenue NOK 58.7m (-11.1%) Revenue in Professional Services was 4.1% lower 66.0 year-on-year when adjusted for negative currency 65.1 64.0 64.3 movements 63.3 62.9 62.4 61.3 Reduction mainly explained by PS r
Slide 13: Majority of Professional Services revenue is recurring and supports a continuous presence with customers
Majority of Professional Services revenue is recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue ~54 % of Professional Services revenue is recurring, or recurring like, and based on long Projects 46% 45% 49% 50% 46% term agreements and
Slide 14: Acquisition of vyble - German provider of cloud-based payroll & HR management (SaaS) for the SME market
Acquisition of vyble® - German provider of cloud-based payroll & HR management (SaaS) for the SME market vyble has a complete suite of Payroll and HR solutions delivered as Software as a Service (SaaS) Targeting the German SME market (companies with 1-250 employees) valued at estimated EUR 2,6 billi
Slide 15: Financial Review
Financial Review Simplify work life. Achieve more.
Slide 16: Higher revenue for the quarter in local currency
Higher revenue for the quarter in local currency Revenue Adj. EBIT* Adj. EBIT margin NOK 202m (-0.8%) NOK 10.2m (-36.8%) 5.1% (-2.7pp) +4.1% higher revenue for the quarter vs. last year, when adj. for currency movements (NOK 10.3m) 206.2 203.5 15.8 7,8% 201.7 Increase mainly due to the inclusion of
Slide 17: Significant ARR build-up in Managed Services through new BPO contracts
Significant ARR build-up in Managed Services through new BPO contracts Contracted ARR* in MS (NOKm) New BPO contracts within Managed Services with total 94 ARR of ~NOK 37m signed during the quarter 5 5 594 New BPO contracts awarded FY have expected ARR of 510 505 ~NOK 115m when fully implemented ARR
Slide 18: Revenue deferred as part of transformation projects for new BPO contracts
Revenue deferred as part of transformation projects for new BPO contracts Deferred revenue and employee hours capitalised, LTM (NOKm) Significant potential revenue generating +26 capacity utilised on implementing new 51 BPO contracts, which will generate recurring revenue from go-live date 41 39 36
Slide 19: EBIT for Q4 impacted by one-offs and investments in 2022 revenue
EBIT for Q4 impacted by one-offs and investments in 2022 revenue Adj. EBIT (NOKm) and margin (%) Adj. EBIT (NOKm) and margin (%), LTM 7.8% Consolidated adj. EBIT and adj. EBIT margin for 7.2% 7.2% 7.0% 7.1% 7.1% 7.1% 6.4% Q4 impacted by: 6.2% 5.1% More MS and PS resources utilised on transformation
Slide 20: Condensed Profit and Loss
Condensed Profit and Loss 2021 2020 2021 2020 (NOK 1 000) Oct-Dec Oct-Dec Jan-Dec Jan-Dec Revenue 201 695 203 522 775 265 792 326 License costs 18 519 20 945 67 481 72 517 Personnel expenses 102 196 106 584 405 949 430 733 Other operating expenses 57 493 44 526 199 892 167 138 Amortization implement
Slide 21: Positive cash flow from operations during the quarter and strong cash position
Positive cash flow from operations during the quarter and strong cash position Development in cash balance (NOKm) -6,2 Cash balance at 31 December of NOK 176m -4,0 19,9 -2,3 176,2 168,8 Positive cash flow from operations of NOK 19.9m, 19% higher than last year Net interest-bearing debt of NOK 183.0m
Slide 22: Markets and Outlook
Markets and Outlook Simplify work life. Achieve more.
Slide 23: Complete SaaS based payroll and HR suite digitalizing people processes
Complete SaaS based payroll and HR suite digitalizing people processes © zalaris 2022 Page 23
Slide 24: Addressable German market is valued at EUR 2,6 billion
Addressable German market is valued at EUR 2,6 billion © zalaris 2022 Page 24
Slide 25: Vyble solution target at small and medium sized businesses
Vyble solution target at small and medium sized businesses © zalaris 2022 Page 25
Slide 26: Solution designed to support indirect distribution
Solution designed to support indirect distribution © zalaris 2022 Page 26
Slide 27: Aiming a maintaining record speed
Aiming a maintaining record speed All time high sales with net ARR of NOK 115 million full-year representing a future revenue growth of 11.5% when implemented Pipeline and opportunity space continue supporting organic growth ambitions of 10%+ Continue driving cost efficiency initiatives that with in
Slide 28: Thank you!
We simplify HR and payroll administration, and empower you with useful information so that you can invest more in people. Thank you! Zalaris ASA | +47 4000 3300 | www.zalaris.com Simplify work life. Achieve more.