Nordhealth As · OSL:NORDH
Nordhealth As — Q2 2023 Earnings Presentation
36 slides from Nordhealth As's earnings presentation, Aug 22, 2023
Slide 1: Nordhealth
(X] nordhealth
Slide 2: Q2 2023 presentation
Q2 2023 presentation 22 August 2023
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 Update 3.0 Therapy 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: Our mission
🚀 Our mission Build and acquire software that empowers healthcare professionals to save time so they can focus on delivering great care and growing their business Nordhealth 6
Slide 7: Strategy
Strategy Profitability ● Focus development on one product per vertical ● Improve gross margin and development resource allocation by migrating legacy products to Provet Cloud and EasyPractice ● Reduce CAC/New ARR through improvement in onboarding efficiency ● Lean corporate G&A (no additional headco
Slide 8: Q2 2023 KPIs
Q2 2023 KPIs 19.8% 110% organic 3.7% 1.7 CAC / new ARR ARR growth net retention rate gross churn Pro Forma LTM Q2 2023 Pro Forma LTM Q2 2023 LTM Q2 2023 Pro Forma LTM Q2 2023 6.5% total EUR 34.1M EUR 35.2M EUR 0.43 ARR growth ARR Signed ARR ARR per share * Q1 2023 vs Q2 2023 Q2 2023 Annualised Q2 20
Slide 9: 6.5% QoQ ARR Growth in Q2 2023
6.5% QoQ ARR Growth in Q2 2023 +6.5% 1.1 35.2 • ARR grew 6.5% 1.7 -0.2 34.1 • New customer acquisition 0.6 accounted for 27% of the growth 32.0 • Strong expansion in Q2/2023 primarily driven by Provet Cloud user growth and new add-on sales • 49% of ARR on Cloud products in Q2/23 vs. 45% in Q1/23 • P
Slide 10: 20% YoY Pro Forma ARR Growth
20% YoY Pro Forma ARR Growth +19.8% 3.8 -1.1 34.1 1.1 35.2 2.8 • Pro Forma ARR growth at 19.8% in LTM ending Q2/23 28.4 • New customer acquisition accounted for 41% of the growth • 69% of new customer revenues came from Cloud products • Net retention rate (including price increases) 110% Provet Clou
Slide 11: Strong improvement in profitability
Strong improvement in profitability 1.1 0.8 0.7 0.4 0.4 • Growth in total revenue in Q2/23 18% • Restructuring measures in both -0.1 Veterinary and Therapy business -0.4 -1.1 -0.6 -0.2 units -1.1 -1.3 -1.4 • Focus on savings opportunities -1.6 -1.8 from migrating legacy products to -2.0 cloud -2.3 -
Slide 12: Organisation size ready for scale
Organisation size ready for scale At the end of Q2/23 total number of employees amounted to 377 (378 at the end of previous quarter) of which 127 (127) work in Therapy, 222 (225) in Veterinary and 28 (26) in HQ G&A. 404 392 400 378 377 332 257 Q4/2021 Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023
Slide 13: Veterinary Update
02 Veterinary Update Charles MacBain, CEO Nordhealth 13
Slide 14: Veterinary business update
Veterinary business update 2023 Focus ● Nordic legacy migrations ● Acquire new customers in UK, US, Spain ● Acquire new corporate in UK, US, Spain Growth ● CVS pilot ongoing in multiple clinics and progressing well ● Small UK corporate of approx. €160k signed ARR ● Provet Cloud signed ARR in Q2 was
Slide 15: 12% QoQ ARR growth
12% QoQ ARR growth +12.2% 1.1 18.3 • Growth in the second quarter 1.6 -0.0 17.2 2023 was 11.9 % • New customer acquisition accounted for 16% of the growth 0.3 15.4 • Net retention rate (including price increases) 110.0%, primarily driven by Provet Cloud user growth and new add-on sales • 67% of new
Slide 16: 28% YoY Pro Forma ARR growth
28% YoY Pro Forma ARR growth 18.3 +28.0% 1.1 4.3 -0.2 17.2 17.2 • Pro Forma ARR growth at 28.0% in LTM ending Q2/23 1.0 • Net retention rate (including price 13.4 increases) 120.3%, primarily driven by Provet Cloud user growth, new add-on sales and price increases • Churn of 1.5% Provet Cloud signed
Slide 17: Improved Profitability QoQ
Improved Profitability QoQ Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 • Revenue growth (EUR 1.1M in total revenue) together with reorganisation activities -0.2 initiated in Q4/22 had a positive impact on profitability development also in Q2/23 -0.6 -0.8 -0.9 • Reduction in headcount from 233 in Q4/22 to -1
Slide 18: Therapy Update
03 Therapy Update Charles MacBain, CEO Nordhealth 18
Slide 19: Therapy business update
Therapy business update 2023 Focus ● Aspit migration to EasyPractice ● Launch booking portal in Finland Growth ● NEMUS, one of Norway’s leading therapy companies, selected Aspit as their PMS ● Launched Diarium for massage therapists in Finland ● Booking portal, nordhealth.fi, launching therapist pro
Slide 20: 1.5% QoQ ARR growth
1.5% QoQ ARR growth 1.5% • Growth in the second quarter -0.2 2023 was 1.5% 0.1 0.3 16.9 • Low net retention rate (including 16.7 price increases) 99.4%, primarily driven by EasyPractice churn and Aspit end of the invoicing quarter downgrades • New customer acquisition accounted for 72% of the growth
Slide 21: 12.5% YoY Pro Forma ARR growth
12.5% YoY Pro Forma ARR growth +12.5% 1.0 -0.9 • Pro Forma ARR growth at 12.5% 16.9 in LTM ending Q2/23 1.7 • Net retention rate (including 15.0 price increases) 100.9% • Churn of 5.7% • New customer acquisition accounted for 64% of the growth • 64% of new customers came from Cloud products New Net
Slide 22: Strategic reorganisation measures improved profitability
Strategic reorganisation measures improved profitability 1.8 1.5 • Weak NOK and SEK impacting negatively reported revenue growth but reorganisation 1.3 activities initiated in Q4/22 had a positive 1.2 impact on profitability development also in 1.1 Q2/23 0.9 • Reduction in headcount from 140 in Q4/2
Slide 23: Financial Update
04 Financial Update Mari Orttenvuori, CFO Nordhealth 23
Slide 24: Profit & Loss statement
Profit & Loss statement Consolidated Income Statement Unaudited Unaudited Unaudited Unaudited Audited • Total revenues Q2/23 grew 22% YoY to EUR 9.2M; EUR in thousands Q2 2023 Q2 2022 H1 2023 H1 2022 FY 2022 H1/23 growth 23% YoY Recurring revenue 8 201 7 144 16 090 13 596 28 216 Other revenue 987 36
Slide 25: Balance Sheet
Balance Sheet Consolidated Balance Sheet Unaudited Unaudited Audited Cash and Cash Equivalents EUR in thousands 30-June-23 30-June-22 31-Dec-22 ● Cash balance remains strong at EUR 29.0M of cash Intangible assets 11 947 7 687 10 280 and cash equivalents Deferred tax assets 525 43 585 Other capitaliz
Slide 26: Cashflow
Cashflow Consolidated Cash Flow Statement Unaudited Unaudited Unaudited Unaudited Audited Cash flow from operating activities EUR in thousands Q2 2023 Q2 2022 H1 2023 H1 2022 FY 2022 ● Operative cash flow improved in Q2/23 in line with Cash flow from operations profitability - impacted by timing and
Slide 27: Financial calendar
Financial calendar Extended quarterly presentation in Q3 2023 on 14 November 2023. It will be held as a physical event with an opportunity to participate either virtually or physically
Slide 28: Conclusion
Conclusion ● Solid growth and profitability improvement in Q2/2023 ● Signed ARR & Implemented ARR on target ● Confirming guidance ○ 15-20% growth in recurring revenue in 2023 from 2022 (constant currency Dec. 31st 2022 FX rates) ○ EBITDA - CAPEX break-even by Q1 2025 ● EBITDA and EBITDA - CAPEX impr
Slide 29: Q&A
05 Q&A Nordhealth 29
Slide 30: 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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Slide 32: Appendix
(X) nordhealth Appendix ay
Slide 33: KPIs by business segments (Pro Forma)
KPIs by business segments (Pro Forma) 🐶Veterinary Therapy Total Cloud Hosted Cloud Hosted Cloud Hosted All 2022-Q2 (€M) € 5.6 € 7.8 € 6.5 € 8.5 € 12.1 € 16.3 € 28.4 2023-Q2 (€M) € 9.0 € 8.2 € 7.6 € 9.3 € 16.6 € 17.5 € 34.1 Growth 61.6% 4.1% 16.1% 9.8% 37.0% 7.1% 19.8% Migration (€M) € 0.1 € -0.1…
Slide 34: Business Segments
Business Segments 🐶Veterinary Therapy Cloud Hosted Cloud Hosted Products Provet Cloud Provet Legacy (Finland) EasyPractice Aspit (Norway) Nordhealth Pay Sanimalis (Norway, Sweden) Diarium Vetserve (Norway) Nordhealth Connect Vetvision (Denmark) Navisec Flex Vetera (DACH) Share of recurring…
Slide 35: Our products
Our products Electronic Health Occupational and Veterinary Physiotherapists Psychotherapists Record Software Speech therapists World leading position Leaders in Norway and Finland, aiming to expand Practice Management Appointment Calendar & Unified Communication Inventory management Invoicing Softwa
Slide 36: Acquisition history
Acquisition history Several acquisitions completed since 2005 2005 2009 2017 2019 2019 Acquired Praktiikka Entering the therapy Acquired Sanimalis Acquired Provet Pet segment Acquired Navicre Acquired Trofast and Vetserve 2021 2021 2022 2022 2022 Acquired parts of Acquired Novasoft Acquired Aspit Yo