Trifork Group Ag · OMXCOP:TRIFOR
Trifork — Q3 2024 Earnings Presentation
29 slides from Trifork's earnings presentation, Nov 1, 2024
Slide 1: 2024 Q3 Investor Presentation: Navigating headwinds through transformation
2024 Q3 INVESTOR PRESENTATION 1 NOVEMBER 2024 Navigating headwinds through transformation
Slide 2: Disclaimer: Important Information
DISCLAIMER IMPORTANT INFORMATION This presentation contains forward-looking statements including, but not limited to, statements and expectations concerning expected or projected earnings, strategies, trends and developments. Forward-looking statements are statements (other than statements of histor
Slide 3: Presenters
PRESENTERS CEO CFO Jørn Larsen Kristian Wulf-Andersen Year of joining 1996 Year of joining 2007 Year of birth 1966 Year of birth 1971 Nationality Danish Nationality Danish Educational background Mechanical engineering degree - Civil engineering Educational background Bachelor in Economics - Aarhus B
Slide 4: Trifork Group in short: Ecosystem with shared value creation
TRIFORK GROUP IN SHORT Ecosystem with shared value creation MINIMIZING RISK MAXIMIZING OPPORTUNITIES Trifork Trifork Labs - 76 individual business units - 25 minority investments in small tech companies - Majority ownership - Software products and platforms, either IP spinoff from Trifork or externa
Slide 5: -1.8% revenue growth in Q3
REVENUE -1.8% revenue growth 20% (1) in Q3 -1.4% to 34% 23% 9% 37% 17% 12% 0.0% Revenue from acquisitions 207.9 205-208 Organic revenue 184.9 202.2 183.4 Guidance 158.5 150.0 Revenue growth 146.0 138.0 115.4 106.4 86.5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2
Slide 6: 12.3% adj. EBITDA margin in Q3
TRIFORK SEGMENT - ADJUSTED EBITDA 12.3% adj. EBITDA margin in Q3 12.0% 12.4% 12.4% 17.5% 18.1% 17.3% 16.9% to 13.2% 35.0 Adjusted EBITDA, Trifork Segment 31.9 Guidance 28.6 25-27 Adjusted EBITDA margin, Trifork Segment 20.2 17.9 13.3 10.7 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 7: Initiating cost savings programme of EURm 10
TRIFORK SEGMENT - ADJUSTED EBITDA Initiating cost savings programme of EURm 10 ▪︎ Underestimated negative margin impact from persistently lower- than-expected revenue growth throughout the year - Lower market demand in private segment in particular - Some units have struggled to secure new customers
Slide 8: 2024 Guidance and mid-term targets
2024 GUIDANCE AND MID-TERM TARGETS Guidance downgraded for 2024 due to further delays and continued challenging business climate Trifork Group Trifork Segment Trifork Group Trifork Group revenue adj. EBITDA EBIT NIBD/adj. EBITDA 2 EURm 205-208 EURm 25-27 EURm 8-10 No guidance Guidance 2024 Q3 2024:
Slide 9: Highlights in Q3
FINANCIAL HIGHLIGHTS IN Q3 -0.8% decline in the core business in Q3 REVENUE GROWTH KEY FINANCIALS KEY STATISTICS ▪︎ 76 business units (1) Inorganic growth EURm 47.1 -6.8% ▪︎ 1,278 headcount +2.6% Q3 2024 revenue Q3 2024 organic ▪︎ 25 active startups revenue growth -1.9% ▪︎ >1.0m GOTO subscribers onl
Slide 10: Trifork Segment - Performance update Q3: Inspire
TRIFORK SEGMENT - PERFORMANCE UPDATE Q3 Inspire Conferences Innovation & Operate & Protect Design Workshop ▪︎ Q3 seasonally a quarter with low conference activity ▪︎ Improved earnings momentum continued with EURm 0.8 less negative EBITDA in Q1-Q3 compared to previous year ▪︎ We see good level of wor
Slide 11: Trifork Segment - Performance update Q3: Build
TRIFORK SEGMENT - PERFORMANCE UPDATE Q3 Build Conferences Innovation & Operate & Protect Design Workshop ▪︎ Revenue -2.9% vs. Q3 2023, weaker than expected ▪︎ Weak adj. EBITDA margin of 11.3% due to low revenue growth, low utilization, and costs of reorganization ▪︎ Weakness continues to be primaril
Slide 12: Trifork Segment - Performance update Q3: Run
TRIFORK SEGMENT - PERFORMANCE UPDATE Q3 Run Conferences Innovation & Operate & Protect Design Workshop ▪︎ Revenue increased by 2.2% in Q3 (all organic) ▪︎ Adjusted for volatile and non-core hardware and third- party licenses, revenue growth was 8.4% ▪︎ Adj. EBITDA margin of 33.5% in Q3 ▪︎ Good sales
Slide 13: Main events in Q3
TRIFORK SEGMENT Main events in Q3 Organization Partnerships and trade shows ▪︎ 1,184 FTEs on average (Q3 23: 1,115) ▪︎ Held sessions with the Danish Health Authority and and 1,278 employees in total a large Danish municipality, discussing the future (Q3 23: 1,202) of data management, AI, and Apple V
Slide 14: Some of our customer engagements in Q3
TRIFORK SEGMENT Some of our customer engagements in Q3 Energy and climate Apple Vision Pro solution for SAP mobile maintenance footprint solution for Consumer loan platform global medtech company for Banedanmark global B2C enterprise for Sparxpres Adherence to NIS2 and Expanded cloud Fraud detection
Slide 15: Scalable, secure, and cost effective AI enablement
CASE STORY Scalable, secure, and cost effective AI enablement BY TRIFORK Many organizations struggle with taking AI from data science into the real world in a scalable, secure, and cost-effective way Corax enables customers to configure AI-based workflows with minimal coding. It integrates easily in
Slide 16: Progressing on strategic initiatives for 2024
TRIFORK SEGMENT Progressing on strategic initiatives for 2024 Priorities Action points Progress in Q3 Maintain high level of - Open US and Swiss markets further, potentially with - Expanded US team further with high growth rates as result 1 business development acquisitions - Conversion of leads to
Slide 17: Labs EBT of 2.1m in Q3 from good operational execution
TRIFORK LABS Labs EBT of 2.1m in Q3 from good operational execution Position 1-5 ALPHABETIC ORDER Position 6 – 10 ALPHABETIC ORDER 6.7% REST AxonIQ Arkyn Studios Software development framework Field and factory SaaS on top of SAP 18.3% Bluespace Ventures POS. 6–10 C4 Media The future of Swiss digita
Slide 18: Innovating for a better world: Working towards ESG targets
INNOVATING FOR A BETTER WORLD Working towards ESG targets and preparing for CSRD ENVIRONMENT Science-based emission targets 2030 70% reduction in Scope 1 and 2 emissions1 and transition to green electricity 2030 100% renewable electricity 2026 70% of Trifork’s suppliers2 have set science-based emiss
Slide 19: Trifork Group / Trifork Segment revenue
FINANCIAL REVIEW Trifork Group / Trifork Segment revenue Q3 2024 REVENUE ▪︎ Revenue of EURm 47.1 equal to -1.8% decline Inorganic growth +2.6% ▪︎ Growth impacted by: -1.9% ▪︎ EURm 0.5 less revenue from non-core hardware and third-party licenses in Run. If this is excluded decline was -0.8% ▪︎ Contin
Slide 20: Trifork Segment - Performance
FINANCIAL REVIEW Trifork Segment - Performance Q3 2024 ADJUSTED EBITDA ▪︎ Adj. EBITDA Growth -23.0% ▪︎ EURm 5.8, equal to margin of 12.3% (Q3 23: 14.5%) Margin ▪︎ Decline of 16.5% explained by: 15.2% ▪︎ Lack of positive revenue growth 12.0% ▪︎ Lower Build margins from lower utilization ▪︎ Negative r
Slide 21: Trifork Segment - Performance
FINANCIAL REVIEW Trifork Segment - Performance REVENUE BY SUB-SEGMENTS (EURM) ADJ. EBITDA AND MARGINS BY SUB-SEGMENT IN 9M 2024 Inspire Build Run -42.6% 13.4% 22.0% 12.0% Other 21
Slide 22: Trifork Group - Performance
FINANCIAL REVIEW Trifork Group - Performance Q3 2024 EBIT ▪︎ EBIT Growth ▪︎ 2.4% margin (Q3 2023: 6.6%) impacted negatively by Margin same factors as adj. EBITDA ▪︎ Slightly increased depreciations/amortizations from Chapter 5 and Spantree acquisitions and new office leases -63.5% 8.0% -64.1% 3.0% 6
Slide 23: Trifork Segment - Inspire
FINANCIAL REVIEW Trifork Segment - Inspire Q3 2024 REVENUE ADJUSTED EBITDA ▪︎ Revenue EURm 0.8 in Q3 (+11.6%) ▪︎ No larger conference activities in the quarter ▪︎ Adj. EBITDA EURm -0.6 (Q3 2023: EURm -0.9) 6.3 ▪︎ Good planning for GOTO Copenhagen in Q4 +8.2% ▪︎ Expecting result in Q4 to be around br
Slide 24: Trifork Segment - Build
FINANCIAL REVIEW Trifork Segment - Build Q3 2024 REVENUE ADJUSTED EBITDA ▪︎ EURm 34.5 revenue (-2.9%) Inorganic growth Margin ▪︎ Continued soft market environment in Private Denmark, but Public Denmark getting better +3.5% UK weak while US momentum is strong 149.6 -29.3% ▪︎ -0.3% ▪︎ Adj. EBITDA marg
Slide 25: Trifork Segment - Run
FINANCIAL REVIEW Trifork Segment - Run Q3 2024 REVENUE ADJUSTED EBITDA ▪︎ Revenue of EURm 11.6 (+2.2% organic) Margin ▪︎ EURm 0.5 less hardware and third party licenses in the quarter. Adjusted for this, revenue growth was +8.4% Adj. EBITDA margin of 33.5% (Q3 2023: 51.3 ▪︎ -7.0% -7.2% 23.2%) ▪︎ Imp
Slide 26: Trifork Segment - Run revenue split
FINANCIAL REVIEW Trifork Segment - Run revenue split Hosting and security Licenses and support Third-party licenses Hardware Adj. EBITDA margin 21.7% 16,000 31.2% 19.2% 33.5% 12,000 23.2% 21.1% 13.1% 12.1% 16.2% 20.1% 23.5% 28.3% 19.0% 16.4% 8,000 28.5% 20.6% 22.7% 22.6% 15.7% 4,000 Q2/2020 Q4/2020
Slide 27: Labs Segment - Performance & Position
FINANCIAL REVIEW Labs Segment - Performance & Position EBT (EURM) INVESTMENTS (EURM) Accumulated net exit proceeds and dividends Accumulated unrealized gains Invested unrealized gains from deconsolidation of Group companies Invested cash in current portfolio Book value EURm 75.4 (1) (1) 27
Slide 28: Trifork Group - Cash Flow & Financial Position
FINANCIAL REVIEW Trifork Group - Cash Flow & Financial Position Q3 2024 NET INTEREST-BEARING DEBT ▪︎ Operating cash flow of EURm 4.9 (Q3/23: 11.6) Leverage ratio (NIBD/adj. EBITDA) -0.6x ▪︎ Investing activities of EURm -6.0 (Q3/23: -1.5) ▪︎ Financing activities of EURm 3.5 (Q3/23: -1.4) -0.1x ▪︎ Net
Slide 29: Q&A
Q&A Long-term external growth drivers Software innovation specialists Three decades of resilient growth and margins Full-circle and low risk business model Effective and agile teal organization Successful and profitable innovation model Enabling customers to become sustainable We change the world wi