Vercom Sa · GPW:VRC
Vercom Sa — Q2 2024 Earnings Presentation
38 slides from Vercom Sa's earnings presentation, Sep 2, 2024
Slide 1: Q2 2024 Investor presentation
| Q2 2024 Investor presentation 2 September 2024 : Scale beyond
Slide 2: Disclaimer
: Disclaimer By reviewing this material, you agree to the following limitations: The information provided was prepared by VERCOM S.A. (the "Company”) for informational purposes only and for the purposes of this presentation (the "Presentation"). This Presentation does not constitute or form part of
Slide 3: Profitable growth continued in Q2 2024
: Profitable growth continued in Q2 2024
Slide 4: Q2 2024 financial results
: Q2 2024 financial results Gross profit Organic growth y/y PLN 54m +24% Adj. EBITDA PLN 27m +30% FX-adj. net income PLN 19m +37% : Scale beyond 44
Slide 5: LTM EBITDA already above 2024 ESOP target
: LTM EBITDA already above 2024 ESOP target ESOP financial target – adjusted EBITDA (PLNm) LTM EBITDA already +PLN 2m above the 2024 ESOP target 5 95 80 55 37 2021 2022 2023 2024 5
Slide 6: 19% YoY customer base growth
: 19% YoY customer base growth Total number of customers +19% 87,300 73,100 Q2 2023 Q2 2024 : Scale beyond 66
Slide 7: Record dividend payout from 2023 net profit
: Record dividend payout from 2023 net profit Dividend per share (PLN) +42% 1.60 1.13 2022 2023 7
Slide 8: We are a fast-growing SaaS company
: We are a fast-growing SaaS company
Slide 9: Dynamic growth driven by organic expansion and value-accretive acquisitions
: Dynamic growth driven by organic expansion and value-accretive acquisitions Revenue (PLNm) x30 2022: Global scale-up 2021: Debut on the WSE 337 260 2020: CPaaS leader in the CEE 179 117 78 59 20 34 12 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 9
Slide 10: Facilitating everyday communication between businesses and their customers
Facilitating : Our solutionseveryday communication are an inherent part ofbetween everydaybusinesses life and their customers 10 10
Slide 11: 20 years of experience rewarded with trust of landmark partners
: 20 years of experience rewarded with trust of landmark partners 87.300+ Customers 11
Slide 12: Selling services to customers in 180 markets globally
: Selling services to customers in 180 markets globally Sales to foreign customers* (PLNm) +36% 35.1 25.8 Q2 2023 Q2 2024 Team Top markets Other markets locations * Outside of Poland and Czech Republic 12
Slide 13: Growth in the Enterprise segment accelerated by new cross-sell opportunities
: Growth in the Enterprise segment accelerated by new cross-sell opportunities
Slide 14: Vercom customer engagement flywheel
: Vercom customer engagement flywheel Design & templates W TRACT NE CUSTOMER Segmentation Save time using our content AT S creation tools and templates Boost customer engagement and loyalty by focusing on the right people Smart analytics Turn insights into actions with A/B testing advanced analytica
Slide 15: Sinsay (LPP): case study
: Implementation of OTT (Viber) communication by Sinsay (LPP brand) Sinsay (LPP): case study Fastest-growing LPP brand We are expnding co-operation: The client has been using our solutions for transactional and marketing communication through SMS, EMAIL, and PUSH channels across all 39 markets Due t
Slide 16: Viber is a highly effective communication channel complementary to SMS
: Viber is a highly effective communication channel complementary to SMS Cost-effective way to reach Viber (OTT) features the audience from Ukraine Branding: logo, brand description 91% Name: LPP S.A / sinsay.com Coverage (for Ukraine) Text limit: up to 1000 characters 56% Graphics: jpg, png, gif Av
Slide 17: STS: case study
: Implementation of the OTT (RCS) communication by STS STS: case study STS is a leading sports betting company in Poland Expanding co-operation: The client has been using our solutions for transactional and marketing communication via EMAIL Due to the need to increase the engagement of target audien
Slide 18: RCS allows to engage the audience more effectively than traditional SMS
: RCS allows to engage the audience more effectively than traditional SMS We observe a growing interest in RCS RCS features with 10+ implementations completed Branding: logo, brand description 50% Company name: brand and security Coverage (for Poalnd) Text limit: up to 1000 characters Graphics: jpg,
Slide 19: SME product innovation focused on seamless integration of AI features
: SME product innovation focused on seamless integration of AI features
Slide 20: We are increasing R&D capex to accelerate integration of AI features
: We are increasing R&D capex to accelerate integration of AI features R&D investment (PLNm) Key areas of AI development +76% Abuse prevention: Automatic assessment of client content allowing better protection of the platform and reputation of the infrastructure (i.e. quality of IP addresses) Conten
Slide 21: Introducing AI driven landing page generator
: Introducing AI driven landing page generator 1 Provide background information 2 Choose preferred style 3 Generate landing page 21
Slide 22: Introducing AI driven email content creator
: Introducing AI driven email content creator 1 Choose your tone of voice 2 Select what kind of content you want 22
Slide 23: Healthy growth structure driven by customer adds and cross-selling
: Healthy growth structure driven by customer adds and cross-selling
Slide 24: Strong gross profit growth reflects the growing scale of operations
: Strong gross profit growth reflects the growing scale of operations Gross profit (PLNm) +61% CAGR Q2 2020 – Q2 2024 54 44 21 8 12 Q2 2020 Q2 2021 Q2 2022 Q2 2023 Q2 2024 24
Slide 25: Gross profit growth driven by customer adds and cross-selling of services
: Gross profit growth driven by customer adds and cross-selling of services Gross profit (PLNm) +24% -7 p.p. +134% +14.200 Significant increase sales to Enterprise clients in H1 2024 drove NER up while diluting the gross margin (120% NER ex. top client) * NER (Net Expansion Rate) – change in revenue
Slide 26: Increase in SG&A cost base reflects the growing scale of the business
: Increase in SG&A cost base reflects the growing scale of the business General and administrative expenses (PLNm) Note The increase of G&A costs is mostly associated with the growing scale of the business (PLN 2.7m YoY) 19.6 19.1 16.4 15.8 17.0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Sales and mark
Slide 27: Dynamic EBITDA growth in line with target growth trajectory for 2024
: Dynamic EBITDA growth in line with target growth trajectory for 2024 Adjusted EBITDA (PLNm) Note +46% CAGR Q2 2020 – Q2 2024 Q2 2024 EBITDA in line with target growth trajectory for 2024 Strong organic growth rate amounting to 30% YoY c. 2 p.p. decrease in EBITDA margin resulting from the signific
Slide 28: Strong cash generation capacity proven by increasing free cash flow
: Strong cash generation capacity proven by increasing free cash flow
Slide 29: High conversion rate of EBITDA into operating cash flow
: High conversion rate of EBITDA into operating cash flow Adjusted EBITDA and net cashflow from operating activities (PLNm) Adjusted EBITDA Net cashflow from operating activities 27 23 21 18 13 11 9 9 6 5 Q2 2020 Q2 2021 Q2 2022 Q2 2023 Q2 2024 29
Slide 30: Strong cash generation capacity underpinned by 20%+ FCF margin
: Strong cash generation capacity undeprinned by 20%+ FCF margin LTM EBITDA to LTM FCF bridge (PLNm) 86% EBITDA to FCF conversion rate 21% 3) FCF margin 2) 1) 1) 30
Slide 31: Rule of 40 - outstanding performance vis-à-vis global SaaS peers
: Rule of 40 - outstanding performance vis-à-vis global SaaS peers Rule of 40 for selected SaaS peers One of the highest Rule of 40 (FCF margin + growth rate) 64% among top global competitors 51% 50% LTM FCF margin 21% 41% 40% 19% 18% EBITDA growth 30% Source: finbox.com, accessed on 17/05/2024 31
Slide 32: Net income growth supported by decreasing leverage
: Net income growth supported by decreasing leverage
Slide 33: Net income growth supported by decreasing leverage
: Net income growth supported by decreasing leverage FX-adjusted net profit (PLNm) Note +37% FX-adjusted net profit growth of 37% yoy Net income supported by: ▪ Operating leverage ▪ Decreasing financing costs ▪ Positive tax rate impact due to: ▪ The decreasing level of interest payments ▪ Tax relief
Slide 34: We expect to have positive net cash position by the end of the year
: We expect to have positive net cash position by the end of the year Net debt / LTM EBITDA Note Net debt currently amounts to just PLN 45m Decreasing net debt / EBITDA (c. 0.5x) trend affected by PLN 35m dividend distribution Healthy balance sheet structure means plenty of headroom for potential 3.
Slide 35: We are on track to achieve our ambitious goals
: We are on track to achieve our ambitious goals
Slide 36: We are on track to achieve 2024 growth target
: We are on track to achieve 2024 growth target Adjusted EBITDA (PLNm) 120 +55% x2 100 EBITDA growth drivers 80 +30% Organic growth rate 60 x14 ### Increase of target 40 85 addressable market 55 20 37 26 19 10 0 2018 2019 2020 2021 2022 2023 2024 target 36
Slide 37: Key takeaways from Q2 2024 results
: Key takeaways from Q2 2024 results Continued profitable growth (adj. EBITDA +30% YoY), in line with target growth trajectory for 2024 Healthy growth structure driven by net customer adds (c. 19% YoY) and effective cross-selling of services to Enterprise clients (NER +120% excluding top customer) I
Slide 38: Thank you for your attention
: Thank you for your attention