Zalaris Asa · OSL:ZAL
Zalaris Asa — Q1 2021 Earnings Presentation
25 slides from Zalaris Asa's earnings presentation, Apr 29, 2021
Slide 1: Presentation of interim financial results | Q1 2021
Presentation of interim financial results | Q1 2021 29 April 2021
Slide 2: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 2
Slide 3: First quarter 2021: Continued improvement in EBIT
Highlights Q1 Presentation 2021 First quarter 2021: Continued improvement in EBIT • Revenue of NOK 192.8 million for Q1 (-3.9%) • EBIT of NOK 13.8 million for Q1 (+3.0%) • Covid-19 still impacting revenue negatively through some temporary lower volumes and change orders • Signed a 5-year BPO agreeme
Slide 4: Positive margin development continuing during the quarter
Highlights Q1 Presentation 2021 Positive margin development continuing during the quarter Revenue Adj. EBIT* Adj. EBIT margin #FTEs* NOK 193m (-3.9%) NOK 13.8m (+3.0%) 7.2% (+0.5pp) 714 (-5.4%) 200.6 822 192.4 192.8 7,2% 13.8 6,7% 728 714 13.4 4,9% 9.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 5: European Payroll & HR Solutions that Value People
Highlights Q1 Presentation 2021 European Payroll & HR Solutions that Value People Zalaris – Local presence with one global platform • Zalaris is a leading European provider of Payroll and Human Capital Management Solutions delivered through Software as a Service, Business Process as a Service, or Co
Slide 6: Diversified customer base with Germany largest market facing unit
Highlights Q1 Presentation 2021 Diversified customer base with Germany largest market facing unit Diversified across industries and sectors Revenue per country Q1 2021 (%) Health UK Other Industry Retail Poland Not for profit 4,8% organizations and Public 7,5% 2,1% Germany sector Bank & Finland Insu
Slide 7: Lower BPO revenue on reduced volumes, but strong new signings
Highlights Q1 Presentation 2021 Lower BPO revenue on reduced volumes, but strong new signings Revenue EBIT NOK 128.4m (-6.0%) NOK 15.4m (-NOK 1.3m) ▪ Reduction in revenue due to lower volume of travel 16.7 expense processing and change orders due to 136.6 131.7 128.4 15.4 Covid-19. Expect to recoup
Slide 8: Strong start of the year with several strategic signings in Managed Services
Highlights Q1 Presentation 2021 Strong start of the year with several strategic signings in Managed Services • Several new BPO contracts and extensions signed during Q1 and recent weeks • Platform based deals utilizing 5-year agreement with Metsä 5-year agreement with Telefónica for Group for multi-
Slide 9: Telefonica – a landmark deal on the Zalaris platform in Germany
Q1 Presentation 2021 Telefonica – a landmark deal on the Zalaris platform in Germany blueprinting the future • 8’200 employees to be served from Zalaris’ Leipzig Service Center • Consolidate two SAP Payroll solutions to one cloud SAP solution on the Zalaris PeopleHub platform • Integrated to Telefon
Slide 10: Grew Professional Services in Poland during the quarter
Highlights Q1 Presentation 2021 Grew Professional Services in Poland during the quarter Revenue EBIT NOK 64.3m (+0.5%) NOK 5.5m (-NOK 0.8m) 64.0 64.3 ▪ Revenue in Poland grew by ~23% (+NOK 8.7 60.7 2.3m YOY) through new and existing customers, offset by a reduction in Germany 6.3 ▪ Pipeline of poten
Slide 11: Professional Services sales is picking up after Covid slowdown
Highlights Q1 Presentation 2021 Professional Services sales is picking up after Covid slowdown • Significant new project wins in Germany and Poland • Continuing positive trend of additional sales to existing UK Agreement with ThyssenKrupp Agreement for the implementation of customers Elevator for th
Slide 12: More than 55% of Professional Services revenue is recurring
Highlights Q1 Presentation 2021 More than 55% of Professional Services revenue is recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue • ~55% of Professional Services revenue is recurring and based on long term agreements and relationshi
Slide 13: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 13
Slide 14: Covid-19 related reduction in revenue YoY
Financial Review Q1 Presentation 2021 Covid-19 related reduction in revenue YoY Revenue Adj. EBIT* Adj. EBIT margin NOK 192.8m (-3.9%) NOK 13.8m (+3.0%) 7.2% (+0.5pp) • Revenue for the quarter lower than 200.6 last year, with some lower volumes (e.g. 192.4 192.8 7,2% travel expense processing and ch
Slide 15: Stable EBIT YoY and margins gradually improving
Financial Review Q1 Presentation 2021 Stable EBIT YoY and margins gradually improving Adj. EBIT (NOKm) and margin (%), quarterly Adj. EBIT (NOKm) and margin (%), LTM • Adj. EBIT increased by 3.0% compared to last year, despite some lower revenue 7,8% 7,0% 7,1% 7,0% 7,2% 6,7% 6,4% • Adj. EBIT margin
Slide 16: Condensed Profit and Loss
Financial Review Q1 Presentation 2021 Condensed Profit and Loss 2021 2020 2020 (NOK 1 000) Jan-Mar Jan-Mar Jan-Dec • Continued improvement in adj. EBIT margin - 7.2% vs. 192 778 200 611 792 326 Revenue 6.7%, despite some lower License costs 15 575 16 998 72 517 106 062 111 579 430 733 revenue Person
Slide 17: Continued strong cash balance
Financial Review Q1 Presentation 2021 Continued strong cash balance NOK million 124,8 -0,1 -2,1 -4,0 • No material operating cash flow for the -1,0 117,6 quarter due to significant prepayments for licenses in Q1 and other working capital changes, including reduction in VAT payable • Capex of NOK 2.1
Slide 18: Condensed Balance Sheet
Financial Review Q1 Presentation 2021 Condensed Balance Sheet 2021 2020 2020 • Cash and cash equivalents of NOK (NOK 1 000) 31. Mar 31. Mar 31. Dec 117.6m 346 881 400 936 358 008 Fixed and intangible assets • Lease liabilities relate to right-of-use Trade accounts receivable 144 859 161 913 148 651
Slide 19: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 19
Slide 20: Zalaris' M&A strategy focuses on targets with strong recurring revenue components
Q1 Presentation 2021 Zalaris’ M&A strategy focuses on targets with strong recurring revenue components and/or HR Technology that can strengthen our European market position High 1 1 • Companies with portfolio of long-term payroll • Companies located in new European countries or own HR contracts with
Slide 21: Zalaris is an active player in several processes
Q1 Presentation 2021 Zalaris is an active player in several processes • Participating in several processes including companies with pure play HR BPO and combinations of HR Tech and HR BPO • Rationale to leverage platform, synergies and scale in existing geographies and potentially add new HR Tech to
Slide 22: We continue our journey to become the leading European provider of Payroll and HR services
Summary Q1 Presentation 2021 We continue our journey to become the leading European provider of Payroll and HR services • Creating more Net Promoting Customers - and Employees • Continue improving margins towards our communicated 10% target through organizational simplification, increased productivi
Slide 23: Support #teamZalaris Norseman raising funds to combat cancer
Q1 Presentation 2021 Support #teamZalarisNorseman raising funds to combat cancer in support of #AktivMotKreft and #5KYourWay The sponsorship of #teamZalaris for Norseman supports key Zalaris’ values – Aiming High and Team Spirit! Together, our eight-member team will help to raise funds for Aktiv mot
Slide 24: Agenda
Agenda 1. Highlights 2. Financials 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2021 Page 24
Slide 25: Thank you!
“ We simplify HR and payroll administration, and empower you with useful information so that you can invest more in people. Hans-Petter Mellerud, CEO & Founder Thank you! Gunnar.Manum@zalaris.com Hans-Petter.Mellerud@zalaris.com Zalaris ASA | +47 4000 3300 | www.zalaris.com