Netcompany Group A/S · OMXCOP:NETC
Netcompany Group A/S — Q2 2019 Earnings Presentation
29 slides from Netcompany Group A/S's earnings presentation, 2019
Slide 1: Netcompany Q2 2019
NETCOMPANY Q2 2019 © Copyright 2019 Netcompany. All rights reserved.
Slide 2: Important information
Important information . This report contains forward-looking statements including, but not limited to, the statements and expectations contained in the outlook section. Forward-looking statements are statements (other than statements of historical fact) relating to future events and Netcompany’s ant
Slide 3: Presenters
Presenters . …will go through the business highlights for Q2 2019 and give an update on employees as well as 2019 guidance André Rogaczewski, CEO …will go through the financial highlights for the quarter Thomas Johansen,CFO 3
Slide 4: Highlights Q2
Highlights Q2/6M Highlights Q2 . DKKm Gross profit Adjusted Revenue Gross profit Average FTEs margin EBITA Q2 2019 593.1 222.7 37.6% 126.1 2,259 Change to 18.0% 13.4% -1.5pp 5.8% 23.6% Q2 2018 4
Slide 5: Employee development
Highlights Q2/6M Employee development . #FTEs increased to 2,098 2,259 Change 150 Non-client facing +39 Average employee 210 UK contractors +12 age 33 1,826 38 87 111 121 Freelancers -27 198 47 Vietnam -17 64 251 104 United Kingdom +48 73 0 170 The Netherlands New starters 137 in Q1 2019 187 +47 New
Slide 6: Cases: New public contracts
Highlights Q2/6M Cases: New public contracts . Q2 2019 - - - The project aims to introduce a state Coordinate and manage the Restoring the collection of all public of the art ship registry for registering deployment activities, continue the debt including outstanding taxes. ownership of ships where
Slide 7: Acquisition of Netcompany Netherlands
Highlights Q2/6M Acquisition of Netcompany Netherlands . Netherlands . Norway • Completed on 13 May 2019 • First plan of the integration completed UK • Focus on pipeline Denmark • Strengthen “go-to” market Netherlands • Support FTE growth • Still a small company to the Netcompany group 7
Slide 8: Revenue visibility
Outlook for 2019 Revenue visibility . Revenue visibility, DKK million Comments Private segment Public segment Revenue visibility start of July for remaining part of 2019 at DKK 405.5 2,105.6 2.1bn 222.6 509.3 182.9 197.1 918.2 Better visibility in the private 1,190.8 312.2 segment compared to previo
Slide 9: Guidance for 2019
Outlook for 2019 Guidance for 2019 . Updated Original guidance 2019 guidance 2019 Organic revenue growth in constant currencies 20-22% 20-25% Adjusted EBITA margin in constant currencies – organic businesses ~26% ~26% Reported revenue growth 20.75-23.25 % N/A Adjusted EBITA margin in constant curren
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS . 10
Slide 11: Working days
Highlights Q2/6M Working days . Q2 2018 Q2 2019 6M 2018 6M 2019 Comments +2 2 working day less in DK and NO in Q2 2019 compared to Q2 2018 as Easter holiday felt on different days DK -1 -1 in 2018 – more public holidays on -2 workdays +2 NO -1 -1 Higher impact on margins in DK and -2 NO due to highe
Slide 12: Q2 income statement
Actual financials Q2/6M Q2 income statement . Q2 2019 Q2 2018 % change DKK million Comments Income statement Revenue 593.1 502.2 18.0% Revenue negatively impacted by Cost of services -370.4 -306.2 21.0% Easter Gross profit 222.7 196.4 13.4% Sales and marketing costs -3.3 -4.3 22.7% Gross profit nega
Slide 13: Revenue – Organic
Actual financials Q2/6M Revenue – Organic . Revenue in contract markets**, DKKm Comments 2018 2019* +16.6% Revenue growth picking up Q/Q +16.7% compared to the beginning of the Q2 586.2 year in DK – as expected +16.9% 502.6 372.4 434.6 +15.5% 41.2 47.6 89.0 104.0 NO and UK lower in Q2 compared to Q1
Slide 14: Gross profit margin
Actual financials Q2/6M Gross profit margin . Gross profit margin Comments 2018 2019* Margin impacted by Easter in Q2 in -1.9pp -1.5pp DK and NO -2.9pp Q2 2.1pp 44.0 % 42.1 % 39.1 % 37.6 % 34.9 % 32.0 % Less Easter impact in the UK due to 20.6 % 22.7 % 18.0 % high use of independent contractors -0.5
Slide 15: Adjusted EBITA
Actual financials Q2/6M Adjusted EBITA . Adjusted EBITA margin (before allocated cost from HQ) Comments 2018 2019* -1.3pp Easter impact around 2-2.5% in Q2 -1.8pp -4.9pp +0.6pp - DK also impacted from IPO related 28.6 % 27.3 % 24.9 % 23.1 % activities in Q2 2018 Q2 19.6 % 14.7 % 11.6 % 12.2 % Strong
Slide 16: Public segment
Actual financials Q2/6M Public segment . Comments % change Non-organic DKK million Q2 2019 Q2 2018 (reported) impact (NL) Growth driven from DK and UK Revenue 341.5 267.8 27.5% 2.4pp Allocated Costs -284.3 -208.8 36.1% 3.6pp Adjusted EBITA 57.2 59.8 -2.9% -1.8pp The changes in split – with a higher
Slide 17: Private segment
Actual financials Q2/6M Private segment . Comments % change Non-organic DKK million Q2 2019 Q2 2018 (reported) impact (NL) Revenue 251.6 234.8 7.1% 0.3pp Growth in both DK and NO from Allocated Costs -182.7 -174.5 4.7% 0.4pp new clients in DK and a mix of new and existing clients in NO Adjusted EBIT
Slide 18: Cash flow
Actual financials Q2/6M Cash flow . Comments Q2 2019 Q2 2018 6M 2019 6M 2018 DKK million Free cash flow increased 390.4% Operating profit (EBIT) 98.9 63.8 219.4 155.1 from DKK 117.2m in Q2 2019 Depreciation and amortisation 38.0 39.0 75.6 77.5 compared to Q2 2018. Non-cash 4.2 0.5 6.7 0.5 Working ca
Slide 19: Work in progress
Actual financials Q2/6M Work in progress . Work in progress last 2 years Comments DKK million Asset Liability WIP net At 30 June 2019 330.4 -21.4 309.0 Stable levels of WIP At 31 December 2018 284.7 -29.6 255.1 At 30 June 2018 289.5 -35.7 253.8 Bring down of WIP balances expected through Q3 and Q4 A
Slide 20: Q&A
&A netcompany
Slide 21: Appendix
APPENDIX . 21
Slide 22: Highlights 6M
Highlights Q2/6M Highlights 6M . DKKm Gross profit Adjusted Revenue Gross profit Average FTEs margin EBITA 6M 2019 1,190.8 456.3 38.3% 273.3 2,179 Change to 16.8% 15.6% -0.4pp 10.6% 17.5% 6M 2018 22
Slide 23: 6M income statement
Actual financials Q2/6M 6M income statement . 6M 2019 6M 2018 % change DKK million Income statement Revenue 1,190.8 1,019.6 16.8% Cost of services -734.4 -625.0 17.5% Gross profit 456.3 394.6 15.6% Sales and marketing costs -6.1 -7.0 -13.5% Administrative costs -176.9 -140.6 25.9% Special items -3.7
Slide 24: Balance sheet
Actual financials Q2/6M Balance sheet . June 30 June 30 DKK million 2019 2018 Assets Intangible assets 2,602.0 2,573.8 Tangible assets 136.7 47.2 Deferred tax assets 2.2 0.5 Other receivables 14.6 12.0 Total non-current assets 2,755.6 2,603.5 Trade receivables 427.2 399.0 Contract work in progress 3
Slide 25: Public segment
Actual financials Q2/6M Public segment . % change Non-organic DKK million 6M 2019 6M 2018 (reported) impact (NL) Revenue 692.3 553.6 25.1% 1.2pp Allocated Costs -561.8 -429.8 30.7% 1.8pp Adjusted EBITA 130.5 123.8 5.4% -0.8pp Adjusted EBITA margin 18.8% 22.4% -3.6pp -0.3pp Allocated special items -2
Slide 26: Private segment
Actual financials Q2/6M Private segment . % change Non-organic DKK million 6M 2019 6M 2018 (reported) impact (NL) Revenue 498.5 466.1 7.0% 0.1pp Allocated Costs -355.5 -342.7 3.8% 0.2pp Adjusted EBITA 142.9 123.3 15.8% 0.0pp Adjusted EBITA margin 28.7% 26.5% 2.2pp 0.0pp Allocated special items -1.5
Slide 27: Revenue type
Actual financials Q2/6M Revenue type . Non-organic Public Private Total Growth growth Revenue, DKK million contribution (NL) Development 169.8 119.9 289.7 33.2% 2.9pp Maintenance 171.7 131.7 303.4 6.4% 0.3pp Revenue Split Development Maintenance Q2 Q2 43.3 % 51.2 % 48.8 % 2019 56.7 % 2018 27
Slide 28: Revenue type
Actual financials Q2/6M Revenue type . Non-organic Public Private Total Growth growth Revenue, DKK million contribution (NL) Development 360.5 259.2 619.7 40.7% 1.4pp Maintenance 331.8 239.3 571.1 -1.4% 0.2pp Revenue Split Development Maintenance 6M 6M 43.2 % 48.0 % 2019 52.0 % 2018 56.8 % 28
Slide 29: Currency exposures
Actual financials Q2/6M Currency exposures . Q2 2019 NOK Local currency, million DKK NOK GBP EUR VND PLN 80 2017/2018 2018/2019 78 Revenue 434.6 61.1 12.2 1.0 0 0 76 74 EBIT 87.5 6.7 0.5 -0.1 2,398.9 0.5 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun GBP Net result 53.4 4.6 0.4 -0.1 2,076.9 0.3 201