Vercom Sa · GPW:VRC
Vercom Sa — Q1 2024 Earnings Presentation
37 slides from Vercom Sa's earnings presentation, May 21, 2024
Slide 1: Q1 2024 Investor presentation
| Q1 2024 Investor presentation 21 May 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: Highly successful 3 years on WSE
: Highly successful 3 years on WSE LTM EBITDA 28 91 x3 Team members 100 400 x4 Customers 11,400 85,100 x8 Addressable market CEE Global x14 IPO Today 3
Slide 4: Growing aspiration to join mWIG40 index
: Growing aspiration to join mWIG40 index Market capitalization (PLNk) 3,100 Aspirational goal: 2,900 2,700 2,500 2,300 3x Increase 2,100 from IPO 1,900 1,700 1,500 1,300 1,100 900 700 500 Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 Sep 23 Dec 23 Mar 24 4
Slide 5: Outstanding financial results underpinned by +30% organic growth
: Outstanding financial results underpinned by +30% organic growth
Slide 6: Q1 2024 financial results
: Q1 2024 financial results Gross profit Organic growth y/y PLN 51m +26% Adj. EBITDA PLN 23m +33% Net income PLN 16m +72% : Scale beyond 66
Slide 7: 5,700 net customer adds in Q1 2024
: 5,700 net customer adds in Q1 2024 Number of new customers +24% 5,700 4,600 Q1 2023 Q1 2024 : Scale beyond 77
Slide 8: 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 8
Slide 9: Strategic focus on SME clients drives global expansion
: Strategic focus on SME clients drives global expansion
Slide 10: Strong focus on scalability to further grow international presence
: Strong focus on scalability to further grow international presence +1m : SME Long-term target: Paying customers Targeting broader spectrum of customers : ENTERPRISE Globalization of the customer base : CEE : GLOBAL 10
Slide 11: 20% YoY customer base growth
: 20% YoY customer base growth Total number of customers +20% 85,100 70,900 Q1 2023 Q1 2024 : Scale beyond 11 11
Slide 12: Growing international sales
: Growing international sales Sales to foreign customers* (PLNm) +42% 33.2 23.4 Q1 2023 Q1 2024 * Outside of Poland and Czech Republic 12
Slide 13: Selling services to customers in 180 markets globally
: Selling services to customers in 180 markets globally Estimated structure of gross margin from foreign customers in 2023 37% North America 47% Europe 16% Other Team locations Top markets Other markets 13
Slide 14: Strong pick-up in the Enterprise segment driven by improved consumer sentiment
: Strong pick-up in the Enterprise segment driven by improved consumer sentiment
Slide 15: MessageFlow launched in Q4 2023
: MessageFlow launched in Q4 2023 MessageFlow – the new platform aimed enterprise clients One stop-shop for our mid-market customers providing access to the most advanced features and all communication channels Dedicated suite of tools for both marketers and developers Fresh look and new back-end to
Slide 16: 20 years of experience rewarded with trust of landmark partners
: 20 years of experience rewarded with trust of landmark partners 85.100+ Customers 16
Slide 17: LPP: case study
: New platform drives acquisition of new high-calibre clients LPP: case study Largest fashion company in Central and Eastern Europe Solutions: One-stop-shop solution for transactional and marketing communication Millions of Push/Email/SMS messages sent for all 5 LPP fashion brands in 39 European cou
Slide 18: TAURON: case study
: Migration of clients to MessageFlow drives cross-selling of services TAURON: case study A provider of electricity for homes and businesses Solutions: Transfer of transactional and marketing communication to the MessageFlow platform and integration of communication channels Maximum level of communi
Slide 19: We are benefiting from the improving consumer sentiment
: We are benefiting from the improving consumer sentiment Improving consumer sentiment drives the number of online interactions across all market sectors e-commerce Financial institutions Courier companies Utilities Telecoms FMCG Publishing Marketing & product Ordering Payments Shipping status Invoi
Slide 20: Acceleration of the e-commerce supports messaging volume
: Acceleration of the e-commerce supports messaging volume Every e-commerce transaction generates multiple messages, acting as a powerful revenue multiplier Selected groups of clients Retail platforms Financial institutions Last-mile couriers Selected clients Placing Payment Payment Shipment Final I
Slide 21: Healthy growth structure driven by customer adds and cross-selling
: Healthy growth structure driven by customer adds and cross-selling
Slide 22: Strong gross profit growth reflects the growing scale of operations
: Strong gross profit growth reflects the growing scale of operations Gross profit (PLNm) +62% CAGR Q1 2020 – Q1 2024 51 40 15 7 10 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Q1 2024 22
Slide 23: 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) +26% -5 p.p. +121% +14.200 Significant increase sales to Enterprise clients in Q1 2024 drove NER while diluting the gross margin * NER (Net Expansion Rate) – change in revenue from customers generating re
Slide 24: 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 3.2m) PLN 0.8m of G&A increase YoY was associated with the consolidation of Appchance (si
Slide 25: Growing contribution of SaaS services drives cash conversion
: Growing contribution of SaaS services drives cash conversion
Slide 26: Dynamic EBITDA growth in line with target growth trajectory
: Dynamic EBITDA growth in line with target growth trajectory Adjusted EBITDA (PLNm) Note Q1 2024 EBITDA in line with target +43% CAGR Q1 2020 – Q1 2024 growth trajectory for 2024 Strong organic growth rate amounting to 33% YoY Decreasing seasonality resulting from the growing contribution of subscr
Slide 27: 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 23 23 18 17 9 8 8 8 6 6 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Q1 2024 27
Slide 28: High cash generation capacity
: High cash generation capacity LTM EBITDA to LTM FCF bridge (PLNm) 86% EBITDA to FCF conversion rate 21% 3) FCF margin 2) 1) 1) 28
Slide 29: 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) among 64% top global competitors 54% 50% LTM FCF margin 21% 41% 40% 19% 18% EBITDA growth 33% Source: finbox.com, accessed on 17/05/2024 29
Slide 30: Dynamic net income growth supported by decreasing leverage
: Dynamic net income growth supported by decreasing leverage
Slide 31: Strong net income growth driven by operating leverage and lower financing costs
: Strong net income growth driven by operating leverage and lower financing costs Net profit (PLNm) Note +72% Robust net profit growth of 72% yoy Growing net profit margin amounting to c. 16% in Q1 2024 Net income supported by: ▪ Lower financing costs due to: ▪ Prepayment of c. PLN 25m debt in Q4 20
Slide 32: We expect to have positive net cash position in 2024
: We expect to have positive net cash position in 2024 Net debt / LTM EBITDA Note Safe and decreasing net debt / EBITDA (c. 0.3x) with a view to have positive net cash in 2024 Net debt currently amounts to just PLN 27m Stronger cash position means more headroom for potential dividends and growth ini
Slide 33: Increasing headroom for potential acquisitions
: Increasing headroom for potential acquisitions Estimated M&A potential* (PLNm) +67% 500 300 Q4 2023 Q4 2024E * Assuming nil net debt by the end of 2024 and ability to achieve target EBITDA level 33
Slide 34: We are on track to achieve our ambitious goals
: We are on track to achieve our ambitious goals
Slide 35: 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 35
Slide 36: Key takeaways from Q1 2024 results
: Key takeaways from Q1 2024 results Q1 results in line with target growth trajectory for 2024 Strong organic growth rate of c. 33% while maintaining c. 20%+ FCF margin – it means we boast one of the highest Rule of 40 benchmark among leading SaaS companies Healthy growth structure driven by net cus
Slide 37: Thank you for your attention
: Thank you for your attention