Gofore Plc · OMXHEX:GOFORE
Gofore — Investor Presentation (March 2021)
44 slides from Gofore's investor presentation, March 2021
Slide 1: Gofore — Pure-play digital transformation consultancy
GOFORE Gofore — Pure-play digital transformation consultancy Investor presentation — March 2021
Slide 2: Disclaimer
GOFORE Disclaimer This presentation includes forward looking statements which involve risks and uncertainty factors. These statements are not based on historical facts but relate to the company’s future activities and performance. They include statements about future strategies and anticipated benef
Slide 3: Presenting today
GOFORE Presenting today «J Mikael Nylund, CEO Teppo Talvinko, CFO
Slide 4: Gofore is a growing and profitable digital transformation consultancy
Gofore is a growing and profitable digital transformation consultancy GOFORE
Slide 5: The world is turning digital at an increasing pace
GOFORE The world is turning digital at an increasing pace 1T-market predictions By 2023, digitally By 2024, over 50% of By 2023, over 500 million By 2022, 30% of Nordic transformed enterprises global IT spend will be for digital solutions will be enterprises will adopt tools will account for more th
Slide 6: We deliver digital solutions with positive societal impact
GOFORE We deliver digital solutions with positive societal impact Selected examples Digitalizing national Building a smarter Protecting the service architecture education sector rchipelago Sea Revolutionizing services Accelerating the switch to for the labor market electric cars Creating a single po
Slide 7: Net sales development 2012-2020
78.0 64.1 50.6 34.0 18.6 9.2 12.4 3.7 6.0 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 8: Our aim is always to be
GOFORE Our aim is always to be a= we Growing and Constantly renewing Impactful and International Offering exceptional profitable responsible customer and employee experience
Slide 9: Key recent highlights
GOFORE Key recent highlights ¢ Strong operative and financial performance continued with net sales growth of 21.7% and adjusted EBITA margin reaching 13.8% despite the COVID-19 situation. * Active M&A track has continued with the acquisition of Qentinel Finland in September 2020 and CCEA in March 20
Slide 10: Gofore key investment highlights
Gofore key investment highlights © Gofore ideally positioned as a digi-native in the accelerating digital transformation © Pure-play next-gen offering with strong customer satisfaction 6) Outstanding historical growth, margins and cash flow Tech-native culture supports scalability and efficiency Res
Slide 11: Gofore ideally positioned as a digi-native in the accelerating digital transformation
GOFORE _ Gofore ideally positioned as a digi-native in the accelerating digital transformation Traditional IT services Business support 2-4% Market growth!) | Long implementation cycles IT to support operations Cost savings Offshoring IT system maintenance 11
Slide 12: Pure-play next-gen offering for agile digital transformation
GOFORE ta) Pure-play next-gen offering for agile digital transformation 100% legacy-free consulting and development services Lead Create Assure ADVISORY SERVICE AGILE CLOUD, QUALITY DESIGN DEVELOPMENT DATA & ASSURANCE ANALYTICS Digitally GEL Design and technology development services (Auten a Oy for
Slide 13: Long-term relationships with a diverse and growing client base
Long-term relationships with a diverse and growing client base Public (74% of sales") Private (26% of sales") ZEEE Outotec ANDRIZ ee aimo park a @on ssrepirO @ () h- eis FJ ass O Lantmanner Sales CAGR Sales CAGR 2017-20: 2017-20: G 1) 2020 figure; 2) 2017 public vs. private sales split percentages b
Slide 14: Tech-native platform underpinning scalability and efficiency
GOFORE e Tech-native platform underpinning scalability and efficiency Daily data collection Real-time forward-looking analytics Human- Data-driven Al-aided decision making centric management Conversational management bots culture model Shared real-time situational awareness Shared responsibility for
Slide 15: Employee growth and attractive employer rankings
# 2019 2020 1 Supercell 6 Reaktor 2 Futurice 7 Microsoft 3 Google 8 Fazer 4 KONE 9 Vincit 5 10 Konecranes 724 582 495 374 196 132 95 45 62 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 16: Sales split by sector, contract type and customer
78.0 64.1 74% 91% 2019 2020 Public Private Time-and-material Fixed price/Other Returning customers New customers
Slide 17: Growth and profitability versus peers
35% 30% 25% 20% 15% 10% 5% 0% -5% -10% 0% 5% 10% 15% 20% 25% 30%
Slide 18: Long-term target to continue rapid and profitable growth
GOFORE — Long-term target to continue rapid and profitable growth Gofore financial targets and dividend policy Growth Profitability Dividend 15% EBITA margin At least 40% of annual net profit >20% annual net sales growth, of which organic growth accounts for approximately half
Slide 19: Avenues to reach the growth targets
6 Avenues to reach the growth targets Growth in Finland International growth Disciplined M&A 1. Become #1 in digital 1. Grow with international 1. Keep up M&A growth at transformation business clients served from Finland least at the historical pace for the p wits Sette 2. Expand physical presence 2
Slide 20: Public and private sector market characteristics
Need for higher efficiency and improved service provision Digitalisation at the top of the strategic agenda Large partnerships and comprehensive services scopes Procurement of expertise and individual tasks The most modern public organisations very advanced digitally IT development still partly in-h
Slide 21: Gofore sales growth and ranking versus competitors
400 350 # Company Sales index 57.8 300 1 IT generalist 100 250 44.8 2 IT generalist 48 200 33.0 150 3 IT product supplier 34 21.4 100 4 27 50 2017 2018 2019 2020 5 IT generalist 19 Gofore Comp. 1 Comp. 2 2017 2018 2019 2020 Comp. 3 Comp. 4
Slide 22: Growth and profitability figures
19.3 20.1 17.6 12.6 2017 2018 2019 2020 2018 2019 2020
Slide 23: Grow with international clients
Grow with international clients Gofore existing platform enables growth with international clients without setting up new physical locations Actively look for and rapidly react to international opportunities — build and develop needed capabilities Deliver promises and show capabilities to grow and e
Slide 24: Market characteristics in Germany
• • • • Creation of new business and sales Improvement of internal efficiency • Agile development Strong in-house development culture More centralized competition Very fragmented competition Fewer significant players Mid size competitor dominated
Slide 25: Gofore has followed a disciplined M&A strategy over the past years
GOFORE — Gofore has followed a disciplined M&A strategy over the past years Leadin 4/2017 state-of-the-art design capability, Silver Planet 2/2019 boosted international digital change business advisory services Sales €4m Sales€7m FTE ~80 FTE ~40 Solinor 8/2018 Mangodesign strengthened 6/2019 expansi
Slide 26: CCEA Ltd and Celkee Ltd key figures
EURm CCEA Ltd Celkee Ltd • Net sales 5.2 0.4 • EBITDA 1.1 0.1 • EBITDA-% 21% 18% EBIT 1.1 0.0 • EBIT-% 20% -2% • • •
Slide 27: Human-centric digital transformation
Growth in Finland International growth 6 Human-centric digital transformation = Human-centric People-driven digital technology + change Leading human-centric digital transformation offering for all organisations
Slide 28: Disciplined M&A
Disciplined M&A Scalable M&A platform and a systematic integration approach Gofore integration model 7) Digital transformation services Platform Customer base Cultural integration and cross-selling integration Financial profile supporting Gofore’s targets + Built to be scalable Keep up historical M&
Slide 29: Financial highlights
Financial highlights GOFORE 29
Slide 30: Net sales and sales CAGR 2017-2020
Sales CAGR 2017-2020 Total 32% 78.0 Finland 34% 64.1 50.6 International 19% 34.0 Public sector 39% Private sector 17% 2017 2018 2019 2020 FAS figures IFRS figures
Slide 31: Profitability development 2017-2020
• • 10.8 • 8.0 6.8 • 5.7 • 7.7 2017 2018 2019 2020 FAS figures IFRS figures
Slide 32: Balance sheet and cash flow key figures
EURm (unless stated otherwise) Q4 2019 Q4 2020 • Cash and cash equivalents 21.4 21.4 Net debt -12.7 -3.8 • Equity ratio 58.1% 47.0% • Net gearing -31.9% -15.4%
Slide 33: Financial guidance
\ Financial guidance 2021 Gofore estimates that, for the full year 2021, net sales will increase compared to 2020, and Adjusted EBITA will increase compared to 2020. Gofore will continue to report and comment on its net sales development on a monthly basis. 2 P#GOFORE
Slide 34: Appendix
Appendix GOFORE
Slide 35: We are more than just another IT consultant
GOFORE We are more than just another IT consultant ; ; © Inour customers’ operational environment pace of change is increasing and predictability is decreasing Developing customers * Traditional “3-year plan” thinking does not work — constant changeis needed capabilities © Together we build right ca
Slide 36: Gofore Spark — our end-to-end framework
GOFORE Gofore Spark — our end-to-end framework / what customers need for successful digitalisation Execute change, Produce, maintain, transform improve Create vision, Identify capabilities, define strategy create foundation w Where we want to be Vision, mission, strategy Where we are now Evaluation
Slide 37: Supporting customers in their digital transformation / what we actually deliver
GOFORE Supporting customers in their digital transformation / what we actually deliver Create vision, Identify capabilities, Execute change, Produce, maintain, define strategy create foundation transform improve ex20 eZ ¥ | wi Gece ee ee eeeaeaeaeaeneneeeeeeetenenaeaeaeaes wee All connected/nosilos
Slide 38: Solid performance through the COVID-19 pandemic
GOFORE Solid performance through the COVID-19 pandemic * The COVID-19 pandemic has caused uncertainties in the operating environment * In the longer term, the pandemic is expected to accelerate digitalization bearing in mind that public and private sector customers’ ability to invest in digital tran
Slide 39: Monthly net sales development in 2020
Qentinel included since September 2020 8.7 8.5 8.3 7.5 7.1 6.8 6.6 6.1 6.1 6.4 6.26.0 6.1 5.9 5.9 6.0 5.2 5.3 5.5 5.1 5.35.6 4.6 2.22.4 January February March April May June July August September October November December
Slide 40: Significant share of sales to public sector
GOFORE Significant share of sales to public sector, which has been a focus area for us Net sales distribution 2020 By location By clientele Subcontracting 10% 78.0 90% 78.0 42% MEUR 58% MEUR = Finland Outside Finland mPrivate m Public Top5 mOthers m Subcontractors m Personnel
Slide 41: Cost structure and adjusted EBITA
• Net sales 100% • • Personnel costs 57% • • Material and services 16% • 1) Other opex 13% • Adjusted EBITA 14% •
Slide 42: Quarterly development
Quarterly development Group (consolidated) Q1/2020 Q2/2020 Q3/2020' Q4/2020' Net sales, MEUR 18.8 18.6 16.3 24.3 EBITA, MEUR, adjusted 3.2 25 19 3.3 EBITA-%, adjusted 16.8% 13.3% 11.5% 13.5% Group (consolidated) Q1/2019 Q2/2019 Q3/2019 Q4/2019 Net sales, MEUR 16.7 16.8 13.3 173 EBITA, MEUR, adjusted
Slide 43: Key figures
GOFORE Key figures In thousands of EUR, unless otherwise stated 2020! 20192 Net sales 77,953 64,066 Growth of net sales, % 21.7 26.7 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 12,329 9,223 Earnings before interest, taxes, depreciation and amortisation (EBITDA) margin, %
Slide 44: Key figures
GOFORE Key figures In thousands of EUR, unless otherwise stated 2020! 20192 Earnings per share (EPS), diluted*, euros 0.49 0.37 Number of outstanding shares at the end of the period 14,036,927 14,012,628 Equity ratio, % 47.0 58.1 Net gearing, % -15.4 -31.9 Return on equity (ROE), % 20.2 18.7 Return