Webstep As · OSL:WSTEP
Webstep As — Q3 2019 Earnings Presentation
32 slides from Webstep As's earnings presentation, Nov 7, 2019
Slide 1: Q3 2019 & Strategic Update
Q3 2019 & STRATEGIC UPDATE Webstep ASA Oslo 7 November 2019 Arne Norheim (CEO) Liv Annike Kverneland (CFO)
Slide 2: Q3 presentation, Strategic update, Q&A
1. Q3 presentation § Highlights § Financial review § Outlook 2. Strategic update § Status § IT market towards 2022 § Ambitions and priorities 2020-2022 3. Q&A
Slide 3: Q3 Highlights
Q3 Highlights • Revenue growth hampered • Q3 revenues: NOK 137.2 million (-0.6 per cent) • YTD revenues: NOK 483.7 million (-0.9 per cent) • EBITDA negatively impacted by increased use of subcontractors and costs of growth initiatives • Q3 EBITDA: NOK 4.1 million (-53.8 per cent) • YTD EBITDA: NOK 4
Slide 4: Key Value Drivers
Q3 Highlights Key Value Drivers • Reduced capacity • Increased use of subcontractors • Higher rates • One more working day • Onboarding (costs and utilisation) • Increase of sales and recruitment capacity • Capacity growth initiatives starting to yield results
Slide 5: Revenue growth hampered by lower capacity
Financial Review | Income Statement Revenue growth hampered by lower capacity (Amounts in NOK million) Q3 Q3 % YTD YTD % 2019 2018 Change 2019 2018 Change • Higher hourly rates and increased use of subcontractors Total revenues partly offset the negative effect 137.2 138.1 -0.6 % 483.7 487.9 -0.9 %
Slide 6: Financial Review | Segments: Norway
Financial Review | Segments NORWAY (Amounts in NOK million) Q3 2019 Q3 2018 YTD 2019 YTD 2018 FY 2018 Sales revenues 118.1 120.2 418.1 419.8 570.3 EBITDA 3.8 8.8 45.8 57.9 75.3 EBITDA margin 3.2 % 7.3 % 11.0 % 13.8 % 13.2 % EBITDA with former principles for leasing (IAS 17) 2.5 8.8 42.6 57.9 75.3 EB
Slide 7: Financial Review | Segments: Sweden
Financial Review | Segments SWEDEN (Amounts in NOK million) Q3 2019 Q3 2018 YTD 2019 YTD 2018 FY 2018 Sales revenues 19.1 17.8 65.6 68.1 92.8 EBITDA 0.3 0.1 2.6 3.4 3.5 EBITDA margin 1.4 % 0.6 % 4.0 % 5.0 % 3.7 % EBITDA with former principles for leasing (IAS 17) -0.1 0.1 1.4 3.4 3.5 EBITDA margin w
Slide 8: Continued strong financial position
Financial Review | Statement of Financial Position Continued strong financial position (Amounts in NOK million) 30 Sept 31 Dec (Amounts in NOK million) 30 Sept 31 Dec 2019 2018 2018 2019 2018 2018 ASSETS EQUITY Non-current assets Share capital 27.0 27.0 27.0 Intangible assets 383.6 383.4 387.8 Treas
Slide 9: Solid cash flow from operating activities
Financial Review | Cash Flow Solid cash flow from operating activities (Amounts in NOK million) Q3 Q3 YTD YTD Full year 2019 2018 2019 2018 2018 Operating activities • Positive change in receivables impacted Profit/(loss) before tax 0.8 7.6 39.5 57.6 73.5 by calendar effect for Adjustments for: paym
Slide 10: Outlook
Outlook ● Utilisation expected to remain high, although near-term impact of onboarding ● Employee growth expected in Q4. Higher average number of employees and reduced use of subcontractors compared to Q4 2018 ● Costs related to increasing the sales and recruiting capacity and other measures to supp
Slide 11: Q3 presentation, Strategic update, Q&A
1. Q3 presentation § Highlights § Financial review § Outlook 2. Strategic update § Status § IT market towards 2022 § Ambitions and priorities 2020-2022 3. Q&A
Slide 12: Ambitions for 2017–2019
Where do we stand? Ambitions for 2017–2019 1. Grow faster than the market for IT consulting services in the geographies we operate 2. Maintain EBITDA margin above market as demonstrated over the last years 3. Annual dividends minimum 75 per cent of net profit
Slide 13: Revenues & EBITDA 2014-2018, Dividends 2018-2019
Where do we stand? Revenues & EBITDA 2014-2018 Dividends 2018-2019 Dividend ratio in line with 75% ambition Payout year 2019 2018 Dividend per share (NOK) 1.60 1.50 Total dividend NOK 42.4 million NOK 39.7 million Net profit previous year NOK 56.2 million NOK 33.9 million Payout ratio 75% 117% *) To
Slide 14: 2019: The change of trends require action
Where do we stand? 2019: The change of trends require action Webstep revenue trend Webstep EBITDA and EBITDA margin trends LTM = Last Twelve Months 2017 EBITDA is excl IPO and other non-recurring costs
Slide 15: Growth in most locations since IPO
Where do we stand? Growth in most locations since IPO 393 employees as of 30 September 2017 407 employees as of 30 September 2019
Slide 16: Growth in most locations since IPO
Where do we stand? Growth in most locations since IPO Norway Sweden Oslo: Sweden: • Extraordinary turnover in 2H 2018 with spill-over • Positive development for Malmø and Uppsala effect into 1H 2019 • Stockholm requires a continued focus • Expect stepwise build-up of capacity in 2020
Slide 17: Key tech trends supporting market growth
IT market towards 2022 Key tech trends supporting market growth Digitalisation Wave 2 Industrialisation of IT “End to end”; digitalisation of core Mass produces and standardised products business processes. New products from a few global players with innovative and services. New business power and b
Slide 18: Webstep is well positioned to capture market growth
IT market towards 2022 Webstep is well positioned to capture market growth Source: Radar
Slide 19: Webstep is well positioned to capture market growth
Summing up Webstep is well positioned to capture market growth ● Megatrends support future market growth ● Expect high demand and willingness to pay for expert services ● Customers also want a wider range of services ● Webstep has a strong position as a preferred employer for IT experts ● Webstep in
Slide 20: The preferred IT experts
Heading towards 2022 The preferred IT experts
Slide 21: Our long-term ambitions remain unchanged
Heading towards 2022 Our long-term ambitions remain unchanged 1. Grow faster than the market for IT consulting services in the geographies we operate 2. EBITDA margin above market average 3. Annual dividends of minimum 75 per cent of net profit
Slide 22: Webstep today
Enhancing the business model Webstep today The technology experts
Slide 23: Webstep towards 2022
Enhancing the business model Webstep towards 2022 A structured approach to meeting new and increased demands
Slide 24: Strategic partnership with Telenor
Enhancing the business model Strategic partnership with Telenor § Telenor and Webstep has entered into a strategic partnership to deliver smarter solutions for digitization and Internet of Things § Solutions will be developed on Telenor’s data platform – Managed IoT Cloud (MIC) § The strategic agree
Slide 25: Key success factors and strategies for future growth
Heading towards 2022 Key success factors and strategies for future growth Success factors Strategies 1. Expand service offerings, delivery models and partnerships in response to customer demand 2. Expand recruitment base; recruiting new types of expertise 3. Strengthen local presence in current and
Slide 26: The preferred IT experts
Weelection at the end -adé & *_ob.select= 1 The preferred IT experts Wo
Slide 27: Q3 presentation, Strategic update, Q&A
1. Q3 presentation § Highlights § Financial review § Outlook 2. Strategic update § Status § IT market towards 2022 § Ambitions and priorities 2020-2022 3. Q&A
Slide 28: Appendix
APPENDIX We
Slide 29: Effects of implementation: IFRS Leasing
IFRS 16 Leasing Effects of implementation Amounts in NOK 1000 IFRS 16 IAS 17 IFRS 16 IAS 17 Q3 2019 Q3 2019 Q3 2018 YTD 2019 YTD 2019 YTD 2018 Operating revenues 137 237 137 237 138 060 483 701 483 701 487 862 Operating expenses (excluding depreciation and amortisation) 133 143 134 845 129 191 435 3
Slide 30: Consolidated statement of changes in equity
Equity changes Consolidated statement of changes in equity
Slide 31: Top shareholders at November 2019: By shareholder
Top 20 shareholders at 5 November 2019 By shareholder Shareholder name Shares % Type Country J.C. Broch AS and related parties 6 444 843 24% Ordinary Norway Virtus KAR International Small-Cap 3 119 279 12% Ordinary United States VERDIPAPIRFONDET ALFRED BERG GAMBA 1 556 645 6% Ordinary Norway HANDELS
Slide 32: Share of total and by geography
Top 20 shareholders at 5 November 2019 Share of total and by geography Top 20 shareholders at 5 November 2019 Top 20 shareholders by geography at 5 November 2019 NORDIC USA 27% EUR 73% NORWAY Total top 20 shareholders Other