Zalaris Asa · OSL:ZAL
Zalaris Asa — Q1 2024 Earnings Presentation
26 slides from Zalaris Asa's earnings presentation, May 7, 2024
Slide 1: Presentation of financial results Q1 2024
7 May 2024 Presentation PeopleHub BY ZALARIS of financial Your one-stop results HR platform Q1 2024
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation doe
Slide 3: Agenda
Agenda Today’s presenters • Highlights • Company in brief • Financial review • Outlook • Q&A Hans-Petter Mellerud Gunnar Manum CEO and Founder CFO © zalaris 2024 Page 3
Slide 4: Highlights
Highlights Simplify work life. Achieve more.
Slide 5: Q1 2024 Highlights – all time high revenue and EBIT
Q1 2024 Highlights – all time high revenue and EBIT Strong growth: Revenue increased 22.0% YoY to NOK 318 million with Net Revenue Retention in MS of 109% High EBIT margin: all time high adj. EBIT of NOK 34.8 million (10.9%), up from NOK 18.5 (7.1%) last year Market success continues with contracts
Slide 6: Several large new contracts in Professional Services in Q1
Several large new contract in Professional Services in Q1 New signings and upsell in PS with Total Contract Value of >NOK 200m during the quarter Significant pipeline of Multi-Country PeopleHub new name and upsell opportunities Notable Wins Vår Energi City of Berlin State of NRW APAC Wins Five-year
Slide 7: Managed Services grew 25% YoY to NOK 233 million
Managed Services grew 25% YoY to NOK 233million and 73% of total revenue. Revenue NOK 232.7m (+24.6%) Revenue in Managed Services grew by +25% 24.6% YoY (+20.9% growth YoY when adj. for 228.9 232.7 positive currency effects) 225.8 204.0 200.0 109% Net Revenue Retention YoY in constant 186.0 186.7 cu
Slide 8: Professional Services grew 9%
Professional Services grew 9% and continued being strong contributor to Zalaris’ overall success and Managed Services growth Revenue NOK 76.8m (+9.0%) Revenue in Professional Services grew by 9.0% +9% YoY (+2.8% when adjusted for positive currency 76.8 effects) 75.3 72.3 73.1 72.4 70.5 In local curr
Slide 9: Majority of Professional Services revenue is considered recurring
Majority of Professional Services revenue is considered recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue Projects 46% 43% 41% 42% 47% ~53 % of Professional Services revenue is recurring, or recurring like, and based on AMS 54% 57% 59
Slide 10: X-shoring continues to develop in the right direction
X-shoring continue to develop in the right direction gradually reducing onshore share of total headcount Use of near-/offshore resources as % of total headcount improved with 1.2% during the quarter Trend expected to continue towards Zalaris 4.0 target of 50% © zalaris 2024 Page 10
Slide 11: Company in brief
Company in brief Simplify work life. Achieve more.
Slide 12: Payroll & HR solutions that enable digital organizations
Payroll & HR solutions that enable digital organizations Zalaris is a leading European provider of global payroll and human capital management solutions delivered through software as a service, 1,500,000 ~1,100 340,000+ outsourcing, or consulting delivery models Employees served monthly Zalaris empl
Slide 13: Zalaris' product offering covering the full employee life cycle
Zalaris’ Product offering covering the full employee life cycle HR system Benefits Country specific Employee self Organizational Employee Co2 Document management locations services structures footprint archive Payroll Cloud Global Payroll Payroll payroll payroll hr-automation HR-transformation Workf
Slide 14: Services delivered by two integrated business units
Services delivered by two integrated business units with most revenues being recurring of nature Managed services (MS) Professional services (PS) Zalaris’ cloud solution and comprehensive payroll and HR outsourcing services Consulting services including delivery of traditional consulting projects as
Slide 15: Diversified and large customer base comprising blue-chips
Diversified and large customer base comprising blue-chips across multiple industries Managed Services Professional Services >1,000 employees >2 countries Software agnostic >1,000 employees Private and public sector SAP integration BERLIN Bank, Insurance & Financial services Health & Life Science Inf
Slide 16: Financial Review
Financial Review Simplify work life. Achieve more.
Slide 17: Revenue increased by 18% for the quarter YoY in local currency
Revenue increased by 18% for the quarter YoY in local currency Revenue NOK 318.3m (+22.0%) 22% 18% Revenue growth (as reported) for the quarter YoY: +22.0% 318.3 Revenue growth +17.8% YoY in constant currency 312.4 307.1 MS +24.6% to NOK 233m 280.5 277.5 • Net retention of 109% 260.8 250.6 PS +9.0%
Slide 18: Strong revenue visibility through 2024
Strong revenue visibility through 2024 - new BPO customers to go live will result in significant revenue increase Revenue development based on signed MS contracts (NOKm) 312 Total annual revenue expected to increase by ~NOK 199m (+18%) vs. FY 2023, based on already signed contracts 109 90 (assuming
Slide 19: All time high adj. EBIT for the quarter
All time high adj. EBIT for the quarter Adj. EBIT* (NOKm) and margin (%) Adj. EBIT NOK 34.8 (NOK 18.5m) +88% 10.9% 10.7% Adj. EBIT margin 10.9% (+3.8pp) 8.5% EBIT and margin improvements from increased 7.1% 7.2% revenue (lower unit cost) and operational 33.4 34.8 improvements (e.g. larger share of s
Slide 20: Condensed Profit and Loss
Condensed Profit and Loss 2024 2023 2023 (NOK 1 000) Jan-Mar Jan-Mar Jan-Dec Revenue 318 309 260 799 1 131 209 License costs 24 898 24 009 99 527 % of revenue 7,8 % 9,2 % 8,8 % Personnel expenses 162 095 139 394 584 324 % of revenue 50,9 % 53,4 % 51,7 % Other operating expenses 82 796 64 900 284 751
Slide 21: Strong cash position and proceeds from sale of assets
Strong cash position and proceeds from sale of assets of NOK 42m – cash collection negatively affected by public Easter holidays at quarter end Development in cash balance (NOKm) -6.4 Positive cash flow from -9.7 -2.2 operating activities of NOK 6.9m -6.5 57.4 -19.7 -10.5 161.1 Negative impact from
Slide 22: Outlook
Outlook Simplify work life. Achieve more.
Slide 23: Zalaris target NOK 1.5bn in 2026 revenues with 12-15% adj. EBIT
Zalaris target NOK 1.5bn in 2026 revenues with 12-15% adj. EBIT through operational excellence and scale Development in revenue Key growth and margin initiatives NOKm 1,500 1 Drive revenue growth through continued new customers 1,131 (1,163)2 and upsell of existing customers 893 2 775 Standardized s
Slide 24: In summary: Q1 delivered with all time high revenue and EBIT
In summary: Q1 delivered with all time high revenue and EBIT. Well positioned to continue positive development over the medium and long term. • Solid start of the new year with Q1 Growth of 22% to annualized revenue of nearly NOK 1.3 billion with 10.9% EBIT • Growth to continue as backlog of sold co
Slide 25: Q&A
Q&A Simplify work life. Achieve more.
Slide 26: Thank you!
We simplify HR and payroll administration, and empower you with useful information so that you can invest more in people. Thank you! Zalaris ASA | +47 4000 3300 | www.zalaris.com Simplify work life. Achieve more.