Nordhealth As · OSL:NORDH

Nordhealth As — Q3 2024 Earnings Presentation

41 slides from Nordhealth As's earnings presentation, Nov 12, 2024

  1. Slide 1: Nordhealth

    (X] nordhealth

  2. Slide 2: Q3 2024 presentation

    Q3 2024 presentation 12 November 2024

  3. Slide 3: Today's presenters

    Todayʼs presenters Charles MacBain Mari Laine CEO CFO Nordhealth 3

  4. Slide 4: Agenda

    Agenda 1.0 Company Update 2.0 Veterinary BU Update 3.0 Therapy BU Update 4.0 Financial Update 5.0 Q&A Nordhealth 4

  5. Slide 5: Company Update

    01 Company Update Charles MacBain, CEO Nordhealth 5

  6. Slide 6: Q3 2024 KPIs

    Q3 2024 KPIs 23.7% 114.8% 6.2% 0.7 Organic ARR growth1 Net retention rate Churn1 CAC / new ARR LTM Q3 2024 YoY Q3 2024 LTM Q3 2024 LTM Q3 2024 15.8 LTV / CAC €41.8M €43.8M €0.53 LTM Q3 2024 Implemented ARR Signed ARR ARR per share2 September 2024 Annualised Q3 2024 Q3 2024 Annualised 1. Churn includ

  7. Slide 7: Strong track record of organic and acquisition-led growth

    Strong track record of organic and acquisition-led growth Signed ARR Excludes GR Vets4Pets d CA e post-pilot ualis % Ann 56 rollout Nordhealth 7

  8. Slide 8: Organic ARR growth is accelerating

    Organic ARR growth is accelerating Organic signed ARR growth per period • YTD Q3/24 organic ARR growth has exceeded FY 2023 Nordhealth 8

  9. Slide 9: 23.7% YoY implemented ARR growth

    23.7% YoY implemented ARR growth ARR • Implemented ARR excluding other businesses grew 23.7% YoY • Net upsell primarily driven by CVS implementation and other Provet Cloud ARPU and user growth • 6.2% ARR churn higher than long-term average. Excluding loss of Diarium enterprise customer, churn would

  10. Slide 10: 2.4% QoQ implemented ARR growth in Q3 2024

    2.4% QoQ implemented ARR growth in Q3 2024 Implemented ARR • Implemented ARR grew 2.4% QoQ • New customer acquisition growing steadily overperforming net upsell • Low churn in Q3/24. Annualised churn would be 2.6% Reported in constant currency (using year 2023 end currency rates). Nordhealth 10

  11. Slide 11: Adj. EBITDA - CAPEX positive again Q3 2024

    Adj. EBITDA  CAPEX positive again Q3 2024 EBITDA  CAPEX (adjusted) Drivers of result improvement Q3/24 vs Q3/23 • Recurring revenue growth €1.8M • Implementation/one-off license revenues €0.3M • Costs increases across the organisation to support growth €1.2M Adjusted EBITDA  CAPEX adjus

  12. Slide 12: Veterinary Update

    02 Veterinary Update Charles MacBain, CEO Nordhealth 12

  13. Slide 13: Veterinary update

    Veterinary update ● Strong growth of Provet Cloud YoY driven by CVS ● Nordic migration is progressing, albeit slower than anticipated. €4.1M of ARR still on Vetvision, Provet Net, Sanimalis. ● Product development efforts focused on migration to new front-end, improving core workflows and enterprise

  14. Slide 14: 35.4% YoY Veterinary implemented ARR growth

    35.4% YoY Veterinary implemented ARR growth Implemented ARR • Implemented ARR grew 35.4% YoY • Net retention rate 125.4%, primarily driven by CVS user growth and new add-on sales • Churn of 4.8% • The sunset of Provet Win and Vetserve products increased churn rate over long CVS Post-pilot term avera

  15. Slide 15: 4.1% QoQ Veterinary implemented ARR growth

    4.1% QoQ Veterinary implemented ARR growth Implemented ARR • Implemented ARR growth in was 4.1% in the third quarter • Net upsell was driven by Provet Cloud ARPU and user growth • New customer acquisition accounted for 39.2% of the growth Reported in constant currency (using year 2023 end currency r

  16. Slide 16: Adj. EBITDA - CAPEX improved by €0.8M YoY

    Adj. EBITDA  CAPEX improved by €0.8M YoY EBITDA  CAPEX (adjusted) Drivers of result improvement Q3/24 vs Q3/23 ● Recurring revenue growth €1.6M ● Implementation/one-off license revenues €0.3M ● Costs increases across the organisation to support growth €1.0M Excluding group cost allocatio

  17. Slide 17: Therapy Update

    03 Therapy Update Charles MacBain, CEO Nordhealth 17

  18. Slide 18: Therapy update

    Therapy update ● Focused on developing our new unified platform to meet the needs of Norwegian therapists and enable us to upgrade Aspit customers ● Migrated 60 of 7,598 users - no migrated customers have churned. ● Piloting Norwegian Helsenett, Helfo and Digicare in Q4 2024 ● ARR growth of 9.3% YoY

  19. Slide 19: 9.3% YoY therapy implemented ARR growth

    9.3% YoY therapy implemented ARR growth Implemented ARR • ARR growth at 9.3% YoY • Net retention rate (including price increases) 101.7% • Churn of 7.9% 5.9 % excluding loss of an enterprise customer in Therapy BU in late 2023 • No price increase in the last 24 months for EasyPractice. Aiming to c

  20. Slide 20: 0.1% QoQ Therapy ARR growth

    0.1% QoQ Therapy ARR growth Implemented ARR • Growth in the second quarter was 0.1% • Low net retention rate 92.8% primarily driven by net downsell • Annualised quarter-to-quarter churn rate has decreased from 11.3% in Q4/23 to to 3.2% in Q3/24 Reported in constant currency (using year 2023 end cu

  21. Slide 21: Investments impacted profitability

    Investments impacted profitability EBITDA  CAPEX (adjusted) Drivers of result change between Q3/24 vs Q3/23 ● Recurring revenue growth €0.2M ● Cost increases in product development and sales & marketing to support migrations and future growth €0.4M Excluding group cost allocations. Therapy Q

  22. Slide 22: Financial Update

    04 Financial Update Mari Laine, CFO Nordhealth 22

  23. Slide 23: 26.9% growth in total reported revenues YoY

    26.9% growth in total reported revenues YoY 26.9% • Total reported revenues grew by 26.9% YoY to €11.2M in Q3/24 €8.8M in Q3/23 • Reported recurring revenues grew by 25.9% YoY to €10.4M in Q3/24 €8.2M • Share of recurring revenue in Q3/24 was 92.6% 93.3% in Q3/23 Nordhealth 23

  24. Slide 24: Adjusted EBITDA improving YoY

    Adjusted EBITDA improving YoY • Adjusted EBITDA improved to €1.4M in Q3/24 €0.7M in Q3/23 • Adjusted EBITDA margin 12.5% in Q3/24; an improvement from 7.8% in Q3/23 • Recurring revenue growth €2.1M driving profitability in Q3/24 • Cost increases across the organisation to support growth €1.2M

  25. Slide 25: Free cash flow improving steadily YoY

    Free cash flow improving steadily YoY • Free cash flow improved by €1.6M from Q3/2023 • Positive net operating cash flow of €0.7M in Q3/24 vs. €0.6M in Q3/23 mainly due to improvement in profitability by €1.1M YoY Adjusted for non-recurring items Nordhealth 25

  26. Slide 26: Strong cash position and no debt

    Strong cash position and no debt Balance sheet 30 September 2024 5.8 100 Assets 3.6 80 20.0 9.4 • Cash, cash equivalents and money market funds amounted to €20.0M at 7.9 the end of Q3/24 60 9.6 13.2 • Intangible assets primarily consist of 76.5 capitalised R&D expenses 40 43.0 20 Liabilities and equ

  27. Slide 27: Conclusion

    Conclusion Conclusion ● PMS ARR grew 23.7% YoY (using year 2023 end currency rates) ● Recurring revenue grew 21.7%YTD 2024 vs.YTD 2023 Dec. 31st 2023 constant currency) ● EBITDA  CAPEX was positive in Q2 and Q3 2024 Guidance Update ● Dropped EBITDA  CAPEX break-even by Q1 2025 in the Q2 announcem

  28. Slide 28: Financial calendar

    Financial calendar Q4 2024 results presentation on 4 March 2025. Full year financial calendar can be found on company website.

  29. Slide 29: Q&A

    05 Q&A Nordhealth 29

  30. Slide 30: Appendix

    (X) nordhealth Appendix ay

  31. Slide 31: Profit & Loss statement

    Profit & Loss statement Consolidated Income Statement Unaudited Unaudited Unaudited Unaudited Audited EUR in thousands Q3 2024 Q3 2023 YTD Q3 2024 YTD Q3 2023 FY 2023 Recurring revenue 10 384 8 270 29 484 24 359 33 085 Other revenue 835 568 4 087 2 337 3 740 Total revenue 11 219 8 838 33 571 26 696

  32. Slide 32: Balance Sheet

    Balance Sheet Consolidated Balance Sheet Unaudited Unaudited Audited EUR in thousands 30Sept-24 30Sept-23 31Dec-23 Intangible assets 13 144 12 096 12 480 Deferred tax assets 503 546 547 Other capitalized long-term expenses 44 120 101 Goodwill 43 017 50 572 49 008 Machinery and Equipment 329 573 4

  33. Slide 33: Cashflow

    Cashflow Consolidated Cash Flow Statement Unaudited Unaudited Unaudited Unaudited Audited EUR in thousands Q3 2024 Q3 2023/** YTD Q3 2024 YTD Q3 2023/** FY 2023 Cash flow from operations Profit before income taxes 693 1 797 4 644 7 498 10 806 Taxes paid in the period 112 169 251 31

  34. Slide 34: Business Segments

    Business Segments 🐶Veterinary 󰟻Therapy Other Businesses Cloud Hosted Cloud Hosted Cloud Non-Cloud Products Provet Cloud Vetera DACH EasyPractice Physica Navisec IT Operations Provet Pay Sanimalis Norway Diarium Psykbase Provet Net Finland) Booking Portal Vetvision Denmark) Share of ARR 41%…

  35. Slide 35: Strong organic growth accelerated by acquisition and migration strategy

    Strong organic growth accelerated by acquisition and migration strategy 9 acquisitions completed since 2005, 7 in last 5 years Migrated Migrated Migrated In Progress Migrated 󰎿 2005 󰎿 2009 󰐴 2019 󰐘 2019 󰐘 2019 Acquired Praktiikka Vetserve In Progress In Progress In Progress Flagship 󰎴 2021 󰐘…

  36. Slide 36: Veterinary average churn close to 2% and net retention above 118%

    Veterinary Average churn close to 2% and net retention above 118% over the last 5 years Churn rate Net retention rate ● Churn in LTM Q3/24 impacted by sunsetting of Provet Win and ● Average net retention almost 119% - driven primarily by Vetserve products. growth in enterprise clients. ● Our excepti

  37. Slide 37: Therapy churn and net retention impacted by one-off churn event

    Therapy Churn and net retention impacted by one-off churn event Churn rate Net retention rate ● Churn increased in 2023 and YTD Q3/24 due to losing our 2nd ● Average net retention rate 110% impacted by largest therapy customer following their acquisition by a EasyPractice self-service model and focu

  38. Slide 38: Increase in Veterinary headcount to support growth

    Increase in Veterinary headcount to support growth Headcount At the end of Q3/24 total number of employees amounted to 403 395 at the end of previous quarter) of which 128 128) work in Therapy, 250 239) in Veterinary and 25 28) in HQ G&A. Including employees on a consultancy agreement. Nordhealt

  39. Slide 39: Expanded product offering to solve additional customer pain points

    Expanded product offering to solve additional customer pain points Practice Management Appointment Calendar & Electronic Health Inventory management Invoicing Software Online Booking Records Payments Terminal Payments Online payments Recurring payments Pay by email or SMS link Telemedicine Imaging A

  40. Slide 40: Key definitions

    Key definitions ARR is recurring revenue annualised by multiplying the quarter’s last month recurring revenue by 12. Exchange rates used to calculate ARR are adjusted on an annual basis at the end of the 1st quarter. Constant currency ARR growth rates are calculated by applying the end of the previo

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