Karnov Group Ab · OMXSTO:KAR
Karnov Group Ab — Q1 2019 Earnings Presentation
25 slides from Karnov Group Ab's earnings presentation, May 8, 2019
Slide 1: First quarter 2019
First quarter 2019 Q1 Flemming Breinholt, CEO and Dora Brink Clausen, CFO | 8 May 2019 Q1 2019 PRESENTATION 1
Slide 2: Karnov – The leading B2B platform
Karnov – The leading B2B platform For legal and tax professionals in Denmark and Sweden PRACTITIONERS PUBLIC CONTENT SOURCES Enabling users to make better decisions, faster – every day Legal Accounting and practitioners audit firms CORPORATE Nordic Small & medium PROPRIETARY CONTENT blue-chips enter
Slide 3: Q1 business highlights
Q1 business highlights Continued strong operations and integration of Norstedts Juridik on track IPO over-subscribed, enabling greater financial flexibility The Karnov Group share listed on Nasdaq Stockholm on 11 April (ticker “KAR”) Continued stable growth with improved profitability Steady growth
Slide 4: Q1 highlights
Q1 highlights We have a clear ambition to generate long-term growth and improved margins, and are pleased with the result for Q1. 205 3% 42% 168% Net sales, SEKm Organic growth Adjusted EBITA Cash conversion margin Q1 2019 PRESENTATION 4
Slide 5: Strong result in Denmark
Strong result in Denmark DENMARK Operational development Strong upselling to existing customers New and updated commentaries added to platform for a number of laws The guide to company taxation has been through a comprehensive update BELLA (40% ownership) estate handling workflow service for law fir
Slide 6: New offering for Swedish market on track
New offering for Swedish market on track SWEDEN DENMARK Operational development The integration process of becoming ONE organisation progressed according to plan New joint offering JUNO to be launched under the brand Norstedts Juridik during summer 2019 Successful yearly launch of Swedish Law Book N
Slide 7: Financial development
Financial development Q1 2019 PRESENTATION 7
Slide 8: Stable development with improved profitability
Stable development with improved profitability 6% sales growth and 12% adjusted EBITA growth GROUP Operating cash flow, Earnings per share, Net Sales, SEKm Adjusted EBITA, SEKm SEK +6% SEKm and % +12% +10% +0.30 39% 42% 0.07 -0.23 194 205 76 85 118 130 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019
Slide 9: Steady growth
Steady growth Resilient and visible subscription sales GROUP Net Sales per quarter, SEKm Key comments +6% Growth of 6% driven by online and currency, 200 partly offset by a decline in offline books and training 150 Organic growth of 3% (5%) in line with expectation, positive currency effects of 2% (
Slide 10: Improved profitability
Improved profitability Seasonality in Q1 impacts margins positively GROUP Adjusted EBITA and margin per quarter, SEKm and % Key comments 100 +12% Adjusted EBITA improvement of 12% due to 80 higher sales, favorable product mix, good cost control and lower employee cost 60 Improvement partly offset by
Slide 11: Increased share of online sales
Increased share of online sales Subscription-based sales of 77% GROUP Sales split subscription/non-subscription, % Sales split online/offline, % 100% 100% 23% 18% 24% 25% 32% 80% 34% 80% 60% 60% 40% 77% 82% 40% 76% 75% 68% 66% 20% 20% 0% 0% Q1 2018 Q1 2019 FY 2018 Q1 2018 Q1 2019 FY 2018 Subscriptio
Slide 12: Strong profitability in Segment Denmark
Strong profitability in Segment Denmark Sales driven by upselling to existing customers DENMARK Net Sales, SEKm Adjusted EBITA, SEKm and % Key comments +7% 120 Organic growth of 2% (5%) as expected due +28% to fewer new product launches 100 Currency effects on net sales of 5% 80 60 42% 44% 41% Sales
Slide 13: Segment Sweden grew 4% organically
Segment Sweden grew 4% organically Sales and margins according to expectations SWEDEN Net Sales, SEKm Adjusted EBITA, SEKm and % Key comments Sales grew by 4% of which all organic 120 +4% -1% Upselling to existing customers and new sales 100 60 to both new and existing customers 45% 80 43% Successfu
Slide 14: Solid cashflow and strong cash generation
Solid cashflow and strong cash generation Cash conversion of 168% GROUP Cash flow from operating activities SEKm and cash conversion, % Key comments 219% Cash flow up 10% due to 200 177% 168% Higher operating profit (EBIT) 150 Higher D&A and lower taxes paid +10% Lower increase in receivables du to
Slide 15: New capital structure following IPO
New capital structure following IPO New financing agreement in place GROUP Capital structure Key comments Ratio of net debt to adjusted EBITDA of no more than 3.0. This level may temporarily be Net proceeds of SEK 670 m exceeded, for example as a result of acquisitions. SEK 206 m in loans from relat
Slide 16: Performing in line with financial targets
Performing in line with financial targets Growth Profitability Capital structure Annual organic net sales growth of A higher adjusted EBITA margin Ratio of net debt to adjusted EBITDA 3-5% in the medium term, in the medium term. of no more than 3.0. This level may supplemented by selective acquisiti
Slide 17: Well positioned for future growth
Well positioned for future growth Summary and investment highlights 1 2 3 Market leader in an attractive Unique proprietary content Resilient and visible segment of the information and best-in-class platform subscription sales services market 4 5 Robust and growing earnings Well positioned for futur
Slide 18: Q&A Better decisions, faster
Q&A Better decisions, faster Find what you need, trust what you find and do it quickly. For more information visit www.karnovgroup.com/en/section/investors/ Q1 2019 PRESENTATION 18
Slide 19: Appendix
Appendix Q1 2019 PRESENTATION 19
Slide 20: Condensed income statement
Condensed income statement SEKm Q1 2019 Q1 2018 FY 2018 Net sales 204.9 194.2 715.3 Goods for resale (38.6) (39.1) (126.4) Employee benefit expenses (47.1) (52.9) (215.4) Depreciations and amortisations (42.3) (34.2) (146.8) Other operating expenses (39.8) (56.1) (164.0) Operating profit (EBIT) 37.1
Slide 21: Condensed balance sheet
Condensed balance sheet SEKm 31 March 2019 31 March 2018 31 Dec 2018 SEKm 31 March 2019 31 March 2018 31 Dec 2018 ASSETS EQUITY AND LIABILITIES Non-current assets Total Equity 643.4 666.4 625.2 Goodwill 1,674.6 1,659.7 1,657.7 Other intangible assets 1,298.4 1,326.8 1,289.6 Non-current liabilities R
Slide 22: Cash flow statement
Cash flow statement SEKm Q1 2019 Q1 2018 FY 2018 CASH FLOWS FROM OPERATING ACTIVITIES Operating profit 37.1 11.8 62.7 Adjustments: Non-cash items 42.3 34.2 146.8 Effect of changes in working capital: Increase/decrease in inventories (1.9) (0.8) 1.1 Increase/decrease in receivables 97.2 128.2 10.9 In
Slide 23: Key ratios per quarter
Key ratios per quarter TSEK Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Net sales 204 931 178 817 176 175 166 124 194 226 Organic growth, % 3% 1% 5% 6% 5% EBITA 67 501 36 529 60 194 44 905 41 132 EBITA margin, % 32,9% 20,0% 34,0% 27,0% 21,0% Adjusted EBITA 85 331 60 642 69 632 55 260 76 088 Adjusted EBI
Slide 24: Items Affecting Comparability
Items Affecting Comparability GROUP Q1 Full-year TSEK 2019 2018 2018 Acquisition costs 0 22,395 20,965 Integration costs 3,485 4,490 12,042 IPO costs 14,345 5,262 38,668 Other - 2,807 7,204 Total 17,830 34,955 78,879 Q1 2019 PRESENTATION 24
Slide 25: Important information
Important information The following applies to this document, the oral presentation of the information in this document by Karnov or any person on behalf of Karnov, and any question-and-answer session that follows the oral presentation. This presentation may contain forward-looking statements that r