Karnov Group Ab · OMXSTO:KAR
Karnov Group Ab — Q2 2024 Earnings Presentation
24 slides from Karnov Group Ab's earnings presentation, Aug 21, 2024
Slide 1: Q2 2024 earnings presentation
Pontus Bodelsson, President and CEO Magnus Hansson, Group CFO August 21st, 2024
Slide 2: Pontus Bodelsson, President and CEO
Pontus Bodelsson, President and CEO 2 2
Slide 3: Delivering on the profitable growth strategy
Delivering on the profitable growth strategy 623 3% Net sales Organic (SEKm) growth 21% 3.0x Adjusted Leverage EBITA margin 3
Slide 4: Public sector and corporates growth drivers in Q2
▪ Public sector and corporates growth drivers in Q2 ▪ Great demand for mission-critical legal information solutions and new AI driven features and tools across all local markets ▪ Preparing launch of Karnov’s generative AI platform this autumn ▪ Acquisitions in Denmark and France for further profita
Slide 5: Enhanced legal research AI assistants and growing into legal workflow AI assistants
Enhanced legal research AI assistants and growing into legal workflow AI assistants 2025 2024 Legal research AI assistants ▪ enhanced legal analysis ▪ pattern recognition Legal research AI assistants Legal workflow AI assistants ▪ conversational mode ▪ include customers’ data ▪ natural language sear
Slide 6: Yearly run-rate by category
Yearly run-rate by category 10 000 7 500 4 MEUR 5 000 2 500 0 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Content Sales Marketing & Customer service Finance and Legal Real Estate Other 6
Slide 7: Yearly run-rate by category and split between segments
Yearly run-rate by category and split between segments 10 000 3 MEUR 31% 7 500 43% Region South Region North Group 5 000 26% 2 500 0 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Content Sales and Customer service Tech platform Finance and legal Busi
Slide 8: The total cost-synergies of EUR 20 m will come progressively over the period
The total cost-synergies of EUR 20 m will come progressively over the period 7 20 000 17 500 MEUR 15 000 12 500 10 000 7 500 5 000 2 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2024 2024 2024 2024 2025 2025 2025 2025 2026 2026 2026 2026 Region South integration Acceleration Initiative 8
Slide 9: Region South: stable net sales and integration ahead of plan
▪ Stable net sales following product rationalisation and optimisation of the Spanish sales force ▪ Integration ahead of plan and synergies falling through ▪ Content integration 100% completed ▪ Preparing launch of new product suite in Spain and France during the autumn ▪ Acquisition of Batir Technol
Slide 10: Region North: strong online sales growth and margin improvement
▪ Strong online sales growth and margins improvement ▪ Growth driver is the public sector in Sweden ▪ Acceleration Initiative synergies coming through ▪ Acquisition of carved-out Schultz LIS in Denmark ▪ New customers on the Danish municipality market ▪ Strengthening our portfolio of local content t
Slide 11: Attractive acquisition based on Karnov's playbook
Strategic rationale ▪ Offer the Danish market the best legal information solutions ▪ Proprietary content for improved AI solutions ▪ New customers on Danish municipality market Financial rationale ▪ Cash consideration of up to SEK 481 m ▪ Expected annual net sales of SEK 83 m and expected Attractive
Slide 12: Q2 financials
Q2 financials Magnus Hansson, CFO IIIIKARNOV GROUP
Slide 13: Growth driven by online sales
GROUP NET SALES Numbers in SEKm Growth driven by online sales +3% ▪ Net sales growth of 3% in the quarter 700 ▪ Driven by both volume and price increases 560 ▪ Optimised sales force has slight impact on new sales ▪ Mission-critical solutions 420 ▪ Growing customer base in all segments 280 ▪ Strong p
Slide 14: Strong growth in Region North
GROUP NET SALES Numbers in SEKm Strong growth in Region North +3% ▪ Group net sales were SEK 623 m (608) 700 ▪ Organic growth (constant currency) was 2.6% and the FX 600 effect was 0.3% 500 ▪ Organic growth in Region North was 6.8% 364 338 349 340 348 ▪ Flat development in Region South in line with
Slide 15: Strong growth in online sales in Region North supported by stable sales in Region South
Strong growth in online sales in Region North supported by stable sales in Region South Sales split online/offline, SEKm, Region North Sales split online/offline, SEKm, Region South 400 400 350 350 300 300 82 88 14 250 19 250 200 200 150 150 261 267 260 239 100 74% 77% 100 50 50 0 0 Q2 2023 Q2 2024
Slide 16: Sales split sub/non-sub, Region North and Region South
Sales split sub/non-sub, SEKm, Region North Sales split sub/non-sub, SEKm, Region South 400 400 350 350 64 64 300 300 8 11 250 250 200 200 150 150 285 286 248 267 100 74% 77% 100 50 50 0 0 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Subscription Non-subscription Subscription Non-subscription 16
Slide 17: Margins improvement from synergies
GROUP ADJUSTED EBITA Numbers in SEKm Margins improvement from synergies +21% 180 45% 143 ▪ Adjusted EBITA amounted to SEK 132 m (109) 160 122 40% 116 132 ▪ Group adjusted EBITA margin was 21.1% (18.0) 140 109 35% 120 ▪ Synergies coming through as expected 100 30% ▪ Synergies effect in Q2 was EUR 1.8
Slide 18: Region North: strong growth and margins
Net Sales, SEKm +6% 300 250 200 150 Strong growth and margins 100 50 ▪ Organic growth (constant currency) was 6.8%. 0 259 279 271 294 275 ▪ Growth driven by online sales of legal information solutions. Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Increased market share within the public sector. Adjusted
Slide 19: Region South: synergies coming through as expected
Net Sales, SEKm 0% 400 300 200 Synergies coming through as expected 100 ▪ Organic growth -0.6% 0 349 340 364 338 348 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ▪ Product rationalisation and optimised sales force has a short-term impact on new sales in Spain Adjusted EBITA, SEKm and ▪ Good traction in l
Slide 20: Units managing Group wide tasks
Adjusted EBITA, SEKm and margin, % Units managing Group wide tasks 25 The Group functions cover the Group wide tasks such as Group Management, Information Security, Compliance, 20 HR, Investor Relations and Group Finance. 15 10 5 19 21 26 19 22 0 Q2 2023 Q3 2023 Q4 2023 Q1 2024REGION NORTH Q2 2024 2
Slide 21: Robust capital capacity from free cash flow
Adj. free cash flow, SEKm Robust capital capacity from free cash flow 180 ▪ Adjusted free cash flow amounted to SEK 14 m (-15) 140 ▪ Improvement of SEK 6 m excluding IAC coming from 100 lower payments of leasing liabilities 60 ▪ Leverage of 3.0x following acquisition in the quarter ▪ In line with th
Slide 22: Delivering on the profitable growth strategy
Delivering on the profitable growth strategy ▪ Public sector and corporates growth drivers in Q2 ▪ 3% organic growth ▪ Harvesting synergies and good cost control ▪ 21% adjusted EBITA margin ▪ Annual run-rate synergies of EUR 7 m by the end of Q2 ▪ Acquisitions in Denmark and France for further profi
Slide 23: Thank you
Thank you Q&A MNES W —————e—_—E—eeyeEEEEEEeEeEeE GROUP
Slide 24: Forward-looking statements disclaimer
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 reflect Karnov’s curren