SmartCraft Group AB (publ) · OMXSTO:SMCRT
SmartCraft Group AB (publ) — Q2 2023 Earnings Presentation
45 slides from SmartCraft Group AB (publ)'s earnings presentation, Aug 24, 2023
Slide 1: Q2 2023 report
Q2 2023 report August 24th 2023
Slide 2: Disclaimer
Disclaimer IMPORTANT – You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by SmartCraft ASA (the "Company") or any person on behalf of the Company, and any question-and-answer session that follows the oral
Slide 3: Agenda
Agenda Part 1: Q2 reporting o Operational efficiency o Financial highlights Part 2: Our solid business model secures strong growth o Marketing and sales excellence o Development strategy o Summary and Q&A
Slide 4: Our solutions provide competitive edge for our construction customers
Our solutions provide competitive edge for our construction customers People o Ensure digital flow of information between Documentation people o Store and process all data in one place accessible for all Material o Data in the field is captured with mobile Apps o Total overview of documentation o Re
Slide 5: Leading position in the Nordics
Leading position in the Nordics Solid performance over time 2019 2020 2021 2022 2023 ARR o Consistent and solid growth before NOKm 145 205 269 318 358 Q2’23 and after the IPO in June 2021 29.5% CAGR o Constantly gaining market share Adjusted EBITDA 36% 41% 40% 39% 41% margin o 15 offices in Sweden,
Slide 6: Q2 2023 highlights
Q2 2023 highlights Continued strong growth, record high margins, strong cash flow and low churn MNOK 358 44% MNOK 25 7% Annual Recurring Adjusted EBITDA Operating cash flow Churn Revenue margin consistently low +21% +153% +7% points
Slide 7: Unique business model creating real customer value
Unique business model creating real customer value True Software as a Service Focused team Strategic focus o Recurring revenue (ARR) Successful ARR is our acquisitions mission o Target SMEs construction companies o Maintenance, services and upgrade projects o Solutions for energy saving initiatives
Slide 8: Implemented changes showing results in Finland
Implemented changes showing results in Finland Congrid ARR pipeline Q2 YoY o Increased focus in 2023 on Renovation o New ARR revenue trending upwards last three quarters o Potential revenue pipeline increased 154% YoY and 73% QoQ o Some large existing customers facing challenges in New Build resulti
Slide 9: Increased momentum in Sweden
Increased momentum in Sweden Booked Meetings - Bygglet 2022 2023 o Organic recurring revenue growth of 5% vs Q1 2023 o Organizational changes and increased sales focus is paying off for Bygglet in Q2 o Booked meetings increased by 64% YoY Jan Feb March April May June o Sales conversion 60% LTM
Slide 10: Stable and strong situation in Norway
Booked meetings Y/Y - Cordel Stable and strong 2022 2023 situation in Norway o Continued strong organic YoY recurring revenue growth of 18% in Q2 Jan Feb March April May June o Increased Sales focus paid off especially for Cordel in Q2 Cordel ARR pipeline Q2 QoQ • 119% increase in booked meetings Yo
Slide 11: Solid growth in all segments
Solid growth in all segments Norway Sweden Finland mNOK mNOK mNOK 50 100% 50 100% 50 100% 40 80% 40 80% 40 80% +25% +23% 30 60% 30 60% 30 +24% 60% 20 40% 20 40% 20 40% 10 20% 10 20% 10 20% 0 0% 0 0% 0 0% Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Revenue EBITDA EBITDA margin Revenue EBITDA EBITDA margin Re
Slide 12: Continued growth in revenue and increasingly strong profitability
Continued growth in revenue and increasingly strong profitability Solid YoY revenue growth Consistently high adjusted EBITDA margin R&D capex mNOK mNOK 96.2% 95.8% +23.7% 43,5 % 40,8 % 41,8 % 100.9 38,8 % 10.8% 36,2 % 6.4% 81.2 Acquired ELinn Acquired El-verdi 10.9 5.2 Q1’22 Q1’23 Q2’22 Q2’23 Q2'22
Slide 13: Solid financial position and strong cash flow
Solid financial position Balance sheet, June 30, 2023 and strong cash flow mNOK Cash and cash equivalents Deferred revenue - to support growth strategy and M&A activity Current assets Current liabilities Non-current assets Non-current liabilities Goodwill and intangible assets Equity Operating cash
Slide 14: High growth in recurring revenue as basis for success
Quarterly ARR growth history, mNOK High growth in recurring revenue as basis for success M&A 27,9 Organic o 21% growth in ARR 5,8 growth 8,8 o 15% organic growth 17,6 2,8 17,3 12,8 12,1 o Additionally, acquisition of ELinn (October 2022) and FX 10,6 7,0 7,8 8,3 5,6 changes Q2'21 Q3'21 Q4'21 Q1'22 Q2
Slide 15: Coredination AB
Coredination AB Our 10th aquisition o Complementary Swedish SaaS solution o 200+ customers o 3000+ users o Workforce management o Machine rental o Fleet management 2022: o Great cross-sell and up-sell opportunities o SEK 10m revenue o 10 employees YTD June: o 18% growth o Located in Stockholm o 12%
Slide 16: Strong ability to extract revenue synergies and drive margin improvement post acquisition
Strong ability to extract revenue synergies and drive margin improvement post acquisition Post-acquisition performance Proven track-record: Revenue 9.6% 27.4% 23.3% 14.9% 29.1% 20.8% o Focus in increasing recurring revenue CAGR o Reduce complexity o Make solution easy to buy Adjusted +11.1pp +33.6pp
Slide 17: Key focus to ensure continued profitable growth
Key focus to ensure Medium-term financial targets remain unchanged continued profitable growth Organic growth o Capitalize on solid new customer pipeline 15 – 20% o Customer centric business model o Improved coordination of marketing and sales teams bolt on M&A o Sales automation & self service o Us
Slide 18: Marketing and sales excellence
Marketing and sales excellence
Slide 19: Multiple attractive levers to drive organic growth
Multiple attractive levers to drive organic growth Continue to capitalize on Up-sell & price Cross-sell Deepen and expand position and optimization existing portfolio presence underpenetrated market Clear growth levers to be driven by a strong commercial organisation and proven go-to-market model
Slide 20: What the market says about digitalization
What the market says about digitalization - Prepeak of our findings 2023 o Yearly market survey about digitalization in the construction industry o Analysis conducted by 3rd party consultant o 680 respondents in the Swedish market o 2023 results to be released in September
Slide 21: More than 78% of respondents will increase or maintain investments in digital tools
More than 78% of respondents will increase or maintain investments in digital tools What is your intention when it comes to business investments in digital tools the next 12 months? o Strong figures despite unstable economic climate indicating great awareness of Diagramtittel 2022 2023 60 digitaliza
Slide 22: Significant potential for operational improvements through digital investments
Significant potential for operational improvements through digital investments In what areas do you see improvements by digital investments? o Great potential to improve all parts of the business 48% 47% 46% 42% 36% 36% o Top 3 related to people, materials 33% and documentation of quality 16% 11% as
Slide 23: Digital tools already crucial to prove competitive position
Digital tools already crucial to Estimate on a scale 1-4 how your business prove competitive position has improved by using digital tools o Improvements when handling Productivity 3,5 all key tasks in the company Revenue 3,2 ensure higher productivity! Turnover 2,9 o Improvements regarding document
Slide 24: Use of digital tools create market winners
Do you think a digital tool creates a better working Use of digital tools create climate ? market winners 86% o Less mistakes and greater transparency lead to a better working climate 7% 6% Yes No Don't know o Customer satisfaction is improved Do you think a digital tool is improving customer satisf
Slide 25: New matrix sales and marketing organization established to optimize sales efforts
New matrix sales and marketing organization established to optimize sales efforts Increased scalability Centre of excellence Sales and marketing Best practice sharing Leverage domain knowledge Enables upselling and cross-selling Increased customer satisfaction
Slide 26: Key measures identified to exploit the strong market fundamentals
Key measures identified to exploit the strong market fundamentals Focus areas for continuous improvement Current sales strategy Increase Customer Acquisition Rate Build the brand o Expand awareness o Streamline purchase o Simplify onboarding Convince our lead Increase Customer Lifetime Value Purchas
Slide 27: Highly effective go-to market strategy
Highly effective go-to Highly efficient sales process2 market strategy Best in class sales engine with broad reach and highly effective lead conversion Customer acquisition cost LTV/CAC 18x Sales Meetings Lead processing Campaigns Lifetime Branding customer value 20 646 000 365 600 60% Media views1
Slide 28: More focused marketing efforts resulting in increased customer awareness
More focused marketing efforts resulting in increased customer awareness Established SmartCraft brands have significant shares of search
Slide 29: Successful online strategy improving market position and sales leads
Successful online strategy improving market position and sales leads SmartCraft Sweden online statistics Direct Online Sales Total market exposure jan feb mar apr may jun jul aug sep okt nov dec Q2 Total Exposure 2022 Total Exposure 2023 2022 2023
Slide 30: Extensive use of digital tools to illustrate efficiency gains with SmartCraft solutions
Extensive use of digital tools to illustrate efficiency gains with SmartCraft solutions User friendly tool to create understanding of benefits of digitalization "Every month we handle 50 projects at the same time, which without a digital tool probably would require 30 people and also affect our prof
Slide 31: Digitalization means a profitable business!
You can save Digitalization means a profitable business! 225 720 SEK/yr ...and 564 hours. And still our calculations are moderate! Our long experience help us estimate how many hours businesses can save using our tools. Thus, this tool helps you estimate the gains of your particular business. Keep i
Slide 32: Development strategy
Development strategy «= sizeoF(grouptist) J. zen) ingo-rorockstt _pprockstil> 2")?
Slide 33: Consolidating solutions for electricians to optimize customer benefit and growth
Consolidating solutions for electricians to optimize customer benefit and growth Factors affecting our development priorities Ongoing initiatives to transform our electro offering Electricians web Electricians have We see strong very high demand demand in the part of SmartCraft Core due to energy ar
Slide 34: Benefits of the SmartCraft Core consolidation for electro
Benefits of the SmartCraft Core consolidation for electro o Unified Experience: Long-term ambition to have a cohesive solution, a more intuitive user experience. o Enhanced Efficiency: Seamless transition between tasks, reducing redundancies and increasing productivity. o Future-Ready: SmartCraft Co
Slide 35: SmartCraft Calculation coming to a laptop near you!
SmartCraft Calculation coming to a laptop near you!
Slide 36: The importance of tender calculations
The importance of tender calculations Thousands of products to choose from Difficult to assess time and material Need to be able to manage many versions Maintaining quality and profitability in each calculation Sending bids in short time frames to have better win rate
Slide 37: The importance of tender calculations
The importance of tender calculations Thousands of products to choose from Difficult to assess time and material Need to be able to manage many versions Maintaining quality and profitability in each calculation Sending bids in short time frames to have better win rate
Slide 38: The importance of tender calculations
The importance of tender calculations Thousands of products to choose from Difficult to assess time and material Need to be able to manage many versions Maintaining quality and profitability in each calculation Sending bids in short time frames to have better win rate
Slide 39: The importance of tender calculations
The importance of tender calculations Thousands of products to choose from Difficult to assess time and material Need to be able to manage many versions Maintaining quality and profitability in each calculation Sending bids in short time frames to have better win rate
Slide 40: The importance of tender calculations
The importance of tender calculations Thousands of products to choose from Difficult to assess time and material Need to be able to manage many versions Maintaining quality and profitability in each calculation Sending bids in short time frames to have better win rate
Slide 41: SmartCraft calculation
SmartCraft calculation o Personalized calculation tool crafted specifically for plumbers and electricians o SmartCraft has a long history of delivering calculation software o Designed with user experience in mind o Opening for new customer groups and segments o First launch to plumbers o Expanding t
Slide 42: DEMO
DEMO
Slide 43: Bring AI to our users
Bring AI to our users o H1 2023 – Using AI tools to boost productivity in our R&D department o H2 2023 - Integrating AI tools directly into our products o Areas involve • Speed up onboarding • Customer success modules • Tailored training • Contextual search
Slide 44: Q&A
Q&A Make sure to follow us for the latest news! smartcraft.com LinkedIn Facebook YouTube
Slide 45: SmartCraft
stl, SmartCraft