Nordhealth As · OSL:NORDH

Nordhealth As — Q2 2024 Earnings Presentation

42 slides from Nordhealth As's earnings presentation, Aug 20, 2024

  1. Slide 1: Nordhealth

    (X] nordhealth

  2. Slide 2: Q2 2024 presentation

    Q2 2024 presentation 20 August 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: Q2 2024 KPIs

    Q2 2024 KPIs 17.4% 108% 5.1% 0.8 Organic ARR growth Net retention rate Net churn1 CAC / new ARR2 LTM Q2 2024 LTM Q2 2024 LTM Q2 2024 LTM Q2 2024 12.5 LTV / CAC €40.8M €42.7M €0.52 LTM Q2 2024 Implemented ARR Signed ARR ARR per share2 June 2024 Annualised Q2 2024 Q2 2024 Annualised 1. Excluding loss

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

    Strong track record of organic and acquisition-led growth Signed ARR R AG Excludes dC e Vets4Pets nu alis % post-pilot An 62 rollout Nordhealth 7

  8. Slide 8: Organic ARR growth is accelerating

    Organic ARR growth is accelerating Organic signed ARR growth per period • Already after first 6 months this year ARR growth has been nearly as much as during the whole 2023 Nordhealth 8

  9. Slide 9: 11.7% QoQ implemented ARR growth in Q2 2024

    11.7% QoQ implemented ARR growth in Q2 2024 Implemented ARR • Implemented ARR grew 11.7% QoQ • Strong net upsell in Q2/24 primarily driven by the implementation of CVS small animal clinics to Provet Cloud Reported in constant currency (using year 2023 end currency rates). Nordhealth 9

  10. Slide 10: 17.4% YoY implemented ARR growth and €42.7M Signed ARR

    17.4% YoY implemented ARR growth and €42.7M Signed ARR Implemented ARR • Implemented ARR grew 17.4% YoY • 70%+ of new customer ARR came from Provet Cloud and EasyPractice • Net upsell primarily driven by CVS implementation and other Provet Cloud ARPU and user growth • 7.7% ARR churn higher than long

  11. Slide 11: Adj. EBITDA + CAPEX margin break-even in Q2 2024

    Adj. EBITDA  CAPEX margin break-even in Q2 2024 EBITDA  CAPEX (adjusted) • Adjusted EBITDA  CAPEX adjusted for: • Q2/22 - no adjustments • Q2/23 - no adjustments • Q2/24 - restructuring costs €0.1M Nordhealth 11

  12. Slide 12: Veterinary Update

    02 Veterinary Update Charles MacBain, CEO Nordhealth 12

  13. Slide 13: Veterinary update

    Veterinary update Growth - The CVS roll-out has been progressing successfully and we now have 385 locations live in Provet Cloud. - We signed 489k€ new ARR in Q2 (excl CVS. - Our payment solution Provet Pay has reached over 1M€ ARR in Q2. Migration - Vetserve has been successfully discontinued in Q

  14. Slide 14: 27.8% YoY Veterinary implemented ARR growth

    27.8% YoY Veterinary implemented ARR growth Excludes Implemented ARR Vets4Pets post-pilot rollout • Implemented ARR grew 27.8% YoY • Net retention rate 118.7%, primarily driven by Provet Cloud user growth and new add-on sales • Churn of 4.4% • The sunset of Provet Win and Vetserve products increased

  15. Slide 15: 20.4% QoQ Veterinary implemented ARR growth

    20.4% QoQ Veterinary implemented ARR growth Excludes Implemented ARR Vets4Pets post-pilot rollout • Implemented ARR growth in was 20.4% in the second quarter • Upsell was especially driven by the implementation of CVS small animal clinics • New customer acquisition accounted for 19% of the growth Re

  16. Slide 16: Adj. EBITDA + CAPEX improved by €1.5M YoY

    Adj. EBITDA  CAPEX improved by €1.5M YoY EBITDA  CAPEX (adjusted) Drivers of result improvement Q2/24 vs Q2/23 ● Implementation/one-off license revenues €1.3M ● Recurring revenue growth €1.2M ● 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 Growth ● Our new implemented MRR year-to-date ending June 31st was €55,270 (slightly above target) ● Recurring revenue fell short of target due to higher churn, downsell and delayed price increases for EasyPractice ● 334 therapists profiles signed up to booking portal in Finland and p

  19. Slide 19: Karan Wallia joins Nordhealth as Therapy BU CEO

    Karan Wallia joins Nordhealth as Therapy BU CEO Nordhealth Sept. 2, 2024 Appointed as the CEO of the Therapy Business Unit SmartRecruiter - Amsterdam, Holland Nov 2022  May 2024 Senior VP of Product Management Jan 2022  Nov 2022 General Manage at SmartRecruiters Booking.com - Amsterdam, Holland

  20. Slide 20: 5.4% YoY therapy implemented ARR growth

    5.4% YoY therapy implemented ARR growth Implemented ARR • ARR growth at 5.4% YoY • Net retention rate (including price increases) 97.9% • Churn of 6.3% (excluding loss of an enterprise customer in Therapy BU in late 2023 - impact of that customer shown separately with a lighter colour in the graph

  21. Slide 21: 2.1% QoQ Therapy ARR growth

    2.1% QoQ Therapy ARR growth Implemented ARR • Growth in the second quarter was 2.1% • Annualised quarter-to-quarter churn rate has decreased from 11.3% in Q4 2023 to 8.8% in Q1 2024 and to 6.5% in Q2 2024 Reported in constant currency (using year 2023 end currency rates). Nordhealth 21

  22. Slide 22: Investments impacted profitability

    Investments impacted profitability EBITDA  CAPEX (adjusted) Drivers of result change between Q2/24 vs Q2/23 ● 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

  23. Slide 23: Financial Update

    04 Financial Update Mari Laine, CFO Nordhealth 23

  24. Slide 24: Revenue growth driving profitability

    Revenue growth driving profitability 89% 81% 12.5 33% • Total reported revenues Q2/24 grew 33% YoY 10.0 from € 9.2M to € 12.2M • Share of recurring revenue in Q2/24 was 81% vs 7.5 89% in Q2/23; driven by CVS rapid implementation 5.0 • Adjusted EBITDA improved from €0.2M in Q2/23 9.2 12.2 to €1.3M

  25. Slide 25: Recurring revenue growing at 21%

    Recurring revenue growing at 21% 21% 10.0 9.9 9.5 • Reported recurring revenues Q2/24 9.0 15% grew 21% YoY from €8.2M to €9.9M 9.0 11% 8.7 8.5 10% • Implementation/one-off license revenues €1.3M) coupled with 8.0 5% recurring revenue growth €1.2M 8.2 8.3 driving profitability in Q2/24 7.5 0% 

  26. Slide 26: Free cash flow improving steadily YoY

    Free cash flow improving steadily YoY H1 2021  H1 2024 FY 2021  LTM 2024 • On LTM 2024 basis free cash flow improved by €3.5M from 2023 • Aspit change from bi-annual to monthly invoicing in January 2024 had a positive impact of ~ €1.3M on Net Working Capital in LTM 2024 vs 2023 that was ~ € 3.5M n

  27. Slide 27: Strong cash position and no debt

    Strong cash position and no debt Balance sheet 30 June 2024 5.8 Assets 100 ● Cash, cash equivalents and money 3.6 market funds amounted to €20.4M at 80 11.5 20.4 the end of Q2/24 7.9 60 ● Intangible assets primarily consist of 11.0 capitalised R&D expenses 13.1 78.3 40 Liabilities and equity 45.4 ●

  28. Slide 28: Conclusion

    Conclusion ● Add development resources to accelerate migration of Aspit to EasyPractice which will lead to €3M synergies ● Increasing our investment in Provet Cloud engineering to capture enterprise opportunities in US and EU ● Expanding booking portal to Norway and Denmark Guidance Update ● 1520%

  29. Slide 29: Financial calendar

    Financial calendar Q3 2024 results presentation on 12 November 2024. Full year financial calendar can be found on company website.

  30. Slide 30: Q&A

    05 Q&A Nordhealth 30

  31. Slide 31: Appendix

    (X) nordhealth Appendix ay

  32. Slide 32: Profit & Loss statement

    Profit & Loss statement Consolidated Income Statement Unaudited Unaudited Unaudited Unaudited Audited EUR in thousands Q2 2024 Q2 2023 H1 2024 H1 2023 FY 2023 Recurring revenue 9 941 8 201 19 100 16 090 33 085 Other revenue 2 264 987 3 252 1 769 3 740 Total revenue 12 205 9 187 22 352 17 859 36 825

  33. Slide 33: Balance Sheet

    Balance Sheet Consolidated Balance Sheet Unaudited Unaudited Audited EUR in thousands 30June-24 30June-23 31Dec-23 Intangible assets 12 995 11 721 12 480 Deferred tax assets 519 498 547 Other capitalized long-term expenses 77 364 101 Goodwill 45 391 50 991 49 008 Machinery and Equipment 388 582 4

  34. Slide 34: Cashflow

    Cashflow Consolidated Cash Flow Statement Unaudited Unaudited Unaudited Unaudited Audited EUR in thousands Q2 2024 Q2 2023/** H1 2024 H1 2023/** FY 2023 Cash flow from operations Profit before income taxes 1 603 2 374 3 951 5 701 10 806 Taxes paid in the period 112 191 139 200 5

  35. Slide 35: Business Segments

    Business Segments 🐶Veterinary 󰟻Therapy Other Businesses Cloud Hosted Cloud Hosted Cloud Non-Cloud Products Provet Cloud Provet Net Finland) EasyPractice Physica Navisec IT Operations Provet Pay Sanimalis Norway Diarium Psykbase Vetvision Denmark) Vetera DACH Share of ARR 41% 16% 18% 20% 2%…

  36. Slide 36: 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 󰐘…

  37. Slide 37: Veterinary churn and net retention over the last 5 years

    Veterinary Average churn close to 2% and net retention above 115% over the last 5 years Churn rate Net retention rate ● Churn in LTM Q2/24 impacted by sunsetting of Provet Win and ● Average net retention above 117% - driven primarily by growth Vetserve products. in enterprise clients. ● Our exceptio

  38. Slide 38: 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 H1/24 due to losing our 2nd ● Average net retention rate 109% impacted by largest therapy customer following their acquisition by a EasyPractice self-service model and focus on

  39. Slide 39: Small increase in Veterinary headcount to support growth

    Small increase in Veterinary headcount to support growth Headcount At the end of Q2/24 total number of employees amounted to 395 392 at the end of previous quarter) of which 128 132) work in Therapy, 239 231) in Veterinary and 28 29) in HQ G&A. Including employees on a consultancy agreement. Nor

  40. Slide 40: 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

  41. Slide 41: Key definitions

    Key definitions Recurring revenue includes revenues from software subscriptions as well as revenues from of volume-based transactions (e.g., SMS messages) as well as rebates from third parties (e.g. payment solution providers). ARR is recurring revenue annualised by multiplying the quarter’s last mo

  42. Slide 42: Slide 42

Nordhealth — Q2 2024 Earnings Presentation on 6ix