Admicom Oyj · OMXHEX:ADMCM
Admicom Oyj — Investor Day (January 2023)
59 slides from Admicom Oyj's investor day presentation, Jan 30, 2023
Slide 1: Capital Markets Day 2023
ADMICOM OYJ: Capital Markets Day 2023 January 30, 2023
Slide 2: Important notice
Important notice The following information contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability
Slide 3: What are we talking about today?
What are we talking about today? Strong Foundation Provides base for growing from ERP to Construction technology Drivers for Growth There is a huge growth potential in ConTech around building ecosystem in European scale Measuring Success Our financial position is solid and enables the next growth jo
Slide 4: Presenting today
Presenting today Petri Kairinen Petri Aho Group CEO Group CFO, deputy CEO Joni Haapamäki Jari Kangassalo Mikko Järvi Head of Sales, Head of Project Head of Documenting ERP solutions management solutions solutions BU (Adminet, Hillava) BU (Tocoman, PlanMan) (Kotopro)
Slide 5: Strong foundation
Strong foundation - Solid growth story - Strategic focus for next leap
Slide 6: Admicom – a focused SaaS-provider
Admicom – a focused SaaS-provider Focused in construction technology Widespread and predictable revenues ▪ Construction sector productivity focused ▪ Around 90 % of revenue is recurring 100 % cloud-based solution portfolio ▪ Over 3 000 customers with over 30 000 users ▪ Established in Jyväskylä, Fin
Slide 7: Building up for the next growth journey
Building up for the next growth journey 2021 – 2022 > 20 % / year 2018 – 2020 + 39 % / year GROWTH OF SOLUTION SUITE VERTICAL AND VIA M&A HORIZONTAL EXPANSION PHASE 31,6 2014 – 2017 + 56 % / year 24,9 2010 – 2013 21,9 + 61 % / year SCALE UP PHASE 15,6 GO-TO-MARKET PHASE 14,1 2004 - 2010 11,5 11,9 10
Slide 8: Purpose & Vision
Purpose & Vision Purpose Productivity of customers Building sustainable future together Vision First choice of partner in Sustainability Investments of the European construction construction to quality software ecosystem
Slide 9: First choice of partner in the European construction software ecosystem
Strategic vision: ”First choice of partner in the European construction software ecosystem” Construction Construction technology for Multi-sector ERP- technology for building building ecosystem software in Finland ecosystem in Finland internationally ▪ Limited capability for ▪ Comprehensive portfoli
Slide 10: Our phasing: Strengthen and then accelerate
Our phasing: Strengthen and then accelerate 2023-2024 2024/25-> Focus for Growth Accelerated Growth Strengthening the platform: Cross-sell, technical integrations and increased R&D for comprehensive platform, cultural integration and operating model Accelerated growth with international focus: Chose
Slide 11: Our North Star is the moonshot we aim for
Our North Star is the moonshot we aim for Our building ecosystem customers are +25% more productive than their peers Superior customer Comprehensive data experience is the result platform with AI: of seamless connection Innovative, but simple to use of software with value 2030: solutions utilize dat
Slide 12: Three principles guide us towards the North Star
Three principles guide us towards the North Star 2023-2024 2024-> Focus for Growth Accelerated Growth Bringing the ecosystem to the Winning customer Customer centricity as a client. Closeness with value- experience strategic advantage add services. Increasing speed and agility Data-driven comprehens
Slide 13: “Focus for Growth” means strengthening our base
“Focus for Growth” means strengthening our base Concrete steps taken already ▪ Clarifying operating model and governance ▪ Growth investments into joint operating practices ▪ R&D investment of abt 1 MEUR for 2023 ▪ Deinvestment of non-standard Lakeus accounting clients ▪ Decision to look for separat
Slide 14: “Focus for Growth” means strengthening our base
“Focus for Growth” means strengthening our base Next steps during 2023 ▪ Joint brand and culture ▪ R&D moving to fully agile ▪ Sales & marketing together ▪ Improved customer success ▪ First new product MVP ▪ International go-to-market
Slide 15: Leadership Team
Leadership Team Petri Petri Aho Anna-Maija Kairinen CFO, Deputy-CEO, M&A, strategy Ijäs CEO Business Unit Director, ERP-solutions Jari Mikko Järvi Thomas Kangassalo Business Unit Raehalme Director, CTO, Business Unit Business Unit Documentation Director, Director, solutions Software dev. Project mgm
Slide 16: Board of Directors
Board of Directors Petri Pasi Olli Henna Marko Niemi Aaltola Nokso-Koivisto Mäkinen Somerma Chair of the Board. Professor, University CEO Leaddesk CFO, Supermetrics. CEO, Arco Architects. Board professional in of Jyväskylä, board Prev. CFO Wolt Prev. CEO Siili growth companies memberships Admicom si
Slide 17: Targets for the strategy period
Targets for the strategy period Focus for Growth Accelerated Growth 2030 2023–2024 2025–2030 ambition Organic Comparable organic Organic recurring growth recurring revenue revenue > ARR of growth 8-15% p.a. growth over 15% p.a. EUR 100 million M&A M&A will continue to be an essential > Presence in s
Slide 18: Q&A
Q&A
Slide 19: Drivers for Growth
Drivers for Growth - The market opportunity - Comprehensive portfolio
Slide 20: Productivity challenges in the construction industry
Productivity challenges in the construction industry Labor and skills shortage Limited collaboration Complexity and and communication variability Safety and Health Lack of technology Fragmented supply Hazards chain Weather and Site Lack of conditions standardization “These are some of the main chall
Slide 21: Megatrends in the building ecosystem
Megatrends in the building ecosystem Sustainability Prefabrication Smart cities and green and modular and connected building building buildings Technological Shortage of advancements skilled employees
Slide 22: Building ecosystem software adoption is lagging
Building ecosystem software adoption is lagging Level of Huge opportunity digitalization ICT Media ▪ Building Finance & insu ecosystem one of rance the largest Retail industries globally ▪ Slow to adapt to Automotive / Discrete innovations Utilities ▪ Productivity can be unlocked by Chemicals Oil &
Slide 23: Construction software ecosystem
Construction software ecosystem Fragmented work- and dataflows leading to inefficiency
Slide 24: Unique and wide-ranging position in the value chain
Unique and wide-ranging position in the value chain Design, planning, scheduling Building, renovating Management, admin Maintenance, property mgm. OFF-SITE ON-SITE OFF-SITE ON-SITE & OFF-SITE Potential ENTERPRISE expansion SMB MICRO architechs, designers, engineers site manager, sub-contractor, cont
Slide 25: Competition landscape
Competition landscape Design, planning, scheduling Building, renovating Management, admin Maintenance, property mgm. OFF-SITE ON-SITE OFF-SITE ON-SITE & OFF-SITE ANNUAL VOLUME ENTERPRISE SMB MICRO Generic & entry level software (Excel, Word, CAD, invoicing, etc.) + Local accounting services CUSTOMER
Slide 26: Large current TAM
Large current TAM Services ARR Software ARR ERP- PROJECT MANAGEMENT DOCUMENTATION TOTAL ADDRESSABLE SOLUTIONS SOLUTIONS SOLUTIONS MARKET 323 MEUR 221 MEUR 11x 9x 48 54 MEUR MEUR 23,4 23x 30,2 MEUR 4,4 10x 2,4 MEUR MEUR MEUR ARR 12/22 TAM ARR 12/22 TAM ARR 12/22 TAM ARR 12/22 TAM 16 500 customers 9 6
Slide 27: Strategic imperatives for growth
Strategic imperatives for growth 1.Solid solution platform for building ecosystem ▪ Grow with cross-sell and upsell across clients ▪ Transform the go-to-market game 2.Beat competition with hunger for new sales ▪ Widen from relationship selling to product-led-growth 3.International go-to-market ▪ Wid
Slide 28: Possible pathways to international go-to-market
Possible pathways to international go-to-market Organic growth routes: Point solutions without localization ▪ Product led growth needs ▪ Direct sales for non-localized product ▪ Sales to specific client niche or through Point solutions international clients with local flavor ▪ Establishing local ent
Slide 29: International expansion potential
International expansion potential Estimated TAM Estimated TAM in major in Finland European markets * 323 MEUR 3-10x 11x >2x 30.2 ~1x MEUR ARR 12/22 TAM * Estimation based on the annual production value of the construction industry in selected European countries in 2020 compared to the Finnish constr
Slide 30: Solution suite
Solution suite Tocoman cost estimation Tocoman Kotopro – ▪ Well integrated suite of documenting building information software for SMEs solution Adminet model (BIM) ▪ Best of breed solutions to selected target markets (eg Enterprise) CUSTOMER Hillava – comprehensive ▪ Over 3000 user organizations ERP
Slide 31: ERP solutions
| ERP solutions §
Slide 32: ERP solutions
ERP solutions What differentiates our Adminet solution Key benefits Efficient employees ▪ All critical features in one solution ▪ High level of automation ERP+ No lost Precise ▪ Real-time visibility & mobility materials & pricing equipment Integrated bookkeeping & Automated payroll invoicing Automat
Slide 33: ERP solutions
ERP solutions Why customers choose us Testimonials TEP Roof - customer ▪ One-stop-shop for the critical software needs Janne Asuintupa from the construction site to the management and administration ”The best thing in Adminet is that it is so comprehensive. We have all ▪ Automation & standardized pr
Slide 34: ERP solutions - Future ambitions
ERP solutions - Future ambitions Where are we now? Where do we want to go? How do we do it? ▪ Market leadership in ▪ Provide new digital solutions ▪ Cross-sell within our Finnish construction ERP that create new markets company software market ▪ Increase our market share ▪ Platform based solutions ▪
Slide 35: Project management solutions
Project management solutions
Slide 36: Project management solutions
Project management solutions Our software solution Why customers choose us Quantity ▪ 2D blueprint & 3D takeoff BIM calculation We are pioneers tools ▪ Cost estimation, budget, offers Building on Estimations have Cost calculation ▪ Proprietary cost database information to be done ▪ Project total cos
Slide 37: Project management solutions - future ambitions
Project management solutions - future ambitions Where are we now? Where do we want to go? How do we do it? ▪ Established position in ▪ Added value for SMB markets ▪ New innovations Finnish construction ▪ Developing our solution more ▪ Deep synergy and software market suitable for different fields of
Slide 38: Documentation solutions
Documentation solutions §
Slide 39: Documentation solutions
Documentation solutions Our software solution - Kotopro Why customers choose us ▪ Major focus on ease-of-use and easy Simple Capture data on site to adopt ▪ Real time – always up to date ▪ Bottom-up approach – data is captured on site Flexible to embedd Saves time and into existing Transparency mone
Slide 40: Documentation solutions - Future ambitions
Documentation solutions - Future ambitions Where are we now? Where do we want to go? How do we do it? ▪ Breakthrough in mobile ▪ Focus on growth ▪ Explore product market fit documentation in Finland ▪ Cross-sell to existing Admicom outside Finland ▪ 20 000 pictures / day customers ▪ Keep investing i
Slide 41: Admicommunity making the growth happen
Admicommunity making the growth happen ▪ High employee satisfaction Around 240 employees (latest eNPS 35) ▪ Traditionally high employee 16% ownership - continued in 2022 with 7% personnel fund investing in Admicom shares 28% ▪ Continuing to build the winning team: focus on international competence,
Slide 42: Building sustainable future together
Building sustainable future together Admicom’s ESG contribution How we make impact? Where are we now? Where can we improve? ▪ Own social responsibility ▪ Solid corporate governance ▪ Formalize our ESG practices & governance ▪ Good practices on social ▪ Building sustainable future ▪ The handprint of
Slide 43: Offering vision past, present and future
Offering vision past, present and future Past Present Future Product ERP software Software Suite Comprehensive platform Industry Building technology Multi-industry Focus in building ecosystem focus contractors Customer SME + limited SME with spearhead solutions for SME size enterprise Enterprises Fi
Slide 44: Measuring Success
Measuring Success - Solid SaaS-metrics - Financial platform fit for growth
Slide 45: Admicom’s financial pillars
Admicom’s financial pilars Sustained Safeguarding Attentive Securing strong ARR operating cost control strong growth & leverage & financial SaaS-metrics investment position discipline
Slide 46: Strong financial track record
Strong financial track record ADMCM Peers* Revenue trends 2020 2021 2022 avg. avg. Revenue growth +40.1% +13.4% +27.2% +26.9% +20.9% o/w organic growth +21.5% +9.2% +12.1% +14.3% inorganic growth +18.6% +4.2% +15.1% +11.9% Recurring revenue growth +43.1% +15.4% +23.1% +27.2% Profitability trends EBI
Slide 47: Admicom’s SaaS-metrics
Admicom’s SaaS-metrics * Recurring revenue, Recurring revenue, ARR 12/2022 Gross CHURN-% LTV/CAC ** 30.1 7.7% ~45x MEUR 2022 2022 Recurring revenue Recurring revenue, CAC ** gross margin Net CHURN-% payback period 86% 2.5% ~9mo 2022 2022 2022 * Metrics are based on Admicom’s internal accounting and
Slide 48: 90% of Admicom’s revenues are recurring
90% of Admicom’s revenues are recurring Revenue development and split by service Revenue split by business unit 2022 * 31,6 9% 24,9 20 % 21,9 5% 14% 9% 22 % 15,6 19 % Recurring 7% 11 % revenue 4% 11,5 23 % 13 % 71 % 22 % 73 % 75% 72 % 66 % 65 % 2018 2019 2020 2021 2022 SaaS Accounting services Consu
Slide 49: Excellent OpEx levels despite strong revenue growth
Excellent OpEx levels despite strong revenue growth OpEx as % of revenues by expense category OpEx as % of revenues by function, 2022 * 58% 55% 55% 55% 4% 53% 3% 5% 5% 6% 13% 12% 12% 12% 11% 13% 7% 41% 9% 39% 37% 36% 39% 26% 2018 2019 2020 2021 2022 Personnel costs Other operating costs COGS Sales a
Slide 50: Strong cash conversion and financing position
Strong cash conversion and financing position Cash conversion ratio Financial leverage (net debt) 109% 104% 103% 103% 42 MEUR 3x potential 94% leverage Net debt 15,4 capacity 14,1 12,2 11,9 9,4 10,0 Current net 7,4 7,2 debt 5,0 4,8 current -0,2x leverage 2018 2019 2020 2021 2022 -2,4 OCF before inte
Slide 51: Strategic objectives of M&A
Strategic objectives of M&A ▪ Strengthening expertise and M&A history timeline competitiveness ▪ Case Tocoman, Kotopro, Aitio Finland ▪ Expanding current TAM and market PlanMan reach ▪ Case Tocoman, Kotopro, Hillava ▪ Securing continuity and development 2020 2021 2022 ▪ Case PlanMan and Aitio Finlan
Slide 52: Our business is stable despite customers’ cyclicality
Our business is stable despite customers’ cyclicality Admicom’s point of view on cyclicality Construction sector revenue trends * Market environment 250 ▪ Construction has large share of low-cyclical segments ▪ Megatrends create growing demand for digital 200 solutions ▪ Inflation two-edged sword 15
Slide 53: Outlook 2023
Outlook 2023 Themes affecting revenue growth and profitability Comparable recurring revenue growth 2023 8-15% Growth drivers: + New and expansion sales and cross-selling + Kotopro & PlanMan inorganic growth in H1’2023 – Economic downturn causes uncertainty to new sales and CHURN (FY22 comparable rec
Slide 54: Admicom investment highlights
Admicom investment highlights 1. Firm foundation to build on Vision First choice partner in the European construction software 2. Huge long-term potential in ConTech ecosystem. 3. Comprehensive software suite Ambition 100 4. Solid financials MEUR ARR by 2030
Slide 55: Admicom
Admicom Customers are Superior ie gq $ Focus for Growth oun ae Productivity of 100 ME customers Customers’ investments Since) to quality ey Accelerated Growth Best Comprehensive 2024 > workplace data platform 4 if with Al Sustainability of Focus for building ecosystem | Growth 23-24 Winning Customer
Slide 56: Q&A
Q&A
Slide 57: Dividends and dividend policy
Dividends and dividend policy Dividends and payout ratio * Dividend policy Admicom aims to distribute more 123% than half of its earnings as dividends to its owners, provided that any profit distribution does not jeopardize the 81% growth target set in the strategy or 71% 66% 67% other financial tar
Slide 58: Appendix - definitions
Appendix - definitions Definitions of SaaS and financial metrics EBITA-% = ( Operating profit + depreciation of company goodwill + depreciation of goodwill + amortisation of goodwill ) / Revenue ARR = ( Sum of monthly recurring revenue (MRR) of SaaS and accounting services * 12 ) + ( TTM 12mo revenu
Slide 59: investors.admicom.fi
investors.admicom.fi