Trifork Group Ag · OMXCOP:TRIFOR
Trifork — Q2 2024 Earnings Presentation
35 slides from Trifork's earnings presentation, Aug 20, 2024
Slide 1: Delivering on our strategic initiatives in a tough business climate
2024 Q2 INVESTOR PRESENTATION 20 AUGUST 2024 Delivering on our strategic initiatives in a tough business climate
Slide 2: Disclaimer: Important Information
DISCLAIMER ・ IMPORTANT INFORMATION This presentation contains forward-looking statements including, but not limited to, statements and expectations concerning expected or projected earnings, strategies, trends and developments. Forward-looking statements are statements (other than statements of hist
Slide 3: Presenters
PRESENTERS CEO CFO Jørn Larsen Kristian Wulf-Andersen Year of joining 1996 Year of joining 2007 Year of birth 1966 Year of birth 1971 Nationality Danish Nationality Danish Educational background Mechanical engineering degree - Civil engineering Educational background Bachelor in Economics - Aarhus B
Slide 4: A slow first half but the second half looks better: Revenue
REVENUE A slow first half but 20% (1) the second half 3.4% to 34% 23% 9% 37% 17% 12% 5.8% looks better 215-220 207.9 184.9 202.2 Revenue from acquisitions 183.4 158.5 Organic revenue 138.0 Guidance 115.4 106.4 86.5 102.8 Revenue growth 101.3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 5: A slow first half but the second half looks better: Adj. EBITDA
TRIFORK SEGMENT ADJ. EBITDA A slow first half but the second half 14.1% 12.4% 12.4% 17.5% 18.1% 17.3% 16.9% to 15.8% looks better 35.0 31-34 31.9 28.6 Adjusted EBITDA, Trifork Segment Guidance 20.2 Adjusted EBITDA margin, Trifork Segment 13.3 10.7 12.1 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 6: Updated guidance for 2024
GUIDANCE Updated guidance for 2024 Trifork Group Trifork Segment Trifork Group Trifork Group revenue adj. EBITDA EBIT NIBD/adj. EBITDA EURm 215-220 EURm 31-34 EURm 14-17 No guidance Guidance 2024 Q2 2024: 1.6x 3.4%-5.8% total growth 14.1% - 15.8% margin 6.4% - 7.9% margin 0.8%-3.2% organic growth 1
Slide 7: Ecosystem with shared value creation
TRIFORK GROUP IN SHORT Ecosystem with shared value creation MINIMIZING RISK MAXIMIZING OPPORTUNITIES Trifork Trifork Labs - 74 individual business units - 24 minority investments in small tech companies - Majority ownership - Software products and platforms, either IP spinoff from Trifork or externa
Slide 8: 0.8% growth in the core business in Q2
FINANCIAL HIGHLIGHTS IN Q2 0.8% growth in the core business in Q2 REVENUE GROWTH KEY FINANCIALS KEY STATISTICS ▪︎ 74 business units (1) Inorganic growth EURm 52.5 -6.6% ▪︎ 1,273 headcount Q2 2024 revenue Q2 2024 organic ▪︎ 24 active startups revenue growth ▪︎ +72m views on GOTO YouTube & Instagram +
Slide 9: Inspire - Performance Update Q2
TRIFORK SEGMENT - PERFORMANCE UPDATE Q2 Inspire Conferences Innovation & Operate & Protect Design Workshop ▪︎ Still recovering with cautious enterprise spending on sponsorships and employee education ▪︎ We saw positive results from reorganization initiated in Q1 and a breakeven EBITDA in Q2 ▪︎ Confe
Slide 10: Build - Performance Update Q2
TRIFORK SEGMENT - PERFORMANCE UPDATE Q2 Build Conferences Innovation & Operate & Protect Design Workshop ▪︎ Revenue +0.1% vs Q2 2023, weaker than expected ▪︎ Smart Enterprise grew 8.5% in Q2 and 6.6% in first half of 2024 ▪︎ Public Denmark grew 4% in first half; new customer engagements has compensa
Slide 11: Run - Performance Update Q2
TRIFORK SEGMENT - PERFORMANCE UPDATE Q2 Run Conferences Innovation & Operate & Protect Design Workshop ▪︎ Revenue declined by 19.2% in Q2 (all organic) ▪︎ EURm 3.2 less hardware and third-party software revenue compared to Q2(23). Adjusted for this, Run grew 1.5% in Q2 and 1.8% in first half of 2024
Slide 12: Main events in Q2
TRIFORK SEGMENT Main events in Q2 Organization Partnerships and trade shows ▪︎ 1,181 FTEs on average (Q2 23: 1,086) ▪︎ Invited by Apple with Porsche to Cupertino for and 1,273 employees in total the Apple Vision Pro enterprise launch event (Q2 23: 1,188) ▪︎ Apple, Porsche, and Trifork event in Copen
Slide 13: Three acquisitions in Q2
TRIFORK SEGMENT Three acquisitions in Q2 13 FTE 15 FTE ASSETS Spantree helps customers develop, Sapere has developed highly skilled The primary asset is MPI, which is a automate, manage, and interact with capabilities in the SAP Business complete and configurable platform for large data-intensive an
Slide 14: Revolutionizing options trading
CASE STORY Revolutionizing options trading Based in Chicago, SpiderRock provides high-performance trading systems for large asset managers, proprietary trading firms, and bank trading desks. As an alternative to trading large blocks manually over the phone, SpiderRock’s Alternative Trading System (A
Slide 15: Elixir delivering a competitive advantage
CASE STORY Elixir delivering a competitive advantage Headquartered in Virginia, International Registries Inc. (IRI) is the world’s most experienced, privately held maritime and corporate registry service provider, with 28 offices in major shipping and financial centres globally With the Elixir progr
Slide 16: FinTech
TRIFORK SEGMENT - BUSINESS AREAS FinTech 13.0% of 6M 2024 Group revenue Q2 highlights ▪︎ Focused on winning projects and positioning us for +5.8% opportunities related to EU legislation to be implemented in 2024-25 (Open Finance, Electronic ID, -10.3% CSRD, Crypto Assets) ▪︎ Selected as tech partner
Slide 17: Digital Health
TRIFORK SEGMENT - BUSINESS AREAS Digital Health 12.3% of 6M 2024 Group revenue Q2 highlights ▪︎ Formalized digital health advisory services -0.6% ▪︎ Established new data team -4.2% ▪︎ Completed work for Compassana and a Swiss enterprise ▪︎ Launched partnership with Rokoko Care (new Labs company offe
Slide 18: Smart Building
TRIFORK SEGMENT - BUSINESS AREAS Smart Building 2.0% of 6M 2024 Group revenue Q2 highlights ▪︎ New management in place and ongoing strategic partner discussions to unlock growth in TSBx concept -0.6% -46.2% ▪︎ Presented Cheetah (proprietary data platform) and -51.2% OTTO (proprietary building platfo
Slide 19: Smart Enterprise
TRIFORK SEGMENT - BUSINESS AREAS Smart Enterprise 49.9% of 6M 2024 Group revenue Q2 highlights ▪︎ Market remained difficult but we still manage to land new +6.6% business -0.6% +8.5% ▪︎ Closed a strategic partnership agreement for a large European beverage producer ▪︎ Began development on new SAP Ma
Slide 20: Cyber Protection
TRIFORK SEGMENT - BUSINESS AREAS Cyber Protection 4.2% of 6M 2024 Group revenue Q2 highlights ▪︎ Adjusted for less non-core hardware and third-party licenses, revenue declined 25.1% in Q2 and 19.4% for the first six months -0.6% ▪︎ Completion of big projects, postponement of NIS2 implementation, -42
Slide 21: Cloud Operations
TRIFORK SEGMENT - BUSINESS AREAS Cloud Operations 15.6% of 6M 2024 Group revenue Q2 highlights ▪︎ Adjusted for lower non-core revenue from third-party licenses and -0.6% hardware, growth was 2.7% -7.1% ▪︎ Onboarded two major enterprises in Q2 in both data centres and operations, while two other ente
Slide 22: Strategic initiatives on track in Q2
TRIFORK SEGMENT Strategic initiatives on track in Q2 Priorities Action points Progress in Q2 Maintain high level of - Open US and Swiss markets further, potentially with - Expanded US team further 1 business development acquisitions - Work with one large enterprise in the US spilling into - Broaden
Slide 23: Trifork Labs is performing well, 0.6m EBT in Q2
TRIFORK LABS Trifork Labs is performing well, 0.6m EBT in Q2 Position 1-5 ALPHABETIC ORDER Position 6 – 10 ALPHABETIC ORDER 7.9% REST AxonIQ Arkyn Studios Software development framework Field and factory SaaS on top of SAP 18.9% Bluespace Ventures POS. 6–10 C4 Media Swiss digital health platform Sof
Slide 24: Innovating for a better world
INNOVATING FOR A BETTER WORLD ESG targets communicated at Capital Markets Day ENVIRONMENT Science-based emission targets 2030 70% reduction in Scope 1 and 2 emissions1 and transition to green electricity 2030 100% renewable electricity 2026 70% of Trifork’s suppliers2 have set science-based emission
Slide 25: Trifork Group / Trifork Segment performance
FINANCIAL REVIEW Trifork Group / Trifork Segment performance REVENUE Q2 2024 Inorganic growth ▪︎ Revenue of EURm 52.5 equal to -5.0% decline ▪︎ Growth impacted by: ▪︎ EURm 3.2 less revenue from non-core hardware and +1.5% third-party licenses in Run -2.0% ▪︎ Customers downsizing or cancelling planne
Slide 26: Trifork Segment performance
FINANCIAL REVIEW Trifork Segment performance ADJUSTED EBITDA Q2 2024 Growth ▪︎ Adj. EBITDA Margin ▪︎ EURm 6.3, equal to margin of 12.0% (Q2 23: 14.0%) -25.8% ▪︎ Decline of 19.1% explained by: ▪︎ Lack of positive revenue growth 15.6% -19.1% ▪︎ Lower Build margins from lower utilization 11.8% ▪︎ Negat
Slide 27: Trifork Group performance
FINANCIAL REVIEW Trifork Group performance EBIT Q2 2024 Growth Margin ▪︎ EBIT ▪︎ 3.6% margin (Q2 2023: 7.4%) impacted negatively by same factors as adj. EBITDA ▪︎ Slightly increased depreciations/amortizations -63.4% from Chapter 5 and Spantree acquisitions and new office leases 8.7% -53.4% 7.4% 3.2
Slide 28: Trifork Segment performance
FINANCIAL REVIEW Trifork Segment performance REVENUE BY SUB-SEGMENTS (EURM) ADJ. EBITDA AND MARGINS BY SUB-SEGMENT IN 6M 2024 Inspire Build Run -35.0% 14.4% 16.3% 11.8% Other 28
Slide 29: Inspire performance
FINANCIAL REVIEW Inspire performance REVENUE ADJUSTED EBITDA Q2 2024 ▪︎ Revenue EURm 2.4 in Q2 (+8.6%) ▪︎ Four conferences in the quarter ▪︎ Adj. EBITDA EURm 0.0 in Q2 2024 (Q2 2023: EURm -0.8) +7.3% +8.6% ▪︎ Reorganization in Q1 led to the expected cost reduction in Q2 ▪︎ For the remainder of the y
Slide 30: Build performance
FINANCIAL REVIEW Build performance REVENUE ADJUSTED EBITDA Q2 2024 Inorganic growth Margin ▪︎ EURm 37.2 revenue, same level as last year but -2.3% organic growth ▪︎ Some customers cancelling ongoing work with short notice due to internal budget cuts +2.1% (US/UK/DK) -24.1% +0.9% ▪︎ Adj. EBITDA margi
Slide 31: Run performance
FINANCIAL REVIEW Run performance REVENUE ADJUSTED EBITDA Q2 2024 Margin ▪︎ Revenue of EURm 12.7 and -19.2% revenue growth, entirely organic ▪︎ EURm 3.2 less hardware and third party licenses in the quarter. Adjusted for this, Run growth was +1.5% in Q2 and +1.8% in the first six months. -32.4% -11.3
Slide 32: Run revenue split
FINANCIAL REVIEW Run revenue split (1) Hosting and security Licenses and support Third-party licenses Hardware Adj. EBITDA margin 21.7% 16,000 31.2% 19.2% 12,000 23.2% 21.1% 13.1% 12.1% 16.2% 20.1% 23.5% 28.3% 19.0% 16.4% 28.5% 8,000 20.6% 22.7% 22.6% 15.7% 4,000 Q2/2020 Q4/2020 Q2/2021 Q4/2021 Q2/2
Slide 33: Labs performance
FINANCIAL REVIEW Labs performance EBT (EURM) INVESTMENTS (EURM) Accumulated net exit proceeds and dividends Accumulated unrealized gains Invested unrealized gains from deconsolidation of Group companies Invested cash in current portfolio Book value EURm 73.4 (1) (1) 33
Slide 34: Cash flow and financial position
FINANCIAL REVIEW Cash flow and financial position NET INTEREST-BEARING DEBT Leverage ratio (NIBD/adj. EBITDA) Q2 2024 -0.6x ▪︎ Operating cash flow of EURm 3.6 (Q2/23: 4.1) -0.1x ▪︎ Investing activities of EURm -5.0 (Q2/23: -1.8) 2.2x 0.9x 1.6x ▪︎ Financing activities of EURm -1.0 (Q2/23: -5.6) ▪︎ Ne
Slide 35: Q&A
Q&A Long-term external growth drivers Software innovation specialists Three decades of resilient growth and margins Full-circle and low risk business model Effective and agile teal organization Successful and profitable innovation model Enabling customers to become sustainable We change the world wi