Zalaris Asa · OSL:ZAL
Zalaris Asa — Q1 2022 Earnings Presentation
31 slides from Zalaris Asa's earnings presentation, Apr 29, 2022
Slide 1: Presentation of financial results Q1 2022
29 April 2022 Presentation of financial results Q1 2022
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation doe
Slide 3: Agenda
Agenda Today’s presenters • Highlights • Company in brief • Financial review • Markets and outlook • Q&A Hans-Petter Mellerud Gunnar Manum CEO and Founder CFO © zalaris 2022 Page 3
Slide 4: Highlights
Highlights Simplify work life. Achieve more.
Slide 5: Q1 2022: All time high quarterly revenue
Q1 2022: All time high quarterly revenue Revenue of NOK 209.7 million (NOK 192.8 million) for the first quarter. Revenue grew by +12.0% YoY in constant currency Adjusted EBIT of NOK 14.9 million (NOK 13.8 million) +8.0% YoY Adjusted EBIT margin of 7.1% (7.2%). The margin is expected to increase thro
Slide 6: Continued development in new signings in Managed Services driving recurring revenue streams
Continued development in new signings in Managed Services driving recurring revenue streams Several new BPO contracts and extensions signed Platform based deals utilizing existing capacity with higher incremental margin Pipeline of BPO opportunities still strong in all geographies not impacted of Uk
Slide 7: Professional Services continued development
Professional Services continued development Several new agreements signed Implementing and maintenance of Managed Services projects Continued building a new generation of consultants through trainee programs Using smart shoring and robotized solutions to improve cost efficiency In the UK signing new
Slide 8: Managed Services grew by 17% in the first quarter, in local currency
Managed Services grew by 17% in the first quarter, in local currency Revenue NOK 146.5m (+14.1%) +17.4% higher revenue when adj. for currency effects 150.7 146.5 143.0 136.6 137.5 The inclusion of ba.se added +10.2%, while +7.2% relates to 133.3 132.5 127.4 128.4 new customers and volume increases 1
Slide 9: Professional Services had revenue in line with last year, in local currency
Professional Services had revenue in line with last year, in local currency Revenue NOK 61.9m (-2.4%) Revenue in Professional Services was in line with 66.0 last year when adjusted for negative currency effects 65.1 64.0 64.3 64.0 62.9 62.4 61.9 Significant PS capacity still being utilized on implem
Slide 10: Majority of Professional Services revenue is recurring
Majority of Professional Services revenue is recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue ~55 % of Professional Services revenue is Projects 45% 46% 45% recurring, or recurring like, and based on long 49% 50% term agreements and
Slide 11: Investments in new growth initiatives
Investments in new growth initiatives Established operations in Australia, with further expansion in the APAC region planned Better support European HQed customers as 64% of deals with European origin included APAC coverage* APAC one of fastest growing markets for Multi Country Payroll Vendor consol
Slide 12: Acquired vyble - German provider of cloud-based payroll & HR management (SaaS)
Acquired vyble® - German provider of cloud-based payroll & HR management (SaaS) for the SME market Complete suite of Payroll and HR delivered as Software as a Service (SaaS) Targeting German SME market (companies with 1- 250 employees) valued at estimated EUR 2,6 billion 20 employees located in Hamb
Slide 13: Company in brief
Company in brief Simplify work life. Achieve more.
Slide 14: Payroll & HR Solutions that Enable Fully Digital Organizations
Payroll & HR Solutions that Enable Fully Digital Organizations Local presence with one global IT platform Zalaris is a leading European provider of Payroll and Human Capital Management Solutions delivered through Software as a Service, Outsourcing, or Consulting delivery models Supporting fully digi
Slide 15: Zalaris offering is built around Peoplehub
Zalaris offering is built around Peoplehub – covering the whole employee life cycle © zalaris 2022 Page 15
Slide 16: Payroll and HR partner to mid- and large size organizations
Payroll and HR partner to mid- and large size organizations MANAGED SERVICES (MS) PROFESSIONAL SERVICES (PS) Comprehensive Outsourcing of HR, Payroll and Travel Expenses (BPaaS) Zalaris is responsible for SAP Cloud Services all end-to-end • SuccessFactors • Fieldglass transactional HR Managed payrol
Slide 17: Significant European player with Germany largest entity
Significant European player with Germany largest entity Revenue per country Q1 2022 (%) UK Other Poland 3,6% 2,0% 7,6% Finland 6,4% Germany 34,9% Denmark 8,2% 12,4% Sweden 25,0% Norway © zalaris 2022 Page 17
Slide 18: Diversified customer base across a wide range of industries
Diversified customer base across a wide range of industries BAN K, INSUR AN CE & HEALT H AND LIFE INFR AST RU CT U RE & FINAN CI AL SERVICES SCIENCES T RANS PO RT AT IO N IT , T ECHNO LO G Y & PRO DUCT S & O FFSHO RE & ENERG Y T EL ECO M INDUST RI ALS PUBLIC SERVICES AN D RET AIL SERVICE INDUST RIES
Slide 19: Financial Review
Financial Review Simplify work life. Achieve more.
Slide 20: Revenue increased by 12% for the quarter in local currency
Revenue increased by 12% for the quarter in local currency Revenue NOK 210m (+8.8%) +9% +12% Revenue growth +12.0% YoY in constant currency 216.1 Revenue growth (as reported) for the quarter YoY: +8.8% 209.7 200.6 198.4 203.5 201.7 • From new entities (ba.se and vyble): +7.4% 195.4 189.7 192.8 • New
Slide 21: New BPO contracts will result in significant revenue increase going forward
New BPO contracts will result in significant revenue increase going forward Revenue development over time based on signed MS contracts (NOKm) Total annual revenue expected to increase by NOK 125m 246 (+16%) by Q1 2023 vs. FY 2021, based on signed contracts 60 (assuming no material churn) 5 71 903 An
Slide 22: Revenue deferred as part of transformation projects for new BPO contracts
Revenue deferred as part of transformation projects for new BPO contracts continues to show a high activity level Deferred revenue and employee hours capitalised, LTM (NOKm) Significant potential revenue generating capacity utilised on implementing new 65 BPO contracts, which will generate recurring
Slide 23: EBIT for Q1 impacted by vyble and investments in 2022 revenue
EBIT for Q1 impacted by vyble and investments in 2022 revenue Adj. EBIT (NOKm) and margin (%) 7.2% 7.2% 6.2% Adj. EBIT NOK 14.9m (NOK 13.8m) +8.0% 7.1% 5.1% Adj. EBIT margin 7.1% (7.2%) 13.8 14.1 14.9 Adj. EBIT margin impacted by build-up of 11.4 10.2 delivery capacity for new contracts +42 FTEs (65
Slide 24: Condensed Profit and Loss
Condensed Profit and Loss 2022 2021 2021 (NOK 1 000) Jan-Mar Jan-Mar Jan-Dec Revenue 209 650 192 778 775 265 License costs 19 862 15 575 67 481 Personnel expenses 107 324 106 062 405 949 Other operating expenses 57 307 42 226 199 886 Amortization implementation costs customer projects 8 022 6 756 29
Slide 25: Continued strong cash position
Continued strong cash position Development in cash balance (NOKm) 176,2 Cash balance at 31 March of NOK 135m -17,7 -10,1 NOK 17.7m for share buy-back program -4,4 completed (1.6% of total issued share -4,7 -3,9 134,7 -0,7 NOK 10.1m investment on acquisition of vyvle Net interest-bearing debt of NOK
Slide 26: Markets and Outlook
Markets and Outlook Simplify work life. Achieve more.
Slide 27: 57% of European senior stakeholders expect the use of HR Outsourcing to grow
57% of European senior stakeholders from global enterprises expect the use of HR Outsourcing to grow © zalaris 2022 Page 27
Slide 28: Multi-Country payroll market is growing at 10%+
Multi-Country payroll market is growing at 10%+ Source: Nelson-Hall, “Next Generation Payroll Services” © zalaris 2022 Page 28
Slide 29: Leaving Q1 Zalaris is well positioned to deliver on expectations
Leaving Q1 Zalaris is well positioned to deliver on expectations Zalaris brand increasingly known in growing market Communicated growth of 11,5% within sight and annualized revenue of NOK 900+ million by end of year and expected to continue into 2023 EBIT on track to 10% as revenue from projects und
Slide 30: Q&A
Q&A Simplify work life. Achieve more.
Slide 31: Thank you!
We simplify HR and payroll administration, and empower you with useful information so that you can invest more in people. Thank you! Zalaris ASA | +47 4000 3300 | www.zalaris.com Simplify work life. Achieve more.