Zalaris Asa · OSL:ZAL
Zalaris Asa — Q2 2020 Earnings Presentation
23 slides from Zalaris Asa's earnings presentation, Aug 18, 2020
Slide 1: Presentation of interim financial results | Q2 2020
Presentation of interim financial results | Q2 2020 18th of August 2020
Slide 2: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2020 Page 2
Slide 3: Second quarter 2020: Continued EBIT improvement
Highlights Q2 Presentation 2020 Second quarter 2020: Continued EBIT improvement • Strong positive development in EBIT and Cash Flow • Signed several new agreements and expansions despite Covid-19 resulted in a slow-down in closing new contracts during the quarter. • Proactively and successfully serv
Slide 4: Positive margin development resulting from improvement efforts during the quarter
Highlights Q2 Presentation 2020 Positive margin development resulting from improvement efforts during the quarter Revenue Adj. EBIT Adj. EBIT margin #FTEs NOK 198m (+6%) NOK 12.7m (+72%) 6.4% 723 (-12.4%) 825 198.4 12.7 6,4% 792 188.8 187.5 723 3,9% 7.4 2,2% 4.1 -2.8 -1.4% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 5: European Payroll & HR Solutions that Value People
Highlights Q2 Presentation 2020 European Payroll & HR Solutions that Value People Zalaris – Local presence with one global platform • Zalaris is a leading European provider of Payroll and Human Capital Management Services delivered through Software as a Service, Business Process as a Service, or Con
Slide 6: Diversified customer base with Germany as largest country
Highlights Q2 Presentation 2020 Diversified customer base with Germany as largest country Diversified across industries and sectors Revenue per country Q2 2020 (NOKm) Health UK Other Industry Retail Poland Not for profit 9,0 organizations 12,5 5,6 and Public Finland Germany Bank & sector 13,2 63,9 I
Slide 7: Signed several new agreements and expansions
Highlights Q2 Presentation 2020 Signed several new agreements and expansions • Covid-19 resulted in a slow- down in closing new contracts during the quarter New 10 years Master Services Agreement New contract for implementation of with leading Nordic Bank with 19’000+ SuccessFactors for Stadwerke Kr
Slide 8: Maintained stable recurring revenue in Managed Services
Highlights Q2 Presentation 2020 Maintained stable recurring revenue in Managed Services Revenue EBIT NOK 137.1m (+2.4%) NOK 16.0m (+1.3%) 17.3 ▪Revenue approx. in line with Q2 last year. 135.1 133.9 137.1 15.8 16.0 Some reductions due to reduced volume of travel expense processing. ▪Zero churn and 9
Slide 9: Grew Professional Services revenue and margin developed positively
Highlights Q2 Presentation 2020 Grew Professional Services revenue and margin developed positively Revenue EBIT NOK 61.3m (+14.2%) NOK 6.1m* (+74.3%) ▪ Strong revenue growth to new and existing customers in 61.3 Poland and UK&I 53.8 53.7 ▪ Reducing management layer in German organization increased 6
Slide 10: More than 60% of Professional Services revenue is recurring
Highlights Q2 Presentation 2020 More than 60% of Professional Services revenue is recurring and supports a continuous presence with customers Distribution of Projects vs • 60%+ of Professional Services long term AMS based revenue revenue is recurring and based on long term agreements and relationshi
Slide 11: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2020 Page 11
Slide 12: Revenue growth of 6% y-o-y
Financial Review Q2 Presentation 2020 Revenue growth of 6% y-o-y Revenue Adj. EBIT Adj. EBIT margin NOK 198m (+6%) NOK 12.7m (+72%) 6.4% • Revenue for the quarter approx. in line with Q2 198.4 last year when adjusted for positive one-off 12.7 6,4% 188.8 187.5 revenue effects last year and currency m
Slide 13: EBIT margins gradually improving
Financial Review Q2 Presentation 2020 EBIT margins gradually improving Adj. EBIT (NOKm) and margin (%), quarterly Adj. EBIT (NOKm) and margin (%), LTM • Adj. EBIT increased by 71.6% compared to last year 5,0% 5,0% 6,7% 6,4% 4,4% • Adj. EBIT LTM has increased by 3,9% 50.0% compared to last year 3,5%
Slide 14: Condensed Profit and Loss
Financial Review Q2 Presentation 2020 Condensed Profit and Loss 2020 2019 2020 2019 2019 (NOK 1 000) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec • Significant improvement in adj. EBIT margin (%) compared Revenue 198 445 187 548 399 056 379 899 776 792 to last year – 6.4% vs. 3.9% License costs 16 237 13
Slide 15: Significant positive cash flow during the quarter
Financial Review Q2 Presentation 2020 Significant positive cash flow during the quarter NOK million -3,6 129,0 • Cash balance increased by NOK -4,1 3,8 41.5m during the quarter • Cash balance at 30 June 2020 is 45,4 NOK 69.4m higher than last year +41,5 (Q2’19: NOK 59.6m) • Operating cash flow for t
Slide 16: Condensed Balance Sheet
Financial Review Q2 Presentation 2020 Condensed Balance Sheet • Cash and cash equivalents of NOK 129.0 million, up by NOK 2020 2019 2019 41.5 million from previous (NOK 1 000) 30. Jun 30. Jun 31.Dec quarter 360 477 364 051 354 184 Fixed and intangible assets • Lease liabilities relate to right- Trad
Slide 17: Agenda
Agenda 1. Highlights 2. Financial Review 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2020 Page 17
Slide 18: A complete Payroll and HR partner to mid- and large size organizations
Market and Outlook Q2 Presentation 2020 A complete 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 • SuccessF
Slide 19: Attractive market opportunities
Q2 Presentation 2020 Attractive market opportunities • Growing Market • “The global human capital management market (HCM) market size stood at USD 15,04 Billion in 2018 and is projected to reach USD 30,55 Billion by 2026, exhibiting a CAGR of 9,4% during the forecast period” according to Fortune Ins
Slide 20: We continue work on #BestingOurselves
Summary Q2 Presentation 2020 We continue work on #BestingOurselves • Continue improving margins towards our communicated 10% target through organizational simplification, increased productivity, automation and utilization of our near- and offshore assets • Deliver our 20th year of uninterrupted grow
Slide 21: Agenda
Agenda 1. Highlights 2. Financials 3. Markets and Outlook Hans-Petter Mellerud Gunnar Manum 4. Q&A Founder and CEO CFO © zalaris 2020 Page 21
Slide 22: We open up for questions
Zalaris introduces its own team in the world’s toughest triathlon to represent our motto in its purest form #bestingmyself : — The sponsorship of #teamZalaris for Norseman supports one of Zalaris’ values - Aiming High. Together, this four-member team will help to raise funds for Aktiv mot kreft and
Slide 23: Thank you!
“ We simplify HR and payroll administration, and empower you with useful information so that you can invest more in people. Hans-Petter Mellerud, CEO & Founder Thank you! Gunnar.Manum@zalaris.com Hans-Petter.Mellerud@zalaris.com Zalaris ASA | +47 4000 3300 | www.zalaris.com