Zalaris Asa · OSL:ZAL
Zalaris Asa — Deutsches Eigenkapitalforum 2023
29 slides from Zalaris Asa's conference presentation, Nov 27, 2023
Slide 1: Zalaris ASA Investor Presentation
27 November 2023 Zalaris ASA Investor Presentation Deutsches Eigenkapitalforum 2023
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 presenter • Company in brief • Market positioning • Key financials • Key take-aways Hans-Petter Mellerud CEO and Founder © zalaris 2023 Page 3
Slide 4: Payroll & HR solutions that enable digital organizations
Payroll & HR solutions that enable digital organizations One global IT platform with local presence Geographical footprint Zalaris is a leading European provider of global payroll and human capital management solutions delivered through software as a service, outsourcing, or consulting delivery mode
Slide 5: PeopleHub covers the full employee life cycle
PeopleHub covers the full employee life cycle HR system Benefits Country specific Employee self Organizational Employee Co2 Document management locations services structures footprint archive Payroll Cloud Global Payroll Payroll payroll payroll hr-automation HR-transformation Workforce management Ti
Slide 6: Services delivered by two integrated business units with most revenues being recurring
Services delivered by two integrated business units with most revenues being recurring of nature Managed services (MS) Professional services (PS) Zalaris’ cloud solution and comprehensive payroll and HR outsourcing Consulting services including delivery of traditional consulting services projects as
Slide 7: We successfully support European companies globally
We successfully support European companies globally The addressable market has increased significantly with global opportunities We efficiently manage CAPEX exposure by leveraging our established partner ecosystem for PeopleHub implementation and operation in larger GEOs – and full long-tail coverag
Slide 8: Significant European player with Germany largest and fastest growing market
Significant European player with Germany largest and fastest growing market facing unit Revenue per country Q3 2023 (%) Other UK 2% 9% Poland 7% Germany 36% Finland 9% 7% Denmark 11% Sweden 20% Norway © zalaris 2023 Page 8
Slide 9: Diversified customer base across a wide range of industries
Diversified customer base across a wide range of industries Customer traits Bank, Insurance & Financial services Health & Life Science Infrastructure & Transportation Managed services >1,000 employees >2 countries IT, Technology & Telecom Offshore & Energy Product & Industrials Software agnostic Pro
Slide 10: Predominantly annual recurring revenue from long-term contracts and low churn
Predominantly annual recurring revenue from long-term contracts and low churn Managed Services Profession Services 5-year contracts (average) ~78% of revenue is from customers that were Low historic churn (1.5 - 2.0%) and high net customers 12 months prior (Q3’23) retention 106% (Q3’23 YoY) ~59% of
Slide 11: Strong revenue visibility through 2024
Strong revenue visibility through 2024 - newly signed BPO contracts will result in significant revenue increase Revenue development based on signed MS contracts (NOKm) 292 Total annual revenue expected to increase by ~NOK 112m (+10%) vs. LTM Q3’23, based on already signed contracts 81 99 (assuming n
Slide 12: Significant growth in revenue and EBIT during the last quarters
Significant growth in revenue and EBIT during the last quarters: +27% organic revenue growth LTM YoY (+17% in constant currency) Figures in NOK million Revenue Adj. EBIT* (ex. APAC region) Adj. EBIT margin (ex. APAC region) 277.5 25.6 9,4% 223.6 7,2% 195.4 14.1 5,2% 11.4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 13: Market positioning and growth opportunities
Market positioning and growth opportunities Simplify work life. Achieve more.
Slide 14: We target specific customer characteristics enabling efficient selling
We target specific customer characteristics enabling efficient selling Multi-country vs. Single –country Focusing on multicountry and large single-country opportunities Company size Large and mid-size enterprises in one or multiple countries Industry type Covers most industries with some strongholds
Slide 15: We operate in an attractive market expected to grow with a CAGR of ~8-10%
We operate in an attractive market which is expected to grow with a CAGR of ~8-10% Attractive market with a strong growth outlook across both managed and professional services for which Zalaris currently outperforms Market supported by several tailwinds such as increasing global workforce, intensify
Slide 16: Competitive environment according to industry analysts
Competitive environment according to industry analysts The Global competitive Europe for which Zalaris is landscape for which Zalaris is a vs. considered among the providers strong challenger of choice for enterprise customers
Slide 17: Financial strategy and targets
Financial strategy and targets Simplify work life. Achieve more.
Slide 18: Ambition to grow revenue to NOK 1.5 billion by 2026
Solid revenue growth last 2 years and ambition to grow to NOK 1.5 billion by 2026 (+10% p.a.) Development in revenue >10% annual organic revenue growth driven by: NOKm ~11% CAGR 2023E–2026E Growing HR and payroll market New large multi-country/global long-term contracts ~14% CAGR 2021–2023E in const
Slide 19: Closing in on adj. EBIT margin target of 10%, ambition 12-15% by 2026
Closing in on short-term adj. EBIT margin target of 10% and ambition to expand to 12 - 15% by end-2026 >10% adj. EBIT margin short-term driven by: Development in adj. EBIT and adj. EBIT margin NOKm and % Current EBIT improvement program (Zalaris 4.0) Further right-shoring and standardisation to impr
Slide 20: Increased focus on operating cash flow conversion and capital allocation
Increased focus on growing operating cash flow conversion and prudent capital allocation Targeted long-term operating cash flow conversion* of 70% Achieved mainly through: Working capital improvements Transformation projects for new customers to be minimum cash neutral Target Target EBIT Target EBIT
Slide 21: Key take-aways
Key take-aways Simplify work life. Achieve more.
Slide 22: Twenty-three years of continued growth combined with scalable solutions
Twenty-three years of continued growth combined with scalable solutions deliver value short - and medium-term value 1) Zalaris PeopleHub is increasingly in favour by mid-market and large customers seeking to digitalize their Payroll & HR processes resulting in 24% reported growth in Q3. We are now a
Slide 23: Appendix
Appendix Simplify work life. Achieve more.
Slide 24: Condensed Profit and Loss
Condensed Profit and Loss 2023 2022 2023 2022 2022 (NOK 1 000) Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec Revenue 277 459 223 564 818 788 642 191 892 743 License costs 23 482 20 704 73 348 61 120 80 198 % of revenue 8,5 % 9,3 % 9,0 % 9,5 % 9,0 % Personnel expenses 138 853 120 179 431 558 354 988 483 82
Slide 25: Condensed Balance Sheet
Condensed Balance Sheet 2023 2022 2022 (NOK 1 000) 30. Sept 30. Sept 31. Dec Fixed and intangible assets 439 672 430 120 426 263 Trade accounts receivable 241 011 178 080 191 715 Customer projects assets 187 688 131 478 135 359 Cash and cash equivalents 120 728 94 843 91 796 Other assets 65 050 64 1
Slide 26: Summary of long-term financial targets (to 2026)
Summary of long-term financial targets (to 2026) Revenue: >10% organic growth (Managed Services >15%, Professional Services >5%) Fuelled by large multi-country contracts and expansion with existing customers Profitability: 12% - 15% adj. EBIT margin Utilising right shoring, automation (AI) and incre
Slide 27: Top 20 shareholders
Top 20 shareholders Rank Investor Number of shares Shareholding (%) Type Grouped: 1 NORWEGIAN RETAIL AS 2 891 482 13,06 % Ordinary 2 VERDIPAPIRFONDET ALFRED BERG GAMBAK 2 106 346 9,52 % Ordinary 3 DANSKE BANK A/S 1 428 006 6,45 % Nominee 4 CODEE HOLDING AS 1 395 735 6,31 % Ordinary 5 VERDIPAPIRFONDE
Slide 28: Analyst Coverage
Analyst Coverage Investment Bank Analyst E-mail ABG Sundal Collier Njål Eivind Kleiven njal.kleiven@abgsc.no Arctic Securities Kristian Spetalen kristian.spetalen@arctic.com Jonathan Andersson (credit) jonathan.andersson@arctic.com Nordea Markets David Raso (credit) david.raso@nordea.com SpareBank1
Slide 29: 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.