Exclusive Networks SA — FY2021 Earnings Presentation
45 slides from Exclusive Networks SA's earnings presentation, Mar 30, 2022
Slide 1: FY21 Earnings Call
#WeAreExclusive FY21 Earnings Call
Slide 2: Disclaimer
Disclaimer #WeAreExclusive IMPORTANT: Please read the following before continuing. This document has been prepared by and is the responsibility of Exclusive Networks SA (the “Company”). It comprises information concerning the Company and its subsidiaries (together, the “Group”). What follows applies
Slide 3: Jesper Trolle, CEO
#WeAreExclusive Jesper Trolle CEO
Slide 4: Exclusive At A Glance
Exclusive At A Glance #WeAreExclusive 2,375 €3,3B 3,3B TH Exclusive people FY21 Gross Sales (2) ROW 2,9B US G TI NUO ON 2,3B F C DE O 2,0B ECA AD 1,7B 43 >21K 1,5B 840M Office country locations Reseller Partners 570M REVENUE (€) 338M 279M >170 2:1 Countries served FY21 (1) Ratio of technical to sale
Slide 5: FY21 Highlights
FY21 Highlights #WeAreExclusive Delivering strong financial results in FY Strong business expansion through 2021, with +10% growth in Adjusted EBITA1 existing and new vendors Delivered on growth and Uniquely positioned to capitalise on new profitability targets for the year opportunities in a fast-g
Slide 6: Pierre Boccon-Liaudet, CFO
#WeAreExclusive Pierre Boccon-Liaudet CFO
Slide 7: Another Strong Year of Delivering Value Creation
#WeAreExclusive Another Strong Year of Delivering Value Creation 1 2 3 Top Line Scale Sustained Growth Value Add +15.1% €320m €3.3bn 2021 Gross Sales Growth (1) 2021 Net Margin (2) 2021 Gross Sales +9.2% Growth Year-Over-Year (1) +29.5% on Reported basis 4 5 6 Bottom Line Strong Profitability Growin
Slide 8: Exceptional Track Record of Accelerated Growth and Value Creation
Exceptional Track Record of Accelerated Growth and Value Creation 3.3 GROSS SALES(1) #WeAreExclusive €bn 2.9(2) 2.4 2.0 1.7 1.3 0.8 0.6 0.3 '13 '14 '15 '16 '17 '18 '19 '20 '21 Through organic & inorganic growth Exclusive Networks became the unique Global Cybersecurity Specialist
Slide 9: FY 2021 Record Year: Gross Sales Growth
FY 2021 Record Year +29,5% of Gross Sales reaching high-end of guidance FY 2021 GROSS SALES Full Year 2021 DRIVERS OF GROWTH #WeAreExclusive €m Contribution to Gross Sales growth (1)(4) 15.1% +15.1% 3,320 ~15% 29.5% 2,564 ~13% ~73% 2020 2021 % Growth (1) % Reported Growth (1) YoY Growth Same vendors
Slide 10: Accelerating Growth in the Americas and in the Enterprise Market
Accelerating Growth in the Americas and in the Enterprise Market MORE SALES IN THE AMERICAS MORE LARGE DEALS 2021 Gross Sales breakdown by geography 2021 Gross Sales value growth by Deal Size(2) #WeAreExclusive AMERICAS +29% yoy Deals >€1M +38% vs. 2020 Deals <€20k APAC Deals €500k-€1M +14% vs. 2020
Slide 11: Net Margin Growth Acceleration and Expansion of Adj EBITA Conversion
Net Margin Growth Acceleration and Expansion of Adj EBITA Conversion NET MARGIN GROWTH DRIVEN BY SCALE #WeAreExclusive +24.3% +9.2% MIX EFFECT OF AMERICAS AND DEAL SIZE LEADS TO 319.9 +4.0% +36 293.0 INCREASED BUSINESS PROFITABILITY 247.3 257.3 10.4% 10.2% 9.6% 2019 2020 2020 (1) 2021 Incl. Veracomp
Slide 12: Sales and Operating Leverage Drive Profitability Growth
Sales and Operating Leverage Drive Profitability Growth OPERATING EXPENSES(1) INCLUDING D&A(2) €m #WeAreExclusive % of Gross Sales 7.0% 6.4% 6.0% % of Net Margin 67.2% 63.0% 62.7% (3) 200.7 184.6 Overall, Operating Expenses increased slower than both Net Margin and Gross Sales over the last two year
Slide 13: Executing on Our Strategy Delivers Profitable International Growth
Executing on Our Strategy Delivers Profitable International Growth Gross Sales Revenue Adj. EBITA(1) #WeAreExclusive +14.5% +15.7% +9.0% Strong Growth in EMEA, (2) 2580 (2) 118 Accelerated development in the EMEA 2 254 (2) 1 944 108 1 680 enterprise market and increasing share of large deals 78% of
Slide 14: Putting It All Together: Reported Adjusted EBITA +25%
Putting It All Together: Reported Adjusted EBITA +25% + XX% 2020 Reported € in millions 2019 2020 2021 Growth incl Veracomp #WeAreExclusive vs 2020 Gross Sales 2,375 2,564 2,886 3,320 Growth % 18.3% 7.9% 21.5% 15.1% (4) +29.5% Revenue 1,742 1,892 2,139 2,483 Growth % n.a 8.6% 22.8% 16.1% (4) +31.3%
Slide 15: Net Working Capital
Net Working Capital CONTINUED STRONG WORKING CAPITAL POSITION #WeAreExclusive (2) In €m 2019 2020 2021 (1) (2) (1) Net Working Capital Trade Receivables 650.0 795.4 892.5 Stable compared to last year % of Gross Sales 27.4% 27.6% 26.9% as a % of Gross Sales when Other Receivables 55.3 68.2 67.3 norma
Slide 16: Asset Light Model Supporting High Cash Flow Generation
Asset Light Model Supporting High Cash Flow Generation In €m 2020 2021 #WeAreExclusive Net Income 2.7 (12.5) Variance in the change in Net Working Capital (+) Net Financial Expense / Income (1) 38.7 38.8 €56m relating to the benefit in 2020 from exceptional COVID measures including VAT (+) Income Ta
Slide 17: Asset Light Model Resulting in High Capital Efficiency
Asset Light Model Resulting in High Capital Efficiency HIGH CASH CONVERSION ASSET-LIGHT MODEL, STRONG RETURN ON CAPITAL #WeAreExclusive Operating Free Cash Flow Before Tax / Adj. EBITDA(1)(3) %, ROCE FY21(2)(3) 77% average over the last 3 years(3) 51% average over the last 3 years(3) (3) (4) 104% (3
Slide 18: Net Debt and Leverage: Sufficient Headroom for Continued M&A
Net Debt and Leverage: Sufficient Headroom for Continued M&A and Shareholders’ Return Bank Borrowings #WeAreExclusive Dec 2021 Debt from IPO refinancing € in millions • • No utilization of the RCF line on Dec 31, 2021 Bank Borrowings 453.8 • Includes loan issuance costs of the 2021 financing Short t
Slide 19: Outlook 2022
#WeAreExclusive Outlook 2022 2021 2022 Gross Sales incl. M&A €3,320m Above €3,800m Net Margin €319.9m €362 - €368m Adj. EBITA €119.2m €133 – €138m % of Net Margin 37.3% Operating FCF Before €56.5m 80% of Adj. EBITDA Tax
Slide 20: Key Takeaways
Key Takeaways #WeAreExclusive 1 Cybersecurity at scale 2 Outperforming cybersecurity market with sustainable double-digit growth 3 Value add enables best-in-class margins 4 Operating leverage and consistent strong profitability growth 5 Asset-light model resulting in high capital efficiency
Slide 21: Jesper Trolle, CEO
#WeAreExclusive Jesper Trolle CEO
Slide 22: An increasingly complex environment drives market opportunities
An increasingly complex environment for end customers continues to drive market opportunities #WeAreExclusive NEW LEGISLATION REMOTE WORKING Continued development and The pandemic accelerated digital introduction of international transformation by several years with and national cybersecurity compan
Slide 23: Attacks are growing in sophistication and frequency
Attacks are growing in sophistication, occurring more often, and leaving more victims in their wake #WeAreExclusive EVOLUTION OF REPORTED CYBER BREACHES (1) PROJECTED COST OF CYBER ATTACKS PROJECTED CYBER INSURANCE (GLOBAL, BILLION) (USD, TRILLION) (2) MARKET GROWTH (USD, BILLION) $10.5 390 $14.8 30
Slide 24: We play a central role in the cybersecurity ecosystem
We play a central role in connecting all stakeholders in a highly complex and fragmented cybersecurity ecosystem #WeAreExclusive THE EXCLUSIVE VALUE MANUFACTURERS (VENDORS) VENDORS VENDOR • Create market opportunity at global (MANUFACTURER) scale +3K GLOBALLY OR Incubating start-ups as they scale ou
Slide 25: The Tier model is the dominant route to market for cybersecurity
The 2 Tier model is the dominant route to market for cybersecurity #WeAreExclusive CYBERSECURITY ROUTE TO MARKET (1) TOP TIER CYBERSECURITY SEGMENTS - MARKET OPPORTUNITY (1) (GLOBAL) (USD, BILLION) $60,559 Vendor DIRECT & $18,773 1 TIER MARKET Distribution $41,786 EXCLUSIVE $3,090 7.4% Direct 2 Tier
Slide 26: Huge opportunity to capture an increasing share of a fast-growing market
Huge opportunity to capture an increasing share of a continuing, fast-growing market #WeAreExclusive CYBER SECURITY GLOBAL TAM $60B SERVICEABLE ADDRESSABLE MARKET Upside from non addressed $38B Cyber Security segments EXCLUSIVE’S “SWEET-SPOT” Upside from Net new vendors Upside from Expansion of exis
Slide 27: We are across all top tier cybersecurity segments
We are across all top tier cybersecurity segments with significant opportunities for growth #WeAreExclusive TOP TIER CYBERSECURITY SEGMENTS EXCLUSIVE MARKET SHARE OF TOP TIER CYBERSECURITY SEGMENTS (%) 19% 15% Endpoint 1 Security 7% 6% Network 2 Security 1% 1% ENDPOINT SECURITY NE TWORK SECURITY WEB
Slide 28: We continue to capitalize on the growth of cloud
We continue to capitalize on the growth of cloud #WeAreExclusive EXCLUSIVE’S CLOUD-BASED SAAS-BASED REVENUE SHARE X-OD: ARR SAAS EVOLUTION (SALES TRANSLATED TO ARR) REVENUE SHARE EVOLUTION (%) INDUSTRY BENCHMARK(1) (%) (€, MILLION) c.400% +3% SaaS Vendors: • Sentinel One • Proofpoint • Wasabi JUN '2
Slide 29: Successfully executing against our strategy
Successfully executing against our strategy #WeAreExclusive GROWTH DRIVERS INCREMENTAL ACCELERATORS 1 2 3 4 5 LEVERAGE ADD NEW ENABLE NEW EXTEND PURSUE VALUE UNDERLYING GEOGRAPHIES ON VENDORS ACROSS SERVICES ADD M&A BY GROWTH OF EXISTING VENDORS OUR FOOTPRINT OFFERING ACQUIRING NEW EXISTING VENDORS
Slide 30: Increasing our focus on our ESG impact - our roadmap
Increasing our focus on our ESG impact - our roadmap #WeAreExclusive ENVIRONMENT SOCIAL GOVERNANCE • SUPPORTING OUR BUSINESS PARTNERS IN MEETING • CORE VALUES BASED ON HONESTY, INTEGRITY AND • 43% INDEPENDENT BOARD MEMBERS THEIR CARBON REDUCTION / NET ZERO COMMITMENTS SOCIAL RESPECT • 43% FEMALE BOA
Slide 31: Key Takeaways
Key Takeaways #WeAreExclusive Cybersecurity awareness 1 more prominent than ever Strategy and focus puts us at the 2 centre of a fast-moving ecosystem Uniquely placed to capitalise 3 on market growth opportunities Strategic pillars unchanged; 4 confidence in the future
Slide 32: We welcome any questions you may have
#WeAreExclusive We welcome any questions you may have
Slide 33: Investors & Analysts
#WeAreExclusive Investors & Analysts Hacene BOUMENDJEL , Head of IR ir@exclusive-networks.com
Slide 34: FY21 Earnings Call
#WeAreExclusive FY21 Earnings Call
Slide 35: FY 2021 Revenue: Record Year, Above Cybersecurity Market
FY 2021 Revenue: Record Year, Above Cybersecurity Market FY 2021 REVENUE FY 2021 REVENUE BY SEGMENT #WeAreExclusive €m €m +35.7% 1,944 1,433 +36.4% EMEA c.c. (1) 31.3% 2,483 1,892 2020 2021 +10.8% 278 308 APAC +11.8% c.c. (1) 2020 2021 2020 2021 % Reported Growth +27.6% YoY Growth Americas +31.1% 23
Slide 36: Higher Recurrence and Visibility back to Pre-Covid levels
Higher Recurrence and Visibility back to Pre-Covid levels from both Existing Vendors and Customers Year over Year #WeAreExclusive OUR EXISTING VENDORS AND CUSTOMERS ARE GENERATING HIGHER GROSS SALES Contribution from Previous Year(1) 112% average over the last 3 years 109% average over the last 3 ye
Slide 37: Adj. EBITA by Theater
Adj. EBITA by Theater ADJ. EBITA #WeAreExclusive €m 2019 2020 (1) 2021 EMEA 79 108 118 % of Gross Sales 4.5% 4.8% 4.6% % of Revenue 6.2% 6.4% 6.0% APAC 17 17 19 % of Gross Sales 4.5% 4.6% 4.8% % of Revenue 6.2% 6.0% 6.1% Americas 5 5 9 % of Gross Sales 2.0% 2.0% 2.5% % of Revenue 2.7% 3.0% 3.7% Corp
Slide 38: Historical Financials – Profit & Loss Statement IFRS
Historical Financials – Profit & Loss Statement IFRS in € million 31-Dec-2020 31-Dec-2021 Revenue 1,891.7 2,483.4 #WeAreExclusive Cost of purchased goods and services (1,630.9) (2,158.1) freight on sales (3.5) (5.5) Net Margin 257.3 319.9 Personnel costs (119.9) (153.4) Other operating costs (39.1)
Slide 39: Reconciliation: Gross Sales to Revenue
#WeAreExclusive Reconciliation: Gross Sales to Revenue €m Full Year 2020 Full Year 2021 Gross Sales 2,563.9 3,320.4 Agent vs Principal (Mainly Vendors’ Support) – IFRS 15 (657.8) (793.5) Timing of Revenue Recognition – IFRS 15 10.7 3.5 Intercompany Eliminations (25.0) (47.0) Revenue 1,891.7 2,483.4
Slide 40: Reconciliation: Operating Expenses
Reconciliation: Operating Expenses PERSONNEL COSTS OTHER OPERATING COSTS #WeAreExclusive In €m 2019 2020 2021 In €m 2019 2020 2021 IFRS Reported Personnel Costs 114.9 119.9 153.4 Reported Other Operating Costs 46,5 39,1 43,0 (1) ❶ ❷ ❸ ❶ ❷ ❸ Project Core - Personnel costs -0.8 -1.3 -2.0 Project Core
Slide 41: Reconciliation Adjusted EBITA to Operating Profit to Net Income
Reconciliation Adjusted EBITA to operating Profit to Net Income to Adjusted Net Income #WeAreExclusive In €m 2019 2020 2021 Adj. EBITA 81 95 119 1 Amortisation of Intangible Assets mainly relates to 1 Amortisation of Intangible Assets (54) (54) (57) amortisation of vendor relationships identified in
Slide 42: Below EBITA Detail on Reconciliation Items
Below EBITA Detail on Reconciliation Items Reported Adjustements Adjusted #WeAreExclusive € in millions 2019 2020 2021 2019 2020 2021 2019 2020 2021 1 Operating Profit / Adj EBITA 22 30 51 59 65 68 81 95 119 2 Net Financial Expenses/Income (36) (39) (39) 11 (36) (39) (28) Profit (Loss) Before Tax (1
Slide 43: Historical Financials – Balance Sheet IFRS
Historical Financials – Balance Sheet IFRS €m 31-Dec-2019 31-Dec-2020 31-Dec-2021 Goodwill 274.1 288.6 313.7 Other Intangible Assets 1,235.4 1,166.9 1,154.3 #WeAreExclusive Property, Plant and Equipment 4.0 5.9 7.3 Right-of-use Assets 19.0 22.0 19.3 Non-Current Financial Assets 22.2 25.3 34.5 Assets
Slide 44: Historical Financials – Cash Flow Statement
Historical Financials – Cash Flow Statement €m 2020 2021 Profit/(loss) for the period 2.7 (12.5) #WeAreExclusive Depreciation, amortisation, impairment and change in provisions 63.6 69.1 Financial debt costs & interests on lease liabilities 34.9 28.5 Share-based expenses - 2.8 Operating Activities I
Slide 45: Our Financial KPIs: Definitions and Contemplated Reporting
Our Financial KPIs: Definitions and Contemplated Reporting Definition Segments Reporting #WeAreExclusive • Gross Sales represent revenue recognized by the Group on a gross basis for each revenue stream and before intra and inter segment intercompany EMEA, APAC, Gross Sales Quarterly eliminations Ame