Zalaris Asa · OSL:ZAL
Zalaris Asa — Q1 2020 Earnings Presentation
26 slides from Zalaris Asa's earnings presentation, May 8, 2020
Slide 1: Presentation of interim financial results | Q1 2020
Presentation of interim financial results | Q1 2020 8 May, 2020
Slide 2: Agenda
Agenda • Highlights • Operational review • Financial review • Market update and outlook • Appendix Hans-Petter Mellerud Gunnar Manum Founder and CEO CFO © zalaris 2020 Page 2
Slide 3: First quarter 2020: EBIT improvement in progress
Highlights First quarter 2020: EBIT improvement in progress • We are celebrating Zalaris’ 20th anniversary with a renewal of our identity and strengthen our shared sense of purpose as a team to serve our customers better! • Revenue of NOK 200.6 million for the first quarter (+4.3%) • Adjusted EBIT o
Slide 4: Several large renewals and new customers in Q1
Highlights Several large renewals and new customers in Q1 • 5-year renewal with CircleK to deliver European Managed Payroll and HR services • 5-year renewal with Yara for the provision of multi-country HR services including payroll, time & attendance, and travel expenses • The County Council of Trøn
Slide 5: Delivering on commitments to customers despite COVID-19
Highlights Delivering on commitments to customers despite COVID-19 • Rapidly adapted to the challenges of COVID-19, enabling our +800 employees to work from home within days, and fully running HR support functions for our customers • Currently delivering as normal on customer commitments and is cont
Slide 6: Agenda
6 Agenda • Highlights • Operational review • Financial review • Market update and outlook • Appendix
Slide 7: Increased revenue in both business segments (NOKm)
Operational review Increased revenue in both business segments (NOKm) Managed Services Professional Services +4% +4% 153.2 56.1 60.3 58.3 136.2 133.9 142.3 53.7 53.0 130.4 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 ▪ Marginally higher revenue in NE and higher EUR/NOK • Significant r
Slide 8: Operational efficiency program is showing effect
Operational review Operational efficiency program is showing effect Number of Employees and FTE on downward trend as Majority of headcount reduction in Managed Services effciency measures takes effect 519 519 519 888 883 882 470 877 880 879 878 461 453 872 871 871 869 860 849 853 847 841 807 812 803
Slide 9: Majority of large customer agreements extended
Operational review Majority of large customer agreements extended. Well positioned to support customers coming out of the Covid-19 tunnel 2020 • Gassco extends for another 5 years • Yara extends for another 5 years • CircleK extends for another 5 years 2019 Value Proposition: • Nordea renews for ano
Slide 10: Professional Services recurring revenue increasing
Operational review Professional Services recurring revenue increasing. Profitability initiatives focusing on using capacity for billable work. Revenue mix Projects and Application Maintenance Services • Positive development in Application 33% Maintenance Services (AMS) is improving Projects 46% 45%
Slide 11: EBIT margins within Managed Services improving
Operational review EBIT margins within Managed Services improving - EBIT (NOKm) and EBIT margin (%) Managed Services Professional Services 11,8% 11,8% 10,0% 9,7% 8,2% 15,5% 15,1% 10,8% 15,8 16,7 9,1 13,6 14,9 8,7 6,5% 10,6 6,3 3,5 -0,3 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 -0,6% Q1-19 Q2-19 Q3-19 Q4-19 Q1-2
Slide 12: Agenda
12 Agenda • Highlights • Operational review • Financial review • Market update and outlook • Appendix
Slide 13: Condensed Profit and Loss
Financial review Condensed Profit and Loss 2020 2019 2019 (NOK 1 000) Jan-Mar Jan-Mar Jan-Dec Revenue 200 611 192 351 776 792 License costs 16 998 14 928 67 981 Personnel expenses 111 579 107 569 438 543 Other operating expenses 41 181 42 035 166 887 Amortization implementation costs customer projec
Slide 14: Cost base reduced by ~8% (NOKm)
Financial review Cost base reduced by ~8% (NOKm) 152,8 149,6 6,3 -8,6 -8% 8,4 -6,5 3,6 Personnel exp. + Personnel costs* Other op.exp* Ext. consultants* Less costs capitalised Currency effect Personnel exp. + other op.exp Q1’19 to projects other op.exp Q1’20 • Personnel costs and other op. expenses
Slide 15: Positive cash flow during the quarter (NOKm)
Financial review Positive cash flow during the quarter (NOKm) -4,5 -1,9 -3,7 -6,1 30,9 -5,9 -3,4 87,5 -0,4 82,5 Cash Q4 2019 EBITDA NWC Net cash Capex Interest Lease Loan Other Cash Q1 2020 movement payments payments repaymets customer projects • Operating cash flow for quarter of NOK 16.9m – increa
Slide 16: Condensed Balance Sheet
Financial review Condensed Balance Sheet 2020 2019 2019 (NOK 1 000) 31.Mar 31.Mar 31.Dec Fixed and intangible assets 389 158 374 626 354 184 Trade accounts receivable 161 913 173 941 148 614 Customer projects assets 90 104 97 741 88 808 Cash and cash equivalents 87 491 69 348 82 448 Other assets 43
Slide 17: Agenda
17 Agenda • Highlights • Operational review • Financial review • Market update and outlook • Appendix
Slide 18: Despite Covid-19 – ambition is to deliver our 20th year of uninterrupted growth
Market update and outlook Despite Covid-19 – ambition is to deliver our 20th year of uninterrupted growth 1 2 3 Diversified business model with Attractive and growing market Regional HRO leader blue-chip client base proven to be resilient over time Uniquely positioned towards multinational Zalaris i
Slide 19: We are still aiming high
Market update and outlook We are still aiming high • Delivering our 20th year of uninterrupted growth through expanding relationship with existing customers, explore new verticals as the municipality market in Norway and focus on core products and services combined with improved efficiency of market
Slide 20: We open for questions
Z. zalaris ZQ years We open for questions
Slide 21: Agenda
21 Agenda • Highlights • Operational review • Financial review • Market update and outlook • Appendix
Slide 22: 19 years of uninterrupted growth – to be continued
Appendix 19 years of uninterrupted growth – to be continued renewed BPO in UK extends Selected major contracts won Revenues (NOKm) Significant events Finnish service Established operations to Listed on Oslo Acquired Successful launch Founded by center near-shore in Latvia and Stock Enters Poland, su
Slide 23: Highly experienced management team…
Appendix Highly experienced management team… Management team Competence and experience Prior to his founding of Zalaris, Hans-Petter was a partner with Accenture, where he was responsible for business development in the company’s Nordic Hans-Petter Mellerud Outsourcing Unit. His educational backgrou
Slide 24: …and committed owners and Board of Directors
Appendix …and committed owners and Board of Directors TOP 20 Shareholders as of 5.05.2020 Board members Rank Investor Number of shares Shareholding (%) Type Lars Henriksen (DK) 1 NORWEGIAN RETAIL AS* 3 091 482 15,36 % Ordinary Chairman of the Board 2 SKANDINAVISKA ENSKILDA BANKEN AB 2 634 227 13,09
Slide 25: Disclaimer
Disclaimer This Presentation includes certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements relate to future circumstances and results and other statements that are not histor
Slide 26: 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