Vercom Sa · GPW:VRC

Vercom Sa — Q3 2024 Earnings Presentation

37 slides from Vercom Sa's earnings presentation, Nov 13, 2024

  1. Slide 1: Q3 2024 Investor presentation

    | Q3 2024 Investor presentation 13 November 2024 : Scale beyond

  2. Slide 2: Disclaimer

    : Disclaimer By reviewing this material, you agree to the following limitations: The information provided was prepared by VERCOM S.A. (the "Company”) for informational purposes only and for the purposes of this presentation (the "Presentation"). This Presentation does not constitute or form part of

  3. Slide 3: Profitable growth continued in Q3 2024

    : Profitable growth continued in Q3 2024

  4. Slide 4: Q3 2024 financial results

    : Q3 2024 financial results Gross profit Organic growth y/y PLN 56m +18% Adj. EBITDA PLN 29m +28% Net income PLN 20m +52% : Scale beyond 44

  5. Slide 5: LTM EBITDA already above 2024 ESOP target

    : LTM EBITDA already above 2024 ESOP target ESOP financial target – adjusted EBITDA (PLNm) LTM EBITDA already +PLN 8m above the 2024 ESOP target EBITDA LTM 100+PLNm 103 85 95 80 55 37 2021 2022 2023 2024 LTM 5

  6. Slide 6: On track to achieve ESOP target valuation

    : On track to achieve ESOP target valuation Market capitalization (PLNm) 3,200 Aspirational goal: 2,900 2,600 2,300 ESOP target 2024 (PLN 90 p.s.) 2,000 1,700 1,400 1,100 800 500 Dec 21 Jun 22 Dec 22 Jun 23 Dec 23 Jun 24 6

  7. Slide 7: +20% YoY customer base growth

    : +20% YoY customer base growth Total number of customers +21% 91,600 75,500 Q3 2023 Q3 2024 : Scale beyond 77

  8. Slide 8: Effective cross-selling drives NER

    : Effective cross-selling drives NER Net Expansion Rate (NER) +46 p.p. 156% 120% 110% Q3 2023 Q4 2024 : Scale beyond NER excl. top client NER 88

  9. Slide 9: We are a fast-growing SaaS company

    : We are a fast-growing SaaS company

  10. Slide 10: Dynamic growth driven by organic expansion and value-accretive acquisitions

    : Dynamic growth driven by organic expansion and value-accretive acquisitions Revenue (PLNm) x40 2022: Global scale-up 462 2021: Debut on the WSE 337 260 2020: CPaaS leader in the CEE 179 117 78 59 20 34 12 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 LTM 10

  11. Slide 11: Vercom customer engagement flywheel

    : Vercom customer engagement flywheel Design & templates TRACT NEW CUSTOMER Segmentation Save time using our content AT S creation tools and templates Boost customer engagement and loyalty by focusing on the right people Smart analytics Turn insights into actions with A/B testing advanced analytical

  12. Slide 12: Facilitating everyday communication between businesses and their customers

    Facilitating : Our solutionseveryday communication are an inherent part ofbetween everydaybusinesses life and their customers 12 12

  13. Slide 13: 20 years of experience rewarded with trust of landmark partners

    : 20 years of experience rewarded with trust of landmark partners 91.600+ Customers 13

  14. Slide 14: Selling services to customers in 180 markets globally

    : Selling services to customers in 180 markets globally Est. gross margin currency structure (%) Gross margin in FX Gross margin in PLN 40% 60% Team Top markets Other markets locations 14

  15. Slide 15: Strong focus on scalability to further grow international presence

    : Strong focus on scalability to further grow international presence +1m : SME Long-term target: Paying customers Targeting broader spectrum of customers : ENTERPRISE Globalization of the customer base : CEE : GLOBAL 15

  16. Slide 16: Accelerating adoption of RCS creates new growth opportunities

    : Accelerating adoption of RCS creates new growth opportunities

  17. Slide 17: RCS combines the best features of all messaging channels

    : RCS combines the best features off all messaging channels SMS RCS OTT  No interactive content ✓ Interactive content ✓ Interactive content  No branding ✓ Customer branding ✓ Customer branding ✓ Native support ✓ Native support  Requires 3rd part app 17

  18. Slide 18: Unique features of RCS are driving the adoption in North America and Europe

    : Unique features of RCS are driving the adoption in North America and Europe UK Germany Canada Poland Czech France Republic RCS supported Belgium USA since Q4 24 Spain 18

  19. Slide 19: RCS is set to change the A2P messaging landscape

    : RCS is set to change the A2P messaging landscape RCS market value (USDb) Key highlights Total market value expected to reach USD 3bn by 2028, a 9-fold growth vs. USD 300m currently 9x RCS growth Telecoms are expediting implementation of RCS, with significant coverage across Asia, North America and

  20. Slide 20: Vercom leads the implementation of RCS among the Enterprise customer base

    : Vercom leads the implementation of RCS among the Enterprise customer base Conclusion of an agreement with P4 for the provision of RCS Q1 2024 Q3 2024 Q2 2024 Q4 2024 Conclusion of an agreement with Orange and T-mobile for the provision of RCS 20

  21. Slide 21: Effective customer engagement is a key driver of revenue growth

    : Effective customer engagement is a key driver of revenue growth Case study: customer journey based on combination of different communication channels Connect with customers DriveMarketing engagement Improve upselling Build your relationship Leverage your customer base to Drive engagement via advan

  22. Slide 22: Healthy growth structure driven by customer adds and cross-selling

    : Healthy growth structure driven by customer adds and cross-selling

  23. Slide 23: Strong gross profit growth reflects the growing scale of operations

    : Strong gross profit growth reflects the growing scale of operations Gross profit (PLNm) +68% CAGR Q3 2020 – Q3 2024 56 47 36 14 7 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Q3 2024 23

  24. Slide 24: Gross profit growth driven by customer adds and cross-selling of services

    : Gross profit growth driven by customer adds and cross-selling of services Gross profit (PLNm) +23% +PLN 2.5m -18 p.p. +156% +16.100 +16.100 Gross margin in Significant increase sales to foreign currencies Enterprise clients in 2024 drove recalculated at NER up while diluting the gross 2023 rate ma

  25. Slide 25: Stable SG&A base increases the effect of operating leverage

    : Stable SG&A base increases the effect of operating leverage General and administrative expenses (PLNm) Note Stable G&A costs throughout 2024 19.6 19.1 18.9 The increase of G&A YoY costs is 15.8 17.0 mostly associated with the growing scale of the business (PLN 3.0m) Q3 2023 Q4 2023 Q1 2024 Q2 2024

  26. Slide 26: Dynamic EBITDA growth in line with target growth trajectory for 2024

    : Dynamic EBITDA growth in line with target growth trajectory for 2024 Adjusted EBITDA (PLNm) Note +48% CAGR Q3 2020 – Q3 2024 Q3 2024 EBITDA in line with target growth trajectory for 2024 Strong organic growth rate amounting to 28% YoY Decrease in EBITDA margin resulting from the significant increa

  27. Slide 27: Strong cash generation capacity proven by increasing free cash flow

    : Strong cash generation capacity proven by increasing free cash flow

  28. Slide 28: Almost 100% conversion rate of EBITDA into operating cash flow

    : Almost 100% conversion rate of EBITDA into operating cash flow Adjusted EBITDA and net cashflow from operating activities (PLNm) Adjusted EBITDA Net cashflow from operating activities 103 101 80 73 47 46 35 27 LTM Q3 2021 LTM Q3 2022 LTM Q3 2023 LTM Q3 2024 28

  29. Slide 29: Strong cash generation capacity underpinned by c. 20% FCF margin

    : Strong cash generation capacity underpinned by c. 20% FCF margin LTM EBITDA to LTM FCF bridge (PLNm) -9 7 -11 -5 83% EBITDA to FCF 103 conversion rate 86 19% 3) FCF margin 2) 1) 1) Adj EBITDA LTM Tax Capex Leasing NWC change FCF LTM 29

  30. Slide 30: Rule of 40 - outstanding performance vis-à-vis global SaaS peers

    : Rule of 40 - outstanding performance vis-à-vis global SaaS peers Rule of 40 for selected SaaS peers One of the highest Rule of 40 (FCF margin + growth rate) among top global competitors 56% 51% 47% 42% 41% LTM FCF margin 19% 25% EBITDA growth 28% 9% Source: finbox.com, accessed on 12/09/2024 30

  31. Slide 31: Net income growth supported by decreasing leverage

    : Net income growth supported by decreasing leverage

  32. Slide 32: Net income growth supported by decreasing leverage

    : Net income growth supported by decreasing leverage Reported net profit (PLNm) F -adjusted net profit(1) (PLNm) Note F -adjusted net profit growth of +52% +42% 42% yoy Net income supported by: ▪ Operating leverage ▪ Decreasing financing costs ▪ Positive tax rate impact due to: ▪ The decreasing leve

  33. Slide 33: We expect to have positive net cash position by the end of the year

    : We expect to have positive net cash position by the end of the year Net debt / LTM EBITDA Note Net debt amounts to PLN 41m Decreasing net debt / EBITDA (c. 0.4x) trend affected by PLN 35m dividend distribution Healthy balance sheet structure means plenty of The increase of net debt / headroom for

  34. Slide 34: We are on track to achieve our ambitious goals

    : We are on track to achieve our ambitious goals

  35. Slide 35: We are on track to achieve 2024 growth target

    : We are on track to achieve 2024 growth target Adjusted EBITDA(1) (PLNm) 2023 2024 In 2023, Q4 contributed 28% +7m of the annual EBITDA +6m +6m +5m 31 27 29 23 24 21 22 18 Q1 Q2 Q3 Q4 (1) Q4 2024 target based on current trends and historical seasonality 35

  36. Slide 36: Key takeaways from Q3 2024 results

    : Key takeaways from Q3 2024 results Exceeded PLN 100m of adj. LTM EBITDA with robust +28% YoY growth, in line with target growth trajectory for 2024 Healthy growth structure driven by acceleration in customer adds (+16,100 clients, c. 21% YoY) and continued strong cross-selling of services to Enter

  37. Slide 37: Thank you for your attention

    : Thank you for your attention

Vercom — Q3 2024 Earnings Presentation on 6ix