Slide 1: Gofore – Pure-play digital transformation consultancy
Gofore – Pure-play digital transformation consultancy Q3 2020 Investor Presentation
Slide 2: Presenting
Presenting Mikael Nylund Teppo Talvinko CEO CFO 2
Slide 3: Gofore is a growing and profitable digital transformation consultancy
Gofore is a growing and profitable digital transformation consultancy 3
Slide 4: The world is turning digital at an increasing pace
The world is turning digital at an increasing pace 500M 30% >50% >50% transformed of Global GDP of all IT spend Industry-specific to future solutions workplace By 2023, digitally By 2024, over 50% of By 2023, over 500 million By 2022, 30% of Nordic transformed enterprises global IT spend will be for
Slide 5: Delivering digital solutions with positive societal impact
Delivering digital solutions with positive societal impact Selected examples Digitalizing national Building a smarter Protecting the service architecture education sector Archipelago Sea Revolutionizing services Accelerating the switch to for the labor market electric cars Creating a single point of
Slide 6: Growing and profitable
Growing and profitable Revenue growth CAGR 2012 – 2017: 56% CAGR 2017 – Q3 2020 LTM: 28% €m 16,8% 70-76 14,8% 14,9% 14,1% 13,4% 64,1 12,5% 11,6% 50,6 12,5% 34,0 18,6 12,4 9,2 3,7 6,0 2012 2013 2014 2015 2016 2017 2018 2019 2020 guidance Sales EBITA-% 6
Slide 7: Our aim is always to be…
Low-risk Our aimbusiness model is always towith be…visibility to recurring revenues Growing and profitable Constantly evolving Impactful and International responsible …while offering exceptional customer and employee experience 7
Slide 8: Gofore key investment highlights
Gofore key investment highlights 1 Accelerating digital transformation with Gofore ideally positioned 2 Pure-play next-gen offering with strong customer satisfaction 3 Tech-native culture supports scalability and efficiency 4 Low-risk business model with strong revenue visibility 5 Outstanding growt
Slide 9: Gofore ideally positioned as a digi-native in the accelerating digital transformation
Gofore ideally positioned as a digi-native in Low-risk business model with visibility to recurring revenue 1 the accelerating digital transformation Traditional IT services New digital services Business support Business development 10% 2-4% Market growth1) Market growth1) Long implementation cycles
Slide 10: Pure-play next-gen offering for agile digital transformation
2 Pure-play next-gen offering for agile digital transformation 100% legacy-free consulting and development services ADVISORY SERVICE AGILE CLOUD, QUALITY DESIGN DEVELOPMENT DATA & ASSURANCE ANALYTICS Digitally native Automated Design and technology development services advisory testing for for digit
Slide 11: Excellent customer experience proof of our ability to add value in digital transformation
Excellent customer experience proof of our ability to add value in 2 digital transformation – driving strong customer growth Gofore is a strategic partner for its customers, accelerating digital change Excellent customer experience Top customers are growing Increasing number of large clients NPS1) T
Slide 12: Long-term relationships with a diverse and growing client base
2 Long-term relationships with a diverse and growing client base Public (70% of sales1)) Private (30% of sales1)) 30%1) 70%1) Sales CAGR Sales CAGR +45%2) +24%2) 2017-19: 2017-19: 1) 2019 figure; 2) 2017 based on pro-forma sales split 12
Slide 13: Tech-native platform underpinning scalability and efficiency
Low-risk business model with visibility to recurring revenues 3 Tech-native platform underpinning scalability and efficiency Shared values and communality Daily data collection Low hierarchy and self-organisation Real-time forward-looking analytics Transparency and rich communication Human- Data-dri
Slide 14: Strong employer brand further supports talent acquisition and retention
Strong employer brand further supports talent acquisition Low-risk business model with visibility to recurring revenues 3 and retention # 2019 2020 1 Supercell 6 Reaktor 2 Futurice 7 Microsoft 3 Google 8 Fazer #1 Finland (Medium) 4 KONE 9 Vincit #2 Europe (Small & Medium) 5 10 Konecranes 700+ 582 49
Slide 15: Low-risk business model with strong revenue visibility
Low-risk business model with visibility to recurring revenues 4 Low-risk business model with strong revenue visibility 70% public share with ~90% of revenue from returning 93% of revenue is time-and-material3): ~3-5 year average contract length1): customers2): predictable growth Low execution risk v
Slide 16: Strong margins with further upside
Low-risk business model with visibility to recurring revenues 5 Strong margins with further upside Gofore 2019 (% of net sales) • Operational excellence, market knowledge and advisory business create opportunities in pricing Net sales 100% • Room for improvement in billing rate (71% in 2019 includin
Slide 17: Attractive financial profile in industry comparison
5 Attractive financial profile in industry comparison 35% 2017-20LTM Sales CAGR 30% 25% Net sales CAGR 2017-2020LTM 20% 28% 15% 10% Average EBITA-% Cash conversion 2017-2020LTM 2019 5% 14% 96%2) 1) 0% 2017-20LTM average EBITA margin -5% 0% 5% 10% 15% 20% 25% 30% 1) Adjusted for EVRY merger; 2) Calcu
Slide 18: Clear roadmap for continued strong growth
Low-risk business model with visibility to recurring revenues 6 Clear roadmap for continued strong growth Disciplined M&A Export strong public and industry sector expertise Market share growth and private sector growth New digital services market 2017 State-of-the-art growth Gofore international sal
Slide 19: Gofore financial targets and dividend policy
Low-risk business model with visibility to recurring revenues Gofore financial targets and dividend policy Growth Profitability Dividend Faster than target market At least 40% of annual 15% EBITA margin net profit (market growth max 10%) 19
Slide 20: Interim Report July–30 September 2020
1 July–30 September Interim Report 2020
Slide 21: Highlights of Q3/2020
Highlights of Q3/2020 NET SALES EBITA, ADJUSTED Employees 16,3 MEUR 1,8 MEUR EBITA-%, ADJUSTED 716 (13,3 MEUR) (1,2 MEUR) 11,3% (578) Growth 22.1% Growth 49,2% (9,2%) Growth 23,9% 21
Slide 22: Coronavirus outbreak
Coronavirus outbreak • The coronavirus pandemic has caused uncertainties in the operating environment. • It did not adversely affect the company's business during the three first quarters of 2020, and customer demand has been at the expected level. • There is continuing uncertainty about the pandemi
Slide 23: Net sales and profitability
Net sales and profitability 2017-2020 16,8% 13,4% 13,2% 14,2% 12,5% 70 64,1 60 53,7 50,6 50 46,8 Net sales, MEUR (reported) 40 EBITA, MEUR (adjusted) 34 EBITA, margin, adjusted % 30 20 10 6,8 8,0 6,2 7,6 5,7 0 2017 2018 2019 1-9 2019 1-9 2020 23
Slide 24: Monthly net sales development
Monthly net sales development 2019-2020 Qentinel included since September 8,3 2020 6,8 6,6 6,4 6,2 6,0 6,1 5,9 6,1 6,1 5,9 6,0 5,5 5,6 5,2 5,3 5,1 5,3 4,6 2,2 2,4 January February March April May June July August September October November December 2019 2020 24
Slide 25: Quarterly development
Quarterly development Group (consolidated) Q1/2020 Q2/2020 Q3/20201 Net sales, MEUR 18,8 18,6 16,3 EBITA, MEUR, adjusted 3,3 2,5 1,8 EBITA-%, adjusted 17,3% 13,8% 11,3% Group (consolidated) Q1/2019 Q2/2019 Q3/2019 Q4/2019 Net sales, MEUR 16,7 16,8 13,3 17,3 EBITA, MEUR, adjusted 2,9 2,1 1,2 1,8 EBIT
Slide 26: Net sales distribution
Net sales distribution 1-9/2020 By location By sector By clientele Subcontracting 11% 17% 26% 53,7 89% 53,7 53,7 42% 53,7 MEUR MEUR 58% MEUR MEUR 74% 83% Finland Outside Finland Private Public Top 5 Others Subcontractors Personnel 26
Slide 27: Guidance
Guidance 2020 Gofore estimates that for the full year 2020, its net sales will be in the range of EUR 70-76 million (EUR 64.1 million). Adjusted EBITA is estimated to grow in 2020 from 2019 (EUR 8.0 million). 27
Slide 28: APPENDIX
APPENDIX
Slide 29: Key figures
Key figures In thousands of EUR, unless otherwise stated 1-9/20201 1-9/2019 20192 Net sales 53,668 46,800 64,066 Growth of net sales, % 14.7 29.4 26.7 Earnings before interest, taxes, depreciation and amortisation 7,087 6,344 8,214 (EBITDA) Earnings before interest, taxes, depreciation and amortisat
Slide 30: Key figures
Key figures In thousands of EUR, unless otherwise stated Q1-Q3/20204 Q1-Q3/2019 2019 Earnings per share (EPS), undiluted, euros 0.26 0.25 0.33 Number of outstanding shares at the end of the period 14,003,068 14,012,628 14,012,628 Equity ratio, % 50.9 64.5 64.6 Net gearing, % -20.5 -33.9 -51.0 Return
Slide 31: Thank you!
GOFORE Thank you!