Zalaris Asa · OSL:ZAL
Zalaris Asa — Deutsches Eigenkapitalforum 2024
28 slides from Zalaris Asa's conference presentation, Nov 25, 2024
Slide 1: Zalaris ASA Investor Presentation
25 November 2024 Zalaris ASA PeopleHub BY ZALARIS Investor Your one-stop Presentation HR platform Deutsches Eigenkapitalforum 2024
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 2024 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: Zalaris' Product offering covering the full employee life cycle
Zalaris’ Product offering covering 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 Workf
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 services Consulting services including delivery of traditional consulting projects as
Slide 7: Well-positioned to support European leaders globally
Well-positioned to support European leaders globally Zalaris’ addressable market has increased significantly with global opportunities Low-cost (capex) effort to support global accounts through established partner ecosystem for PeopleHub implementation and operation in larger GEOs (and full long-tai
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 2024 (%) Other Australia 6% 4% UK 5% Poland Germany 5% 37% Finland 8% 8% Denmark 9% 17% Sweden Norway © zalaris 2024 Page 8
Slide 9: Diversified and large customer base comprising blue-chips across multiple industries
Diversified and large customer base comprising blue-chips across multiple industries Managed Services Professional Services Private and public >1,000 employees >2 countries Software agnostic >1,000 employees SAP integration sector BERLIN Bank, Insurance & Financial services Health & Life Science Inf
Slide 10: Predominantly annual recurring revenue from long-term contracts and low churn
Predominantly annual recurring revenue from long-term contracts and low churn According-to-contract revenue vs. Managed Services (~75% of revenue) change orders in Managed Services Change 11% 14% 11% 12% 11% 5-year contracts (average) Orders Low historic churn (1.5 - 3.0%) and high net retention 108
Slide 11: Significant growth in revenue and EBIT during the last quarters
Significant growth in revenue and EBIT during the last quarters: +20% organic revenue growth LTM YoY (+17% in constant currency) Figures in NOK million Revenue Adj. EBIT* Adj. EBIT* margin 340 37 10.9% 278 8.5% 224 24 4.4% 10 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 12: Strong revenue visibility through 2024/25
Strong revenue visibility through 2024/25 - new BPO customers to go live should result in >13% revenue increase compared to revenue LTM Revenue development based on signed MS contracts (NOKm) 335 Total annual revenue expected to increase by ~NOK 173m 122 (+13%) vs. LTM Q3’24, based on already signed
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: The market for HR business process outsourcing is expected to continue its strong growth
The market for HR business process outsourcing is expected to continue its strong growth Market growth expectations Comments Market size, USDbn Managed services market size breakdown Attractive market with strong 12.7 CAGR, % growth outlook across both 17.4 2021-26 managed and professional 5.2 servi
Slide 16: Multi-country payroll capabilities
Zalaris is the MCP provider of choice for enterprise customers in Northern Europe Overview of competitive landscape (mgmt. assessment) Why Zalaris win High Safe- Active BDO TMF guard payroll Ceridian Strada/ Customers needing one common IT global Alight solution to be integrated with Global SD Worx
Slide 17: Financial strategy and targets
Financial strategy and targets Simplify work life. Achieve more.
Slide 18: Zalaris target NOK 1.5bn in 2026 revenues with 12% adj. EBIT
Zalaris target NOK 1.5bn in 2026 revenues with 12% adj. EBIT through operational excellence and scale Revenue development and revenue target Key growth and margin initiatives NOKm 1,500 1 1,292 15% growth in Drive revenue growth through continued new MS and 5% in PS customers growth and upsell from
Slide 19: Increased focus on growing operating cash flow conversion and prudent 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 2026 Target
Slide 20: Key take-aways
Key take-aways Simplify work life. Achieve more.
Slide 21: Twenty-four years of continued growth combined with scalable solutions
Twenty-four years of continued growth combined with scalable solutions delivering value short- and medium-term 1) Zalaris PeopleHub is increasingly in favour by mid-market and large customers seeking to digitalize their Payroll & HR processes resulting in 22% reported growth in Q3’24. We are now a >
Slide 22: Appendix
Appendix Simplify work life. Achieve more.
Slide 23: Condensed Profit and Loss
Condensed Profit and Loss 2024 2023 2024 2023 2023 * (NOK 1 000) Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec Revenue 339 682 278 157 981 406 820 761 1 133 971 License costs 27 113 24 644 79 363 76 733 103 231 % of revenue 8,0 % 8,9 % 8,1 % 9,3 % 9,1 % Personnel expenses 165 156 139 862 500 233 436 195 5
Slide 24: Condensed Balance Sheet
Condensed Balance Sheet 2024 2023 2023 (NOK 1 000) 30. Sept 30. Sept 31. Dec Fixed and intangible assets 470 114 448 813 468 355 Trade accounts receivable 276 712 241 696 263 649 Customer projects assets 260 739 187 688 197 106 Cash and cash equivalents 180 111 120 750 135 970 Other assets 70 203 55
Slide 25: 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 26: Top 20 shareholders
Top 20 shareholders Rank Investor Number of shares Shareholding (%) Type 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 1 482 298 6,70 % Nominee 4 VERDIPAPIRFONDET DNB SMB 1 343 824 6,07 % Ordinary 5 J.P MORGAN SE 1
Slide 27: 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 Edison Katherine Thompson kthompson@edisongroup.com Nordea Markets D
Slide 28: 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.