Slide 1: Presentation of financial results Q2 2024
22 August 2024 Presentation PeopleHub BY ZALARIS of financial Your one-stop results HR platform Q2 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 presenters • Highlights • Financial review • Outlook • Q&A • Appendix: Company in brief Hans-Petter Mellerud Gunnar Manum CEO and Founder CFO Page 3
Slide 4: Highlights
Highlights Simplify work life. Achieve more.
Slide 5: Revenue and EBIT improvements continued in Q2 2024
Revenue and EBIT improvements continued in Q2 2024 Strong growth: Revenue increased 14.9% YoY to NOK 323 million with Net Revenue Retention in Managed Services of 106% Higher EBIT: adj. EBIT of NOK 28.4 million (8.8%), up from NOK 20.2 (7.2%) last year Strong sales pipeline in Managed Services, incl
Slide 6: Q2 sales securing growth and continued low churn
Q2 sales securing growth and continued low churn Expanded and renewed services with existing customers in Managed Services Started implementation project for two large German Managed Services customers based on LOI Significant pipeline of Multi-Country PeopleHub new name and upsell opportunities Sec
Slide 7: Managed Services grew 19% YoY to NOK 242 million and 75% of total revenue
Managed Services grew 19% YoY to NOK 242 million and 75% of total revenue. Revenue NOK 242.3m (+18.8%) Revenue in Managed Services grew by +19% 18.8% YoY (+19.4% growth YoY when adj. for 242.3 243.5 currency effects) 228.9 232.7 204.0 200.0 106% Net Revenue Retention YoY in constant 186.0 186.7 curr
Slide 8: Professional Services revenue was 4% lower YoY mainly due to less working days and lower AMS volume in Poland
Professional Services revenue was 4% lower YoY mainly due to less working days and lower AMS volume in Poland Revenue NOK 69.7m (-3.6%) Revenue in Professional Services was 3.6% lower YoY (-4.2 when adjusted for currency effects). -3.6% 76.8 Revenue reduction is mainly due to lower AMS 75.3 volume i
Slide 9: Majority of Professional Services revenue is considered recurring
Majority of Professional Services revenue is considered recurring and supports a continuous presence with customers Distribution of Projects vs long term AMS based revenue Projects 43% 41% 42% 47% 48% ~52 % of Professional Services revenue is recurring, or recurring like, and based on AMS 57% 59% 58
Slide 10: Financial Review
Financial Review Simplify work life. Achieve more.
Slide 11: Revenue increased by 15% for the quarter YoY in local currency
Revenue increased by 15% for the quarter YoY in local currency Revenue NOK 323.2m (+14.9%) 15% 15% Revenue growth (as reported) for the quarter YoY: +14.9% 323.2 324.1 Revenue growth +15.3% YoY in constant currency MS +18.8% to NOK 242m 281.2 • Net retention of 106% PS -3.6% to NOK 70m Net new SaaS/
Slide 12: Strong revenue visibility through 2024/25 - new BPO customers to go live
Strong revenue visibility through 2024/25 - new BPO customers to go live should result in >15% revenue increase compared to revenue LTM Revenue development based on signed MS contracts (NOKm) 327 Total annual revenue expected to increase by ~NOK 179m (+15%) vs. LTM Q2’24, based on already signed con
Slide 13: Higher adj. EBIT for the quarter
Higher adj. EBIT for the quarter Adj. EBIT* (NOKm) and margin (%) Adj. EBIT NOK 28.4 (NOK 20.2m) +41% 10.7% 10.9% Adj. EBIT margin 8.8% (+1.6pp) 8.5% 8.8% EBIT and margin improvements from increased 7.2% revenue (lower unit cost) and operational 33.4 34.8 improvements (e.g. larger share of service 2
Slide 14: Condensed Profit and Loss
Condensed Profit and Loss 2024 2023 2024 2023 2023 * (NOK 1 000) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec Revenue 323 206 281 219 641 724 542 604 1 133 971 License costs 27 243 26 983 52 250 52 089 103 231 % of revenue 8,4 % 9,6 % 8,1 % 9,6 % 9,1 % Personnel expenses 172 420 155 080 335 077 296 333 5
Slide 15: Operating cash flow increased by NOK 15m YoY and strong cash position at quarter-end
Operating cash flow increased by NOK 15m YoY and strong cash position at quarter-end Development in cash balance (NOKm) -8.8 Positive cash flow from -9.0 operating activities of NOK 18.4m vs. 41.4 -8.4 NOK 3.2m last year -9.7 161.1 -3.1 7.6 -6.8 163.2 -1.1 Cash balance at 30 June NOK 163.2m (+NOK 2.
Slide 16: Outlook
Outlook Simplify work life. Achieve more.
Slide 17: Zalaris target NOK 1.5bn in 2026 revenues with 12-15% adj. EBIT
Zalaris target NOK 1.5bn in 2026 revenues with 12-15% adj. EBIT through operational excellence and scale Development in revenue Key growth and margin initiatives NOKm 1,500 1 Drive revenue growth through continued new 1,131 (1,163)2 customers and upsell of existing customers 893 2 775 > Standardized
Slide 18: German improvement program combined with contribution from new signed contracts to increase EBIT-margin
German improvement program combined with contribution from new signed contracts in Germany to increase EBIT-margin EBIT-margin impact from ongoing operational initiatives in Germany and corresponding effect on group margin and EBIT Full run-rate effect within 12 months Zalaris pro-forma 2023 Full ru
Slide 19: In summary: Q2 another all-time high revenue quarter delivered
In summary: Q2 another all-time high revenue quarter delivered and well under way to deliver on margin targets as improvements in Germany materialize • Solid Q2 with growth of 15% to annualized revenue of nearly NOK 1.3 billion with 8.8% EBIT • Growth to continue as backlog of sold contracts with 11
Slide 20: Q&A
Q&A Simplify work life. Achieve more.
Slide 21: Appendix: Company in brief
Appendix: Company in brief Simplify work life. Achieve more.
Slide 22: Payroll & HR solutions that enable digital organizations
Payroll & HR solutions that enable digital organizations Zalaris is a leading European provider of global payroll and human capital management solutions delivered through software as a service, 1,500,000 ~1,100 340,000+ outsourcing, or consulting delivery models Employees served monthly Zalaris empl
Slide 23: PeopleHub covering the full employee life cycle
’P 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 Workforce management Time Ab
Slide 24: Services delivered by two integrated business units
Services delivered by two integrated business units with most revenues being recurring of nature Managed services (MS) Professional services (PS) ’ h v H v Consulting services including delivery of traditional consulting projects as well as outsourcing and cloud implementation projects Services Payr
Slide 25: 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 26: 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.