62 slides from Link Mobility Group Holding Asa's debt investor presentation, October 2024
Slide 1: LINK Mobility ASA Credit investor presentation
LINK Mobility ASA Credit investor presentation October 2024
Slide 2: Important information (1/2)
Important information (1/2) THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE RELEASED, Certain numbers in the information are unaudited and are based on internal company records. Some of these number may be subject REPRODUCED OR PUBLISHED (IN WHOLE OR IN PART, DI
Slide 3: Important information (2/2)
Important information (2/2) DOCUMENT (“KID”) UNDER THE REGULATION 2014/1286/EU (AS AMENDED, THE “PRIIPS REGULATION”) AND DOES NOT Investors”); (b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the EU Prospectus Regulation); or CONSTITUTE A PROSPECTUS UNDER
Slide 4: Risk factors (1/4)
Risk factors (1/4) Investing in bonds issued by the Company (the "Bonds") involves inherent risks. Prior to making any investment decision with respect to For the Group to survive and grow, the Group must continue to enhance and improve the functionality and features of the Group’s the Bonds, an inv
Slide 5: Risk factors (2/4)
Risk factors (2/4) The Group may be unable to attract, retain and train the required personnel As a high-growth company in a rapidly changing and complex industry, the Group's success depends to a significant extent upon the trade secrets or to seek compensation for its loss should its employees bre
Slide 6: Risk factors (3/4)
Risk factors (3/4) Risks related to financial matters and market risk Risks relating laws, regulations and compliance Currency fluctuations could affect the Group’s cash flow and financial condition Changes in laws and regulation may have an adverse effect on the Group’s profitability While the Grou
Slide 7: Risk factors (4/4)
Risk factors (4/4) Risks relating to the Bonds The Company is a holding company and is dependent upon cash flow from its subsidiaries to meet its obligations, in general and The Bonds are structurally subordinated to liabilities of the Company's subsidiaries pursuant to the Bonds The assets of mater
Slide 8: Issuer characteristics and confirmatory work undertaken
Issuer characteristics and confirmatory work undertaken Issuer characteristics Confirmatory/verification work conducted Issuer overview • Representatives of the Issuer have participated in a «Bring Down Due Dilligence» call and • The issuer, Link Mobility Group Holding ASA (the «Issuer») together wi
Slide 9: Today's presenters
Today’s presenters Thomas Berge Morten Løken Edvardsen Chief Executive Officer (CEO) Chief Financial Officer (CFO)
Slide 10: Agenda: Transaction summary
1. Transaction summary 2. Company overview 3. Market overview 4. Financials 5. Appendix 6. ESG questionnaire
Slide 11: Transaction summary
Transaction summary | Company overview | Market overview | Financials Transaction summary Transaction background Simplified transaction structure4 • Link Mobility Group Holding ASA (the “Issuer” or the “Company”) is one of Europe’s leading CPaaS providers within mobile communication, specialising in
Slide 12: Summary of terms
Transaction summary | Company overview | Market overview | Financials Summary of terms1 Issuer Link Mobility Group Holding ASA Status Senior Unsecured Initial issue amount EUR 125m Framework amount EUR 250m Use of proceeds Net proceeds from the Bond Issue will be used to refinance (or repurchase) ex
Slide 13: Credit highlights
Credit highlights Market leading position and high barriers to entry • Differentiated CPaaS platform focused on driving value by developing and delivering comprehensive solutions and optimal routing 1 • One of Europe’s leading CPaaS providers with +18bn messages delivered in Q2 2024 LTM and a strate
Slide 14: Company overview
1. Transaction summary 2. Company overview 3. Market overview 4. Financials 5. Appendix 6. ESG questionnaire
Slide 15: Overview of LINK Mobility
Transaction summary | Company overview | Market overview | Financials Overview of LINK Mobility Leading global provider of mobile messaging and CPaaS solutions Selected group customers z & partners 2001 Oslo, Norway #1 600 +50k 18 18.9bn Founded by Headquartered In Europe Employees2 Customer Countri
Slide 16: LINK's Communication Platform-as-a-Service
Transaction summary | Company overview | Market overview | Financials LINK’s Communication Platform-as-a-Service Business conversations, deployed in minutes LINK Mobility’s value proposition Revenue (NOKm) Integrates mobile carriers, devices & data across geographies on a unified platform 21%1 6,880
Slide 17: History & key events
Transaction summary | Company overview | Market overview | Financials History & key events LINK Mobility’s journey to become a global leader within the CPaaS industry through organic and inorganic growth Well established platform to serve customer needs in an emerging OTT/RCS(2) environment Extended
Slide 18: LINK service clients through channel-agnostic sw solutions
Transaction summary | Company overview | Market overview | Financials LINK service clients through channel-agnostic sw solutions Established player for more than 20 years - Facilitating evolution to multi-channel / two-way solutions Enhanced interaction through digital solutions TWO WAYS Uniquely t
Slide 19: LINK's recurring and growing business model
Transaction summary | Company overview | Market overview | Financials LINK’s recurring and growing business model Solid European footprint in growing markets supported by megatrends and increased adoption rates Recurring business with more than 50k customers in Europe Megatrends support digital mess
Slide 20: Resilient business model
Transaction summary | Company overview | Market overview | Financials Resilient business model Leveraging diversification and an attractive use-case focus with market-leading positions for consistent and stable growth Key pillars of LINK’s resilient business model Steady growing base with more than
Slide 21: Customer segments overview and go-to market
Transaction summary | Company overview | Market overview | Financials Customer segments overview and go-to market Highly diversified customer base and multichannel strategy addressing a large market opportunity Enterprise Partners Self-Sign Up (SSU) Higher volume, standardised solutions, focus on Se
Slide 22: CPaaS SW solutions will increase license share over time
Transaction summary | Company overview | Market overview | Financials CPaaS SW solutions will increase license share over time LINK’s favorable business model LINK’s product offering CPaaS platforms LINK is tailoring solutions based on success rate (performance on communication) for Market trends cu
Slide 23: New contract wins – increased demand for OTT channels
Transaction summary | Company overview | Market overview | Financials New contract wins – increased demand for OTT channels Good momentum on both traditional SMS and advanced CPaaS solutions in the second quarter LINK signed 802 new and expanding agreements in Q2 24 Key metrics per product – Q2 clos
Slide 24: Solid organic growth, stable margins and capacity for M&A
Transaction summary | Company overview | Market overview | Financials Solid organic growth, stable margins and capacity for M&A NOK millions 6,621 6,880 Highlights from Q2 2024 5,541 5,909 6,282 22.1 % 21.5 % 21.5 % 21.1 % 20.9 % Revenue at NOK 1,816 million for Q2’24 • Organic growth in fixed FX at
Slide 25: Strategy for both organic and inorganic growth
Transaction summary | Company overview | Market overview | Financials Strategy for both organic and inorganic growth M&A a key part of LINK’s strategy Three pillar M&A approach Organic growth a priority for LINK • LINK enhanced its focus on execution of existing commercial opportunities, and aligned
Slide 26: Conservative financial policy
Transaction summary | Company overview | Market overview | Financials Conservative financial policy Leverage level post sale of Message Broadcast gives ample capacity for accretive M&A Financial policy Leverage Ratio1 (NIBD/Adj. EBITDA) With a strong focus on increased gross profit and cash flow fro
Slide 27: Market overview
1. Transaction summary 2. Company overview 3. Market overview 4. Financials 5. Appendix 6. ESG questionnaire
Slide 28: Messaging is becoming an indispensable part of communication
Transaction summary | Company overview | Market overview | Financials Messaging is becoming an indispensable part of communication Increasing degree of digital interaction between consumers and businesses in the modern world People want to message with businesses across the customer journey Pre-Purc
Slide 29: OTT is emerging as a new channel of consumer engagement
Transaction summary | Company overview | Market overview | Financials OTT is emerging as a new channel of consumer engagement LINK Mobility’s omnichannel capable platform is well-positioned for the rise of OTT messaging z OTT messaging application popularity by country SMS vs. OTT messaging applicat
Slide 30: RCS support on iPhone to drive increased demand
Transaction summary | Company overview | Market overview | Financials RCS support on iPhone to drive increased demand LINK expect increased demand for RCS when all consumers can be reached on the channel Apple iOS penetration across LINK’s main markets RCS support on iOS 18 is currently available in
Slide 31: An ever-expanding universe of use cases for CPaaS
Transaction summary | Company overview | Market overview | Financials An ever-expanding universe of use cases for CPaaS Increased adoption of digital messaging across Europe – Country variations provide growth potential Annual A2P SMS (2023 vs. 2020)1 519 Norway 455 500 Denmark 360 361 Banking Healt
Slide 32: Favorable market fundamentals
Transaction summary | Company overview | Market overview | Financials Favorable market fundamentals Serving large and growing markets, LINK mobility is well positioned to capture accelerated CPaaS market growth Ability to serve OTT channels effectively and provide rich content is a key High growth C
Slide 33: Significant barriers to entry
Transaction summary | Company overview | Market overview | Financials Significant barriers to entry… …safeguard LINK’s position as the European CPaaS leader Customers z • Need to communicate with their users through the End users’ preferred communication channels LINK Mobility operates with several
Slide 34: Financials
1. Transaction summary 2. Company overview 3. Market overview 4. Financials 5. Appendix 6. ESG questionnaire
Slide 35: Financial policy and growth strategy
Transaction summary | Company overview | Market overview | Financials Financial policy and growth strategy Focus on maintaining a conservative capital structure and profitable growth Capital structure Acquisition strategy Organic growth • Diverse M&A pipeline with • Organic gross profit growth in •
Slide 36: Strong revenue growth and increased gross profit
Transaction summary | Company overview | Market overview | Financials Strong revenue growth and increased gross profit Revenue more than doubled since 2019, which has translated into significant growth in gross profit Revenue1 Gross profit1 NOKm NOKm 21% 6,881 1,600 15% 1,437 CAGR 6,282 1,400 CAGR 1
Slide 37: Cost base overview
Transaction summary | Company overview | Market overview | Financials Cost base overview Adjusted EBITDA margin has consistently been in the double-digit area Cost of goods sold1 Operational expenses1 NOKm Direct costs of services rendered % of revenue NOKm Payroll and related expenses Other operati
Slide 38: EBITDA adj. has more than doubled since 2019
Transaction summary | Company overview | Market overview | Financials EBITDA adj. has more than doubled since 2019 EBITDA adj. / Gross profit remaining well above 40% and strong increase in recent years EBITDA adj.1 and EBITDA adj. / Gross Profit Comments NOKm EBITDA adj. EBITDA adj. / Gross profit
Slide 39: Solid cash generation and high cash conversion
Transaction summary | Company overview | Market overview | Financials Solid cash generation and high cash conversion Accumulated free cash flow of NOK 1.4bn from 2019-2023 and average free cash flow conversion of ~60% Operating cash flow1 Free cash flow1 and free cash flow conversion NOKm NOKm 1,000
Slide 40: Large increase in cash position
Transaction summary | Company overview | Market overview | Financials Large increase in cash position Key drivers in strong operational performance and successful divestments LTM development in cash 45 39 7 430 (731) (144) (180) (97) 2,519 (45) (40) (18) 2,212 1,042 Cash Q2’23 Divestment Profit befo
Slide 41: Conservative capital structure and deleveraging in recent years
Transaction summary | Company overview | Market overview | Financials Conservative capital structure and deleveraging in recent years Net leverage currently at 1.4x and equity ratio slightly below 50% NIBD and net leverage1 Equity and equity ratio NOKm Net debt Net leverage (reported) NOKm Equity Eq
Slide 42: Track-record of executing accretive acquisitions
Transaction summary | Company overview | Market overview | Financials Track-record of executing accretive acquisitions Proven success of M&A strategy Historical development in LINK EV/EBITDA and EV/EBITDA of targets Comments EV/EBITDA (x) LINK NTM EV/EBITDA Median Target EV/EBITDA Target EV/EBITDA •
Slide 43: Further M&A growth from executing on pipeline in Europe
Transaction summary | Company overview | Market overview | Financials Further M&A growth from executing on pipeline in Europe Ambition for inorganic growth to add 10% of adjusted EBITDA annually Recently strengthened presence in Iberian peninsula M&A targets and play-book guidelines EZ4U acquired in
Slide 44: Appendix
1. Transaction summary 2. Company overview 3. Market overview 4. Financials 5. Appendix 6. ESG questionnaire
Slide 45: Condensed income statement
Transaction summary | Company overview | Market overview | Financials Condensed income statement LINK Mobility Group Holding ASA NOK in millions Q2 2024 Q2 2023 YTD 2024 YTD 2023 Year 2023 Comments to Q2 financials Non-recurring costs of NOK 12 million Total operating revenue 1,816 1,557 3,488 2,890
Slide 46: Condensed balance sheet
Transaction summary | Company overview | Market overview | Financials Condensed balance sheet LINK Mobility Group Holding ASA NOK in millions Q2 2024 Q2 2023 Year 2023 Comments to Q2 financials Non-current assets 7,215 6,638 6,372 Trade and other receivables 1,821 1,219 1,380 Receivables related to
Slide 47: Condensed cash flow statement
Transaction summary | Company overview | Market overview | Financials Condensed cash flow statement LINK Mobility Group Holding ASA LTM Q2 NOK in millions1 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Comments to Q2 financials 2024 Cash conversion in Q2 negatively impacted by WC Adj. EBITDA 147 181 158 180 666 •
Slide 48: Management and Board of Directors
Management and Board of Directors Management Board of Directors Thomas Berge Morten Løken Edvardsen Rune Eivind Strandli André Christensen Jens Rugseth Chief Executive Officer Chief Financial Officer Chief Technical Officer Chairman Board Member Pål Marius Brun Arnhild Sivertsen Riccardo Dragoni Rob
Slide 49: Group legal structure
Group legal structure LINK Mobility Group Holding ASA LINK Mobility Group AS LINK Mobility USA AS LINK Mobility Italia LINK Mobility Poland LINK Mobility AS SRL Sp. z o.o. LINK Mobility Holding LINK Mobility Austria LINK Mobility A/S Netsize UK Ltd Simple SMS GmbH BK Invest GmbH ApS GmbH LINK Mobili
Slide 50: Shareholder overview
Shareholder overview Top 20 accounts for ~75% Investor Number of shares % of top 20 % of total CITIBANK, N.A. 104,323,908 46.67% 34.93% KARBON INVEST AS 15,945,105 7.13% 5.34% LINK MOBILITY GROUP HOLDING ASA 14,892,369 6.66% 4.99% THE BANK OF NEW YORK MELLON SA/NV 13,486,780 6.03% 4.52% FOLKETRYGDFO
Slide 51: Glossary
Glossary Concept Description A2P SMS stands for "Application-to-Person Short Message Service." It refers to the process of sending text messages from an application or software to an individual recipient's mobile phone. In other words, it involves automated messages being generated and sent from an
Slide 52: ESG questionnaire
1. Transaction summary 2. Company overview 3. Market overview 4. Financials 5. Appendix 6. ESG questionnaire
Slide 53: ESG questionnaire (1/9)
ESG questionnaire (1/9) General industry Please list the industry’s three biggest sustainability (ESG) related challenges and briefly describe the process for identifying these challenges LINK Mobility conducts annual Materiality assessments, in order to identify sustainability-related sustainabilit
Slide 54: ESG questionnaire (2/9)
ESG questionnaire (2/9) Environment Please list the firm’s three primary risks related to climate change and if any, the firm’s climate-related opportunities The primary risks related to climate follows from the Material Topics, as defined following the 2023 materiality assessment. As shown above, o
Slide 55: ESG questionnaire (3/9)
ESG questionnaire (3/9) Environment Does the firm anticipate any climate-related investments, and if so to what extent? No. Circular Economy: how are purchases and waste managed? Emission factor for circular computing is visible in LINK’s GHG report page 19 Transition-related risks: Do you anticipat
Slide 56: ESG questionnaire (4/9)
ESG questionnaire (4/9) Environment Please disclose your Scope 1,2 and 3 GHG emissions Please see GHG report on https://a.storyblok.com/f/151608/x/f87f7f2b52/ghg-link-mobility-2023.pdf Have you set a target to become carbon neutral? If so, how have you defined carbon neutrality? No. LINK has committ
Slide 57: ESG questionnaire (5/9)
ESG questionnaire (5/9) Social Does the firm have a history of accidents? If so, how have these been managed? Are there any preventive measures, such as policies? LINK does not have a history of accidents. If applicable, please state your targets for gender and cultural equality and indicate the rel
Slide 58: ESG questionnaire (6/9)
ESG questionnaire (6/9) Social Does the company conduct any other community engagement activities aside from those directly connected to the business? The company consists of more than 30 offices in 18 countries, where each everyone encouraged to create a trust-based relationship not only with busin
Slide 59: ESG questionnaire (7/9)
ESG questionnaire (7/9) Governance Do all staff members receive continuing education on anti-corruption? Are there any ongoing or historical incidents involving corruption, cartels or any other unethical business conduct? Have any preventive measures been taken? Bribery and corruption undermine any
Slide 60: ESG questionnaire (8/9)
ESG questionnaire (8/9) Governance How many independent members sits on the Board of Directors? Three (André Christensen, Sara Murby Forste and Grethe Helene Viksaas). Do all staff members receive continuing education on anti-corruption? Are there any ongoing or historical incidents involving corrup
Slide 61: ESG questionnaire (9/9)
ESG questionnaire (9/9) Governance Please state if and to what extent, the company has transactions with related parties Balances and transactions between LINK Mobility Group Holding ASA and its subsidiaries, which are related parties of LINK Mobility Group AS, have been eliminated on consolidation
Slide 62: LINK Mobility
Ag # link mobility