Vercom Sa · GPW:VRC

Vercom Sa — Q1 2023 Earnings Presentation

34 slides from Vercom Sa's earnings presentation, May 2023

  1. Slide 1: Q1 2023 Investor presentation

    | Q1 2023 Investor presentation May 2023 : Scale beyond

  2. Slide 2: Our mission is to help our clients reconnect with their audience

    : Our mission is to help our clients to reconnect with their audience by removing communication and technological barriers

  3. Slide 3: Customer engagement platform leveraging cross-channel communication

    : Customer engagement platform leveraging cross-channel communication 3

  4. Slide 4: Facilitating everyday communication between businesses and their customers

    : Facilitating Our solutionseveryday are an communication inherent part ofbetween everydaybusinesses life and their customers 4

  5. Slide 5: 20 years of experience rewarded with trust of landmark partners

    : 20 years of experience rewarded with trust of landmark partners 70.900+ CPaaS customers 5

  6. Slide 6: Selling services to customers in 180 markets globally

    : Selling services to customers in 180 markets globally +300 team members in 30 locations incl. San Francisco, New York and Dublin Team locations Top markets Other markets 6

  7. Slide 7: Dynamic growth driven by organic expansion and value-accretive acquisitions

    : Dynamic growth driven by organic expansion and value-accretive acquisitions x40 2022: Global scale-up 2021: Debut on the WSE 260 2020: CPaaS leader in the CEE 179 Up to 2020: Scaling up operations on the local and regional markets Revenue, PLNm 117 78 59 34 10 12 20 6 2013 2014 2015 2016 2017 2018

  8. Slide 8: We continue to grow fast while improving product mix

    : We continue to grow fast while improving product mix

  9. Slide 9: Q1 2023 financial results

    : Q1 2023 financial results Revenue Increase y/y PLN 75m +51% Gross Profit PLN 40m +145% EBITDA* PLN 18m +95% *EBITDA normalized for the non-cash ESOP cost : Scale beyond 99

  10. Slide 10: Strong top line growth reflects the growing scale of operations

    : Strong top line growth reflects the growing scale of operations Revenue (PLNm) +48% CAGR Q1 2019 – Q1 2023 75 50 39 23 16 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 10

  11. Slide 11: Gross profit growth is driven by customer adds and margin expansion

    : Gross profit growth is driven by customer adds and margin expansion Gross profit (PLNm) x2.5 +21 p.p. +107% +51.900 11 (1) NER (Net Expansion Rate) – change in revenue from retail customers generating revenue in the current and the comparative period. Applies to revenue from the CPaaS segment

  12. Slide 12: Stable SG&A cost base allows to benefit from operating leverage

    : Stable SG&A cost base allows to benefit from operating leverage General and administrative expenses (PLNm) Note Increase of G&A costs was mostly associated with the impact of acquisitions completed in 2022, i.e.: Consolidated since Jul-22: (i) MailerLite (c. PLN 6.3m) (ii) Oxylion (c. PLN 1.5m) St

  13. Slide 13: Our cash generation capacity is benefiting from expanding profit margins

    : Our cash generation capacity is benefiting from expanding profit margins

  14. Slide 14: Dynamic EBITDA growth in line with target growth trajectory

    : Dynamic EBITDA growth in line with target growth trajectory EBITDA (PLNm) Note Q1 2023 EBITDA in line with the +66% CAGR Q1 2019 – Q1 2023 Management expectations and target growth trajectory Twofold increase of EBITDA YoY to PLN 17.6m Healthy EBITDA margin amounting to c. 23% in Q1 2023 18 Expans

  15. Slide 15: High conversion rate of EBITDA into operating cash flow

    : High conversion rate of EBITDA into operating cash flow Adjusted EBITDA and net cashflow from operating activities (PLNm) Note Adjusted EBITDA High quality of earnings underpinned by c. 90% conversion Net cashflow from operating activities rate of EBITDA into net cashflow from operating activities

  16. Slide 16: High cash generation capacity proven by c. 78% EBITDA to FCF conversion

    : High cash generation capacity proven by c. 78% EBITDA to FCF conversation rate EBITDA to FCF bridge (PLNm) 78% EBITDA to FCF conversion rate 3) 2) 1) 1) 16

  17. Slide 17: We deliver strong net income growth providing ample space for generous dividends

    : We deliver strong net income growth providing ample space for generous dividends

  18. Slide 18: Robust net income growth despite increase in net financing costs

    : Robust net income growth despite increase in net financing costs Net profit (PLNm) Note +45% Robust net profit growth of 45% yoy Stable net profit margin amounting to c. 13% despite c. PLN 3m impact of net financial expenses vs. Q1 2022 Increase in non-cash amortization of PPA trademarks and clien

  19. Slide 19: Growing cash flows and decreasing net debt / EBITDA ratio

    : Growing cash flows and decreasing net debt / EBITDA ratio FCF (PLNm) Net debt / LTM EBITDA* Note Nearly 3x FCF growth YoY +PLN 8.9m FCF growth by c. PLN 8.9m YoY offsets increase in debt service costs (c. PLN 5.7m YoY) Safe and decreasing level of net debt to -0,4x LTM EBITDA ratio (1.6x) 13,8 4,9

  20. Slide 20: Generous dividend to be paid from 2022 net profit

    : Generous dividend to be paid from 2022 net profit Net profit (PLNm) Note PLN 25m dividend to be paid out from 2022 net profit (c. 80% of consolidated +50% CAGR 2018 – 2022 PLN net profit) +25m Dividend policy announced in March 2023 assumes a minimum of 50% of consolidated net profit to be paid ou

  21. Slide 21: Increasing global footprint means we are more diversified than ever before

    : Increasing global footprint means we are more diversified than ever before

  22. Slide 22: 3x increase in the number of customers

    : 3x increase in the number of customers Number of CPaaS customers +51.900 70 900 19 000 Q1 2022 Q1 2023 : Scale beyond 22 22

  23. Slide 23: Growing contribution of international sales

    : Growing contribution of international sales International sales as a % of CPaaS revenue +25 p.p. 58% 33% Q1 2022 Q1 2023 23

  24. Slide 24: Attractive customer structure - nearly 35% gross margin in North America

    : Attractive customer structure - nearly 35% gross margin in the North American market Estimated structure of gross margin generated on foreign customers (proforma data for 2022) North America Europe Asia Other 34% 50% 6% 10% 3% Spain 3% Benelux 2% France The US is the largest export market in terms

  25. Slide 25: Decreasing client concentration driven by the growing customer base

    : Decreasing client concentration driven by the growing customer base Contribution of top 10 clients to total revenue (less = better) Contribution of top 10 clients to total gross profit (less = better) -7.7 p.p. 22,0% -3.3 p.p. 20,1% 16,9% 14,3% 6,5% 5,2% 4,7% 3,7% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q

  26. Slide 26: We have secured long-term growth potential via 14x increase of TAM

    : We have secured long-term growth potential via 14x increase of TAM

  27. Slide 27: Exponential growth of target addressable market

    : Exponential growth of target addressable market Target addressable market (TAM) Global CPaaS market value (USDb) 14x TAM growth +34% CAGR 2021 - 2025 Market growth driven by secular tailwinds: ▪ Progressing digitalization of business processes ▪ Growing volume of transactional communication ▪ Deve

  28. Slide 28: Integration of services around MailerLite (SME) and MessageFlow (mid-market)

    : Integration of services around MailerLite (SME) and MessageFlow (mid-market) MaileLite: services for SME clients MessageFlow: services for mid-market clients 28

  29. Slide 29: Strategic focus on increasing international presence

    : Strategic focus on increasing international presence Growth strategy in SME segment Tap the tremendous potential of 2m freemium clients : SME Improve monetization of paying users via new services and localizations Leveraging strong competitive position and brand recognition Targeting broader spect

  30. Slide 30: Product roadmap reflects our strategic goals for 2023-2024

    : Product roadmap reflects our strategic goals for 2023-2024 : Solutions for Launch of New integrations with global Mid-market MessageFlow and expansion SaaS systems clients into new geographies Commercial implementation of conversational communication solutions leveraging proprietary and Integratio

  31. Slide 31: We are on track to achieve our mid-term growth targets

    : We are on track to achieve our mid-term growth targets

  32. Slide 32: Significant potential to maintain EBITDA growth trajectory

    : Significant potential to maintain EBITDA growth trajectory Adjusted EBITDA (PLNm) 120 100 +55% EBITDA growth drivers 80 +34% CPaaS market growth CAGR in 2021-2025 60 x14 Increase of TAM 100 ### 40 55 20 37 26 19 10 0 2018 2019 2020 2021 2022 2024 target 32

  33. Slide 33: Key takeaways

    : Key takeaways We continue to grow fast • 145% YoY gross profit expansion to PLN 40m in Q1 2023 • Growing share of high-margin, fast-growing services • 95% YoY EBITDA expansion to PLN 18m in Q1 2023 We are improving profitability and cash generation • Expansion of EBITDA margin by +5 p.p. YoY drive

  34. Slide 34: Q&A

    VERCOM > Q&A

Vercom — Q1 2023 Earnings Presentation on 6ix