Nordhealth As · OSL:NORDH
Nordhealth As — Q4 2023 Earnings Presentation
36 slides from Nordhealth As's earnings presentation, Mar 5, 2024
Slide 1: Nordhealth
(X] nordhealth
Slide 2: Q4 2023 presentation
Q4 2023 presentation 5 March 2024
Slide 3: Today's presenters
Today’s presenters Charles MacBain Mari Orttenvuori CEO CFO Nordhealth 3
Slide 4: Agenda
Agenda 1.0 Company Update 2.0 Financial Update 3.0 Q&A Nordhealth 4
Slide 5: Company Update
01 Company Update Charles MacBain, CEO Nordhealth 5
Slide 6: Q4 2023 KPIs
Q4 2023 KPIs 23.3% 114% 4.9% 1.5 Organic ARR growth * Net retention rate Gross churn CAC / new ARR ** LTM Q4 2023 LTM Q4 2023 LTM Q4 2023 LTM Q4 2023 10.4 LTV / CAC ** EUR 36.6M EUR 38.5M EUR 0.46 Implemented ARR Signed ARR ARR per share *** LTM Q4 2023 Q4 2023 Annualised Q4 2023 Q4 2023 Annualised
Slide 7: Strong track record of organic and acquisition-led growth
Strong track record of organic and acquisition-led growth Signed ARR ~€4M additional ARR Organic ARR 38.5 from CVS and Vets for M&A Pets post-pilot rollout not included in Signed ARR 31.8 % R : 62 4.1 AG RC AR 24.2 9.3 11.9 9.6 27.7 4.6 3.4 14.9 4.9 ARR Q4 2018 ARR Q4 2019 ARR Q4 2020 ARR Q4 2021 AR
Slide 8: 6% QoQ ARR Growth in Q4 2023
6% QoQ ARR Growth in Q4 2023 +5.6% 2.0 38.5 -0.4 1.6 36.6 0.7 34.6 • ARR grew 5.6% QoQ • Expansion in Q4/23 primarily driven by Provet Cloud expansion but tampered by churn in Diarium Provet Cloud New Net signed not customers upsell Churn implemented Q3 2023 ARR Q4 2023 ARR Q4 2023 Signed ARR Report
Slide 9: 23% implemented ARR growth in 2023
23% implemented ARR growth in 2023 23.3% 2.0 38.5 5.6 -1.5 36.6 • ARR grew 23.3% in 2023 2.8 • Strong new customer acquisition in 29.7 Provet Cloud and EasyPractice • Net upsell primarily driven by Provet Cloud ARPU and user growth • Q4 2023 Signed ARR does not include CVS or Vets 4 Pets rollout pos
Slide 10: 43% veterinary implemented ARR growth in 2023
43% veterinary implemented ARR growth in 2023 21.5 +42.9% 2.0 -0.2 • Implemented ARR growth at 42.9% in LTM 4.7 19.5 17.2 ending Q4/23 • Net retention rate 133.2%, primarily driven 1.3 by Provet Cloud user growth, new add-on sales and price increases 13.6 • Churn of 1.6% • New customer acquisition a
Slide 11: 7% therapy implemented ARR growth in 2023
7% therapy implemented ARR growth in 2023 +6.6% 0.8 -1.2 • ARR growth at 6.6% in LTM ending Q4/23 1.5 17.1 • Net retention rate (including price increases) 16.0 97.2% • Churn of 7.8% (5.6% excl. One-off churn) • New customer acquisition accounted for 142% of the growth New Net customers upsell Churn
Slide 12: Mission critical nature of our products seen in SaaS metrics
Mission critical nature of our products and expanding product range can be seen in our Saas metrics Churn rate Net retention rate Churn rate Average churn rate Net Retention rate Average Net Retention rate 0% 125% -1% 120% 113.7% -2.6% -2% 115% -3% 110% -4% 105% -5% 100% 2019 2020 2021 2022 2023 201
Slide 13: Growth in revenue, stable headcount and migration improved profitability
Growth in revenue, stable headcount and migration improved profitability 2022 2023 -0.7 • 19% revenue growth of EUR 5.8M (YoY 2023) and stable headcount has reduced: • Adj. EBITDA - CAPEX loss from -€11.8M to -€6.1M -5.4 -6.1 • Adj. EBITDA loss from -€5.4M to -€0.7M Adj. EBITDA Adj. EBITDA-CAPEX -11
Slide 14: Stable headcount in 2023
Stable headcount in 2023 At the end of Q4/23 total number of employees amounted to 385 (381 at the end of previous quarter) of which 130 (128) work in Therapy, 226 (226) in Veterinary and 29 (27) in HQ G&A. 404 392 400 385 378 381 377 332 Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 Q3/2023 Q4/20
Slide 15: Migration update
Migration update Therapy Veterinary % of ARR % of ARR 44% 45% 45% 42% 46% 53% 56% 57% Q1/23 Q2/23 Q3/23 Q4/23 Q1/23 Q2/23 Q3/23 Q4/2 Hosted/On-premise Cloud Nordhealth 15
Slide 16: Financial Update
02 Financial Update Mari Orttenvuori, CFO Nordhealth 16
Slide 17: Revenue growth driving profitability, despite weak NOK and SEK
Revenue growth driving profitability, despite significant impact of weak NOK and SEK 87% 86% • Total reported revenues Q4/23 grew 10.0 20% YoY from EUR 8.5M to EUR +20% 10.1M 8.0 • On constant currency growth in total reported revenues 25% 6.0 • Share of recurring revenue in Q4/23 4.0 was 86% vs 87%
Slide 18: Recurring revenue on constant currency basis growing at 23%
Recurring revenue on constant currency basis growing at 23% +19% • Reported recurring revenues Q4/23 9.0 grew 19% YoY from EUR 7.4M to EUR 8.7M 8.5 8.7 10% • Revenue impacted by weak NOK and 8.0 5% SEK; on a constant currency basis 8.2 8.3 Q4/24 YoY growth in recurring revenue 7.5 0% would have been
Slide 19: Strong financial position and free cash flow improving
Strong financial position and free cash flow improving Free cash flow • €2.1M improvement in free cash flow in 2023 2022 2023 -5.0 • Aspit customers changed from bi-annual (June and December) to monthly invoicing cycle in Q1/24 and first -6.0 invoicing under the new billing schedule in January 2024,
Slide 20: Strong cash position and no debt
Strong cash position and no debt Balance sheet 31 December 2023 5.8 Assets 100 9.2 ● Cash balance remains strong at EUR 22.2 3.6 22.2M of cash and cash equivalents 80 ● Intangible assets primarily consist of 7.9 60 8.2 capitalised R&D expenses 12.6 Liabilities and equity 82.8 40 ● No interest bearin
Slide 21: Financial calendar
Financial calendar Q1 2024 results presentation on 14 May 2024. Full year financial calendar can be found on company website.
Slide 22: Conclusion
Conclusion Recurring revenue growth with no significant increase in headcount will drive EBITDA - CAPEX margin improvements 2024 Veterinary Focus ● Implement CVS and Pets at Home ● Continue to acquire new customers (corporate and independent) in UK, US, Spain ● Nordic migration to Provet Cloud 2024 T
Slide 23: Guidance 2024
Guidance 2024 2023 ● We grew recurring revenue by 21% in 2023 (Dec. 31st 2022 constant currency), beating our 15-20% guidance ● We are on track to reach EBITDA - CAPEX break-even by Q1 2025 2024 ● 15-20% recurring revenue growth (Dec. 31st 2022 constant currency) ● EBITDA - CAPEX break-even by Q1 20
Slide 24: Q&A
03 Q&A Nordhealth 24
Slide 25: Appendix
(X) nordhealth Appendix ay
Slide 26: Profit & Loss statement
Profit & Loss statement Consolidated Income Statement Unaudited Unaudited Unaudited Audited EUR in thousands Q4 2023 Q4 2022 FY 2023 FY 2022 Recurring revenue 8 749 7 382 33 085 28 216 Other revenue 1 379 1 076 3 740 2 833 Total revenue 10 128 8 458 36 825 31 050 Other operating income 49 130 102 22
Slide 27: Balance Sheet
Balance Sheet Consolidated Balance Sheet Unaudited Audited EUR in thousands 31-Dec-23 31-Dec-22 Intangible assets 12 480 10 280 Deferred tax assets 547 585 Other capitalized long-term expenses 101 32 Goodwill 49 008 57 813 Machinery and Equipment 498 733 Other shares and similar rights of ownership
Slide 28: Cashflow
Cashflow Consolidated Cash Flow Statement Unaudited Unaudited Audited Audited EUR in thousands Q4 2023 Q4 2022 FY 2023 FY 2022 Cash flow from operations Profit before income taxes (3 308) (4 385) (10 806) (14 128) Taxes paid in the period (19) (133) (51) (153) Other non-cash items 902 1 749 969 Depr
Slide 29: 8% QoQ Veterinary implemented ARR growth
8% QoQ Veterinary implemented ARR growth +7.7% 2.0 21.5 • Implemented ARR growth in the fourth quarter of 2023 1.1 -0.0 19.5 stood at 7.7 % 0.3 • New customer acquisition 18.1 accounted for 25% of the growth • 57% of ARR on Cloud products in Q4/23 vs. 56% in Q3/23 Provet Cloud New Net signed not cus
Slide 30: 3% QoQ Therapy ARR growth
3% QoQ Therapy ARR growth 3.3% • Growth in the fourth quarter 2023 was 3.3% 0.6 0.3 -0.4 17.1 • Churn rate high due to loss of 16.5 one enterprise customer (impacted also in previous quarter) • 67% of new customer revenues came from Cloud products • 42% of ARR on Cloud products in Q4/23 (45% in Q3/2
Slide 31: KPIs by business segments
KPIs by business segments 🐶Veterinary Therapy Total Cloud Hosted Cloud Hosted Cloud Hosted All 2022-Q4 (€M) € 5.8 € 7.9 € 6.7 € 9.3 € 12.4 € 17.2 € 29.7 2023-Q4 (€M) € 11.1 € 8.4 € 7.2 € 9.9 € 18.3 € 18.3 € 36.6 Growth 92.7% 6.5% 7.9% 5.7% 47.2% 6.1% 23.3% Migration (€M) € 0.6 € -0.6 € 0.0 € 0.0…
Slide 32: Business Segments
Business Segments 🐶Veterinary Therapy Cloud Hosted Cloud Hosted Products Provet Cloud Provet Legacy (Finland) EasyPractice Aspit (Norway) Provet Pay Sanimalis (Norway, Sweden) Diarium Vetserve (Norway) Nordhealth Connect Vetvision (Denmark) Navisec Vetera (DACH) Share of recurring revenue 30%…
Slide 33: Strong organic growth accelerated by acquisition and migration strategy
Strong organic growth accelerated by acquisition and migration strategy 9 acquisitions completed since 2005, 7 in last 5 years Migrated Migrated Migrated In Progress In Progress 2005 2009 2019 2019 2019 Acquired Praktiikka Vetserve In Progress In Progress In Progress Flagship 2021…
Slide 34: Expanded product offering to solve additional customer pain points
Expanded product offering to solve additional customer pain points Practice Management Appointment Calendar & Electronic Health Inventory management Invoicing Software Online Booking Records Payments Terminal Payments Online payments Recurring payments Pay by email or SMS link Telemedicine Imaging A
Slide 35: Key definitions
Key definitions Recurring revenue includes revenues from software subscriptions as well as revenues from of volume-based transactions (e.g., SMS messages) as well as rebates from third parties (e.g. payment solution providers). ARR is implemented ARR that is recurring revenue annualised by multiplyi
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