LINK Mobility Group ASA

Transcription

1 LINK Mobility Group ASA Den store selskapskvelden 6.juni 208 Arild E.Hustad CEO

2 LINK Mobility the undisputed, market leading mobile messaging and solution provider What does Link do? Link makes businesses mobile across all messaging platforms How? Linking businesses to consumers, sending 6 billion B2C messages in 207, reaching +200 million unique mobile users on behalf of more than 6,500 customers Where? Link is in 5 European countries, and the market leader in in the Nordics, Germany, Spain and Poland What next? Execute ambitious M&A and organic growth strategy, attain scaling synergies and drive profitability Copyright 207 LINK Mobility 2

3 LINK Mobility key figures 208 outlook 2.7bn 400m 320 employees across 5 countries revenue (54% growth) EBITDA (4.8% margin) Copyright 207 LINK Mobility 3 >7,000 customers 8 acquisitions since % average organic growth L8Q 5 countries with leading positions ) Pro forma guidance for 208 revenue and EBITDA, including full year effect of acquisitions. Revenue growth relates to growth versus 207 pro forma figures. The above outlook for 208 is calculated on LINK s best estimate based on information available to LINK, and views and assessment of LINK, as of the date of this report. LINK s growth assumptions may deviate from the outcome resulting in material or immaterial deviations from the outlook. Further, LINK s assumption relating to successfully acquire further businesses during 208 is to a great extent outside the control of LINK. LINK s ability to successfully acquire new businesses at fair value, or at all, could materially affect the outlook figures correspondingly. Investors must therefore make their own calculation in relation to valuing LINK based on their own analysis and judgement

4 Successfully LINKing enterprises with consumers Enterprise use mobile solutions to increase revenue growth customer interaction & loyalty customer satisfaction cost savings Appointments Polls Loyalty programs Parcel notifications Alerts Chat Payments Updates Invoices but businesses are struggling to navigate through the increased complex mix of devices, platforms, technologies and regulations Link provides a platform agnostic, integrated messaging solution that seamlessly finds the most efficient communication platform to fit the customer s requirements Copyright 207 LINK Mobility 4

5 Fully integrated services and solutions offering driving growth Product description Business model Share of revenues COGS Enriched mobile messaging and omni channel solutions Monthly messaging platform license fee Revenue per message 86% Doubledigit growth rate Recurring, scalable revenue Fee to mobile operators and other channel owners Mobile Mobile 3 Intelligence Messaging Mobile Solutions 2 Mobile payment and licenses Customer club, mobile invoice, notifications, authentication and Joyn Monthly license fee Revenue per mobile solution transaction 4% Recurring and sticky revenue, high margins, highly scalable Limited 2 3 Making mobile messaging more powerful by data harvesting and analysis Revenue from 208 Limited Copyright 207 LINK Mobility 5

6 Strong organic growth combined with M&A Revenue growth E NOKm Reported revenue Proforma effect 2,700 Estimated annualized M&A effect 3,754 Estimated organic growth Revenue runrate end PF 208 Est ) Reported revenue growth from 203 to 207. Organic growth based on average organic growth across the period 2) 208 outlook represents yearend revenue runrate based on the assumptions of organic growth of 25% on the 207 pro forma revenue runrate and acquisitions representing NOK ~500m in full year revenues. Note that a term sheet to acquire SMS.it was disclosed in late January and is not included in the 207 pro forma revenue runrate 3) Please note that Link Mobility has signed terms sheets with SMS.it and Allterco regarding the Teracomm assets, i.e. the acquisitions are not closed Copyright 207 LINK Mobility 6

7 Nordic innovation driving European sales Early adopters Late majority Travel Financials Retail TMT + Public Logistics Industry Other Travel Financials Retail TMT + Public Logistics Industry Other Status and maturity of the mobile messaging market Market development in other European countries assessed to be ~4 years behind Norway Norway historically been an early adopter of technology Significant potential from vertical penetration Market development in the Nordics assessed to be ~2 years behind Norway Source: Management estimates Copyright 207 LINK Mobility 7

8 Significant revenue potential from increased market penetration Number of mobile messages per capita (NOK) Market size 7E Population 2 Market potential Norway 362 NOK ~700m 5.m NOK ~.3bn Spain 48 Volume increase NOK ~500m 46.4m NOK ~3bn Germany 37 NOK ~.3bn 82.m NOK ~bn Denmark 23 Sweden 8 Finland 09 Poland Austria France Italy Switzerland Bulgaria Nordics ahead in B2C messaging penetration compared to Europe. Substantial revenue potential from volume growth across existing Link markets ) Company input and Mobilesquared Global A2P messaging traffic 208 2) Worldometers European Countries by population 208 ( Copyright 207 LINK Mobility 8

9 Mobile messaging market expected to continue growing in double digits Global and Western European messaging volume SMS is still the preferred and superior B2C solution Billion messages sent per year Worldwide Western Europe SMS 98 % read rate, compared to , Facebook and tweets with 20%, 2% and 29%, respectively CAGR 22% % opened within 3 minutes CAGR 4% Average response time 90 seconds Reliable independent of platform, network, device, apps, internet access. More than 6.bn frequent users 7E 8E 9E 20E 2E 22E 7E 8E 9E 20E 2E 22E Safe communication platform 9 ) Mobilesquared Global A2P messaging forecast by country Copyright 207 LINK Mobility 9

10 Geographically diversified, low customer concentration and insignificant churn Geographically diversified Low customer concentration Insignificant churn Revenue by geography, Q4 207 Top 30 customers percent of gross margin, 207 Norway: Loss of recurring revenue to total revenue (%) 2 Norway 29% Germany Spain 4% 2% 2,2% 2,3% Sweden Poland 0% 8% 24% 0,6% Denmark France 7% 5% Finland 4% Bulgaria 2% Baltics 0% Over customers across 5 countries in Europe Low customer concentration and welldiversified across sectors and geography Link gateway solutions are implemented in customer s CRM system, creating high switching costs ) Average of the top 30 customers across four quarters for 207 2) Churn measured for the 00 largest customers in Norway Copyright 207 LINK Mobility 0

11 Market dynamics favour market leaders LINK is the unrivalled European market leader As the market leader, LINK is in a highly attractive position with several competitive advantages Market visibility R&D competence and technologic leadership Technology sharing Broader service offering Facilitating for multinational clients Leverage to suppliers Significant economies of scale realised by leveraging the position as market leader with >6bn messages sent¹ Attractive position towards new clients with a demonstrated track record of working with large and reputable regional and international clients Substantial cost synergies across subsidiaries and geographical markets ) Pro forma including full year effect of companies acquired in 207 Copyright 207 LINK Mobility

12 Innovation driving revenue and differentiation New and innovative services Next generation messaging Upgrade SMS with rich media + RCS Early Access Program ) Early Access Program from Google for RCS business messaging. RCS business messaging uses RCS (Rich Communication Services) to upgrade business SMS with rich media, interactivity, branding and better analytics Copyright 207 LINK Mobility 2

13 LINK Conversations to be launched in July 208 Release.0 Ultimo June 208 Channels: RCS via Googles RBM API, depending on coverage in Europe, Web Client Business Information Page Text (bidirectional) Suggestions Suggested actions (e.g. create calendar item, location request, phone call, ) Media (outbound: picture, video, audio) Rich Cards Release.x Q3 208 Carousels of Rich Cards Media (inbound) Mobile invoice (Release ) Copyright 207 LINK Mobility 3

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16 LINK Mobile Invoice Great interest for LINK mobile invoice in several of our markets; Spain, Bulgaria, Germany as well as the Nordics Strong growth in number of transactions 36 contracts signed to date and a strong salespipe of 20 prospects Copyright 207 LINK Mobility 6 Agreement with BankBridge to enable direct customer account debiting throughout Europe

17 LINK drives European consolidation Significant experience acquiring assets across W. Europe Established acquisition criteria and structure Limited competition for targets, due to lack of companies with scale and well developed platforms Proven valuecreating acquisition strategy All companies acquired have been purchased at attractive multiples (average of ~6.2x EV/EBITDA) Attractive synergy potential utilized, driving strong margin expansion Proven successful integration Strong local market position Cash positive, i.e. no turnaround cases and cash flow to LINK from day one Solid, welldiversified customer portfolios Churn below 3% ~80% overlapping technology Strong telecom operator relationships LINK shares Seller s Credit Typical financing structure Cash Historically financing has consisted of /3 cash, /3 seller s credit and /3 shares in LINK Mobility Group ASA Shares and cash settled at closing while sellers credit has historically had a tenor of 3 years ) The financing structure for future acquisitions will be tailored and optimized to each specific situation Copyright 207 LINK Mobility 7

18 Significant benefits gained from consolidation and scaling + One LINK Messaging Platform One LINK Services Application Platform COGS savings Consolidate local platforms and solutions Terminate local products and services Joint support, operations and routing Capex savings Annual recurring synergies of NOK 5070m from end of 209 Delivered NOK 7m in 207 Plan to deliver NOK 3040m in 208 One LINIK Common Routing Team Common products and services Cost efficient Bulgarian development hub EBITDA margin contribution of 23 p.p Copyright 207 LINK Mobility 8

19 Strong revenue and profitability performance Revenue evolution Organic growth evolution EBITDA evolution Reported revenue (NOKm) Yoy growth Organic growth yoy Adjusted EBITDA (NOKm) EBITDA margin 53% 58% 43% 5% 07% 26% 29% 89% 9.% 3.7% 8.0%.7% 7.3% 0.8% 0.8% 2.5% % 29% 6 25% 23% 22% 25% % 9% Q'6 Q2'6 Q3'6 Q4'6 Q'7 Q2'7 Q3'7 Q4'7 Q'6 Q2'6 Q3'6 Q4'6 Q'7 Q2'7 Q3'7 Q4'7 Q'6 Q2'6 Q3'6 Q4'6 Q'7 Q2'7 Q3'7 Q4'7 ) Adjusted for costs related to acquisitions, oneoff costs and share based compensation Copyright 207 LINK Mobility 9

20 Continued strong growth in revenues in Q Revenues of NOK 467 (23% organic growth & 04% total growth) Operating revenues (NOKm) 04% An adjusted EBITDA of NOK 5m (0,9%) up from NOK ,6 billion transactions and interaction with more than 205 million unique mobile phones 25% 23% 22% 25% Q 207 Q2 207 Q3 207 Q4 207 Q 208 = Organical growth QonQ 23% customer and signed 658 new contracts of which 384 new customers Adjusted EBITDA (NOKm) 6 5 High acquisition activity Continued strong performance in all our markets 7 7,3% 0,8% 0,8% 2,5% 0,9% Q 207 Q2 207 Q3 207 Q4 207 Q 208 = Adjusted EBITDA margin Copyright 207 LINK Mobility 20

21 Considerable scale advantages visible in Q 208 7,3 % 2,0 % Adjusted EBITDA% development QonQ 0,3 % 4,3 %,4 % 0,2 % 0,9 % Substantial scale advantages in business model +4.3 percentage points increased margin from scale advantages offsetting gross margin reduction of 2.0 percentage points in existing markets High organic growth is expected to drive scale advantages going forward Q 7 GM pr market GM mix Delta OPEX Delta OPEX Margin effect Q 8 Existing markets Group functions Aquired entities Future acquisitions will further strengthen scale advantages Adjusted EBITDA (NOKm) 6 5 Scale advantages counteract gross margin reduction High growth from large enterprises customers drives scalability further, positive gross profit and no additional OPEX 7 7,3% 0,8% 0,8% 2,5% 0,9% Dilutes gross margin in existing markets as large enterprise customers have lower margins than SME customers Q 207 Q2 207 Q3 207 Q4 207 Q 208 = Adjusted EBITDA margin Acquired entities have lower gross margin than existing markets Copyright 207 LINK Mobility 2

22 Asset light business model Low working capital requirements Low investment requirements High cash conversion Net working capital and share of revenue (NOKm) Quarterly capital investments and share of revenue 2 (NOKm) Cash conversion: Average last three years 3 Q'6 Q2'6 Q3'6 Q4'6 Q'7 Q2'7 Q3'7 Q4'7 9,9 4% 7,9 7% 32,9 4% 65,7 7% 42,6 % 79,3 6% 6% 53,9 62,6 2% 27,9 4,5 0,7 8,6 9, 8,7 6,9 3,9,9%,4%,5%,6%,5%,2%,0%,0% Q'6 Q2'6 Q3'6 Q4'6 Q'7 Q2'7 Q3'7 Q4'7 87% Net working capital Share of revenue CAPEX Share of revenue ) Net working capital: (trade receivables trade payables tax payables) 2) CAPEX: Investments excl. acquisitions 3) Cash conversion: Net cash flow from operations to adjusted EBITDA (average FY 5FY 7) Copyright 207 LINK Mobility 22

23 Delivering on the 208 outlook LTM Revenue evolution 208 Outlook (NOK) 2 LTM per. quarter, NOKm % organic growth m in acquisitions ,700m Pro forma revenue Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 207 Q Pro forma Organic growth M&A outlook 400m Pro forma EBITDA LTM Adjusted EBITDA evolution LTM per. quarter, NOKm Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 207 Q Pro forma % organic growth Acquisitions 3%p margin improvement 400 outlook 25% Organic growth 8bn Mobile messages ) Adjusted for costs related to acquisitions, oneoff cost and share based compensations 2) Pro forma revenue and EBITDA outlook figures. Includes full year effect of acquisitions. The above outlook for 208 is calculated on LINK s best estimate based on information available to LINK, and views and assessment of LINK, as of the date of this report. LINK s growth assumptions may deviate from the outcome resulting in material or immaterial deviations from the outlook. Further, LINK s assumption relating to successfully acquire further businesses during 208 is to a great extent outside the control of LINK. LINK s ability to successfully acquire new businesses at fair value, or at all, could materially affect the outlook figures correspondingly. Investors must therefore make their own calculation in relation to valuing LINK based on their own analysis and judgement 3) Please note that Link Mobility has signed terms sheets with SMS.it and Allterco regarding the Teracomm assets, i.e. the acquisitions are not closed Copyright 207 LINK Mobility 23

24 Key investment highlights The # European mobile messaging and mobile solutions company well protected by high barriers to entry 2 Annual organic growth of 20+%, backed by strong underlying market growth through increased European mobile messaging penetration 3 The European consolidator with a proven rollup acquisition model in a fragmented market with attractive benefits of scale 4 Highly scalable and asset light business model with ~90%+ recurring revenues and ~90% cash conversion 5 Experienced management team ready to take LINK Mobility to the next level Copyright 207 LINK Mobility 24

25 Thank you