Flemming Breinholt, CEO and Dora Brink Clausen, CFO | 21 February - - PowerPoint PPT Presentation

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Fourth quarter 2019

Flemming Breinholt, CEO and Dora Brink Clausen, CFO | 21 February 2020Q4

Q4 2019 PRESENTATION

Q4 highlights and operational update Flemming Breinholt

2 Q4 2019 PRESENTATION

In line with medium-term financial targets +6%

Net sales

+4%

Organic growth

+0.2 pp

Adjusted EBITA margin

2.7

Leverage

3

Financial highlights

Q4 2019 PRESENTATION

Q4 2019 PRESENTATION 4

Operational highlights

All users are onboarded Old platforms are closed down Based on user feedback still deploying enhancements during 1H 2020 JUNO platform to be used to upgrade the Danish offering

Key comments

Completed roll-out of JUNO

5

3% organic growth in Q4 and FY – according to expectations Focus on renewal of customer contracts with normal good outcome Market offensives started including:

Upgrade of Danish offering Collaboration with law firm in promoting e-courses Investment in Procurementlink Negotiations on collaboration with Ante – associated investment closed in January 2020

Market offensive initiated in Denmark

Q4 2019 PRESENTATION

Key comments to Q4 and FY

6

5% organic growth in Q4 and 6% for the FY – according to expectations JUNO roll-out completed User feedback on JUNO – deploying enhancements for 1H 2020 AI-based recommendation function released in the end of Q4 for Notisum

Key comment after Q4

New CEO recruited for Norstedts Juridik

Strong performance in Sweden

Q4 2019 PRESENTATION

Key comments to Q4 and FY

Q4 2019 PRESENTATION 7

Focus onwards

Adding more value for our customers

Strong performance in online Online growth more than offset the

• ffline decline – as expected

Investments in two start-up companies Focus on adding more value in 2020

Key comments

Knowledge/information Process/services

Adding even more value gives our users certainty and more efficiency.

Financial development Dora Brink Clausen

8 Q4 2019 PRESENTATION

…FY and Q4 growth met expectations

GROUP

Q4 2019 PRESENTATION 9

Increased net sales and organic growth

715 757

100 200 300 400 500 600 700 800 FY 2018 FY 2019 Net Sales, SEKm

+6%

+6%

179 189

50 100 150 200 Q4 2018 Q4 2019 Net Sales, SEKm

GROUP

Q4 2019 PRESENTATION 10

Improved adj. EBITA profit & margin for FY

+0.2 pp

• 2.5

pp

61 59

Q4 2018 Q4 2019 10 20 30 40 50 60 70 80 Adjusted EBITA, SEKm and margin %

33.9% 31.4%

262 279

FY 2018 FY 2019 50 100 150 200 250 300 Adjusted EBITA, SEKm and margin %

36.6% 36.8%

… due to strong online performance

Q4 2019 PRESENTATION 11

Key comments

Net sales growth of 5.8% Organic growth of 4.1% and currency effects of 1.7%. Online sales steady growth Offset the declining offline market Both DK and SE contributed to higher sales

Continued steady sales growth

GROUP

194 166 176 179 205 173 190 189

50 100 150 200 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Net Sales, SEKm

+5.8%

GROUP

Q4 2019 PRESENTATION 12

Adjusted EBITA 59 MSEK vs. 61 MSEK Adjusted EBITA margin declined 2.5 pp due to

• ur active decision to take costs to prepare our

new market offensive in Denmark Significant one-off trade in Q4 2018 affected comparability

Flat adj. EBITA – due to market investments

76 55 70 61 85 60 74 59

39% 33% 40% 34% 42% 35% 39% 31%

10 20 30 40 50 60 70 80 90 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Adjusted EBITA and margin, SEKm and %

• 2.5

pp

Key comments

Q4 2019 PRESENTATION 13

Online sales growing according to expectations

74% 79% 26% 23% 24% 21%

0% 20% 40% 60% 80% 100% FY 2018 FY 2019 Q4 2018 Q4 2019 Sales split online/offline, % Online Offline

SALES SPLIT

83% 86% 17% 15% 16% 14%

0% 20% 40% 60% 80% 100% FY 2018 FY 2019 Q4 2018 Q4 2019 Sales split subscription/non-subscription, % Subscription Non-subscription

77% 76% 85% 84%

DENMARK

Q4 2019 PRESENTATION 14

Key comments

6% net sales growth 3% organic growth in line with expectations Currency effect added 3% Decline in adjusted EBITA margin due to active investments to prepare our new market offensive in Denmark

Includes development resources to prepare this

Stable growth in Denmark

102 94 105 96 109 99 110 103 20 40 60 80 100 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net Sales, SEKm

35 40 46 36 44 41 46 34 34% 42% 44% 38% 41% 41% 42% 33%

10 20 30 40 50 Adjusted EBITA, SEKm and %

+6%

• 5

pp

SWEDEN

Q4 2019 PRESENTATION 15

Continued strong performance in Sweden

92 72 72 82 96 74 79 87

20 40 60 80 100

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Net Sales, SEKm

41 16 24 24 41 20 28 25

45% 21% 34% 29% 43% 26% 35% 29% 10 20 30 40 50

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Adjusted EBITA, SEKm and margin, %

+5% +5%

Key comments

5% net sales growth Continued steady growth in online Offline sales declined both due to long-term trend and a one-off trade in Q4 2018 Adjusted EBITA up 5% or SEK 1 m despite SEK 7 m higher D&A Adjusted EBITA margin in line with Q4 2018

GROUP

Q4 2019 PRESENTATION 16

Key comments

Adjusted operating cash flow FY 2019 of over SEK 250 million, enabling dividend proposal Cash conversion rate 89 % for FY Leverage at 2.7 below financial target

Robust cash conversion in Q4

177 23

• 12

120 163 18 2 109

219% 37%

• 16%

177% 168% 25% 2% 156%

• 50

50 100 150 200 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

• Adj. operating cash flow, SEKm

and cash conversion, %

Board proposes SEK 0.45 per share to be paid on May 12

Q4 2019 PRESENTATION 17

Key comments

Karnov’s objective is to distribute 30–50 per cent of the purchase price allocation (PPA) adjusted net profit Proposed dividend corresponds to approx. 30 per cent of PPA + adjusted net profit since listing When proposing the dividend, the Board has taken not only Karnov’s cash generation capabilities and unutilised credit lines into account but also the stated objective to do additional investments and acquisitions

Dividend proposal

DIVIDEND 202 MSEK

50 100 150 200 250 300 PPA + adjusted net profit Dividend level

30% 50% Proposed dividend of SEK 0.45 per share* *Dividend level is 30 % since listing or 22.5 % based on 12 months.

18 Q4 2019 PRESENTATION

Summary of 2019

In line with financial targets

– Organic growth of 4% – Adjusted EBITA margin up 0.2 pp – Leverage below 3x 1

Solid base to grow business further Board of Directors proposing dividend

3

JUNO rollout completed, still enhancements during 1H 2020

4 2

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Q&A

Better decisions, faster

Find what you need, trust what you find and do it quickly. For more information visit www.karnovgroup.com/en/section/investors/

Q4 2019 PRESENTATION

Appendix

20 Q4 2019 PRESENTATION

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Q4 2019 PRESENTATION

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Key ratios per quarter

Q4 2019 PRESENTATION

Q4 2019 PRESENTATION 23

The following applies to this document, the oral presentation of the information in this document by Karnov or any person on behalf of Karnov, and any question-and-answer session that follows the oral presentation. This presentation may contain forward-looking statements that reflect Karnov’s current views with respect to future events as well as potential financial results and operational performance. Forward-looking statements, as a general manner, are all statements other than statements as to historical facts or present facts or circumstances as well as other statements regarding present facts or circumstances. The words “believe”, “expect”, “mean to”, “intend”, “estimate”, “anticipate”, “assume”, “predict”, “can”, ”will”, “shall”, “should”, “consider”, “may”, “might”, “plan to”, “aim”, “potential”, “calculate”, “as far as is known”, or in each case, their negative, or similar expressions, identify certain of these forward-looking statements. Other forward-looking statements can be identified by the context in which they are used. Although Karnov believes that the expectations reflected in such forward-looking statements are reasonable, Karnov can give no assurances that the forward-looking statements will materialise or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors, including factors outside Karnov’s control. Any forward-looking statements included in this presentation speak only as at the date of this presentation. Information in this presentation may be changed, added to or corrected without advance notification but Karnov undertakes no obligation to publicly update or revise any information, including any forward- looking statements, whether as a result of new information, future events or otherwise.

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