Q3 2019 Results 27 November 2019 Disclaimer This Presentation - - PowerPoint PPT Presentation
Q3 2019 Results 27 November 2019 Disclaimer This Presentation - - PowerPoint PPT Presentation
INFRONT ASA Q3 2019 Results 27 November 2019 Disclaimer This Presentation might include certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates.
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Disclaimer
This Presentation might include certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements relate to future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to material risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Neither the Company nor any of its subsidiaries or any such person’s officers or employees provide any assurance that the assumptions underlying such forward-looking statements are free from errors, nor do any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to its actual results. An investment in the company involves significant risk and several factors could cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this presentation. A non-exhaustive overview of relevant risk factors that should be taken into account when considering an investment in the shares issued by the company is included in this presentation. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation. The company does not intend, and does not assume any obligation, to update or correct the information included in this presentation. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its subsidiaries nor any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this Presentation. The contents of this Presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult its own legal, business, investment or tax adviser as to legal, business, investment or tax advice. By attending or receiving this Presentation you acknowledge that (i) you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business, (ii) if you are a U.S. person, you are a QIB (as defined below), and (iii) if you are a non-U.S. person, you are a Qualified Investor or a Relevant Person (as defined below). This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in any jurisdiction or to any person in which or to whom it is unlawful to make such an
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Presenters and agenda
Agen enda da
- Q3 2019 Highlights
- vwd Transaction
- Operations Review
- Financial Review
- Summary
Kristia tian Nesbak ak CEO & Co-founder Max x Hofe fer CFO
ir@infrontfinance.com
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- Complet
eted ed vwd Gro roup up acquis isit ition ion to become a top-three hree financi ncial al termi minal al pro rovider ider in Eu Euro rope
- Rev
even enue e of EUR 25.3 million ion, up 256% % fro rom EUR 7.1 milli lion in Q3 2018 2018
- vwd Group the main contributor to growth with revenue of
EUR 14.8 million in period from the acquisition date 17 July
- Adjusted
sted EBITDA1
1 of EUR 2.9 milli
lion n compare ared d to EUR 1.2 milli lion n in Q3 2018
- Adj. EBITDA before IFRS 16 implementation of EUR 2.3
million
- Number
r of pro rofessi fessional al termina inals ls and solutio tions s users s increased reased to 91.0k 0k fro rom 17.8k in Q3 2018
- Driven by inclusion of Infront Italia and vwd Group
Q3 2019: M&A driving strong revenue growth
Quarterly terly re revenue ue
EUR million 7.1 25.3
5 10 10 15 15 20 20 25 25 30 30 Q3 Q3 18 Q3 Q3 19 +256%
1) EBITDA Q3 2019 adjusted for M&A-related costs of EUR 3.8 million.
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Achieving our strategic ambitions
~2.5x ~4x ~1.5x EUR 98.8m 91.0k EUR 2.9m Q3 2019 9 EUR 28.4m 17.8k EUR 1.2m Q3 2018 8 ARR1 Profess essio iona nal l Users
- Adj. EBITDA
~2x 13 7
- No. countr
ntrie ies s with offic ices es
Successfu ful l execut ution ion of our ambitio itious us long-term rm strat ategy gy... .. ...is is clearly rly re reflected ted in key figures
1) ARR = annual recurring revenue; revenue based on subscriptions amount to 97% of total Group revenue in the period. Calculation for Q3 2019 based on inclusion of vwd Group from 17 July 2019.
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Successfully completed the vwd Group acquisition in July 2019
- Completed
d on 17 July 2019 and consolidated
- lidated fro
rom that at date
- Final
l purc rchase hase price of EUR ~130 milli lion n on an enterp rpris rise value basis
- Finance
nced d thro roug ugh issue ue of a four-year ear EUR 105 milli lion bond bond 1 in April l and an ove
- versub
ubscrib ribed d NOK 242 milli lion n right hts issue in June 2019 2019
- Repor
- rtin
ting g curre rency ncy changed ged to EUR fro rom NOK
- Segment
nt re reportin ting g adjusted ted to re reflect new gro roup structu ucture: :
- Infront Solutions and Terminal
- vwd Group
- News and Other
1) Senior secured bond with EUR 200m maximum borrowing limit and a floating coupon of 3m EURIBOR + 5.75% p.a.. Final maturity of the instrument is 15 May 2023.
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Creating the leading European provider of financial market data
- Diversifie
ified d re revenue ue base with h ~91 000 pro rofes fessio ional nal users, ~3 600 custo tomers, , bro roade der pro roduc uct t offe feri ring ng and more re markets
- Highly
ly complement ntar ary operatio ations with th signific ificant nt cro ross- and upsell lling ing opportu tunit itie ies
- Exposure
ure to the gro rowing ing re regulat latory techn hnolo
- logy
gy segment nt as well l as the wealth lth and asset t managem gement nt market t
- More
re than n 500 employ
- yees in 13 count
ntrie ies
- Platf
atform rm for gro rowt wth h acro ross Eu Euro rope pe and in other markets ts
Source: Company information, Burton Taylor 1) EMEA financial data terminal market
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Integration process underway and initial synergies realized
- Integr
grat ation ion work ongoing ng with h focus on effic icie ient nt transi nsitio tion n to joint nt pro roduct platfo tform and combin inat atio ion n of servic ices and pro rocesses
- Technology platform, organization, products and services
- Consolid
- lidat
atio ion n of data ta fe feeds ds and licenses accord
- rdin
ing g to plan
- Annual cost savings of EUR 2 million expected to be realized over
the initial 12 months from optimization efforts
- Additionally, EUR 0.5m in other short-term Opex savings
- Good traction in efforts and progress as envisaged
- Fu
Furth ther estim timat ated EUR 6.0-8.5 .5 million ion in tot
- tal
l cost t sav aving ngs to be achieved ove
- ver the next
t 24-36 months hs
- Additional operational efficiencies and scaling from strengthened
position and product offering, and expanded reach in Europe
2.0 8.5-11 11.0 0.5 6.0-8.5 2 4 6 8 10 12 Data cost savings Short-term savings (12 months) Long-term savings (24-36 months) Total cost savings (realized and identified)
Total tal annual l sav aving ings potent ntial ial of EUR 8.5-11m ident ntif ifie ied
EUR m Identified savings Realized savings*
* Annualized value of realized savings as per Q3 2019
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Status update on key integration processes
Technology y and pro roducts
- Integr
grat ating ing pro roducts ucts and solut utions ions to fully leverage age bre readt dth h of data a sourc rces, servic ices and the extend nded d geograp raphic hical al re reach
- Combining
ning the stre rengt ngths hs of our solut ution ions will l enable le Infront ront to compete acro ross asset-clas lasses
- Infron
ront t solut ution ions and pro roducts ucts pre repare ared d for gro roup-wid wide develop lopment nt
- Infront Web Toolkit
- GPRV charts
- Other key web components
Sales and mark rketing
- Fo
Focus on potent ntial ial for up- and cro ross-se sell lling ing on the e expanded ed custo tomer r base
- Started
ted marketing ting Infro ront nt Pro rofe fession ional al Termin inal al to vwd custo tomers in Q3 2019
- First contract signed in October
- Strong reception in market and growing sales pipeline
- Geogr
graph aphic ic expan ansion ion cre reate ates new gro rowt wth opportunit nitie ies for the news busine ness
- Preparing to expand current services portfolio into new
markets
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Acquisitions are the main driver for user and revenue growth
- Stro
rong ng gro rowth th in number r of pro rofes fession ional al users due to acquis isit itio ions ns
- f Market Connect and vwd Gro
roup1
5.5 1.6 9.1 14.8 1.5 0.0 .0 2.0 .0 4.0 .0 6.0 .0 8.0 .0 10.0 .0 12.0 .0 14.0 .0 16.0 .0 Inf Infront So Solu lutio ions and Ter Termin inal vwd wd Group News News and Ot Other Q318 Q319
Segment nt re revenues ues
EUR million
Number r of pro rofes fessio ional nal users
’000 users
- Solut
utio ions ns and Termin inal al YoY driven by inclu lusion ion of Infron ront t Itali lia a and
- rg
rganic ic gro rowt wth h
- Vwd Gro
roup p inclu lude ded d fro rom 17 July
- News and Other
her re revenu nue re reflects re reduced d sales in non-core busines ness and NOK/SEK SEK headwind winds
91.0 .0 17.8
1) vwd’s Professional terminals users represent mainly users of vwd Market Manager and Investment Manager. Professional PMS users represent users of vwd Portfolio and Advisory Management Systems. The “Other Solutions” mainly include light weighted users of other smaller trading solutions.
FINANCIAL REVIEW
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Q3 2019 financial highlights
- Revenue
ue at EUR 25.3 milli lion, n, up 256% fro rom EUR 7.1 milli lion n in Q3 2018
- 25% of Q3 2019 revenue was recognized in foreign currency
- 97% was recurring subscription revenue, with ARR1 at end of quarter of EUR 100m+
- Adjusted
ted EBITD TDA2
2 of EUR 2.9 milli
lion n compare ared d to EUR 1.2 milli lion n in Q3 2018
- Adj. EBITDA before IFRS 16 implementation EUR 2.3 million
- Adjusted
ted EBITD TDA marg rgin n of 11.4% % compared d to 16.2% % in Q3 2018
- Margin decrease reflects product development and organizational investments for future growth
1) ARR = Annual Recurring Revenue 2) EBITDA Q3 2019 adjusted for M&A-related costs of EUR 3.8 million. Adj. EBITDA margin Q3 2019 before IFRS 16 implementation at 9.2%
7.1 25.3
5 10 10 15 15 20 20 25 25 30 30 Q3 Q3 18 Q3 Q3 19
Quarterly terly re revenue ue
EUR million 1.2 2.9
16.2% .2% 11.4% .4% 0% 5% 10% 15% 20% 25% 30% 0.0 .0 0.5 0.5 1.0 .0 1.5 .5 2.0 .0 2.5 .5 3.0 .0 Q3 Q3 18 Q3 Q3 19
Adj.EBI EBITD TDA* * and marg rgin* n*
EUR million
256% 256%
13 EUR million
1) Adjusted for M&A-related costs incurred
EUR million EUR million
2) Adjusted EBITDA of EUR 2.3m and adjusted EBITDA margin of 9.2% in Q3 2019 before IFRS 16 implementation, the IFRS 16 effects positively impacted Q3 2019 Opex by EUR 0.6m
7.1 7.3 10.8 10.9 25.3 5 10 10 15 15 20 20 25 25 30 30 Q3 Q3 18 Q4 Q4 18 Q1 Q1 19 Q2 Q2 19 Q3 Q3 19 66.9 9 % 73.1 % 59.9 % 61.6 % 63.2 % 0% 0% 10% 10% 20% 20% 30% 30% 40% 40% 50% 50% 60% 60% 70% 70% 80% 80% Q3 Q3 18 Q4 Q4 18 Q1 Q1 19 Q2 19 Q2 19 Q3 Q3 19
Revenu enue Gros
- ss
s Margin rgin %
0.9 1.2 1.5 1.4 4.3 0.0 .0 1.0 .0 2.0 .0 3.0 .0 4.0 .0 5.0 .0 Q3 Q3 18 Q4 Q4 18 Q1 Q1 19 Q2 Q2 19 Q3 Q3 19
Adjust justed ed1
1 Opex
ex2 Adjust justed ed EBI BITDA1
1 and
d margi rgin2
- Revenue growth driven mainly by acquisitions
- f Infront Italia and vwd, but also organic
growth, price increases and growth in retail trading solutions
- YoY decline in gross margin reflects inclusion of
Infront Italia and vwd
- Increase in adjusted Opex reflects Infront Italia
and vwd, as well as higher personnel costs across the group to support future growth.
- Adjusted EBITDA increased by 150% YoY (incl.
IFRS16 effects) following the acquisitions and synergy effects across the group
- Infront Italia and vwd synergy capture on track
with consolidation of data feeds and licenses expected to yield EUR 0.7m and EUR 2.0m respectively in annual cost savings. Additional
- perational improvements expected to yield
further min. EUR 6.0m in annual cost savings
- ver the next 24-36 months.
1.2 1.3 1.9 2.1 2.9 0% 0% 5% 5% 10% 10% 15% 15% 20% 20% 25% 25% 0.0 .0 1.0 .0 2.0 2.0 3.0 .0 4.0 .0 Q3 Q3 18 Q4 Q4 18 Q1 19 Q1 19 Q2 Q2 19 Q3 Q3 19
EBITDA driven by M&A , temporary margin-decline reflects investments
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Acquisition driving revenue growth across regions and segments
- DA
DACH: Revenue from new markets and subsidiaries in Germany (D), Austria (A) and Switzerland (CH) following recent acquisition of vwd Group
- Nord
rdic Region: ion: Stable underlying revenue. Q3 2019 and the previous quarter impacted by timing of recognition of EUR 0.3 million accrued revenue. Adjusted for this effect the Q2 and Q3 2019 revenue would both have been EUR 6.7m
- Other
her re region
- ns:
: Revenue of EUR 6.2 million, up from EUR 0.6 million in Q3 2018 driven by inclusion of Infront Italia and vwd
- Revenue
ue per Segment nt: : Terminal and Solutions revenue increased 64% YoY due to the Infront Italia and vwd acquisitions,
- rganic growth and new Infront Web
Technology sales. News and Other non-core business down 7%. vwd segment represents acquired revenue in Q3.
6.5 0.6 6.7 0.7 6.7 4.0 7.0 3.9 12.7 6.4 6.2 2 4 6 8 10 10 12 12 14 14 DA DACH Nord
- rdic
ic Re Regio gion Othe ther r Re Regio gions ns 5.5 0.0 1.6 5.9 0.0 1.5 9.3 0.0 1.4 9.3 0.0 1.6 9.1 14.8 1.5 2 4 6 8 10 10 12 12 14 14 16 16 Inf nfron
- nt
t Solutio lutions ns and nd Term rmina inal vwd wd Grou roup News & Othe her
Revenu enue per r Regi gion
- n
Revenue enue per r Segm gment ent
EUR million EUR million
Q3 18 Q3 18 Q3 18 Q3 19 Q3 19 Q3 19 Q3 18 Q3 18 Q3 18 Q3 19 Q3 19 Q3 19
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Cash position remains solid following the acquisition of vwd Group
- Operating
rating CF: EUR -1.2 milli lion n Reflecting loss before tax of EUR 9.5 million, including acquisition-related costs of EUR 2.6 million
- Investin
ing g CF: EUR -121.4 .4 milli lion
- n
Mainly reflecting the EUR 130.6 million paid for vwd and EUR 2.7 million of other investments, partly offset the cash balance acquired in vwd of EUR 12.9 million
- Financi
ncing ng CF: EUR +127.2 milli lion Mainly net proceeds from the equity- and bond issues of EUR 23.4 million and EUR 102.3 million, respectively
- End of the period
- d cash position
ition: EUR 13.9 million
8.7 13.9 (1.2) (121.4) .4) 127.2 .2 0.5
- 130
- 120
- 110
- 100
- 90
- 80
- 70
- 60
- 50
- 40
40
- 30
30
- 20
20
- 10
10 10 10 20 20 Cas ash, Begin ginning ning of
- f
th the year CF F fro rom Ope pera ratio tions ns CF F fro rom Inve nvestm tments nts CF F fro rom Fi Finan nancin ing Ef Effects ts of FX FX chang hanges on
- n
cash Cas ash, End End of th the pe perio riod
YTD 2019 9 Cash sh Flow signf nfic icant ntly ly impact pacted ed by M&A activ tivity ity EUR million
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Summary
- Leading European position secured with acquisitions of
vwd Group and Infront Italia
- Focus going forward on integration and synergy
capture
- 97% recurring subscription revenue base with ARR of
EUR 100m+ per Q4 2019
- Solid sales pipeline in all regions and potential from up-
and cross-selling supports long-term organic growth ambition
- Potential for further attractive M&A opportunities
7.1 7.3 10.8 10.9 25.3 Q3 18 Q3 18 Q4 18 Q4 18 Q1 19 Q1 19 Q2 19 Q2 19 Q3 19 Q3 19 Quarterly terly Revenu nues EUR million
Q&A
ir@infrontfinance.com
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Next Quarterly Report
- Quarterly Report Q4 2019 to be published on 28 February 2020
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