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Tel Aviv Stock Exchange
Sapiens Annual Investor Meeting
February 27, 2019
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Roni Al-Dor
President and CEO, Sapiens
Sapiens’ Year in Review and Into 2019
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Certain statements made in this presentation may constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation
Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify these forward-looking
statements (although not all forward-looking statements include such words). These forward-looking statements, which may include,
without limitation, projections regarding our future performance and financial condition, are made on the basis of management ’s
current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future
performance and actual results could differ materially from those contained in the forward-looking statement.
These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New
risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding
these risks and uncertainties, as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 3 of
Part III of our Annual Report on Form 20-F for the year ended December 31, 2017 and subsequent reports and registration
statements filed from time to time with the Securities and Exchange Commission.
Safe Harbor Statement
3
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AGENDA
• 2018 and beyond
• Market trends overview
• Potential for future growth
• Products & innovation
• Leveraging customer base
• Our goals
• Marketing
• India competence center
Agenda
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25 new logos
33 Go Lives
5
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6
Revenue Growth
$272M$290M
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7
Improved Operational Profit
$23.1M$39.5M
8.5 %13.6 %
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8
2018and beyond
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P&C EMEA & APAC
• Accelerating growth
Our Main Objectives for 2018
P&C NA
• Generating growth
Life
• Stabilizing existing projects
Cross sell
• Generating more sales in existing accounts
9
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We Delivered as Planned
P&C NA
P&C EMEA&APAC
Life
Cross sell
Stable GrowthHigh
Growth
10
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• Large projects• Strong digital proposition• Strong team of experts• Strong references• Managed services proposition
11
P&C EMEA & APAC
PROPERTY & CASUALTY
IDITSuite
Reinsurance (Global)
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P&C North AmericaLaunching a Winning Offering
CoreSuite for Property &
Casualty
Stream
Policy Billing
Policy Billing Claims
Policy Billing Claims
X X12
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• Strong suite proposition in the US
• Excellent customer references
• Strong business content
• Innovation and ecosystem integration
13
P&C North America
PROPERTY & CASUALTY
CoreSuite
Reinsurance
Workers compensation
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Positioning
• Fit-to-Market Solutions
• Europe - dominant brand position
• North America – gaining momentum
Leading Property & Casualty Offering
14
Key Achievements
• Double digit growth (to 60% of revenues)
• Digital-ready offering
• Entering higher tiers/larger deal sizes (platform & services)
• Shifting to cloud
Europe
Sapiens IDITA
dva
nce
d T
ech
no
logy
Breadth of Functionality
North America
StoneRiverPowerSuite
Adaptik Policy
Bre
adth
of
Fun
ctio
nal
ity
Advanced Technology
Source: Celent 2018.
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• Achieving operational efficiency
• Product investment
15
Life, Pension & Annuities
LIFE, PENSION &
ANNUITIES
CoreSuite
Complementary solutions
Run-off solution
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Positioning
• End-to-end proposition- Covering both strategic growth business and run-off portfolio management- Comprehensive proposition: both full core suite and business components
16
Leading Life, Pension & Annuities Offering
Key Achievements
• Building strong foundation for growth
• Digital-ready offering
• Focus – exited retirement services projects
• Shifting to cloud
North America
Europe
Source: Gartner 2017.
Bre
adth
of
Fun
ctio
nal
ity
Advanced Technology
Ab
ility
to
Exe
cute
As of August 2017Completeness of Vision
VisionariesNiche Players
LeadersChallengers
Msg Life
Fadata
DXC Technology
Key Lane
Sapiens
Vermeg
IN2
Edlund
Mphasis (Wyde)
Source: Celent 2018.
Sapiens
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• Decision is an important component for the newly developed platform for P&C
• Recognized as an enabler for achieving decision automation and business agility
17
Sapiens Decision for InsuranceClosed deal with Tier 1 insurance company
DECISION
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• Core Suite for L&P
• IDITSuite
18
Cross Sell
• Reinsurance Pro
• Reinsurance Master
• Reinsurance Master
• CoreSuite for L&P
• Jproducts
• Stream
• CoreSuite for P&C
Number of successful cross sell deals
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M&A2018 acquisitions
• Consultancy and development projects with an expertise in the digital domain
• Leading Policy Administration solution in US
19
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Looking into 2019
P&C NA
P&C EMEA&APAC
Life
Cross sell
Stable GrowthHigh
Growth
20
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Objectives for 2019
P&C NA
P&C EMEA&APAC
Life
Cross sell
Stable GrowthHigh
Growth
21
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Managed Services• Build a solid
infrastructure
• Build on existing clients
• Penetrate the market
Digital• Integration with core
systems
• Integration with Ecosystem
• Expand customers base
22
Adding New Pillars for 2019
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Adding Two Pillars
Digital
Managed Services
Stable GrowthHigh
Growth
23
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The Market Evolution
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Disruptive Forces in Insurance – The Next Wave
19
25
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InsurTech on the RISE
Insurancetechnologystart-ups
1,500+
Funding
$10-15B
BusinessCategories
14
26
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Disruption or Evolution?
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28
Disruption or Evolution?
DISRUPTthe way business is conducted
EQUIPThe business with digital disruptive capabilities
Property & Casualty Life, Pension, Annuities Health & Medical
Underwriting Data, Analytics, Cyber Wearables & Sensors Distribution Validation & Fraud
28
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Insurers Investing in Innovation
Source:
Innovation units Insurers as VCs
29
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INSURANCEand
InsureTech
will be inseparable
30
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31
Our Potential for Future Growth
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32
Large and Growing Global Insurance IT Market
Sapiens’ Total Addressable Market:
$40B
Source: Celent April 2017 and Sapiens estimates.
Highly Attractive, Growing Market
Highly Attractive, Growing Market
NEW 20%
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Expansion Potential
NA, UK, Nordics, SA,
APAC
Territories
Core products implementation
Services
Hosting, AO
Managed services
2 SI partners
Partners
3333
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Expansion Potential
LoBs: personal, commercial
Lines of Business
API layer, Portal, BI
Digital
Tiers 2-4
Tiers
Sapiens + InsurTechpartners
Ecosystem
3434
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Realizing Our Potential
35
Roadmap development
M&A
Design partners
SI partnership
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36
Our Products & Innovation
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PROPERTY & CASUALTY
LIFE, PENSION &ANNUITIES
WORKERS’COMPENSATION
FINANCIAL & COMPLIANCE
DECISION MANAGEMENT DIGITAL
Our Offering
37
Steady growth in all
domains
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Investment in Our Products
38
Core Product
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39
Services & Partners
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Evolution of our ServicesOne hand to shake with long term partnership
Core product implementation
services40
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Post-Production Support
Digital SuiteLayer 3
Layer 2
Customer support, application management and operation management
Infrastructure hosting and IT management
Layer 1
Tier 2Customer Application
and ICT Engineers
Tier 3Core Product Experts
and ICT Experts
Tier 1Service Desk
Cu
sto
mer
Ser
vice
Des
k
41
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Expanding our SI
Partnerships
42
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43
Our Customer Base
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…with so many great customers
44
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45
from project implementation to
full serviceproposition
from product-oriented to a
customer-centric approach
45
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Small companies are looking to sell their products to customers
46
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Big companies are looking for products & services for their customers
Changing our mindset
47
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Building a Customer Success Team
North America Europe
48
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49
Transformation Projects
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• While generating great assets for the long term, business and IT transformation is always challenging and tough
• Multi-site competence centers
• Rapid growth (especially in the P&C domain)
Transformation Projects Outlook
50
Development & Delivery Center
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• Adopt vs adapt
• Agile methodology
• OOTB / Jump start
• Building training competence center
• Automation tools (DevOps, testing automation)
51
Our Approach
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52
• Recruitment – massive growth
• Training
• Delivery – scale-up
• New business – close in 2019 and pipeline for 2020
• Leverage existing customer base
• Products & innovation
• Managed services
• New territories
What We Need to Address in 2019To support growth
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DivisionsManagement Team
Tal SharonIPEL
Liana GelikasP&C EMEA,
APAC, Global RI
Osnat Segev-Harel
Corporate Development
Norman TutnauerAlliances
Harold Westervelt
Decision
Roni GiladiCFO
Riki Efraim-Lederman
L&P, NA Life & P&C
Meirav SpieroHR
Tamar Alon-Verber
Business Finance
Yaffa Cohen-Ifrah
Marketing & IR
Ben ShoryDigital, CTO
Raj GhumanSales EMEA,
APAC
Irena GluckBusiness
Operations
Tony NovielliSales NA
Iris Cohen-Carmel
Legal and M&A
Finance, HR
Corporate Development
Sales & Marketing
CTO
5353
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• Continue major growth
• Further improve profit
• New M&A
54
Our Main Goals
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What Makes Us Different
55
GLOBALLEADING
PRODUCTSANALYST
RECOGNITION
WIDE RANGE OF SOLUTIONS
WIDE RANGE OF SERVICES
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Sapiens Rebranding and NamingYaffa Cohen-Ifrah, CMO
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Our Challenge: 30 different product names
57
IDITALIS
Stingray
PowerSuite
CompSuite
StoneRiver
URS
FRSClosed Books
Sapiens PORTAL
Sapiens DECISION
Sapiens INTELLIGENCE
Life Portraits
Life Apply
LifeSuite
4SightBI
Stream Claims
Adaptik Policy
Adaptik Billing
Stream BI
eFreedom
Power2Pay
CommonTools
ID3
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And 8 Company Names
INSECO
58
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AGENDA
We developed a Master Brand Architecture
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AGENDA
We have a strong brand name:
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approach
And now we gave it a personal
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AGENDA
We chose the
CIRCLE
as our leading icon, because it symbolizes a COMPLETE
and WHOLE solution.
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Sapiens is
unified company
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64
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65
Images
65
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We introduced New Product Names
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PROPERTY & CASUALTY
LIFE,PENSION &ANNUITIES
WORKERS’COMPENSATION
FINANCIAL & COMPLIANCE
DECISION MANAGEMENT DIGITAL
New Look
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AGENDA
Focusing on our corporate brand:
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AGENDA
And.. choosing Descriptive Product Names
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Roni Giladi, CFO
Financial Results 2018
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Revenue
$290M
Revenue Operational Profit
$40M13.6%
Summary
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Summary
$290M
Revenue Operational Profit
2018Transition Year
2017
$40M13.6%
$272M $23M8.5%
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Revenue Growth
73
135.4
157.5
179.3
216.2
272.0
290.3
2013 2014 2015 2016 2017 2018
Non-GAAP Revenues (USD millions)
+16.3%
+13.8%
+6.7%
+20.6%
+25.8%
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49.6
91.3
16.6
61.3
92.0
26
74.5
107.2
34.6
112.4120.9
38.7
137.3128.5
24.5
NA Europe* APAC & SA
2014 2015 2016 2017 2018
Annual Revenue by Geography
74
* Europe includes UK, Nordics, Israel and rest of Europe.
Non-GAAP Revenue (USD millions)
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The Transition
75
Revenue Breakdown by Division
50 %44 %
34 %
47 %
16 %
9%
216
290
2016 2018Europe* NA APAC & SA
50 % 28 %
30 %
62 %20 %
10 %
216
290
2016 2018
L&P P&C Other*
Revenue Breakdown by Region
(USD millions)
*Other includes Decision and Technology * Europe includes UK, Nordics, Israel and rest of Europe.
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Revenue Growth Analysis
290.3
3M18M27M6.3M
272.0 Organic
Japan Exit & Reduction in SA
Project
Currency
M&A
2017 2018
3%
1%10%
-7%
Organic growth rate % where calculated on the basis of 2017, excluding the full revenue attributed to the Japan and SA Project.76
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2017 2018 Impact
StoneRiver13M
KP4M
Adaptik10M
$27M
Revenue Growth Analysis
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Revenue Growth Analysis
Japan Exit 5
Reduction in SA Project 13
Total $18M
78
Japan Exit & Reduction in
SA Project
18
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Revenue Growth Analysis
P&C EMEA & APAC ++
P&C NA +
L&P --
Other =
Organic Growth
+3%
79
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80
Profitability
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Operational Margin
81
3%
4.7%
12.4% 12.5% 12.5%
13.2%
14%
14.8%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
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Operational Margin
82
2017 2018
1 Cost Reduction Q2, Q4Efficiency
throughout the year
2 StoneRiver improvement
Profitability 8% on acquisition 15%+
Corporate Integration with SPNS
Delivery Efficiency Efficiency
R&D Close stream Policy and Billing
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Off-Shore Employees
Q4 2016 Q4 2017 Q4 2018
India 212 359 677
Poland 92 118 115
Total 304 477 792
% Off-shore from Delivery & R&D 20% 28% 37%
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84
Cash Position
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Cash and Cash Equivalents
85
• Cash and Cash Equivalents
• $64M as of the end of 2018
• Dividend
• payment of $10M in October 2018
Debt Position
December 2018 $78
January 2019 (10)
Net Debt as of today $68(spread over 7 years)
EBITDA 2018 $43
Debt/EBITDA 1.6
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86
Revenue Guidance
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2015 2016 2017 2018 2019 Guidance
+6.7%
Revenue GrowthNon-GAAP Revenues (USD millions)
1 2019 guidance per Sapiens press release dated February 26, 2019.
Non-GAAP Revenues (USD millions)
(1)
+25.8%
9.5%-11.3%
318 -323
+20.6%
290.3
272.0
216.2
179.3
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Revenue Growth Analysis
2018 2019Guidance
$290.3M
$320.5M
88
28.2 2.0
Organic M&A
10%
2019 guidance per Sapiens press release dated February 26, 2019.
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89
2018 2019
P&C EMEA & APAC ++ ++
P&C NA + ++
L&P -- =
Other = =
Growth Rate +3% +10%
Organic Growth
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90
Profitability Guidance
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91
Profitability Increase
2018 Actual
2019G Average
Profit Growth
Revenue 290.3 320.5
Operating Profit 39.5 49.4 +25%
Operating Margin 13.6% 15.4% 180 bps
2019 non-GAAP operating margin guidance of 15.2%-15.6%
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92
Operating Profit
2018 Q4 2018 2019
13.6% 14.8% 15.2% – 15.6%
We are in sight of reaching 2019 operating profit starting from Q4/2018
GM R&D Sales G&A
Economy of Scale
- + - +Off-shore
+ + - +
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93
Reducing the Risks2016 2017 2018
Largest Customer
13.6% 5.7% 5.8%
Total Top 10 50% 34% 31%
# Customers 200 420 453
Products 11 21 22
Revenues Expenses DiffUSD 56% 40% N/A
ILS 9% 38% Negative
GBP 16% 8% Positive
Euro 12% 2% Positive
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94
Summary
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2018
1. New Customer/Project2. Improve offshore going
forward3. Integration Adaptik & Stream4. Corporate saving
1. Continue Global P&C double digit growth
2. Moving from decline revenue in L&P to stabilization with positive outlook
3. Margin expansion
Growth & Profitability
2019
Profitability > Growth
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96
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Contact: Yaffa Cohen-Ifrah, CMO & Head of Corporate Communications
Mobile: +1-201-250-9414 | Phone: +972-3-7902032
Email: [email protected] | Website: www.sapiens.com