financial results fy 2018/2019...croatian market) almost twofold increase in net profit and net...
TRANSCRIPT
Financial results
FY 2018/2019 5 September 2019
Q4 16/17 Q4 17/18 Q4 18/19 Acquisition
116173
236
20
30.06.2018 30.06.2019 30.06.2019**
1.81.5 1.3
Maintaining over 30% growth rate and another record-breaking quarter
Revenue [PLN mn] Adj. EBITDA [PLN mn]
2
CAGR +33% CAGR +31%
* Net debt / EBITDA according to annualised adjusted EBITDA for Q4** Senior debt excluding the subordinated loan from PFR TFI
2.2x
Net debt/ EBITDA*
Q4 16/17 Q4 17/18 Q4 18/19
6.3 7.110.8
Q4 16/17 Q4 17/18 Q4 18/19
22.730.6
40.1
Number of customers [’000]
R22 has already over 255,000 customers
3
Voice
Marketing automation
SMS / Mobile
Push notifications
RCS
Hosting
We provide basic services regarding the presence of companies on the Internet, around which we build a wide portfolio of services that automate business process
HOSTING OMNICHANNEL TELECOMMUNICATION
VoIP
Internet + TV
Infrastructure for Group
SaaS platform
Domain
E-commerce
SSL Certificates
We are building the CEE market leader– doubling the scale of business in two years
4
Becoming a leader on the Romanian market
Entering the Croatian market, taking over the market vice leader
Planned acquisitions in other countries of the region
Possibility of organic position building in selected countries
Financing model
PFR TFI + bank + own funds
We are building the CEE market leader– doubling the scale of business in two years
5
PLN 12.7 mn
revenue in 2018/19
PLN 3.7 mn
EBITDA in 2018/19
50,000customers
Successful entry into Romanian market
Strengthening the position of market leader by 3 more acquisitions
25%share in market
EUR 0.8 mn
revenue in 2018
EUR 0.2 mn
EBITDA in 2018
9,000customers
Start of expansion on the Croatian market
17%shares in market
Common strategic goals and operational cooperation
Extending the portfolio of tools and services
6
Software house specializing in mobile technologies, IOT and m-commerce
PLN 1.15 mn
investment of R22
Joint product development, incl. mobile push
Acquiring a committed team and mobile competences
A platform for creating and managing e-stores based on Magento
EUR 1 mn
investment of R22
Planned expansion to other countries
350customers in Romania
A marketing automation tool supporting customer acquisition, service and retention
PLN 10 mn
entire investment of R22
Product and sales development, international scalability
75%customers from outside Poland, mainly the USA
R22 group results
7
[PLN ‘000] Q4 2017/2018 Q4 2018/2019 Change
Revenue 30 599 40 077 31%
EBIT 4 094 7 272 78%
Adjusted EBITDA 7 139 10 767 51%
One off-expenses 960 403 -58%
Net profit 2 787 4 857 74%
- net profit of shareholders of the parent company 1 946 3 303 70%
Consistent growth in revenue
Quarterly EBITDA nearly PLN 11 mn(the result does not include all Romanian companies and the Croatian market)
Almost twofold increase in net profit and net profit attributable to equity holders of the parent
EBITDA and indebtedness do not take into account IFRS 16 due to the shifted financial year
Q1 17/18 Q2 17/18 Q3 17/18 Q4 17/18 Q1 18/19 Q2 18/19 Q3 18/19 Q4 18/19
6.7 6.8 6.6 7.1 8.1 9.0 10.0 10.8
Adjusted EBITDA [PLN mn]
R22 group results
8
[PLN ‘000] 2017/2018 2018/2019 Change
Revenue 110 595 145 615 32%
EBIT 16 774 25 095 50%
Adjusted EBITDA 27 228 37 901 39%
One off-expenses 2 195 1 282 -42%
Net profit 10 527 16 714 59%
- net profit of shareholders of the parent company 6 788 11 571 70%
Consistent increase in revenues as a result of acquisitions and organic activities
A significant increasein profitability
Greater increase in net profit attributable to equity holders of the parent(does not include the purchase of minority interests in the hosting segment)
EBITDA and indebtedness do not take into account IFRS 16 due to the shifted financial year
2015/2016 2016/2017 2017/2018 2018/2019
42.374.1
110.6145.6
2015/2016 2016/2017 2017/2018 2018/2019
15.221.8
27.237.9
Revenue [PLN mn] Adjusted EBITDA [PLN mn]
High ability of cash generation
9
Net debt / EBITDA *
Ability to generate high cash flows
High conversion of EBITDA to operating cash flows (82%) and to unlevered FCF (63%)
Low net debt/annualisedEBITDA ~1.5
Unlevered FCF decreased by loan and interest repayments gives over PLN 2.5 mn cash surplus quarterly
Unlevered FCF – operating cash flows decreased by capital expenditures and leasing related payments
[PLN ‘000] Q4 2017/2018 Q4 2018/2019 Change
Net cash from operating activities 4 109 8 841 84%
Acquisition of property, plant and equipment and intangible assets
-1 703 -1 412 26%
Payment of liabilities arising from financial leases -757 -685 20%
Unlevered FCF 1 649 6 744 124%
Repayment of credits and loans -2 365 -3 019 -74%
Interest paid -751 -1 139 22%
Cash surplus -1 467 2 585 -128%
30.06.2018 30.06.2019 30.06.2019**
Net debt 50 660 66 864 57 974
* Net debt / EBITDA according to annualised adjusted EBITDA for Q4** Senior debt excluding the subordinated loan from PFR TFI
30.06.2018 30.06.2019 30.06.2019**
1.81.5 1.3
Omnichannel segment
10
Accelerate the growth rate of revenue and the number of clients
Increase EBITDA margin by 6 p.p.
Dynamic increase in the number of enterprise clients
Consistent portfolio development (User.com, Reopen, Mobile Push)
Numer of Enterprise customers Number of SME customers
Revenue [PLN ‘000]
Q4 17/18 Q4 18/19
6 820 7 460
Q4 17/18 Q4 18/19
152174
+ 22 yoy + 640 yoy
Q4 17/18 Q4 18/19
14 875
19 195
Q4 17/18 Q4 18/19
2 5554 476
+ 29% yoy
EBITDA [PLN ’000]+ 75% yoy
Omnichannel segment
11
Effective actions in the area of ARPU growth and margin growth(increase of EBITDA margin by 6 p.p.)
Simultaneous increase in the number of customers
ARPU Enterprise [tys. PLN]+ 8% yoy
ARPU SME [PLN]+ 7% yoy
112
132
119
122
101 113117
131
50,0
60,0
70,0
80,0
90,0
100,0
110,0
120,0
130,0
140,0
Q1 Q2 Q3 Q4
24.926.1
22.2
24.523.1
25.9 23.1
26.4
15,0
17,0
19,0
21,0
23,0
25,0
27,0
Q1 Q2 Q3 Q4
2017/2018 2018/2019
Hosting segment
12
Over 50% increase in revenues
Stable salesstructure
Hosting services+74%
Domain+22%
Value addedservices+24%
Agreement on the purchase of minority shares in the segment
34%
25%
16%
25%
Revenue structure
Q4 17/18 Q4 18/19
11 501
17 794
Revenue [PLN ’000]+ 55% yoy
Q4 17/18 Q4 18/19
3 399
5 564
EBITDA [PLN ’000]+ 64% yoy
Shared hosting Domains
VAS (i.a. SSL)VPS (cloud) and dedicated servers
Segment hostingu
13
A clear increase in the segment’s ARPU and prospect of futhergrowth in the subsequent quarters
Continuation of customer base growth
Growth in the quality of customer service and satisfaction
NPS ratio 49 pionts, First Time Responseratio 12 minutes
Stable churn, below the market average
Number of customers– hosting [’000]
Number of domains [’000]
FY 16/17 FY 17/18 FY 18/19 Acquisitions
61113
177
20
FY 16/17 FY 17/18 FY 18/19 Acqisitions
133218
295
67
Hosting ARPU Domain ARPU
167
197
234
FY 16/17 FY 17/18 FY 18/19
5862
66
FY 16/17 FY 17/18 FY 18/19
Purchase of minority shares in the hosting segment
14
Agreement on the purchase of minority shares in H88 S.A. for EUR 13.6 mn
On July 1, 2019, the first stage of the transaction -Vercom and R22 purchased 7.12% of shares each
The purpose of R22 is to buy H88 shares owned by Vercom.
Option to buy out the remaining shares by February 10, 2020
The transaction will be financed by bank debt.
After the transaction, debt is at a safe level of 2-2.5x EBITDA
R22 on the WSE
15
In 2018/2019, a 2.6% increase in quotations, compared to a 6.8% decrease in sWIG80
In particular, the strong increase in the R22 share priceonly in 2019, when it increased by over 30%
13.7% increase in share price from IPO
Debut on December 27, 2017
Entry to sWIG80 after the session on March 15, 2019
Purchase of own shares worth PLN 2 mn
The management's intention is to pay dividends from the profit for 2018/2019
I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII
2018 2019
Volume R22 R22 sWIG80
Our goal is to become the leader in the CEE market
16
Keeping the pace of growth and doubling the scale of business
in two years due to organic development and acquisitions, while
maintaining the financial stability
Foreign expansion in the CEE region
Further integration of the acquired entities and building synergies, up-
selling of products, expansion to other countries
Operations on the current customer base
Offer optimisation, ARPU growth, cross-sell, product and
technology development
Portfolio development
Further expanding the Group's offer with
complementary solutions and cross-sell
Rebranding
Unification of the hosting brand, synergies at the
level of service and customer acquisition
