Financial presentation
Q1 2024
13 May 2024
LINK in short
Market leader in Europe - Global ambitions with strong growth credentials
European #1 for enterprise digital messaging | Revenue NOKm |
• Attracting and serving customers locally with local languages | |
• Creating stickiness and upsell opportunities | 21%* |
• High double-digit growth over the last 4 years | |
Proven M&A achievements with more than 30 acquisitions
- Expanded throughout Europe from the Nordics since 2016
600 employees, 29 offices, 17 countries serving more than 50,000 customers
Adjusted EBITDA NOKm
16%*
2 | Interim Report Q1 2024 |
* CAGR growth
LINK's recurring and growing business model
Solid European footprint in growing markets supported by megatrends and increased adoption rates
Recurring business with more than 50,000 customers in Europe
- Customers remain and increase their usage
Net retention rate (NRR) and customer churn (%)
Nurn
Scalable business model
- Adjusted EBITDA growth versus gross profit growth
Gross profit (NOKm) - growth% | Adjusted EBITDA (NOKm) - growth% |
LL
Megatrends support digital messaging growth
- Increased adoption and traction on higher margin CPaaS solutions
Annual messaging per capita | CPaaS GP - Closed won contracts (NOKm) |
Norwa K rance ain erman
Diversified use cases and industry exposure
- Resilient revenue distribution tilted towards stable notifications
o
emaining
o
o | o | No i ica ions | obile | us omer |
ar e ing | care | |||
Customer revenue concentration
3 | Interim Report Q1 2024 |
Q1 2024 highlights - Profitable growth ahead of market trends
17% adjusted EBITDA growth at high end of expectations
Revenue at NOK 1,672 million
• Organic growth in fixed FX at 20%
• Strong contribution from Western Europe, Central Europe and Global Messaging
Gross profit at NOK 356 million | Organic growth and FX effect | |||||
• Organic growth in fixed FX at 11% | NOKm | Q1 2023 | Organic growth | FX effect | Q1 2024 | |
• Supported by higher margin OTT channels like RCS and WhatsApp | Revenue | 1 333 | 261 | 78 | 1 672 | |
Organic growth (%) | 20% | |||||
Adjusted EBITDA at NOK 158 million | Gross profit | 309 | 33 | 14 | 356 | |
Organic growth (%) | 11% | |||||
• Strong organic growth in fixed FX at 17% | Adjusted EBITDA | 130 | 22 | 6 | 158 | |
• Reduced by an atypical bad debt provision of NOK 9 million | Organic growth (%) | 17% |
High cash reserve NOK 3.4 billion
- Share buyback program progressing as planned
- Strong first quarter free cash flow at NOK 118 million
Growth and disciplined capital deployment
- M&A pipeline discussions continuing as expected
- Prioritizing 11 actionable targets with EBITDA potential up to EUR 40 million
4 | Interim Report Q1 2024 |
Double digit organic gross profit growth
Higher margin OTT channels continue to positively impact profitability
Group organic gross profit development (NOKm)
Enterprise segments delivering growth in high end of expectations
• Strong growth momentum in Western Europe compared to softer Q1 23
• Strong growth on new OTT channels like RCS and WhatsApp continue
Global Messaging growing 5% while supporting routing for enterprise
• Margin QoQ relatively stable while impacted by mix effects YoY
Positive NOK 14 million FX effect with NOK depreciation
• Reported gross profit growth of 15% to NOK 356 million
Group gross margin (%)
Gross margin lower YoY with higher share Global Messaging
• Posi ive im ac rom ric er c annels li e and W a 's a
• High growth on larger lower margin customers diluting margin YoY
• Underlying customer margins stable
5 | Interim Report Q1 2024 |
New contract wins - CPaaS traction drives organic growth
New contracts wins established at higher level following commercial refocus
New agreements signed in quarter | Gross profit contribution* from new contract wins |
NOKm
LINK signed 802 new and expanding agreements in Q1 24
- Good mix of various sized contracts
- CPaaS solutions and new channels continue to impact both closed contracts and pipeline positively
Paa | P |
Continued strong growth in CPaaS contracts sold +100% YoY
- A2P contribution of NOK 22 million
- Total contract wins established at higher level - modest impact of closed won from Easter during Q1
6 | Interim Report Q1 2024 | * Historically 75% of gross profit recorded in P&L within 12 months |
Recurring revenue supported by high NRR and low churn
Customers stay with LINK and increase their usage
Net retention rate (NRR) and customer churn (%)
Net retention stable well above 100%
- Supporting growth in recurring revenue
Customer churn consistently low
- Enterprise churn below 2% over time
- Sticky integrations and high transition costs for clients
N | urn |
Customer accounts ('000)*
Steady growing base with more than 50,000 customers
- Significant upselling potential beyond initial use-case to existing customers
- High commercial success rate in second sale (~70% win-rate)
7 | Interim Report Q1 2024 | * Customer accounts pre Q2 2023 have been corrected for inactive accounts |
MarketingPlatform - LINK's mar e ing au oma ion solu ion
Advanced SaaS platform rolled out across LINK's oo rin
SaaS platform | Go-to-Market (GTM) | |||
• | Platform adapted to LINK's omnic annel en er rise o erings | • | Already rolled out in Norway, Sweden, Finland and Denmark | |
• SMS, WhatsApp, RCS and e-mail | • Market feedback as strong competitor to established solutions | |||
• Now highly competitive automated SaaS marketing solution | • | Solution offers complete omnichannel marketing messaging for SMEs | ||
• | Acquired platform lacked necessary functionality delaying commercial launch | • o be ex anded across LINK's oo rin wi | aa license model |
- MarketingPlatform was acquired by LINK in 2021
Increased contribution to closed won business and pipeline
losed won
Closed won GP (mNOK) | Pipeline GP (mNOK) |
8 | Interim Report Q1 2024 |
Diverse M&A pipeline in Europe and beyond
Actionable targets mostly located in Europe
M&A play-book guidelines | Prioritizing 11 actionable targets in Europe and beyond | ||
• | Strong local market position and strong telecom operator relationships | • Combined revenue up to EUR 250 million | |
• Cash EBITDA positive and cash accretive to LINK from day one | • | Combined EBITDA up to EUR 40 million | |
• | Solid, well-diversified customer portfolios with low churn | • | Combination of smaller bolt-ons and larger level ups |
• | ~80% overlapping technology strong commercial enterprise focus | • Targets mostly located in Europe |
- Synergy potential to create further value
- Target valuations between 6-9x cash EBITDA before synergies pending growth momentum
9 | Interim Report Q1 2024 |
LINK positioned for strong FCF growth in 2024 and beyond
LINK's European business is scalable and highly cash generative
- Organic gross profit growth in high single digits historically
- Organic adjusted EBITDA expected to grow at higher rate than organic gross profit
- Net debt not exceeding 2 - 2.5x adjusted EBITDA range when refinancing in 2025
Diverse M&A pipeline with additional EBITDA potential > NOK 200 million in Europe alone
- Bolt-onsin Europe priority to realize further scale
- Several potential level-up cases in Europe and beyond including the US
10 | Interim Report Q1 2024 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Link Mobility Group Holding ASA published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 04:19:05 UTC.