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Carasent
Earnings Release • Apr 24, 2024
3568_rns_2024-04-24_88899357-51b1-4284-ad59-becab6bf6e37.pdf
Earnings Release
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Interim report Q1
24 April 2024
Driving efficiency and quality in the world of care
Agenda
1 Highlights Q1
- 2 Company update
- 3 Financial update
Todays presenters
Daniel Öhman CEO
Svein Martin Bjørnstad CFO
Update
- New financial targets
- New agreement with VGR regarding Medrave
- E-referrals released
- The relisting process continues with aim of first day of trading in Stockholm in Q4
Growth
- Signed not implemented ARR amounts to NOK 14m
- 20% organic growth in signed ARR
Profitability
- Additional cost savings as a result of continued efficiency focus
- Significant YoY improvements; positive EBITDA capex, excluding Webdoc X
- Cash flow positive in Q1
Track record of growth 4
1: Defined as EBITDA less capitalized development expenses
Significant improvement through cost efficiencies and growth Revenue growth is the key to drive margins going forward
Strong focus on new ARR 6
Major steps taken the last 18 months
- Focus on customers
- Improvements of products and delivery
- Professionalized marketing efforts
- Outbound sales efforts
- New development to open up new markets
Plenty of room to grow
~20% market share ~1.5bn target market Non-cyclical and growing market High barriers to entry
Limited competition
Proven traction 7
Note: Underlying growth based on Q1 recurring revenue growth
1: Graph shows development of number of medical controls completed by HPI customers LTM per month since august 2022
Strong visibility on next 18 months 8
▪ Backlog secures high visibility on growth for 2024-2025 ▪ Additional cost savings in Q1 ▪ Close to breakeven on cash profitability in Q2 2023A 2024 2025 Revenue NOK 244m NOK 270m NOK 320m EBITDA 13m +40m +80m EBITDA – capex -52m ~neutral +40m EBITDA – capex excl. Webdoc X -26m +20m +60m
Keeping costs flat with ~85% gross margin results in rapid cash flow growth
Financial performance Q1 2024 9
Well functioning base with strong scalability
Ambition to keep costs flat and accelerate growth
HPI & Ad Opus with significant improvements YoY (adjusted for 1m one-offs for additional savings)
Divestment of Confrere cleans up structure and lets us focus
| NOKm | Operations (excl. HPI, Ad Opus) |
HPI & Ad Opus | WDX | HQ | Confrere (divested in Q1) |
Group |
|---|---|---|---|---|---|---|
| Total revenues | 57 | 9 | 0 | - | 1 | 67 |
| Share of revenue Organic recurring |
86 % | 13 % | 0 % | nm | 1% | 100 % |
| growth | 16 % | 4 % | nm | nm | nm | 15 % |
| Adj. EBITDA | ||||||
| Q1 2024 | 14 | 1 | -1 | -6 | 0 | 8 |
| Q1 2023 | 11 | 1 | 0 | -7 | 0 | 5 |
| Margin 2024 | 24 % | 14 % | nm | nm | nm | 12 % |
| Margin 2023 | 22 % | 14 % | nm | nm | nm | 8 % |
| Adj. EBITDA – capex |
||||||
| Q1 2024 | 8 | -1 | -6 | -6 | 0 | -5 |
| Q1 2023 | 0 | -4 | -8 | -7 | 0 | -18 |
| Margin 2024 | 14 % | -8 % | nm | nm | nm | -7 % |
| Margin 2023 | 1 % | -48 % | nm | nm | nm | -30 % |
Journey Ahead and Q1 Highlights
| Strong organic growth |
• • • |
15% organic growth in recurring revenues in Q1 Signed agreement with C-Medical, VGR, 9 new Capio clinics New sales model with digital marketing, new webpages, CRM and new renumeration model |
|---|---|---|
| Efficient use of resources |
• • • |
Continuous efficiency gains Additional cost savings – 1.7m one-off costs related to lay-offs Optimize operating cost base – procurement and prioritization |
| Launch Webdoc X |
• • |
Development focus on certifying for Germany Working with partners to identify and initiate dialogue with acquisition targets |
10
Strong foundation of mission critical solutions with minimal churn in a growing and non-cyclical industry
Financial update
Q1 2024
Carasent – Q1 financial highlights
12
Strong YoY improvements 13
| NOKm | Q1 2024 | Q1 2023 | YoY growth |
|---|---|---|---|
| Webdoc | 33.5 | 26.8 | 25% |
| Other EHR | 14.7 | 13.4 | 9% |
| Platform products | 13.4 | 13.6 | -1% |
| Consulting and other | 5.3 | 6.1 | -13% |
| Revenue | 66.9 | 59.9 | 12% |
| COGS | -10.7 | -11.8 | |
| Gross profit | 56.2 | 48.1 | 17% |
| Gross profit margin | 84% | 80% | |
| Personnel expenses | -36.5 | -31.2 | |
| Other operating costs | -13.4 | -14.6 | |
| EBITDA | 6.3 | 2.3 | 175% |
| Non-recurring expenses | 1.7 | 2.6 | |
| Adj. EBITDA | 8.0 | 4.9 | 64% |
| Adj. EBITDA margin | 12% | 8% | |
| Capitalized development | -12.9 | -23.1 | |
| Adj. EBITDA - capex |
-4.9 | -18.2 | nm |
| Adj. EBITDA - capex margin |
-7% | -30% | |
| Adj. EBITDA - capex excl. Webdoc X |
1.0 | -10.7 | nm |
| Adj. EBITDA - capex margin |
1 % | -18 % |
- Webdoc with 25% YoY growth (21% excl. fx effects)
- Consulting revenues down 13% as we prioritize recurring revenues
- Gross profit margin increased from 80% to 84%
- Increase in personnel expenses as a result of lower degree of capitalization of costs and one-offs related to lay-offs (capitalized development decreased ~10m)
- Non-recurring expenses exclusively related to layoffs in Q1 2024
15% recurring revenue growth Q1 YoY
15% organic growth – strong market position with high stickiness and low churn
14
20% organic growth in signed ARR
Sales initiatives starting to pay off – strong growth in revenue backlog
▪ Significant uptick in recurring revenue growth driven by large new contracts
15
- Signed not implemented ARR of NOK 14m vs. 2m YE Q1 2023
- Churn at 1.7%, and even lower excluding Ad Opus
Positive cash flow in Q1 16
- Operating cash flow at 20% of revenues
- Strong working capital effects in Q1 from annual invoicing for some products
- Capex significantly down YOY
- Other cash flow mainly related to interest and leasing payments
- Cash flow positive in Q1
Improving profitability 17
Cash profitability has improved by cost savings Aim to grow revenues significantly faster than costs going forward Gross margin of 84% in Q1
Q&A
