AI assistant
ECIT AS Investor Presentation 2022
3584_10-k_2023-03-14_1960c595-1257-409a-af53-b6ad55ceb26d.pdf
Investor Presentation
Open in viewerOpens in your device viewer
ECIT & Key Financials 2022
3
4
Division performance
Acquisitions
Financial review
5 Overall
Peter Lauring CEO
Mads Skovgaard CFO
ECIT – fundamental drivers
- Integrating IT, Accounting & Software
- Managed by entrepreneurs
- Dual Ownership
- Buy & Integrate
- Tech driven Services provider
- ~ 28% Revenue CAGR
- ~ 36% EBITDA CAGR
ECIT in short
| Founded in 2013 | |
|---|---|
| +130 acquisitions | |
| ~250 partners | |
| People business (+ 2300) | |
| 9 countries |
|
| Strategic partner |
Performance – full-year 2022
Financial summary
| (NOKm) | FY 2022 |
FY 2021 |
Revenue development | ||
|---|---|---|---|---|---|
| Revenue | 2,826 | 2,318 | 32.3% | 30.1% | 21.9% |
| COGS | -529 | -441 | |||
| Gross Profit | 2,297 | 1,877 | 1,782 | 2,318 | 2,826 |
| PEX | -1,677 | -1,384 | |||
| OPEX | -203 | -154 | |||
| EBITDA* | 418 | 339 | FY 2020 | FY 2021 | FY 2022 |
| KPIs | Adj. EPS development | ||||
| Total revenue growth | 21.9% | 30.1% | 0.21 | ||
| Organic revenue growth | 10.0% | 5.5% | |||
| M&A revenue growth | 13.0% | 27.8% | 0.07 | 0.13 | |
| EBITDA-margin | 14.8% | 14.6% |
Highlights
- 10% organic growth Improved across all divisions.
- Revenue growth ~22%
- EBITDA improvement.
- EPS improvement.
FY 2020 FY 2021 FY 2022
Divisions
Integration (mergers) & building ECIT
- "Building a group not a group of 4 Large mergers affecting 2022 companies".
- 15 largest companies represent ~70% of Group revenue.
- New Division management team
- Strengthening ECIT.
20 companies 4 companies
Revenue: ~NOK 1 billion
FTE: ~425
F&A division
| Financial overview – FY 2022 |
|||
|---|---|---|---|
| (NOKm) | FY 2022 |
FY 2021 |
|
| Revenue | 1,543 | 1,298 | |
| EBITDA | 263 | 225 | |
| Total revenue growth | 19.3% | 32.2% | |
| EBITDA-margin | 17.0% | 17.4% |
• Organic growth improvement.
- Consolidation 5 largest F&A companies equals ~57% of division revenue.
- Nearshoring utilisation.
Financial overview – Q4 2022
| (NOKm) | Q4 2022 |
Q4 2021 |
|---|---|---|
| Revenue | 410 | 316 |
| EBITDA | 77 | 63 |
| Total revenue growth | 29.2% | 22.0% |
| EBITDA-margin | 18.6% | 19.9% |
EBITDA and margin development
• Internal education
IT division
| Financial overview – FY 2022 |
|||
|---|---|---|---|
| (NOKm) | FY 2022 |
FY 2021 |
|
| Revenue | 1,260 | 1,047 | |
| EBITDA | 164 | 140 | |
| Total revenue growth | 20.4% | 23.0% | |
| EBITDA-margin | 13.0% | 13.4% |
Revenue development Comments
• Revenue recognition – from gross to net of 78m (58m).
- Good organic growth.
- Normalised delivery situation (Q4 2022).
Financial overview – Q4 2022
| (NOKm) | Q4 2022 |
Q4 2021 |
|---|---|---|
| Revenue | 365 | 307 |
| EBITDA | 52 | 56 |
| Total revenue growth | 18.8% | 13.9% |
| EBITDA-margin | 14.3% | 18.2% |
EBITDA and margin development
• Consolidation – 5 largest IT companies ~75% of division revenue.
Tech division
| Financial summery – FY 2022 |
|||||
|---|---|---|---|---|---|
| (NOKm) | FY 2022 |
FY 2021 |
|||
| Revenue | 143 | 97 | |||
| EBITDA | 6 | -2 | |||
| Total revenue growth | 46.9% | 37.1% | |||
| EBITDA-margin | 4.0% | -2.1% |
Annual recurring revenue Comments
- Revenue recognition from gross to net of 25m (7m).
- Reasonable organic growth consulting revenue – ARR.
- ECIT system implementation.
• Several systems are gaining revenue traction.
Financial summery – Q4 2022
| (NOKm) | Q4 2022 |
Q4 2021 |
|---|---|---|
| Revenue | 46 | 34 |
| EBITDA | 6 | 4 |
| Total revenue growth | 33.3% | 39.6% |
| EBITDA-margin | 13.4% | 13.1% |
Acquisitions in 2022
Acquisitions in 2022
M&A acquired revenue (NOKm)
Acquisitions
- In general, acquisitions is adding volume, competence base, capacity, product & services, technology, and geographical presence.
- Cloud-based ERP system
- Cloud-based HR-system
Financial review
Financial review
Profit & loss summarized Comments
| (NOKm) | Q4 2022 |
Q4 2021 |
Growth | FY 2022 |
FY 2021 |
Growth |
|---|---|---|---|---|---|---|
| Revenue EBITDA Profit for the year Adj. profit for the year |
792 135 67 60 |
629 113 51 54 |
25.9% 19.5% 30.7% 10.4% |
2,826 418 177 159 |
2,318 339 115 118 |
21.9% 23.1% 53.9% 35.1% |
| P&L items: Retructuring & transaction costs Financial income Financial expenses |
-1 12 -8 |
-1 15 -17 |
-37.8% -20.0% -52.9% |
-13 50 -38 |
-9 27 -41 |
45.9% 85.9% -6.8% |
| KPIs Total revenue growth Organic revenue growth M&A revenue growth Currency impact |
25.9% 16.2% 9.6% 0.1% |
22.7% 2.4% 22.6% -2.3% |
21.9% 10.0% 13.0% -1.1% |
30.1% 5.5% 27.8% -3.2% |
||
| EBITDA-margin Diluted EPS Adj. diluted EPS |
17.0% 0.09 0.08 |
18.0% 0.04 0.02 |
102.9% 246.8% |
14.8% 0.23 0.21 |
14.6% 0.12 0.13 |
91.7% 61.3% |
- Reasonable 2022 revenue growth.
- Good Q4 2022 organic growth.
- IFRS 15 Changed accounting for thirdparty software revenue and some Tech revenue – in total 103m (65).
- Consolidation impacting a third of the business.
- Limited impact from cost inflation in 2022.
- Sale of Cloud Connection AS (ass. Comp.) and ECIT Invent AS (F&A subsidiary).
- EPS improvement.
EBITDA margin development
Three-year EBITDA margin development Comments
| 2020 | 2021 | 2022 | margin. | |
|---|---|---|---|---|
| 1 Reported EBITDA-% |
14.4% | 14.6% | 14.8% | 2021). |
| 2 Integration (acquisition) |
+ ~0.5%p Norian Group* |
+ ~0.4%p Norian Group* |
||
| 3 Consolidation (mergers) |
+ ~0.4%p Merger impact |
2023. | ||
| 4 Est. underlying EBITDA-% |
14.4% | ~15.1% | ~15.6% |
- Acquisitions and mergers affect EBITDA margin.
- Lower margin in Norian Group (from 2021).
- A third of ECIT was merged late 2021 / start 2022.
- Integration improvement continue in
Notes
Underlying business = EBITDA-% for the group excluding large acquisitions (Norian Group) and large mergers (+20 companies merged into four) EBITDA = EBITDA before transactions- and restructuring costs
*) Norian Group was acquired in April 2021 – consequently only included in nine months in 2021.
Cash Flow & financial position
| (NOKm) | FY 2022 |
FY 2021 |
|---|---|---|
| EBITDA | 418 | 339 |
| Transaction and restructuring costs | -13 | -9 |
| Corporation tax, paid | -58 | -40 |
| Change in NWC | -20 | -42 |
| Cash flow from operations | 327 | 249 |
| Cash flow from investing | -315 | -319 |
| Cash flow from financing | -94 | 95 |
| Cash flow for the year | -83 | 25 |
| Free cash flow | 221 | 154 |
| Covid-19 impact on NWC | 1 | 33 |
| Free cash flow incl. Covid-19 | 222 | 187 |
Cash Flow Statement Free cash flow (NOK million) Comments
Financial position (NOK million)
| (NOKm) | FY 2022 |
FY 2021 |
|---|---|---|
| Net-interest-bearing-debt (NIBD) | 350 | 137 |
| Leverage ratio | 0.8x | 0.4x |
| NIBD ex. leasing debt | 124 | -99 |
| Undrawn revolving facility | 423 | 588 |
- FCF increase from higher EBITDA reduction from higher NWC.
- Comparable figures adjusted for Covid-19 impact.
- Financing activities leasing & dividends in 2022 versus listing 2021.
- NIBD at NOK 350 million (137) incl. IFRS16.
- NIBD at NOK 124 million (excl. IFRS 16).
- Leverage ratio 0.8x (0.4x).
- NOK +400 million in financial headroom.
- Partly hedged interest rate
Key financial targets (mid-to-long term ambitions)
| Key Financial targets | FY 2022 ex. Adj. |
FY 2022 incl. Adj. |
Mid-to-long term targets |
|---|---|---|---|
| Growth | |||
| Total revenue growth | 22.9% | 21.9% | > 15.0% |
| Organic revenue growth | 11.2% | 10.0% | > 5.5% |
| Recurring & repeatable revenue | 77.0% | 77.0% | > 75.0% |
| Earnings EBITDA-margin |
14.3% | 14.8% | > 17.0% |
| Leverage Leverage ratio (NIBD/EBITDA) |
0.8x | 0.8x | < 2.5x |
| Mergers & acquisitions M&A acq. Revenue, NOKm |
302 | 302 | 350 |
Management comments
- Financial targets unchanged including acquisition target.
- Based on an assumption of stable macro economic development.
- Price increases are expected to impact revenue growth in 2023 to offset the effect of cost inflation.
Overall evaluation
