NFON AG — Call Transcript 2022

May 19, 2022

NFON Earnings Call

Q1 Results 2022 - 19 May 2022

Presentation Chapters

01 Mission – Markets – Strategy

02 Q1 2022 Highlights

03 Overview Financial Figures Q1 2022

04 Outlook – Key Investment Highlights

NFON aims to be the leading provider of integrated business communication in Europe.

From Cloud PBX to UCaaS and CCaaS to integrated Business Communications

Major market-shaping trends

Accelerated digital transformation

Hybrid Office

Sustainability

Explosion of data

Applications for everything

Regulations & Security

Local vs Global

Earnings Call Q1 2022 19 May 2022 4

The rapidly expanding market for integrated Business Communications …

… creates strong market and growth opportunities

Source: Company information based on Cavell, MZA, IDC, Fortune Business Insight

Earnings Call Q1 2022 19 May 2022 5

Next steps to drive further top-line acceleration

On the way to reach our mission

Total number of seats on the balance sheet

Recurring revenue growth of 9.2% yoy

High share of recurring revenues of 90.7%

Seat growth of 11.7% compared to 31.03.2021

Seat growth at guidance

Development number of seats ('000) and ARPU

• Increase of total number of seats by 11.7%
• Still high usage of airtime leads to stable development of ARPU
• Continuously low gross churn rate of ~0.5% per month underlines quality of product and service and guarantees continuous recurring revenues

Sustained growth in recurring revenues

Development total recurring vs. non-recurring revenues in € million

COMMENTS

• Total revenue growth of 7.3% in comparison to Q1 2021
• Recurring revenues grew by 9.2% compared to Q1 2021
  • Partner program starting
  • Cumulative effect
• Decrease of non-recurring by 8.2% compared to previous quarter
• High share of recurring revenue in total revenues of 90.7%

0.0

10.0

20.0

30.0

40.0

50.0

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Further improved gross margin due to increased share of higher margin revenues

Cost of materials (adj.)1 and gross margin2 development in € million

2Gross margin defined as (revenue - adj. cost of materials)/ revenue

• High gross margin (adj.) continues to show a constantly positive development
• Cost of materials on previous year's level. This results in a further lower rate (18.5%) compared to the same period of the previous year (Q1 2021: 19.3%)
• Cost of materials are largely variable in nature and mainly comprise of costs for hardware sold, costs for airtime sold and data centre housing costs

Development of personnel expenses

Adj. personnel expenses1 in € million

• Personnel expenses as reported amount to €9.2m (Q1 2021: €8.0m)
• Adjustments of €0.2m for stock options and retention bonus (Q1 2021: €0.2m)
• Adj. personnel expenses amount to €9.0m (Q1 2021: €7.8mm) due to increase in workforce by 15.7%
  • Q1 2022: Ø 503 employees
  • Q1 2021: Ø 435 employees

Increase of marketing expenses as planned

Marketing expenses in € million

• Marketing expenses increased by 67.7% yoy
• Increased investments will mostly impact second half of 2022 onwards
• Focus on channel marketing

Selling Costs in line with 2021 ratio

Selling expenses in € million

• Selling expenses mainly include sales commissions to dealers and distributors (excl. wholesale partners)
• Dealers and distributors receive a percentage share of revenues per seat provided the customer is still a customer and the partner is still a partner of NFON
• Slight increase of sales commissions by 11.6% compared to previous year

EBITDA

• NFON still aims to increase the investment ratio again in 2022
• High expenditures in headcounts and marketing

		Detailed reconciliation of one-off items
--	--	------------------------------------------

Reconciliation from EBITDA to adjusted EBITDA	Q1 2022	Q1 2021
€ million
EBITDA	-0.4	1.6
Retention bonus/ Stock options	0.2	0.2
Consulting expenses	0.6	0.1
Total EBITDA adjustments	0.9	0.3
Adjusted EBITDA	0.5	1.8
Rounding differences are possible

NFON Guidance 2022

Key Investment Highlights

Questions & Answers

Appendix

Share at a glance

ISIN	DE000A0N4N52
Segment	Prime Standard/ Telecommunication
Shares	16.6 million (29 March 2021)
Designated sponsor	Baader Bank ODDO Seydler
First day of trading	11 May 2018
Coverage	Berenberg Bank, Baader Bank, Hauck & Aufhäuser, ODDO Bryan Garnier Barclays

Shareholder structure (31 March 2022)

C-Level Team

Dr. Klaus Von Rottkay CEO

• 20 years of C-Level experience in the IT industry

• Previous experience includes

  • McKinsey & Company

  • Microsoft

  • Planet Home

Jan-Peter Koopmann CTO

• 20 years of C-Level experience in the IT/Telco industry

• Previous experience includes

  • Founder Seceidos

  • Tiscali

  • Telenor Group

Petra Boss CFO

• With NFON since 2016

• 18 years of experience in the finance sector (various industries)

Jan Forster CMO

• With NFON since 2014

• 18 years of experience in B2B and B2C marketing (various brands)

Financial Calendar

19.05. Financial Results Q1 2022

Web Conference

18.08. Half

-year Results 2022

Web Conference

Aug. Annual General Meeting

Location will be published in due time

17.11. Financial Results Q3 2022

Web Conference

Earnings Call Q1 2022 19 May 2022 24

Investor Relations Contact

https://www.nfon.com/blog/de/

https://facebook.com/NFONcom

https://twitter.com/NFONcom

SABINA PRÜSER

Head of Investor Relations

NFON AG

TELEPHONE

Machtlfinger Straße 7

81379 Munich, Germany

Fon +49 (0) 89 453 00 134

Fax +49 (0) 89 453 00 33 134

sabina.prueser@nfon.com

Disclaimer

This publication contains forward-looking statements regarding NFON AG ("NFON") or the NFON Group and its subsidiaries, including assessments, estimates and forecasts regarding the financial position, business strategy, plans and objectives of management and future operations of NFON and the NFON Group. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the results of operations, profitability, performance or results of NFON or the NFON Group to differ materially from those expressed or implied by such forwardlooking statements. These forward-looking statements are made as of the date of this press release and are based on numerous assumptions that may prove to be incorrect.

NFON makes no representations and assumes no liability with regard to the proper presentation, completeness, correctness, appropriateness or accuracy of the information and assessments contained herein. The information contained in this press release is subject to change without notice. They may be incomplete or abbreviated and may not contain all material information relating to NFON or the NFON Group. NFON assumes no obligation to publicly update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. This press release is not an offer to buy or subscribe for securities and should not be construed as a basis for investment decisions in NFON or the NFON Group, in whole or in part