NFON AG

Earnings Release • May 25, 2023

NFON Earnings Call

Q1 Results 2023 – 25 May 2023

Patrik Heider joining the NFON team as new CEO

Patrik Heider CEO

• Patrik Heider (49) has joined NFON in his role as CEO on May 15, 2023
• He is a highly experienced and international manager with exceptional leadership qualities and excellent capital market experience
• He was responsible for the successful development of Nemetschek SE as Spokesman of the Board and CFOO
  • Accelerated organic revenue growth from 7% to 15% per annum while driving profitability even stronger
  • Executed six group level and ten brand level acquisitions that have driven product and technology enhancement, international market expansion, and revenue growth acceleration (overall acquisition target portfolio growth 20%)
  • Substantially increased the visibility and profile of Nemetschek in the German and global public equity capital markets (market cap CAGR of 72% per annum to €8 billion at exit date)
  • Expanded the universe of equity research firms covering the stock and leaded the company into MDax (from Prime Standard)
• Prior joining NFON he was CEO of the software companies Thinkproject and riskmethods

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

NFON 2023 strategy for profitable and sustainable growth

NFON Group Targets

• Components of growth: Products, Channel, Partnerships
  • Components of profitability: Operational Excellence
    • Sustainability as part of our strategy

Q1 Results 2023

Q1 2023 Results at a Glance

2020 2022

2021

Continuously growing share of recurring revenues

Development total recurring vs. non-recurring revenues

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

COMMENTS

• Recurring revenues grew by 5.3%
• Total revenue growth of 2.6% compared to Q1 2022 due to decrease of non-recurring revenues (-23.6%) compared to previous quarter
• High share of recurring revenues of 93.1% provides predictable revenue streams

Continued seat growth

Development number of seats ('000)

COMMENTS

• In line with the strategic focus on profitability, seat growth is no longer a key performance indicator of NFON
• Increase of total number of seats by 6.6%*
  • Latent demand for cloud telephone systems
  • High level of customer satisfaction
• Continuously low gross churn rate of ~0.5% per month underlines quality of product and service and guarantees continuous recurring revenues

Gross margin at a high level with increasingly positive development

COGS (adj.)1 and gross margin2 development in € million

COMMENTS

Improved gross margin compared to the same period last year due to successfully growing share of higher-margin sales

1Cost of materials adjusted for changes in inventories of finished goods 2Gross margin defined as (revenue - adj. cost of materials)/ revenue

Reduced personnel expenses within the scope of the profitability-oriented strategy

Adj. personnel expenses1 in € million

COMMENTS

• Average number of employees decreased from 503 to 468 (minus 7.5%)
  • Measures implemented primarily in the fourth quarter of the previous year to create the profitable further growth of the NFON Group
• Adj. personnel expenses amount to €8.7m (Q1 2022: €9.0m) minus 3.9%
• Adj. personnel expense ratio of 41.8% (Q1 2022: 44.5%) expected to decrease further in the course of 2023 due to scaling effects and reduction of staff

Retention Bonus, and cost of focusing on core markets

Adj. EBITDA improvement reflects focus on profitability Adj. EBITDA1 in € million

COMMENTS

• Significant improvement in adj. EBITDA of €1.5m is the result of the strategic management decision to focus on profitability
• Adj. EBITDA margin in Q1 2023 stood at 9.6%
• Higher marketing expenses will again be incurred in the following quarters as planned

1 Adjustments see next slide

EBITDA

• Measures to increase profitability show effect
• Significant reduction in marketing and headcount expenses

Reconciliation from EBITDA to adjusted EBITDA	Q1 2023	Q1 2022
€ million
EBITDA	1.9	-0.4
Stock options	0	0.2
Focusing on core markets	0.1	0
M&A activities	0	0.6
Total EBITDA adjustments	0.1	0.9
Adjusted EBITDA	2.0	0.5
Rounding differences are possible

Outlook 2023

Guidance for profitable and sustainable growth 2023

2022

20232020 2021

Recurring revenues growth	We expect recurring revenue growth in the mid to upper single-digit percentage range
Recurring revenues share	We expect the resulting recurring revenue ratio >88%
Adjusted EBITDA	We expect adjusted EBITDA to be >€4mio

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

Shareholder structure (11 April 2023)

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

24.08. • Financial Results Half-Year 2023 20 Web Conference 23 23.11.

25.05. • Financial Results Q1 2023

• Web Conference

30.06. • Annual General Meeting 2023

Munich

• Financial Results Q3 2023

• Web Conference

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

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Claudius Krause

cometis AG

krause@cometis.de

Fon +49 611 20 58 55 - 28

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.