NFON AG — Investor Presentation 2024

Apr 25, 2024

Earnings Call

Full Year Results 2023 – 25 April 2024

Who you have on the call today

Patrik Heider CEO / CFO

Agenda for today

01 Business update FY 2023

02 Financial figures FY 2023

03 Outlook

2024

04 Q&A session

Business update

FY 2023

NFON 2025 + Strategy for continous and sustainably profitable growth

OUR OBJECTIVE:

Sustainably profitable corporate development

THE FOUNDATION: Operational excellence

Financial figures

FY 2023

FY 2023 results at a glance

Continuously growing share of recurring revenue

Development of total recurring vs. non-recurring revenue in EUR million

COMMENTS

• § Recurring revenue grew moderately by 4.8% compared to 2022
  • acquisition of new customers
  • increase in installed extensions (seats) within the existing customer base particularly in Germany and Austria
  • offering enhanced products (Premium Solutions) to existing customers
• § Total revenue growth of 1.19 in comparison with FY 2022 due to decrease of nonrecurring revenue by 27.8% compared to previous FY 2022
• § Enhanced high share of recurring revenue in total revenue of 93.7% provides predictable revenue streams

Reliably high gross margin again with increasingly positive development

Development of COGS (adj.)1 in EUR million and gross margin2

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

COMMENTS

• § Improved gross margin compared to the same period last year due to successfully growing share of high-margin sales
• § Cost of materials is largely variable in nature and mainly comprises costs for hardware sold, costs for airtime sold and data centre housing costs
• § Despite an increase in sales, cost of materials fell by 9.9% in the reporting period
• § This again results in a low material cost ratio of 15.8% compared to the same period of the previous year (12M 2022: 17.8%)

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Reduced personnel expenses in line with strategic focus

Adjusted1 personnel expenses in EUR million

COMMENTS

• § Average number of employees decreased from 526 to 453 (–13.9%)
• § Personnel expenses as reported amount to EUR 34.9 million (FY 2022: EUR 37.4 million)
• § Adjustments:
  • EUR 0.1 million realignment of Group-wide activities (FY 2022: EUR 0.5 million).
  • EUR 1.1 million incurred in connection with the reorganisation of top management.
  • EUR 0.1 million for stock options (FY 2022: EUR 0.5 million)
• § Adjusted personnel expense ratio of 40.9% (FY 2022: 45.0%) expected to decrease further in the course of 2024 due to scaling effects.

EBITDA

• § Measures to increase profitability taking effect
• § Increase in revenues
• § Higher gross profit
• § Cost reductions in the area of personnel expenses and other operating expenses

§ EBIT improved to EUR –0.5 million for the reasons mentioned above.

Detailed reconciliation of one-off items

Reconciliation from EBITDA to adjusted EBITDA1	FY 2023	FY 2022
EUR million
EBITDA	6.8	–5.3
Reorganisation of top management	1.3	0.0
Stock options / ESOPS	0.1	0.5
Focus on core markets	0.2	0.5
Expenses for preparations for capital market transactions	0.0	1.4
Rebranding	0.0	0.9
Administrative expenses	0.1	0.0
Provision for licence payments	0.0	0.9
Total EBITDA adjustments	1.6	4.3
Adjusted EBITDA	8.4	–1.0

1 Rounding differences are possible

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After significant improvment in 2023, we are Free Cash Flow positive for the first time since listing

Free Cash Flow1 in EUR million

COMMENTS

• § FCF substantially improved from EUR –12.3 million in 2022 to EUR 1.0 million in 2023
• § Improvement mainly due to significant increase in consolidated net loss from EUR –15.582 million in 2022 to EUR –0.8 million in 2023

1 Free cash flow is calculated by deducting capital expenditure on property, plant and equipment and intangible assets, excluding cash flows for M&A activities

Outlook

2024

Strategic areas of NFON 2024

2024: a year of transformation and further sustainable profitable growth

	4021 2020 Results 2023	2022 Guidance 2024
Recurring revenue growth	EUR 77.1 million	We expect recurring revenue growth in the mid to upper single-digit percentage range
Recurring revenue share	93.7%	We expect a resulting recurring revenue ratio of >90%
Adjusted EBITDA	EUR 8.4 million	We expect adjusted EBITDA to be in the range of EUR 10 million to EUR 12 million

Q&A session

Appendix

FY 2023

Seat growth in line with strategic focus

Development of number of seats ('000) and ARPU

COMMENTS

• § Increase in total number of seats by 3.4%
• § ARPU development: FY 2023 stable at year-end level. Very slight decline versus FY 2022
• § Continued low gross churn rate 2023 of ~0.5% per month underlines quality of product and service and guarantees continuous recurring revenue
• § Our innovative, automated and userfriendly omnichannel solution Contact Center Hub has been developing positively since its launch at the beginning of 2023.

Decrease in marketing expenses as planned

Marketing expenses in EUR million

COMMENTS

• § Marketing expenses decreased by 48% yoy
• § Focused and efficient marketing where we see market potential. Channel marketing moves to the fore.

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Selling costs slightly higher compared to FY 2022

Selling expenses in EUR million

COMMENTS

• § Selling expenses mainly include sales commissions to dealers and distributors (excluding wholesale partners)
  • Dealers and distributors only receive a percentage share of revenue per seat
• § Increase in sales commissions by 5.4% yoy
• § Slight increase resulted, among other things, from additional incentives for partners with special promotions and from higher training expenses
• § No further significant changes are expected

Share at a glance

ISIN	DE000A0N4N52
Segment	Prime Standard/ Telecommunication
Shares	16.6 million (29 March 2021)
Designated sponsors	Baader Bank ODDO Seydler
First day of trading	11 May 2018
Coverage	Berenberg Bank, Baader Bank, NuWays, ODDO BHF

Shareholder structure* in %, as of 17 April 2024

C-levelteam

Patrik Heider CEO / CFO

• § At NFON since 2023
• § ~20 years of C-level experience and in the IT industry
• § Previous experience includes
  • Nemetschek SE
  • Thinkproject
  • riskmethods

Andreas Wesselmann CTO

• § At NFON since 2024
• § > 20 years' experience in an international working environment as well as in senior executive positions within the software industry
• § Previous experience includes
  • SAP

Merano Mettbach CSO

• § At NFON since 1 September 2023
• § > 20 years of senior executive experience within the telco industry
• § Previous experience includes
  • Cisco Systems
  • BroadSoft
  • Vodafone

Markus Krammer CPO

• § At NFON since 2015
• § Previous position:
  • Managing Director for NFON Developments Lda.
• § > 20 years of experience in senior executive positions within the telco industry

Earnings Call FY 2023 - 25 April 2024 24

Financial calendar

20 24 07/03

• Preliminary group financial results FY 2023

25/04 • Group annual report FY 2023

23/05

• Financial results 3M/Q1 2024

28/06

• Annual General Meeting 2024

22/08

• Group half -year report 2024

21/11

• Financial results 9M/Q3 2024

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FRIEDERIKE THYSSEN VP Investor Relations & Sustainability

Machtlfinger Straße 7 81379 Munich, Germany NFON AG Zielstattstrasse 36 81379 Munich, Germany

NFON AG

Phone: +49 89 453 00-449 ir-info@nfon.com

TELEPHONE

26 Earnings Call FY 2023 - 25 April 2024

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 forward-looking 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.

c 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. It 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.

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Thank you