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TeamViewer AG Interim / Quarterly Report 2023
430_10-q_2023-08-01_1d754f6b-2a3d-4dc6-95a6-b3f7bc3bb807.pdf
Interim / Quarterly Report
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Half-Year Report H1 2023
Creating a world that works better
–
Annual Report
TeamViewer at a glance
| H1 2023 |
H1 2022 | Δ YoY | |
|---|---|---|---|
| Sales | |||
| Revenue (in EUR m) | 305.5 | 272.0 | +12 % |
| Billings (in EUR m) | 327.3 | 299.6 | +9 %/ 10 % cc1 |
| Number of subscribers2 (end of period) (in thousands) |
633 | 619 | +2 % |
| Net retention rate (NRR) | 109 % | 101 % | +8 pp |
| Profits and Margins | |||
| Adjusted (Revenue) EBITDA3 (in EUR m) | 127.9 | 113.7 | +12 % |
| Adjusted (Revenue) EBITDA3 margin | 42 % | 42 % | +0 pp |
| EBITDA (in EUR m) | 107.5 | 88.4 | +22 % |
| EBITDA margin (EBITDA in % of revenue) | 35 % | 32 % | +3 pp |
| EBIT (in EUR m) | 79.8 | 61.9 | +29 % |
| EBIT margin (EBIT in % of revenue) | 26 % | 23 % | +3 pp |
| Cash Flow | |||
| Cash flows from operating activities (in EUR m) | 111.5 | 65.8 | +70 % |
| Cash flows from investing activities (in EUR m) | (12.7) | (5.6) | +125 % |
| Levered free cash flow (FCFE) | 98.7 | 50.1 | +97 % |
| Cash conversion (FCFE/Adjusted (Revenue) EBITDA) | 77 % | 44 % | +33 pp |
| Cash and cash equivalents (in EUR m) | 71.9 | 383.4 | -81 % |
| Other | |||
| R&D expenses (in EUR m) | (38.8) | (35.0) | +11 % |
| Employees full-time equivalents (end of period) | 1,421 | 1,322 | +7 % |
| Basic earnings per share (in EUR) | 0.33 | 0.14 | +137 % |
| Adjusted basic earnings per share (in EUR) | 0.44 | 0.33 | +32 % |
1 cc = constant currency.
2 Adjusted for Russia and Belarus.
3 Since beginning of FY 2023, TeamViewer uses an updated KPI framework, with Revenue (IFRS) moving more into focus. On the back of this, the definition of the Adjusted EBITDA changed from a Billings to a Revenue perspective.
Notice
This report is a non-binding English translation of the German Half-Year Report H1 2023.
Interactive PDF
This PDF document is optimised for use on screen. The house icon at the top right takes you to the table of contents. The links therein lead to the respective chapters.
Definition TeamViewer
TeamViewer refers to the TeamViewer Group, including all Group companies.
TeamViewer SE refers to the individual company and the parent company of the Group.
Rounding
Percentage changes and totals presented in tables of this report are generally calculated on unrounded numbers. Therefore, numbers in tables may not add up precisely to the totals indicated and percentage change data may not precisely reflect the change data of the rounded figures for the same reason.
Alternative performance measures
This report contains alternative performance measures (APM) that are not defined under IFRS. The APM can be reconciled to the key performance indicators included in the IFRS financial statements and should not be viewed in isolation. TeamViewer believes that the APM provide an additional, deeper understanding of the Company's performance.
Gender-related spelling
In preparing this report, attention has been paid to using gender-inclusive language to the greatest extent possible. In references where this is not possible, this in no way implies discrimination towards the other genders. In the interest of equal treatment, the corresponding terms apply equally to all genders.
Table of contents
3 Interim Management Report - 1 Group Fundamentals
| A_ Interim Management Report |
5 |
|---|---|
| B_ Interim Consolidated Financial Statements |
17 |
| C_Further Information | 39 |
TeamViewer SE– Half-Year Report H1 2023
| 1 | Group Fundamentals | 6 |
|---|---|---|
| 2 | Report on Economic Position | 7 |
| 3 | Events after the Reporting Date15 | |
| 4 | Opportunities and Risks 15 |
|
| 5 | Outlook 16 |
|
| 1 | Consolidated Statement of Profit and Loss and other Comprehensive Income |
|
|---|---|---|
| from 1 January to 30 June18 |
||
| 2 | Consolidated Statement of Financial Position as of 30 June19 | |
| 3 | Consolidated Statement of Cash Flows from 1 January to 30 June | 20 |
| 4 | Consolidated Statement of Changes in Equity 21 |
|
| 5 | Notes to the Interim Consolidated Financial Statements22 |
| 1 | Responsibility Statement40 | |
|---|---|---|
| 2 | Review Report 41 |
|
| 3 | Financial Calendar 42 |
|
| 4 | Imprint42 | |
| 5 | Disclaimer 43 |
A_ Interim Management Report
5 A_ Interim Management Report – 1 Group Fundamentals
1 Group Fundamentals
The progressive evolution of digital technologies is changing the way people interact and work. For companies, the growing necessity to connect both employees and a wide range of electronic devices, chip-controlled machines, and applications – anytime and anywhere – is driving the digital transformation of business processes. This is resulting in steadily increasing demand for connectivity solutions, such as those offered by TeamViewer.
As a global technology company, TeamViewer offers a cloud-based platform to connect computers, machines and industrial equipment and digitally supports work processes along the entire value chain in both the industrial and service sectors. Through its software solutions, TeamViewer's goal is to increase productivity and efficiency for the user and, at the same time, make a positive contribution to the environment. Next to a significant number of private users, who can use selected products for non-commercial applications free of charge, TeamViewer's worldwide user base consists of more than 630,000 business customers of various sizes and from a wide range of industries, who use the products and solutions under a subscription model. Since inception of the company in the year 2005, TeamViewer's software has been installed on more than 2.4 billion devices globally.
The parent company of the Group is TeamViewer SE, headquartered in Göppingen, Germany. The Group has a total of 1,421 employees worldwide as of 30 June 2023 (31 December 2022: 1,386 FTE). TeamViewer SE (until the change of legal form in March 2023 TeamViewer AG) has been listed on the Frankfurt Stock Exchange since September 2019 and has been a member of the German stock exchange index MDAX since December 2019.
The statements made in the Annual Report 2022 regarding the business model, Group structure, Group management, markets and sales, research and development, security and data protection, as well as the topics of sustainability and governance, are still applicable at the time of preparation of the Half-Year Report H1 2023.
Selected TeamViewer use cases along the entire value chain of an industrial company
2 Report on Economic Position
2.1 Macroeconomic environment
The year 2023 continues to be marked by geopolitical tensions and economic cutbacks. The challenging and volatile environment of the previous year has continued into the current fiscal year.
China's withdrawal from its 'zero-COVID' policy, the easing of global supply constraints and decreasing commodity prices – particularly for energy – have recently had a positive impact on economic development and outlook for inflation. Sustained monetary policy tightening, rising financing costs and restrained investment and consumption, however, have had a dampening effect in the first half of 2023. The overall economic environment remains volatile and forecasts for economic development are cautious. After a 3.3 % increase in global production was achieved in 2022, current economic forecasts for the full-year 2023 are assuming growth of around 2.8 %.1 The global labour market is expected to face a continued shortage of skilled workers.2
According to current forecasts, the economic outlook for Germany and the United States, which are the most important single markets for TeamViewer, show low to negative growth for the full-year 2023. The expectation for Germany is negative GDP growth of -0.2 %. For the United States, the year-on-year GDP growth is expected at 1.3 %.3
In the reporting period, the US dollar (USD) has weakened against the euro (EUR). Following an average EUR/USD exchange rate of 1.05 in the 2022 fiscal year, the average exchange rate in the first half of 2023 was 1.08. 4/5
- IfW Kiel Kieler Konjunkturberichte 2023-Q2: https://www.ifw-kiel.de/de/publikationen/kieler-konjunktur berichte/2023/weltwirtschaft-im-sommer-2023-expansion-bleibt-vorerst-schwach-0/ (retrieved 19 June 2023). 4 Statista: https://de.statista.com/statistik/daten/studie/200194/umfrage/wechselkurs-des-euro-gegenueber-dem-usdollar-seit-2001/ (retrieved on 12 July 2023).
- 5 Statista: https://de.statista.com/statistik/daten/studie/214878/umfrage/wechselkurs-des-euro-gegenueber-dem-usdollar-monatliche-entwicklung/ (Average of prices at the end of the month, retrieved on 12 July 2023).
Sector environment
The international market research institute Gartner now expects global IT spending to grow by 5.5 % in 2023, an increase of 3.1 percentage points compared to the January estimate. The global IT market is expected to total around USD 4.6 trillion in 2023, up from USD 4.4 trillion in 2022. 6/7 The relevant sub-segments for TeamViewer, software solutions and IT services, are expected to achieve growth rates of around 12.3 % and 9.1 %, respectively, in 2023.8
In contrast to the overall economic situation, the accelerated growth in global IT spending and the relevant sub-segments is primarily driven by the increasing demand for efficiencyenhancing and cloud-based software solutions.9 Developments in the field of artificial intelligence (AI) and the associated potential for automating business workflows are also driving growth prospects.10
2.2 Business development
In the first six months of the 2023 fiscal year, TeamViewer continued to successfully execute its growth strategy along the three defined growth dimensions: i) new and extended use cases, ii) broadening existing customer relationships and iii) geographic expansion and profitable growth.
1 IfW Kiel - Kieler Konjunkturberichte 2023-Q2: https://www.ifw-kiel.de/de/publikationen/kieler-konjunktur berichte/2023/weltwirtschaft-im-sommer-2023-expansion-bleibt-vorerst-schwach-0/ (retrieved 19 June 2023).
2 World Economic Forum: https://www.weforum.org/agenda/2023/01/how-automation-will-pull-us-through-the-labourshortage-davos23/ (retrieved 5 June 2023). 3
6 Gartner, Inc. – Expectation Worldwide IT Spending: https://www.gartner.com/en/newsroom/press-releases/2023-01-18 gartner-forecasts-worldwide-it-spending-to-grow-2-percent-in-2023 (retrieved on 5 June 2023).
7 Gartner, Inc. – Expectation Worldwide IT Spending: https://www.gartner.com/en/newsroom/press-releases/2023-04-06 gartner-forecasts-worldwide-it-spending-to-grow-5-percent-in-2023 (retrieved on 5 June 2023).
8 Gartner, Inc. - Expectation Worldwide IT Spending: https://www.gartner.com/en/newsroom/press-releases/2023-04-06 gartner-forecasts-worldwide-it-spending-to-grow-5-percent-in-2023 (retrieved 5 June 2023).
9Gartner, Inc. - Expectation Worldwide IT Spending: https://www.gartner.com/en/newsroom/press-releases/2023-04-06 gartner-forecasts-worldwide-it-spending-to-grow-5-percent-in-2023 (retrieved 6 June 2023).
10 Fortune Tech AI: https://fortune.com/2023/07/06/microsoft-ai-3-trillion-valuation-morgan-stanley/ (retrieved 12 July 2023).
On the back of this, revenue increased by 12 % to EUR 305.5million and the adjusted (revenue) EBITDA by 12 % to EUR 127.9 million. Billings in the first half-year amounted to EUR 327.3 million and increased by 9 % compared to the same prior-year period.
The successful growth strategy is underlined by the increasing net retention rate (NRR) of 109 % (+8 pp compared to H1 2022). This figure is evidence of the sustained high customer satisfaction levels and thus the success of sales activities and the quality of TeamViewer's product and solution portfolio.
The following important events and initiatives occurred in the first half of 2023 and were relevant to the business performance and key financial figures of the Group:
New sales partner programme
To strengthen its global sales organisation and drive growth in all regions, TeamViewer launched a new partner programme entitled "TeamUp" in February 2023. The programme is aimed at the Company's sales partners, which includes resellers, referral partners, distributors, managed service providers and system integrators. To further deepen the collaboration with sales partners and benefit from their local market expertise, the programme relies on comprehensive sales training, the provision of marketing materials and a globally standardised partner portal.
Strengthening the Americas sales organisation
To further strengthen the regional sales organisation in the Americas and fully seize the local growth potential, Georg Beyschlag was appointed as the new President of TeamViewer AMERICAS in March 2023. In addition, TeamViewer opened a new sales hub in Mexico to serve as a central location for further expansion into the dynamic markets of Latin America.
Launch of TeamViewer Remote
In April 2023, TeamViewer launched the next generation of its remote access and support solution, rolling it out globally. A reworked user experience, improved product security and a number of new features increase the attractiveness of TeamViewer Remote within the main target audience. This will strengthen the non-commercial use of the product by private individuals, open new cross- and upselling potential and accelerate the SMB business (small and medium-sized business). 11 The new web-first approach with advanced application programming interfaces (API) will speed up TeamViewer's ability to innovate and pave the
11 The division into SMB/Enterprise customers for TeamViewer is based on subscription fees (billings) invoiced in advance of ≤/> EUR 10,000 for at least twelve months.
way to integrate the entire product portfolio and additional third-party applications on the same technical architecture.
Successful Annual General Meeting
At the Annual General Meeting on 24 May 2023, which was once again held as a virtual event without the physical presence of shareholders or their proxies, shareholders approved all agenda items with a large majority. With the election of Swantje Conrad and Christina Stercken, the Supervisory Board was expanded to eight members and the proportion of female members has significantly improved to 37.5 %. In the constituent Supervisory Board meeting that followed the Annual General Meeting, Ralf W. Dieter was elected as the Chairman of the Supervisory Board.
Ongoing share buyback programme
The first tranche of the share buyback programme announced in February 2023 was successfully completed on 15 June 2023 with a volume of EUR 75 million. The second tranche of the buyback programme, with a total volume of up to EUR 150 million (excluding incidental acquisition costs), was launched on 20 June 2023 under the new buyback authorisation granted by the 2023 Annual General Meeting. The Company intends to complete the share buyback programme by the end of 2023.
Capital reduction
Effective 26 June 2023, the Company cancelled 6,515,856 treasury shares, resulting in a reduction of the share capital from the previous level of EUR 186,515,856.00 to EUR 180,000,000.00. The capital reduction did not affect the amount of shareholders' equity, as it was offset by a corresponding adjustment in the item "treasury shares".
2.3 Earnings position of the Group
In addition to the most important items of the income statement in accordance with IFRS, the management view (non-IFRS) is also discussed below.
Revenue and billings
Relationship between revenue and billings
TeamViewer Group's revenue under IFRS is derived from billings (the value of goods and services invoiced; non-IFRS) and the change in deferred revenue recognised in profit or loss (see following table). The Group usually invoices its software products at the beginning of the contract in an amount to be paid in advance. This amount is recognised as revenue over the lifetime of the contract, which typically spans twelve months. Increasingly, multi-year contracts are also concluded.
Revenue and billings development
Despite the geopolitical and macroeconomic challenges described above, as well as a decline in the USD against the EUR in the course of H1 2023, revenue and billings increased in the first half of 2023 year-on-year as follows:
| In EUR million, unless otherwise stated |
H1 2023 | H1 2022 | ∆ YoY (currency adjusted) |
|---|---|---|---|
| Revenue (IFRS) | 305.5 | 272.0 | +12 % |
| Change in deferred revenue recognised in profit or loss |
21.9 | 27.6 | n/a |
| Billings (non-IFRS) | 327.3 | 299.6 | +9 % (+10 %) |
The following factors are considered as the primary growth drivers:
- Cross- and upselling campaigns (SMB and Enterprise)
- Conclusion of multi-year contracts (SMB and Enterprise)
- Acquisition of new customers (SMB and Enterprise)
- Monetization campaign (SMB)
- Implementation of price adjustments initiated in Q4 2022 (SMB)
Revenue and billings by region
| In EUR million, unless otherwise stated |
H1 2023 | H1 2022 | ∆ YoY (currency adjusted) |
Total share in H1 2023 |
Total share in H1 2022 |
|---|---|---|---|---|---|
| EMEA | |||||
| Revenue | 161.2 | 146.7 | +10 % | 53 % | 54 % |
| Billings | 180.0 | 162.9 | +10 % (+11 %) |
55 % | 54 % |
| AMERICAS | |||||
| Revenue | 109.0 | 93.3 | +17 % | 36 % | 34 % |
| Billings | 106.6 | 100.7 | +6 % (+5 %) |
33 % | 34 % |
| APAC | |||||
| Revenue | 35.3 | 31.9 | +10 % |
12 % | 12 % |
| Billings | 40.7 | 36.0 | +13 % (+19 %) |
12 % | 12 % |
| Total Revenue | 305.5 | 272.0 | +12 % | 100 % | 100 % |
| Total Billings | 327.3 | 299.6 | +9 % (+10 %) |
100 % | 100 % |
Billings and revenue also increased across all regions in the first six months of the current fiscal year, with the APAC region recording the strongest billings growth rate in constant currency. This is an indication that the investments made in the organisational structure in the Asia-Pacific region last year are paying off. The AMERICAS region, where a reorganization of the sales organisation was initiated in the first half of 2023, showed the lowest billings growth rates. This performance was also due to longer procurement cycles in the current macroeconomic environment. In terms of revenue, the AMERICAS region recorded the highest growth rate, which can be explained, amongst others, by positive currency effects.
| In EUR million | H1 2023 | H1 2022 | ∆ YoY (currency adjusted) |
Total share in H1 2023 |
Total share in H1 2022 |
|---|---|---|---|---|---|
| SMB | |||||
| Revenue1 | 247.2 | 226.2 | +9 % |
81 % |
83 % |
| Billings | 264.6 | 237.5 | +11 % (+12 %) |
81 % | 79 % |
| Enterprise | |||||
| Revenue1 | 58.3 | 45.7 | +27 % |
19 % |
17 % |
| Billings | 62.7 | 62.1 | +1 % (+2 %) |
19 % | 21 % |
| Total Revenue | 305.5 | 272.0 | +12 % | 100 % | 100 % |
| Total Billings | 327.3 | 299.6 | +9 % (+10 %) |
100 % | 100 % |
Revenue and billings by customer classification
1 Since FY 2023, the effects of multi-year deals are considered more precisely in the revenue split calculation. Prior year's comparable figures (H1 2022 reported: SMB EUR 222.3 million; Enterprise EUR 49.7 million) were adjusted accordingly.
On the back of the aforementioned growth drivers, the SMB business performed very well in H1 2023 in terms of both revenue and billings, as well as subscribers (+2 % year-on-year to 629 thousand at the end of H1 2023). During the reporting period, continued progress was made in enhancing the webshop and the e-commerce user experience for SMB customers. Additional product awareness was created with the introduction of TeamViewer Remote and the respective marketing activities. The improved performance of the SMB business compensated well for the slower development of the Enterprise business – especially in higher priced billings categories and in the AMERICAS region. The Enterprise customer base as of the end of H1 2023 had increased by 894 customers (+29 % year-on-year) to 3,956.
Cost development
Total costs and other income/expenses
| In EUR million | H1 2023 | H1 2022 | ∆ YoY |
|---|---|---|---|
| Cost of sales | (38.8) | (35.7) | +9 % |
| R&D costs | (38.8) | (35.0) | +11 % |
| Marketing costs | (68.3) | (63.2) | +8 % |
| Sales expenses | (54.7) | (48.3) | +13 % |
| General and administrative costs1 | (24.1) | (26.2) | -8 % |
| Expenses for impairments on trade receivables | (4.0) | (5.6) | -29 % |
| Other income | 3.8 | 4.2 | -9 % |
| Other expenses | (0.9) | (0.4) | +145 % |
| Total | (225.7) | (210.1) | +7 % |
1 In H1 2023, costs for human resource management in the amount of EUR 3.5 million were allocated to individual functional areas (of which, cost of sales: EUR 0.2 million; R&D: EUR 1.2 million; marketing: EUR 0.3 million; and sales: EUR 1.8 million). In the previous year, these costs were largely reported under general and administrative costs.
Cost of sales consists primarily of amortization of intangible assets, router and server costs, payment fees, and personnel costs. Gross profit, defined as revenue less cost of sales, increased by 13 % to EUR 266.6 million (H1 2022: EUR 236.3 million). The corresponding gross margin in H1 remained stable year-on-year at 87 %.
R&D costs increased, as expected, with higher personnel costs related to investments in future product offerings.
The main drivers for the rise in marketing costs were targeted marketing measures in connection with the launch of TeamViewer Remote as well as increasing personnel costs. Costs from sports partnerships also increased in line with contractual agreements and due to currency effects.
Sales expenses increased in H1 2023 mainly due to higher year-on-year personnel (including bonus payments) and travel expenses. The slightly higher increase in sales expenses versus revenue was more than offset by reductions in other cost items.
The decline in general and administrative costs was mainly due to the reallocation of costs for human resource management to individual functional areas.
In H1 2023, the expenses for impairments on trade receivables benefited from lower yearon-year bad debt expenses which resulted from an improved dunning process and better payment behaviour (also due to a higher share of the Enterprise business).
The primary driver for the increase in the net position of other income and other expenses in H1 2023 was income from hedged exchange rate fluctuations. In the previous year, the netted position resulted primarily from the revaluation of M&A related liabilities.
Overall, the rise in total costs and other income/expenses was lower in proportion to the rise in revenue, which had a positive impact on TeamViewer's profitability in the reporting period.
EBITDA
Total costs, which include depreciation and amortisation of tangible and intangible assets, equalled EUR 27.7 million in H1 2023. This amounted to an increase of 5 % compared to the same prior-year period (H1 2022: EUR 26.5 million). This rise stemmed mainly from higher depreciation on capitalised leases and leasehold improvements. Subtracting total costs excluding depreciation and amortization from revenue (IFRS) results in the EBITDA (see table below for development and adjustment).
Reconciliation of EBITDA to adjusted EBITDA (non-IFRS)
| In EUR million | H1 2023 | H1 2022 | ∆ YoY |
|---|---|---|---|
| EBITDA | 107.5 | 88.4 | +22 % |
| EBITDA margin in % of revenue | 35 % | 32 % | +3 pp |
| Expenses for share-based compensation | 16.6 | 15.5 | +7 % |
| Other items to be adjusted |
3.8 | 9.8 | -61 % |
| Adjusted (revenue) EBITDA (non-IFRS) | 127.9 | 113.7 | +12 % |
| Adjusted EBITDA margin in % of revenue | 42 % | 42 % | +0 pp |
Operating profit/EBIT (IFRS)
The TeamViewer Group's EBIT (IFRS) is derived from revenue (IFRS) less the aforementioned total costs and other income/expenses (including D&A). The EBIT increased by 29 % to EUR 79.8 million in H1 2023, resulting in a year-on-year increase in the EBIT margin of 3 percentage points to 26 % in H1 2023 (H1 2022: 23 %).
Earnings before taxes (EBT)
Earnings before taxes (EBT) rose by 68 % to EUR 70.7 million in H1 2023 (H1 2022: EUR 42.0 million). The disproportionately higher increase compared to EBIT was caused by the development of the items of the finance result shown below:
| In EUR million | H1 2023 | H1 2022 | ∆ YoY |
|---|---|---|---|
| Finance income | 1.2 | 0.5 | +162 % |
| Finance expenses |
(8.7) | (16.6) | -48 % |
| Foreign currency result | (1.6) | (3.7) | -57 % |
The increase in finance income in the first half of 2023 was mainly generated from the interest income on bank deposits in the current rising interest rate environment. At the same time, finance expenses benefited from a lower level of debt. However, the main reason for the decrease in finance expenses was costs in connection with the early repayment of debt incurred in the prior-year period, which were related to the refinancing of financial liabilities.
The decrease in net foreign currency expenses (balance of foreign currency income and expense) resulted mainly from the conversion of all financial liabilities to euros and the simultaneous reduction of the US dollar cash position.
Net income
The income taxes to be deducted from EBT in H1 2023 consisted of EUR 28.0 million (H1 2022: EUR 15.0 million) current tax expenses and EUR 14.5 million deferred tax income (H1 2022: EUR 0.6 million deferred tax expense). As a result, the total tax expense in H1 2023 amounted to EUR 13.5 million (H1 2022: EUR 15.6 million). The increase in current tax expenses resulted mainly from the increase in earnings before taxes.
The change in deferred taxes, from expense to income, was mainly related to the capitalization of previously unrecognized tax loss and interest carry forwards as well as temporary differences in accordance with IFRS regulations. This is related to TeamViewer's substantiated plans to conclude a profit and loss transfer agreement (PLTA) at the level of TeamViewer SE in the future. The PLTA requires the approval of the annual general meeting. Accordingly, the tax rate (income taxes in relation to EBT) in H1 2023 of 19.1 % was significantly below the previous year's rate (H1 2022: 37.2 %).
The Group net income for the first half-year increased by 117 % to EUR 57.2 million (H1 2022: EUR 26.4 million). Earnings per share rose from EUR 0.14 to EUR 0.33.
TeamViewer also uses the adjusted Group net income (non-IFRS) to assess its earnings situation. This is defined as the Group net income adjusted for certain income and expenses, as outlined in the following table:
Reconciliation of net profit to adjusted net profit (non-IFRS)
| In EUR million | H1 2023 | H1 2022 | ∆ YoY |
|---|---|---|---|
| Group result | 57.2 | 26.4 | +117 % |
| PPA depreciation and amortisation1 | 14.9 | 14.9 | +0 % |
| Expenses for share-based compensation | 16.6 | 15.5 | +7 % |
| Other items to be adjusted2 | 3.8 | 9.8 | -61 % |
| Extraordinary items in finance result | 0.0 | 5.9 | -100 % |
| Income tax items to be adjusted | (16.1) | (9.4) | +71 % |
| Adjusted Group net income/loss (non-IFRS) | 76.3 | 63.1 | +21 % |
1D&A related to acquisitions. 2See adjusted EBITDA (non-IFRS).
The corresponding adjusted earnings per share amounted to EUR 0.44 and increased by 32 % year-on-year (H1 2022: EUR 0.33) with a simultaneous decrease in the number of shares.
2.4 Net assets and financial position
Asset structure
Assets on the balance sheet
| 30 June 2023 | 31 December 2022 | Change | |||||
|---|---|---|---|---|---|---|---|
| In EUR m | In % | In EUR m | In % | In EUR m | In % | ||
| Non-current assets | 958.7 | 86 | 963.6 | 82 | (4.9) | -1 | |
| Current assets | 150.2 | 14 | 209.1 | 18 | (58.9) | -28 | |
| Total assets | 1,108.9 | 100 | 1,172.7 | 100 | (63.8) | -5 |
The Group's non-current assets as of 30 June 2023 comprised goodwill (largest item; at EUR 667,9 million almost unchanged compared to 31 December 2022), intangible assets, property, plant and equipment, financial assets, other assets and deferred tax assets. The decrease in non-current assets as of 30 June 2023 resulted mainly from scheduled depreciation within intangible assets and property, plant and equipment. These were partially offset by investments and higher deferred tax assets.
The Group's current assets as of 30 June 2023 comprised trade receivables, other assets, tax receivables, financial assets and cash and cash equivalents. The decrease in current assets as of 30 June 2023 was mainly due to the decrease in cash and cash equivalents as a result of the ongoing share buyback programme. At EUR 71.9 million (31 December 2022: EUR 161.0 million), available liquidity continued to be the largest item within current assets. The decrease in liquidity was partly offset by the increase in other assets to EUR 55.3 million (December 31, 2022: EUR 19.4 million), which mainly resulted from advance payments for sponsorship contracts.
Equity and liabilities on the balance sheet
| 30 June 2023 | 31 December 2022 | Change | ||||
|---|---|---|---|---|---|---|
| In EUR m | In % | In EUR m | In % | In EUR m | In % | |
| Equity | 102.8 | 9 | 115.3 | 10 | (12.5) | -11 |
| Non-current liabilities | 506.9 | 46 | 583.1 | 50 | (76.2) | -13 |
| Current liabilities | 499.2 | 45 | 474.3 | 40 | 24.9 | +5 |
| Total equity and liabilities | 1,108.9 | 100 | 1,172.7 | 100 | (63.8) | -5 |
The Group's equity decreased as a result of the acquisition of treasury shares in the course of the share buyback program. The recognition of comprehensive income had an offsetting positive effect on equity. The equity ratio decreased from 10 % to 9 %.
The Group's non-current liabilities also decreased as of 30 June 2023. This was mainly due to the reduction of financial liabilities by EUR 84.9 million. This was offset by an increase in noncurrent deferred revenue of EUR 11.3 million, primarily due to the higher level of multi-year contracts.
Current liabilities increased as of 30 June 2023. This was mainly due to the growth-related increase in current deferred revenues by EUR 19.8 million, as well as increased deferred liabilities and other liabilities due to advance payments of EUR 11.4 million and higher deferred tax liabilities of EUR 7.9 million. This was offset by a reduction in current financial liabilities of EUR 14.1 million.
Financing
TeamViewer's debt financing mix is based on a balanced ratio of various instruments and maturities. To reduce volatility and raise predictability, variable interest rates were largely converted into fixed interest rate structures using interest rate hedges. All liabilities to credit institutions are denominated in euros. As of 30 June 2023, the total nominal values drawn amounted to EUR 500 million (31 December 2022: EUR 600 million).
The revolving credit facility was unutilised as of 30 June 2023 (31 December 2022: EUR 100 million). A drawdown of the facility up to EUR 450 million is possible.
Liabilities
| 30 June 2023 In EUR thousands |
Year of maturity |
Principal amount (EUR) 30 June 2023 |
Principal amount (EUR) 31 December 2022 |
|
|---|---|---|---|---|
| Loans | ||||
| 2022 syndicated loan | 2025 | 100,000 | 100,000 | |
| 2022 syndicated loan Revolving credit facility |
2027 | 0 | 100,000 | |
| 2021 bilateral bank loan | 2025 | 100,000 | 100,000 | |
| Promissory notes | ||||
| 3-year fixed/variable promissory note |
2024 | 85,000 | 85,000 | |
| 5-year fixed/variable promissory note |
2026 | 193,000 | 193,000 | |
| 7-year fixed/variable promissory note |
2028 | 13,000 | 13,000 | |
| 10-year fixed/variable promissory note |
2031 | 9,000 | 9,000 | |
| Total | 500,000 | 600,000 |
The interest payment dates for the syndicated loan 2022 are currently on a rolling threemonth basis. After each interest payment date, the interest payment period can be changed to any period of between one and twelve months. The variable promissory notes have semiannual interest payment dates.
The TeamViewer Group's net financial liabilities, defined as total financial liabilities (excluding other financial liabilities) less cash and cash equivalents, decreased to EUR 461.8 million as of 30 June 2023 (31 December 2022: EUR 471.6 million).
The net leverage ratio, which compares the Group's net financial liabilities in relation to adjusted (revenue) EBITDA of the last twelve months, decreased to 1.9 x as of 30 June 2023 (31 December 2022: 2.1 x). This corresponds to a ratio of 1.5 x as of 30 June 2023 (31 December 2022: 1.6 x) when comparing net financial liabilities in relation to adjusted (billings) EBITDA of the last twelve months.
Development of net leverage ratio
| In EUR million | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Current financial liabilities | 99.2 | 113.3 |
| Non-current financial liabilities | 434.5 | 519.3 |
| Cash and cash equivalents | (71.9) | (161.0) |
| Net financial liabilities | 461.8 | 471.6 |
| Adjusted (revenue) EBITDA (LTM) |
244.0 | 229.8 |
| Net leverage ratio | 1.9 x |
2.1 x |
Under the terms of the 2022 credit agreements, TeamViewer is required to comply with certain leverage covenants based on the ratio of net financial liabilities to EBITDA as defined in the respective credit agreements. TeamViewer complied with the covenants at all times during the first half of 2023.
Financial position
| In EUR million, unless otherwise stated |
H1 2023 | H1 2022 | Change | Change in % |
|---|---|---|---|---|
| Cash and cash equivalents at the beginning of the period |
161.0 | 550.5 | (389.5) | -71 |
| Cash flow from operating activities |
111.5 | 65.8 | 45.7 | +70 |
| Cash flow from investing activities |
(12.7) | (5.6) | (7.1) | +125 |
| Cash flow from financing activities |
(187.4) | (243.2) | 55.8 | -23 |
| Other changes | (0.5) | 15.9 | (16.4) | -103 |
| Cash and cash equivalents at the end of the period |
71.9 | 383.4 | (311.5) | -81 |
The increase in operating cash flow in the first half of 2023 resulted mainly from positive working capital effects, improved operating profit, and lower tax payments.
At the same time, cash outflows from investing activities increased. This was primarily due to higher net cash outflows from business combinations and higher investments in financial assets. The development was partly offset by lower investments in property, plant and equipment and intangible assets.
The decrease in cash outflow from financing activities is mainly due to a lower share buyback volume compared to the prior year, which was partly offset by the repayment of financial liabilities.
In order to show the cash inflow available to shareholders, TeamViewer calculates the levered free cash flow (FCFE). In the first half of 2023, the FCFE almost doubled year-on-year to EUR 98.7 million. The corresponding cash conversion was 77 % (+33 percentage points).
Levered free cash flow
| In EUR million, unless otherwise stated |
H1 2023 | H1 2022 | Change | Change in % |
|---|---|---|---|---|
| Cash flows from operating activities |
111.5 | 65.8 | 45.7 | +70 |
| Investments in property, plant and equipment and intangible assets |
(2.9) | (3.7) | 0.8 | -22 |
| Payments for the redemption portion of lease liabilities |
(2.9) | (4.1) | 1.2 | -29 |
| Interest paid on borrowed funds and lease liabilities |
(7.1) | (8.0) | 0.9 | -11 |
| Levered free cash flow (FCFE) | 98.7 | 50.1 | 48.6 | +97 |
3 Events after the Reporting Date
After 30 June 2023, the following event occurred which could have a material impact on TeamViewer's future results of operations, financial position and net assets:
On 13 July 2023, TeamViewer announced that Mei Dent will be appointed Chief Product & Technology Officer (CPTO) and member of the Management Board of TeamViewer SE, effective 31 August 2023. In her role, Mei Dent will be responsible for the company's overall innovation strategy as well as the concrete further development of TeamViewer's product and solution portfolio.
4 Opportunities and Risks
There have been no significant changes in the risk assessment contained in the opportunity and risk report of the Company's Annual Report 2022.
The Management Board is confident that the identified risks do not currently pose a threat to the continued existence of the Group or any of its material subsidiaries, either individually or in the aggregate.
5 Outlook
Despite ongoing geopolitical and economic challenges, TeamViewer looks back on a successful first half of 2023. Revenue grew at a double-digit rate of 12 %. A rather slow start to the year in the Enterprise business was offset by a significantly improved SMB business year-on-year with good customer growth. Adjusted (revenue) EBITDA grew in line with revenue by 12 %. This resulted in an adjusted (revenue) EBITDA margin of 42 %.
In H1 2023, TeamViewer worked on a number of different organizational and operational measures to position the company even better for the future. Particular focus was placed on strengthening the SMB product offering (especially through the global launch of TeamViewer Remote), the organizational realignment of the AMERICAS region, and targeted measures to expand existing and acquire new business relationships, especially in the Enterprise space.
This, combined with the high relevance of TeamViewer's product portfolio in times of ongoing skills shortages, the digital transformation in the industrial environment, and generally more challenging sustainability goals, leaves the Management Board confident for the second half of the year. TeamViewer therefore confirms its guidance for the full year 2023 based on the following KPIs:
Guidance 2023
| Revenue in EUR million |
EUR 620 m to EUR 645 m1 +10–14 % compared to previous year |
|
|---|---|---|
| Adjusted (revenue) EBITDA margin in % | Approx. 40 % |
|
| 1 Based on an average EUR/USD exchange rate for 2022 of 1.05. | ||
| Göppingen, 31 July 2023 | ||
| The Management Board | ||
| Oliver Steil | Michael Wilkens | Peter Turner |
B_ Condensed Interim Consolidated Financial Statements
17 B_ Condensed Interim Consolidated Financial Statements – 5 Outlook
1 Consolidated Statement of Profit and Loss and other Comprehensive Income
from 1 January to 30 June
| In EUR thousands | 2023 | 2022 | Note |
|---|---|---|---|
| Revenue | 305,462 | 271,978 | (5) |
| Cost of sales | (38,829) | (35,658) | |
| Gross profit | 266,632 | 236,320 | |
| Research and development | (38,805) | (35,044) | |
| Marketing | (68,324) | (63,237) | |
| Sales | (54,664) | (48,257) | |
| General and administrative12 | (24,051) | (26,198) | |
| Bad debt expenses | (3,951) | (5,565) | (8) |
| Other income | 3,846 | 4,228 | |
| Other expenses | (924) | (378) | |
| Operating profit | 79,759 | 61,869 | |
| Finance income | 1,244 | 474 | |
| Finance costs | (8,669) | (16,629) | |
| Foreign currency result | (1,610) | (3,702) | |
| Profit before tax | 70,725 | 42,013 |
| In EUR thousands | 2023 | 2022 | Note |
|---|---|---|---|
| Income taxes | (13,530) | (15,624) | (7) |
| Net Income | 57,195 | 26,389 | |
| Earnings per share, basic (in EUR) | 0.33 | 0.14 | (14) |
| Earnings per share, diluted (in EUR) | 0.33 | 0.14 | (14) |
| Other comprehensive income | |||
| Other comprehensive income for the period, reclassified to profit or loss in |
|||
| subsequent periods | 1,106 | 4,290 | |
| Hedge reserve, gross | 1,699 | 1,574 | (9) |
| Exchange differences on the translation of foreign operations |
(593) | 2,716 | |
| Total comprehensive income | 58,301 | 30,679 |
12 In the first half of 2023, costs for human resource management in the amount of EUR 3,499.0 thousand were allocated to the individual functional areas (of which cost of sales: EUR -219.9 thousand, research and development: EUR -1,215.6 thousand, marketing: EUR -303.8 thousand and sales: EUR -1,759.8 thousand). In the previous year, human resource management costs were mainly reported under general and administrative.
2 Consolidated Statement of Financial Position as of 30 June
| In EUR thousands | 30 Jun 2023 | 31 Dec 2022 | Note |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 667,856 | 667,929 | |
| Intangible assets | 194,554 | 212,864 | |
| Property, plant and equipment | 46,287 | 50,265 | |
| Financial assets | 18,842 | 18,537 | (11) |
| Other assets | 16,461 | 11,922 | |
| Deferred tax assets | 14,705 | 2,126 | |
| Total non-current assets | 958,705 | 963,644 | |
| Current assets | |||
| Trade receivables | 12,612 | 18,295 | (8) |
| Other assets | 55,269 | 19,392 | |
| Tax assets | 1,345 | 3,335 | |
| Financial assets | 9,073 | 7,038 | (11) |
| Cash and cash equivalents | 71,892 | 160,997 | |
| Total current assets | 150,192 | 209,057 |
Total assets 1,108,896 1,172,702
| In EUR thousands | 30 Jun 2023 | 31 Dec 2022 | Note |
|---|---|---|---|
| Equity | |||
| Issued capital | 180,000 | 186,516 | (9) |
| Capital reserve | 181,677 | 236,849 | (9) |
| Accumulated losses | (152,007) | (209,203) | (9) |
| Hedge reserve | 79 | (1,620) | (9) |
| Foreign currency translation reserve | 2,410 | 3,003 | (9) |
| Treasury shares | (109,378) | (100,263) | (9) |
| Total equity attributable to the shareholders of TeamViewer SE | 102,779 | 115,282 | |
| Non-current liabilities | |||
| Provisions | 543 | 530 | |
| Financial liabilities | 434,487 | 519,346 | (10) |
| Deferred revenue | 35,466 | 24,151 | |
| Deferred and other liabilities | 1,670 | 2,081 | |
| Other financial liabilities | 1,133 | 3,119 | (10) |
| Deferred tax liabilities | 33,625 | 33,852 | |
| Total non-current liabilities | 506,924 | 583,079 | |
| Current liabilities | |||
| Provisions | 9,023 | 9,013 | |
| Financial liabilities | 99,238 | 113,295 | (10) |
| Trade payables | 8,399 | 8,875 | |
| Deferred revenue | 307,904 | 288,138 | |
| Deferred and other liabilities | 53,816 | 42,385 | |
| Other financial liabilities | 11,825 | 11,537 | (10) |
| Tax liabilities | 8,987 | 1,098 | |
| Total current liabilities | 499,193 | 474,341 | |
| Total liabilities | 1,006,117 | 1,057,420 | |
| Total equity and liabilities | 1,108,896 | 1,172,702 |
3 Consolidated Statement of Cash Flows
from 1 January to 30 June
| In EUR thousands | 2023 | 2022 | Note |
|---|---|---|---|
| Profit before tax | 70,725 | 42,013 | |
| Depreciation, amortisation and impairment of non-current assets |
27,744 | 26,493 | |
| Increase/(decrease) in provisions | 23 | 379 | |
| Non-operational foreign currency result | 250 | 6,783 | |
| Expenses for equity-settled share-based compensation |
15,399 | 14,569 | (6) |
| Net financial costs | 7,425 | 16,154 | |
| Change in deferred revenue | 31,081 | 27,208 | (5) |
| Changes in other net working capital and other | (23,341) | (45,824) | |
| Income taxes paid | (17,777) | (21,981) | (7) |
| Cash flows from operating activities | 111,529 | 65,795 | |
| Payments for tangible and intangible assets | (2,868) | (3,673) | |
| Payments for financial assets | (2,038) | - | |
| Payments for acquisitions | (7,823) | (1,977) | (4) |
| Cash flows from investing activities | (12,729) | (5,650) |
| In EUR thousands | 2023 | 2022 | Note |
|---|---|---|---|
| Repayments of borrowings | (100,000) | - | (10) |
| Payments of the capital element of lease liabilities | (2,892) | (4,060) | |
| Interest paid on borrowings and lease liabilities | (7,060) | (7,976) | |
| Purchase of treasury shares | (77,437) | (231,158) | (9) |
| Cash flows from financing activities | (187,390) | (243,194) | |
| Net change in cash and cash equivalents | (88,590) | (183,049) | |
| Net foreign exchange rate difference | (516) | 16,717 | |
| Net change from risk provisioning | - | (805) | |
| Cash and cash equivalents at beginning of period | 160,997 | 550,533 | |
| Cash and cash equivalents at end of period | 71,892 | 383,396 |
4 Consolidated Statement of Changes in Equity
| In EUR thousands | Issued capital | Capital reserve | Accumulated losses | Hedge reserve | Foreign currency translation reserve |
Treasury shares | Total equity | Note |
|---|---|---|---|---|---|---|---|---|
| Status as of 1 January 2023 |
186,516 | 236,849 | (209,203) | (1,620) | 3,003 | (100,263) | 115,282 | |
| Net Income | - | - | 57,195 | - | - | - | 57,195 | |
| Other comprehensive income | - | - | - | 1,699 | (593) | - | 1,106 | |
| Share-based compensation | - | 15,552 | - | - | - | - | 15,552 | (6) |
| Reissuance of treasury shares under share-based payments |
- | (3,187) | - | - | - | 3,187 | - | |
| Purchase of treasury shares | - | (8,918) | - | - | - | (77,437) | (86,355) | (9) |
| Cancellation of treasury shares | (6,516) | (58,619) | - | - | - | 65,135 | - | (9) |
| Balance as of 30 June 2023 |
180,000 | 181,677 | (152,007) | 79 | 2,410 | (109,378) | 102,779 |
| In EUR thousands | Issued capital | Capital reserve | Accumulated losses | Hedge reserve | Foreign currency translation reserve |
Treasury shares | Total equity | Note |
|---|---|---|---|---|---|---|---|---|
| Status as of 1 January 2022 |
201,071 | 394,487 | (276,803) | 12 | 1,320 | – | 320,087 | |
| Net Income | – | – | 26,389 | – | – | - | 26,389 | |
| Other comprehensive income | – | – | – | 1,574 | 2,716 | - | 4,290 | |
| Share-based compensation | - | 14,569 | – | – | – | - | 14,569 | (6) |
| Purchase of treasury shares | - | - | - | - | - | (231,158) | (231,158) | (9) |
| Cancellation of treasury shares | (14,555) | (185,270) | - | - | - | 199,825 | - | (9) |
| Balance as of 30 June 2022 |
186,516 | 223,786 | (250,413) | 1,586 | 4,036 | (31,333) | 134,177 |
5 Notes to the Interim Consolidated Financial Statements
1. Company information
TeamViewer SE is a listed stock corporation headquartered in Göppingen, Germany. The Company is registered at the District Court of Ulm under the commercial register number HRB 745906. TeamViewer SE, Göppingen, is the parent company of the TeamViewer Group ("TeamViewer" or the "Group"). At its meeting on 11 March 2022, the Supervisory Board of TeamViewer SE approved the proposal of the Management Board to prepare the conversion of the Company from an AG ("Aktiengesellschaft" into a European stock corporation (Sociateas Europaea, or SE) under the name TeamViewer SE. The shareholders also accepted the conversion at the Annual General Meeting of 17 May 2022. The conversion took place on March 15, 2023.
TeamViewer SE's principal shareholder, with a shareholding of 20.83% of the issued capital as of 30 June 2023 (31 December 2022: 20.10%), is TigerLuxOne S.à.r.l. (TLO), a company registered in Luxembourg. TeamViewer SE's registered office Göppingen, Germany. The registered office is located at Bahnhofsplatz 2, 73033 Göppingen, Germany. The Group's fiscal year is the calendar year.
In the following, "Company" refers to TeamViewer SE.
As a global technology company, TeamViewer offers a cloud-based platform to network computers, machines and industrial equipment and digitally supports work processes along the entire value chain in both the industrial and service sectors. Through its products and services, TeamViewer's goal is to increase productivity and efficiency for the user and, at the same time, make a positive contribution to the environment. Next to a significant number of private users, who can use selected products in the portfolio for non-commercial applications free of charge, TeamViewer's worldwide user base consists of more than 630,000 corporate customers of various sizes and from a wide range of industries who use the products and solutions under a subscription model.
2. Basis of preparation
The condensed interim consolidated financial statements do not contain all the information or disclosures required for consolidated financial statements as of the end of the fiscal year and should therefore be read in conjunction with the consolidated financial statements as of 31 December 2022.
(a) Statement of compliance
These condensed and unaudited interim consolidated financial statements for the six months ended 30 June 2023 comply with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) applicable as of the reporting date and as adopted by the European Union (EU) pursuant to EU Regulation No. 1606/2002 of the European Parliament and of the Council on the application of international accounting standards. These condensed interim consolidated financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" in conjunction with IAS 1 "Presentation of Financial Statement" and are reviewed by PricewaterhouseCoopers GmbH, Stuttgart (please refer to page 41 "Review Report").
(b) Presentation currency
The condensed interim consolidated financial statements are presented in euros (EUR), which is the Company´s presentation currency. Unless otherwise stated, all amounts are rounded to the nearest thousand euros (EUR thousand), with the effect that rounding differences may occur when individual amounts are added together. The same applies to the addition of percentages.
3. Significant accounting policies
The same accounting policies and recognition and measurement methods were applied in the preparation of these financial statements as of 31 December 2022.
As of 30 June 2023, the income tax expense is determined using the effective tax rate expected for the full year.
(a) Terminologies
Billings represent the value (net) of goods and services invoiced to customers within a specific period and which constitute a contract as defined by IFRS 15.
In distinguishing between the different customer groups, TeamViewer uses the following categories:
SMB customers mean customers with ACV (Annual Contract Value; is defined as the annualised value of one SMB/Enterprise contract) across all products and services of less than EUR 10,000 within the last twelve-month period. If the threshold is exceeded, the customer will be reallocated.
Enterprise customers mean customers with ACV across all products and services of at least EUR 10,000 within the last twelve-month period. Customers who do not reach this threshold will be reallocated.
To evaluate customer loyalty, TeamViewer uses the net retention rate (NRR) as a nonfinancial performance indicator. To determine the NRR, billings are categorised as follows:
Retained Billings means recurring billings (renewals, cross- and upselling) attributable to retained subscribers who were subscribers in the previous twelve-month period (LTM-1).
New Billings means recurring billings attributable to new subscribers.
Non-recurring Billings means billings that do not recur such as professional services and hardware reselling.
Net Retention Rate (NRR) means the Retained Billings of the last twelve months (LTM), divided by the total recurring Billings (Retained Billings + New Billings) of the previous twelvemonth period (LTM-1). The total recurring Billings of the LTM-1 period are adjusted for multiyear deals (MYD).
(b) Foreign currencies
The following relevant exchange rates were applied as of the reporting date:
| Closing rates | Average rate for period | ||||
|---|---|---|---|---|---|
| Currency | ISO code |
30 June 2023 |
31 Dec 2022 |
1 January – 30 June 2023 |
1 January – 30 June 2022 |
| Armenian dram | AMD | 421.44 | 422.35 | 421.60 | 512.73 |
| Australian dollar | AUD | 1.64 | 1.58 | 1.60 | 1.52 |
| Canadian dollar | CAD | 1.44 | 1.46 | 1.46 | N/A |
| Chinese yuan | CNY | 7.90 | 7.40 | 7.49 | 7.08 |
| Pound sterling | GBP | 0.86 | 0.89 | 0.88 | 0.84 |
| Indian rupee | INR | 89.21 | 88.76 | 88.87 | 83.32 |
| Japanese yen | JPY | 157.16 | 140.64 | 145.79 | 134.30 |
| Mexican peso | MXN | 18.56 | 20.90 | 19.66 | 22.17 |
| Singapore dollar | SGD | 1.47 | 1.44 | 1.44 | 1.49 |
| US dollar | USD | 1.09 | 1.07 | 1.08 | 1.09 |
(c) Standards, interpretations and amendments to existing published standards issued and applied
No new standards or other amendments or improvements to standards have been adopted that are mandatory for financial years beginning on 1 January 2023 and expected to have a material impact on the Group´s net assets, financial positions and results of operations.
(d) Standards, interpretations and amendments to published standards that have not yet been applied
The expected effects of new and amended standards and interpretations that are effective for reporting periods beginning after 31 December 2022 and are disclosed in the 2022 consolidated financial statement. The Group is not voluntarily applying any of the new or amended standards and interpretations ahead of time.
4. Structure of the Group
TeamViewer SE – Half-Year Report H1 2023 On 15 March 2023 Teamviewer completed the conversion from Teamviewer AG into Teamviewer SE (European stock corporation).
(a) Group structure as of 30 June 2023
As of 30 June 2023, the Group consisted of TeamViewer SE, headquartered in Göppingen, Germany, as the parent company, and 15 fully consolidated companies.
(b) Investment in Associates
TeamViewer invested in 2023 in an individually immaterial associate. TeamViewer owns less than 20% of the equity interest and less than 20% of the voting rights, but has a right to solely designate a member to the board of directors. Therefore, TeamViewer has determined that it has significant influence.
| In EUR thousands | 30 June 2023 |
31 December 2022 |
|---|---|---|
| Carrying amount of interest in associates | 2,035 | - |
5. Revenue
Reconciliation of billings to revenue
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Billings | 327,328 | 299,594 |
| Change in deferred revenue recognised in profit or loss |
(21,867) | (27,616) |
| Total revenue | 305,462 | 271,978 |
For a further breakdown of revenue, please see Note 12 Operating segments.
6. Personnel expenses
Personnel expenses consist of the following items:
Personnel expenses
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Wages and salaries | 65,328 | 56,120 |
| Social security contributions | 12,955 | 11,103 |
| Equity-settled share-based compensation | 15,399 | 14,569 |
| thereof EPP Programme | 5,665 | 6,877 |
| thereof Ubimax | 2,630 | 6,576 |
| thereof RSU | 7,105 | 1,116 |
| Cash-settled share-based compensation | 1,149 | 859 |
| thereof LTIP | 685 | 836 |
| thereof PSU1 | 464 | 23 |
| Expenses for M&A | 121 | (197) |
| Total personnel expenses | 94,951 | 82,455 |
1 Including social security contributions RSU.
EPP Programme
Selected executives received additional EPP units during the financial year and an additional upfront payment (next share sale by TLO) was agreed. The fair value of the additional EPP units is EUR 1.1 million. The fair value was determined using the share price of TeamViewer SE at the grant date (EUR 15.40).
Restricted Stock Unit Plan (RSU) and Phantom Stock Unit Plan (PSU)
In May 2022, TeamViewer introduced a Restricted Stock Unit Plan (RSU 2022) and a Phantom Stock Unit Plan (PSU 2022) for the performance-based remuneration of employees. In addition, TeamViewer introduced a new Restricted Stock Unit Plan in June 2023 (RSU 2023) and a Phantom Stock Unit Plan (PSU 2023). The purpose of the RSU or PSU is to attract, retain and motivate employees by enabling them to participate in the Company's success. Employees participate in either the RSU or the PSU.
RSU 2023
Plan description
The RSU 2023 grants the employees TeamViewer shares after vesting. In addition, TeamViewer grants certain employees additional shares including a performance condition that billings targets in 2023 need to be reached. These entitlements are granted to the employee in the respective financial year and vests in four equal parts every 31st of December from 2023 until 2026. After each vesting period, the vested shares are transferred to the employees. The employee is not entitled to dividends or voting rights before the shares are transferred. The employee's entitlement expires upon termination of the employment relationship.
Valuation and accounting
The fair value of one share of the RSU was determined based on the Company's share price and is EUR 14.58. RSU granted whose vesting is dependent on vesting conditions that are not market conditions are only recognized if it can be assumed at the reporting date that the vesting conditions will be met. An adjustment for the lack of dividend entitlement was not made, as no dividend payments are expected. The RSU 2023 is accounted for as an equitysettled share-based payment transaction. To the extent that TeamViewer incurs expenses for social security contributions on the granting of shares, these are accounted for as cashsettled share-based payments.
PSU 2023
Plan description
The PSU 2023 has the same terms and conditions but is settled in cash instead of shares. The cash settlement is calculated based on the average price of the TeamViewer share over the last 60 trading days before vesting.
Valuation and accounting
The fair value of a virtual share of the PSU 2023 on the measurement date was determined solely based on the Company's share price. An adjustment for the missing dividend entitlement of the virtual shares was not made, as no dividend payment is expected. The PSU 2023 is accounted for as a cash-settled share-based payment.
Development of the number of RSU shares/virtual PSU shares
| In units | RSU | PSU |
|---|---|---|
| 31 December 2022 | 710,609 | 12,012 |
| Granted | 1,943,199 | 68,153 |
| Forfeited | (57,388) | (1,765) |
| Vested | (21,063) | - |
| 30 June 2023 pending | 2,575,357 | 78,400 |
| thereof vesting on 31 December 2023 | 696,905 | 20,454 |
| thereof vesting on 31 December 2024 | 696,905 | 20,454 |
| thereof vesting on 31 December 2025 | 696,905 | 20,454 |
| thereof vesting on 31 December 2026 | 484,641 | 17,038 |
7. Income taxes
Due to the specific planning of a profit loss transfer agreement between Regit Eins GmbH and TeamViewer SE, there will be future taxable profits at the level of TeamViewer SE which can be offset against existing tax and interest losses. Resulting as of 30 June 2023, deferred tax assets are recognized with a total amount of EUR 13 million. Thereof EUR 8 million relate to previous periods. The profit loss transfer agreement requires the approval of the annual general meeting.
8. Trade receivables
As of 30 June 2023 and 31 December 2022, only current trade receivables exist.
Expected credit losses on trade receivables
| Age structure of trade receivables |
||
|---|---|---|
| In EUR thousands | 30 June 2023 | 31 December 2022 |
| Up to 30 days past due | 12,673 | 19,524 |
| 31–60 days past due | 3,097 | 2,457 |
| 61–90 days past due | 1,815 | 2,041 |
| 91–120 days past due | 1,256 | 1,273 |
| 121–150 days past due | 1,164 | 1,119 |
| More than 150 days past due | 7,544 | 7,688 |
| Total before valuation allowance | 27,550 | 34,101 |
| Valuation allowance | (14,938) | (15,806) |
| Trade receivables | 12,612 | 18,295 |
| 30 June 2023 | 31 December 2022 | |||
|---|---|---|---|---|
| Past due | In EUR thousands |
Expected default rate in % |
In EUR thousands |
Expected default rate in % |
| Up to 30 days | (2,709) | 25 | (3,718) | 22 |
| 31–60 days | (1,410) | 48 | (1,390) | 58 |
| 61–90 days | (1,370) | 79 | (1,284) | 64 |
| 91–120 days | (1,130) | 95 | (1,105) | 89 |
| 121–150 days | (1,092) | 99 | (1,069) | 99 |
| More than 150 days | (7,227) | 99 | (7,241) | 99 |
| Total valuation allowance | (14,938) | (15,806) |
Development of valuation allowance on trade receivables
| In EUR thousands | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Valuation allowance at the beginning of fiscal year |
(15,806) | (17,115) |
| Release/(additions) | (3,951) | (13,604) |
| Utilisation | 4,819 | 14,913 |
| Total valuation allowance at the end of fiscal year |
(14,938) | (15,806) |
On average, invoices in the first half of 2023 were paid 27 days after invoicing (fiscal year 2022: 37 days).
9. Equity
Number of shares
| In thousands | Subscribed capital | Treasury Shares |
|---|---|---|
| 31 December 2021 | 201,071 | – |
| Purchase of Treasury shares | – | (24,094) |
| Cancellation of Treasury shares | (14,555) | 14,555 |
| 31 December 2022 | 186,516 | (9,539) |
| Purchase of Treasury shares | – | (5.252) |
| Reissuance of treasury shares under share based payments |
– | 259 |
| Cancellation of Treasury shares | (6,516) | 6,516 |
| 30 June 2023 | 180,000 | (8.016) |
Issued capital – As of 30 June 2023, the subscribed capital comprised the share capital of TeamViewer SE in the amount of EUR 180,000,000 and is divided into ordinary 180,000,00 no-par value ordinary bearer shares (no-par value shares). A total of 356,977 shares are subject to a lock-up period and pledged for the benefit of the Company as part of share-based compensations.
Authorised capital – The Management Board is authorised to increase the issued capital on one or more occasions until 2 September 2024 by up to EUR 98,929,069 (Authorised Capital 2020). The subscription rights of existing shareholders may be excluded under certain conditions.
By resolution of the Annual General Meeting on 3 September 2019, the Management Board was authorised, with the approval of the Supervisory Board, to increase the Company's share capital once or several times in the period up to 2 September 2024 by up to a total of EUR 100,000,000 by issuing up to 100,000,000 no-par value bearer shares in return for cash contributions and/or contributions in kind (Authorised Capital 2019). The profit entitlement of new shares may be determined in deviation from § 60 (2) AktG. Shareholders are in principle to be granted subscription rights. However, the Management Board is authorised, in each case with the approval of the Supervisory Board, to exclude shareholders' subscription rights on one or more occasions in the following cases:
- Insofar as this is necessary to compensate for fractional amounts.
- Insofar as this is necessary to grant holders or creditors of convertible bonds, bonds with warrants or convertible profit participation rights issued by the Company and/or by its directly or indirectly majority-owned subsidiaries subscription rights to new shares to the extent to which they would be entitled after exercising their conversion or option rights or after, fulfilment of their option exercise or conversion obligations.
- Insofar as the new shares are issued against cash contributions and the issue price of the new shares is not significantly lower than the stock market price of the shares of the Company already listed at the time of the final determination of the issue price, which should be as close as possible to the placement of the shares. This authorisation to exclude subscription rights shall only apply insofar as the notional interest in the share capital attributable to the shares issued with the exclusion of subscription rights pursuant to § 186 (3) Sentence 4 AktG does not exceed a total of 10 % of the share capital, neither at the time this authorisation becomes effective nor at the time this authorisation is exercised.
- Insofar as the new shares are issued against contributions in kind, particularly in the form of companies, parts of companies, interests in companies, receivables, or other assets.
As of 31 December 2021, the Company had utilised Authorised Capital 2019 in the amount of EUR 1,070,931.00 in the context of a capital increase against contribution in kind, which took place in the 2020 fiscal year. Contingent Capital 2019 has not been utilised to date. Authorised Capital 2019 amounted to EUR 98,929,069.00 and Contingent Capital 2019 amounted to EUR 60,000,000.00 as of 30 June 2023.
Conditional Capital – The Company's share capital is conditionally increased by up to EUR 60,000 thousand through the issue of up to 60,000,000 new no-par value bearer shares (Conditional Capital 2019). Conditional Capital 2019 serves exclusively to grant new shares to the holders or creditors of bonds issued by the Company or other companies in which the Company directly or indirectly holds a majority interest until 2 September 2024 in accordance with the authorisation resolution of the Annual General Meeting on 3 September 2019, in the event that conversion or option rights are exercised or conversion or option obligations are fulfilled or the Company exercises its right to grant shares in the Company in whole or in part instead of payment of the cash amount due.
In addition, by resolution of the Annual General Meeting on 3 September 2019, the Management Board was authorised, with the approval of the Supervisory Board, to issue bearer or registered convertible bonds and/or bonds with warrants, or a combination of these instruments, on one or more occasions in partial amounts until 2 September 2024, for a total nominal amount of up to EUR 1,400,000,000, in each case with or without a limited term, and to grant the holders of these bonds conversion or option rights to subscribe for up to 60,000,000 no-par value bearer shares in the Company with a notional interest in the share capital of up to EUR 60,000,000 in total in accordance with the more detailed provisions of the terms and conditions of issue of these bonds. The bonds may provide for an obligation to convert or exercise an option at the end of the term or at an earlier point in time. The bonds may be issued against cash or non-cash contributions. The bonds may also be issued by companies in which the Company directly or indirectly holds a majority interest. In this case, the Management Board is authorised, with the approval of the Supervisory Board, to assume the necessary guarantees for the obligations arising from the bonds on behalf of the Company and to grant or impose conversion or option rights or conversion or option exercise obligations for shares in the Company on the holders or creditors of these bonds.
The Management Board was also authorised, with the approval of the Supervisory Board, to exclude shareholders' subscription rights when issuing bonds under certain circumstances, including issuance in return for non-cash contributions, in particular for the purpose of acquiring companies, parts of companies or equity interests in companies.
The share capital of the Company is conditionally increased by up to EUR 60,000,000 by issuing up to 60,000,000 new no-par value shares (Conditional Capital 2019). The Conditional Capital 2019 serves exclusively to grant new shares to the holders or creditors of bonds issued by the Company or by other companies in which the Company directly or indirectly holds a majority interest until 2 September 2024 in accordance with the authorisation resolution of the Annual General Meeting on 3 September 2019, in the event that conversion or option rights are exercised or conversion or option exercise obligations are fulfilled or the Company exercises its right to grant shares in the Company in whole or in part instead of payment of the cash amount due.
Capital reserve – The decrease in the capital reserve in the fiscal year results mainly from the cancelation of treasury shares.
Foreign currency translation reserve – The currency translation reserve results from the translation of foreign operations into euros.
Hedge reserve – The reserve for cash flow hedges includes the effects of Fair Value changes in derivatives designated as hedges and their deferred tax effects.
Treasury shares – The Management Board was authorised by the Company's Annual General Meeting on 17 May 2022, until 16 May 2027, to buy treasury shares, with the approval of the Supervisory Board, up to a total of 10 % of the share capital existing at the time of the resolution or – whichever is less – to purchase the existing share capital at the time this authorisation is exercised. This authorisation was replaced by the Company's Annual General Meeting on 24 May 2023, so that the Management Board is now authorized, with the approval of the Supervisory Board, to acquire treasury shares up to a total of 10 % of the share capital until 23 May 2028. If the share capital is lower at the time this authorisation is exercised, this lower value shall apply. The shares acquired based on the authorisation, together with other shares in the Company that the Company has already acquired and still owns, may at no time account for more than 10 % of the respective existing share capital. The acquisition takes place via the stock exchange by means of a public offer to buy or sell addressed to all shareholders of the Company, using derivatives or from a credit or financial institution.
On 6 February 2023, the Management Board of TeamViewer SE resolved a new share buyback program (SBB 2023) with a total volume of up to EUR 150 million (without ancillary costs) and is scheduled for completion in 2023. The buyback will be concluded in two independent tranches via the stock exchange. The first tranche with a volume of up to EUR 75 million started on 15 February 2023 and ended on 15 June 2023. In total 5,078,064 shares have been purchased as part the first tranche. The second tranche of the SBB 2023 started on 20 June 2023. Up to 30 June 2023 174,074 shares have been purchased as part of the second tranche.
In the first quarter 2023, 258,515 shares have been transferred to the employees under the RSU program. Effective 26 June 2023, 6,515,856 shares have been cancelled. The Company's issued capital was reduced accordingly. The remaining shares will initially be held by the Company for later use for all purposes permitted under stock corporation law, in particular the "RSU" programme.
As 30 June 2023 the Company held 8,016,367 treasury shares. The item "Treasury share reserve" contains the acquisition costs for 8,016,367 treasury shares.
10.Financial liabilities
| In EUR thousands | 30 June 2023 | |||
|---|---|---|---|---|
| Current | Non-current | Total | ||
| Financial liabilities | 99,238 | 434,487 | 533,725 | |
| thereof from loans | 87,473 | 411,969 | 499,442 | |
| thereof from lease liabilities | 11,765 | 22,518 | 34,282 | |
| Other financial liabilities | 11,825 | 1,133 | 12,958 | |
| Total | 111,063 | 435,619 | 546,683 |
| In EUR thousands | 31 December 2022 | |||
|---|---|---|---|---|
| Current | Non-current | Total | ||
| Financial liabilities | 113,295 | 519,346 | 632,641 | |
| thereof from loans | 101,664 | 496,380 | 598,044 | |
| thereof from lease liabilities | 11,632 | 22,966 | 34,598 | |
| Other financial liabilities | 11,537 | 3,119 | 14,656 | |
| Total | 124,832 | 522,465 | 647,297 |
(a) Maturity and repayment structure
Liabilities to banks
| In EUR thousands | 30 June 2023 | ||||
|---|---|---|---|---|---|
| Currency | Year of maturity |
Nominal value |
Carrying amount |
||
| Loan | |||||
| 2022 syndicated loan in EUR | EUR | 2025 | 100,000 | 99,502 | |
| 2022 syndicated loan – revolving credit facility |
EUR | 2027 | - | (2,143)1 | |
| 2021 bilateral bank loan in EUR | EUR | 2025 | 100,000 | 100,000 | |
| Promissory notes | |||||
| 3-year fixed promissory note | EUR | 2024 | 27,000 | 27,067 | |
| 3-year variable promissory note | EUR | 2024 | 58,000 | 58,760 | |
| 5-year fixed promissory note | EUR | 2026 | 118,000 | 118,249 | |
| 5-year variable promissory note | EUR | 2026 | 75,000 | 75,954 | |
| 7-year fixed promissory note | EUR | 2028 | 13,000 | 13,030 | |
| 10-year fixed promissory note | EUR | 2031 | 9,000 | 9,024 | |
| Total | 500,000 | 499,442 |
1 Represents the capitalized transaction costs.
Liabilities to banks
| In EUR thousands | 31 December 2022 | |||
|---|---|---|---|---|
| Currency | Year of maturity |
Nominal value |
Carrying amount |
|
| Loan | ||||
| 2022 syndicated loan in EUR | EUR | 2025 | 100,000 | 99,301 |
| 2022 syndicated loan – revolving credit facility |
EUR | 2027 | 100,000 | 97,636 |
| 2021 bilateral bank loan in EUR | EUR | 2025 | 100,000 | 100,000 |
| Promissory notes | ||||
| 3-year fixed promissory note | EUR | 2024 | 27,000 | 27,054 |
| 3-year variable promissory note | EUR | 2024 | 58,000 | 58,347 |
| 5-year fixed promissory note | EUR | 2026 | 118,000 | 118,218 |
| 5-year variable promissory note | EUR | 2026 | 75,000 | 75,438 |
| 7-year fixed promissory note | EUR | 2028 | 13,000 | 13,028 |
| 10-year fixed promissory note | EUR | 2031 | 9,000 | 9,023 |
| Total | 600,000 | 598,044 |
The revolving credit facility was repaid in full in March 2023 and has not been drawn as of 30 June 2023 (31 December 2022: EUR 100 million). A drawdown of the facility up to EUR 450 million is possible.
11.Financial instruments – fair values and risk management
(a) Classification and fair values
All assets and liabilities for which a fair value is determined or recognised are categorised as follows:
- Level 1: Quoted prices in active markets for identical assets or liabilities.
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
- Level 3: Inputs for the asset or liability that are not based on observable market data.
The following table shows the carrying amounts and fair values of financial assets and liabilities with their respective level in the fair value hierarchy.
Carrying amount and fair value level 30 June 2023
| In EUR thousands | Carrying amount | Fair value level | |||
|---|---|---|---|---|---|
| Classification according to IFRS 9 | At fair value through profit or loss |
At amortised cost |
Fair value | Level | |
| Derivative financial assets | 20,539 | 2 | |||
| Trade receivables | 12,612 | ||||
| Cash and cash equivalents | 71,892 | ||||
| Other financial assets | 7,376 | ||||
| Total financial assets | 20,539 | 91,880 | |||
| Derivative financial liabilities | 3,380 | 2 | |||
| Other financial liabilities: Contingent purchase price payments |
410 | 3 | |||
| Trade payables | 8,399 | ||||
| Lease liabilities | 34,282 | ||||
| Liabilities to banks | 499,442 | 477,870 | 2 | ||
| Other financial liabilities | 9,168 | ||||
| Total financial liabilities | 3,790 | 551,291 | |||
Carrying amount and fair value level 31 December 2022
| In EUR thousands | Carrying amount | Fair value level | ||
|---|---|---|---|---|
| Classification according to IFRS 9 | At fair value through profit or loss |
At amortised cost |
Fair value | Level |
| Derivative financial assets | 20,809 | 2 | ||
| Trade receivables | 18,295 | |||
| Cash and cash equivalents | 160,997 | |||
| Other financial assets | 4,766 | |||
| Total financial assets | 20,809 | 184,059 | ||
| Derivative financial liabilities | 5,892 | 2 | ||
| Other financial liabilities: contingent purchase price payments |
4,490 | 3 | ||
| Trade payables | 8,875 | |||
| Lease liabilities | 34,598 | |||
| Liabilities to banks | 598,044 | 590,973 | 2 | |
| Other financial liabilities | 4,273 | |||
| Total financial liabilities | 10,382 | 645,789 |
Non-current other financial assets consist mainly of rent deposits for rented office space and specifically for the Group's new headquarters.
(b) Fair value measurement
The fair value of derivatives as of the valuation date is calculated using an option pricing model in which the most relevant factors are interest yield curves and, in the case of foreign currency derivatives, the appropriate forward rates.
The fair values of financial liabilities allocated to Level 2 are calculated as the present value of the payments associated with the liabilities.
Trade receivables, loans receivable and cash and cash equivalents all generally have shortterm maturities. Trade payables, liabilities due and other financial liabilities also generally have short-term maturities. For this reason, their carrying amount at the reporting date is almost equal to their fair value.
The fair value of the outstanding contingent consideration for business combinations (Level 3) is measured using a discounted cash flow model based on significant unobservable inputs. The significant unobservable inputs are the contractually defined earn-out relevant billings.
The significant unobservable inputs related to a fair value measurement classified within Level 3 of the measurement hierarchy, together with a quantitative sensitivity analysis, were as follows as of 30 June 2023:
Valuation of contingent purchase price payments as of 30 June 2023
| Measurement method |
Relevant unobservable input factors |
Earn-out relevant billings (in EUR million) |
Sensitivity analysis +/- 10 %13 (in EUR million) |
|
|---|---|---|---|---|
| Contingent purchase price payment for Viscopic acquisition |
DCF method | Contractually defined billings |
1.3 | +/- 0.0 |
Valuation of contingent purchase price payments as of 31 December 2022
| Measurement method |
Relevant unobservable input factors |
Earn-out relevant billings (in EUR million) |
Sensitivity analysis +/- 10 %14 (in EUR million) |
|
|---|---|---|---|---|
| Contingent purchase price payment for Upskill acquisition |
DCF method | Contractually defined billings |
0.0 | +/- 0.0 |
| Contingent purchase price payment for Xaleon acquisition15 |
DCF method | Contractually defined billings |
8.1 | +/- 0.0 |
| Contingent purchase price payment for Viscopic acquisition |
DCF method | Contractually defined billings |
1.2 | +/- 0.0 |
The main input factors are in line with expectations as of the reporting date.
The estimates of the fair values of the liabilities for the outstanding contingent purchase price payments are also based on the contractually defined factors that the future payments are based on and the expectations that the Group has for these factors (Level 3). The Group assesses the probability based on the achievement of the defined targets and their timing. The assumptions made are reviewed at regular intervals.
14 Change in contingent purchase price liability with +/- 10% change in contractually defined earn-out relevant billings.
15 As of 31 December, the contingent consideration for the earn-out related to Xaleon for the years 2023 and 2024 has been replaced with a liability of EUR 3.8 million, due in February 2023.
13 Change in contingent purchase price liability based on a +/- 10% change in contractually defined earn-out relevant billings.
The changes in the fair values of financial instruments classified in Level 3 in the first half of 2023 are presented below:
| In EUR thousands | Outstanding contingent purchase price payments for acquisitions |
|
|---|---|---|
| 1 January 2023 | 4,490 | |
| (Other income)/other expenses | 53 | |
| Payouts | (4,133) | |
| 30 June 2023 | 410 |
There were no transitions between fair value levels in 2023 and 2022.
(c) Derivatives
Cash flows in US dollars are hedged in part with FX forwards that hedge an average monthly amount of USD 7.5 million until 31 December 2025. The derivatives are not designated as hedges.
Another portfolio of FX forwards is designated as a hedging instrument for contractual agreed USD prepayments. The derivatives mitigate the risk of unfavourable currency movements totalling USD 45.6 million until May 2025. The hedge ratio declines from 0.8 in 2023 to 0.25 in 2025.
In July 2022, four interest rate cap agreements were incepted to hedge the cash flows for the floating rate promissory notes with maturities in March 2024 (EUR 58 million) and March 2026 (EUR 75 million). All interest rate cap agreements are with a strike of 2 % on the 6-month EURIBOR, which is inversely proportional to the floating rate promissory notes with the same benchmark rate.
12. Operating segments
The Group is managed as a single-segment company with the TeamViewer platform as the basis for segmentation. The decision for segmentation was based on the internal organisation, which is based on the platform as the single reporting line. The platform´s reporting is based on the different geographical regions as reporting units, namely "Europe, Middle East and Africa" (EMEA), "North, Central and South America" (AMERICAS), and "Asia Pacific" (APAC).
As there is no other segment, the consolidated statement of profit and loss and other comprehensive income already shows the segment revenue and expenses, while the consolidated statement of financial position already shows the segment assets and segment liabilities. All revenue reported in the consolidated statement of profit and loss and other comprehensive income was generated with external customers.
Non-current assets relate mainly to Germany.
The management analyses the revenue and billings based on regional and customer group level. The performance is measured by the management based on adjusted EBITDA.
Revenue by regions
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| EMEA | 161,218 | 146,685 |
| AMERICAS | 108,981 | 93,346 |
| APAC | 35,263 | 31,947 |
| Revenue | 305,462 | 271,978 |
Revenue by country
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| USA | 85,979 | 68,584 |
| Germany | 48,886 | 42,765 |
| Great Britain | 17,425 | 16,166 |
| France | 16,590 | 15,071 |
| Other countries | 136,582 | 129,392 |
| Revenue | 305,462 | 271,978 |
Revenue is allocated to individual countries based on the location of the respective customer.
Billings by country
Revenue by customer group
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 202216 |
|---|---|---|
| SMB customers | 247,152 | 226,233 |
| Enterprise customers | 58,310 | 45,745 |
| Revenue | 305,462 | 271,978 |
The Group has a very diversified customer base, with no single customer accounting for more than 10 % of revenue.
Billings by region
| Total revenue | 305,462 | 271,978 |
|---|---|---|
| Change in deferred revenue recognised in profit or loss | (21,867) | (27,616) |
| Billings | 327,328 | 299,594 |
| APAC | 40,684 | 36,029 |
| AMERICAS | 106,641 | 100,651 |
| EMEA | 180,004 | 162,914 |
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| USA | 84,410 | 80,489 |
| Germany | 57,643 | 48,935 |
| France | 19,264 | 17,947 |
| Great Britain | 19,083 | 18,089 |
| Other countries | 146,929 | 134,133 |
| Billings | 327,328 | 299,594 |
Billings by customer group
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| SMB customers | 264,646 | 237,536 |
| Enterprise customers | 62,683 | 62,057 |
| Billings | 327,328 | 299,594 |
Billings by category17
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Retained | 297,320 | 264,580 |
| New | 28,612 | 33,212 |
| Non-recurring | 1,396 | 1,801 |
| Billings | 327,328 | 299,594 |
16 Since FY 2023, the effects of multi-year deals are considered more precisely in the revenue split calculation. Prior year's comparable figures (H1 2022 reported: SMB EUR 222,263 thousand; Enterprise EUR 49,715 thousand) were adjusted accordingly.
17 Please refer to our comments under 2 (c) Basis of preparation of the consolidated statement of other comprehensive income and the consolidated statement of financial position in the Consolidated Financial Statements of 2022.
Calculation Net Retention Rate (NRR)
| In EUR thousands | 30 June 2023 |
30 June 2022 |
|---|---|---|
| Retained Billings LTM | 601,541 | 503,166 |
| Recurring Billings LTM-1 | 576,170 | 499,371 |
| MYD adjustment | (25,652) | - |
| Eligible base | 550,518 | 499,371 |
| In percent | ||
| Net retention rate (NRR) | 109 % | 101 % |
Adjusted EBITDA is calculated as follows:
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Operating profit (EBIT) | 79,759 | 61,869 |
| Depreciation and amortisation | 27,744 | 26,493 |
| EBITDA | 107,504 | 88,363 |
| Other items for adjustment | 20,364 | 25,322 |
| Adjusted (Revenue) EBITDA | 127,867 | 113,684 |
| Change in deferred revenue recognised in profit or loss |
21,867 | 27,616 |
| Adjusted (Billings) EBITDA | 149,734 | 141,300 |
Other items for adjustment comprise the following:
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Expenses for share-based compensation | (16,588) | (15,488) |
| thereof expenses for equity-settled share-based compensation |
(15,399) | (14,569) |
| thereof expenses for cash-settled share-based compensations to own employees |
(1,188) | (919) |
| Further items for adjustment | (3,776) | (9,834) |
| Reorganisation expenses | (701) | (6,897) |
| Expenses from special IT projects | (1,197) | (2,532) |
| Measurement of financial instruments | (940) | - |
| Expenses for special legal disputes | (566) | (1,628) |
| Expenses from financing and M&A | (246) | (254) |
| Earn-out adjustments18 | 53 | 3,768 |
| Other | (180) | (2,290) |
| Total | (20,364) | (25,322) |
13. Related party disclosures
No material transactions were conducted with related parties in the first half of 2023.
Transactions involving key management personnel
Management Board remuneration according to IFRS
| In EUR thousands | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Short-term employee benefits | 2,376 | 2,169 |
| Share-based compensation | 596 | 807 |
| Total | 2,972 | 2,976 |
Share-based compensation includes expenses related to the long-term incentive program (LTIP) of EUR 0.6 million (in the first half of 2022: EUR 0.8 million) and liabilities as of 30 June 2023 of EUR 1,8 million (31 December 2022: EUR 1.1 million).
No other transaction took place with key management personnel during the reporting period (as in the comparative period of 2022) and no other balances were outstanding as of 30 June 2023 or 31 December 2022.
At the Annual General Meeting on 24 May 2023, the shareholders approved the expansion of the Supervisory Board to eight members. Swantje Conrad and Christina Stercken were newly elected to the Supervisory Board.
14.Earnings per share
For the purpose of calculating basic earnings per share, net income/loss attributable to the parent company's ordinary shares is divided by the weighted average number of ordinary shares outstanding during the year.
Earnings per share (basic)
| In EUR | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Net Income | 57,195,082 | 26,389,336 |
| Shares issued as of 30 June |
180,000,000 | 186,515,856 |
| Effect of Ubimax share-based compensation | (356,977) | (713,954) |
| Weighted effect of treasury shares | (4,624,255) | 5,387,832 |
| Weighted average number of shares outstanding | 175,018,768 | 191,189,734 |
| Earnings per share (Net income/(loss)/number of shares) |
0,33 | 0,14 |
In determining basic earnings per share, 1,070,931 ordinary shares issued by TeamViewer to the seller in connection with the acquisition of Ubimax GmbH are excluded as long as they are subject to potential clawback for lack of vesting. These new shares are subject to a clawback in the event that they are not vested under the "Ubimax" share-based compensation because the founders do not perform the required work. They are pledged to TeamViewer SE and are subject to a vesting period of three years. They are scheduled to be released in three annual tranches and will be released as soon as they are earned as part of the share-based compensation. The latter applied to 713,954 of the 1,070,931 new ordinary shares. These were vested under share-based compensation on 21 August 2021 (first tranche: 356,977 shares) and on 21 August 2022 (second tranche: 356,977 shares) and consequently released. For additional information on the share-based compensation transaction "Ubimax", see Note 4 (b) Company acquisitions and Note 7 Personnel expenses in the Consolidated Financial Statement of 2022.
For the purpose of calculating diluted earnings per share, net income/loss attributable to ordinary equity holders of TeamViewer SE is divided by the weighted average number of ordinary shares outstanding, plus the weighted average number of ordinary shares that would result from the conversion of all potentially dilutive ordinary shares into ordinary shares.
Earnings per share (diluted)
| In EUR | 1 January – 30 June 2023 |
1 January – 30 June 2022 |
|---|---|---|
| Net Income | 57,195,082 | 26,389,336 |
| Weighted average number of shares outstanding | 175,018,768 | 191,189,734 |
| Dilutive effect of Ubimax share-based compensation | 307,835 | 163,160 |
| Dilutive effect of RSU share-based compensation | 473,681 | 3,763 |
| Weighted average number of shares outstanding adjusted for dilutive effect |
175,800,283 | 191,356,657 |
| Earnings per share (Net income/number of shares) |
0.33 | 0.14 |
For the calculation of diluted earnings per share, the weighted average number of shares outstanding is increased by the number of potentially dilutive shares from the "Ubimax" and "RSU" share-based compensation. The number of potentially dilutive shares is determined as the difference between the following two figures:
- a) the weighted average number of ordinary shares issued but not yet vested under the "Ubimax" and "RSU" share-based compensation plan
- b) the number of ordinary shares that would have been issued at their average market price during the period
To determine the latter figure, it is assumed that an amount equal to the future expense still to be incurred from the share-based compensation transaction is used to repurchase the issued ordinary shares at their average market price during the period (so-called treasury stock method).
No other transactions involving ordinary shares or potential ordinary shares have taken place in the period between the reporting date and the release date for publication of the consolidated financial statements.
15. Events after the reporting date
After 30 June 2023, the following event occurred that could have a material effect on the future net assets, financial position and result of operations of TeamViewer:
Starting 31 August 2023, Mei Dent joins TeamViewer as Chief Product and Technology Officer (CPTO) and member of the management board of TeamViewer SE.
Göppingen, 31 July 2023
The Management Board
Oliver Steil Michael Wilkens Peter Turner
39 C_ Further Information – 5 Notes to the Interim Consolidated Financial Statements
1 Responsibility Statement
To the best of our knowledge, and in accordance with the applicable reporting principles, the interim consolidated financial statements give a true and fair view of the earnings, assets, and financial position of the Group, and interim group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remainder of the fiscal year.
Göppingen, 31 July 2023
The Management Board
Oliver Steil Michael Wilkens Peter Turner
TeamViewer SE – Half-Year Report H1 2023
2 Review Report
To TeamViewer SE, Göppingen
We have reviewed the condensed consolidated interim financial statements – comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and selected explanatory notes – and the interim group management report of TeamViewer SE, Göppingen, for the period from 1 January 2023 to 30 June 2023 which are part of the half-year financial report pursuant to § (Article) 115 WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the parent Company's Board of Managing Directors. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW) and additionally observed the International Standard on Review Engagements "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE 2410). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has
not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Stuttgart, 31 July 2023
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
Jürgen Schwehr Jens Rosenberger Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
31 October 2023
Q3 2023 Results
4 Imprint
Investor Relations [email protected]
Public Relations [email protected]
Publisher TeamViewer SE Bahnhofsplatz 2 73033 Göppingen Germany
Design HGB Hamburger Geschäftsberichte GmbH & Co. KG
5 Disclaimer
Certain statements in this report may constitute forward-looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties, including, but not limited to, those risks and uncertainties described in TeamViewer's disclosures. You should not rely on these forward-looking statements as predictions of future events.
TeamViewer's actual results may differ materially and adversely from any forward-looking statements discussed in this report due to several factors, including without limitation, risks from macroeconomic developments, external fraud, lack of innovation capabilities, inadequate data security and changes in competition levels. TeamViewer undertakes no obligation, and does not expect to publicly update, or publicly revise, any forward-looking statement, whether as a result of new information, future events or otherwise.
Percentage change data and totals presented in tables throughout this report are generally calculated on unrounded numbers. Therefore, numbers in tables may not add up precisely to the totals indicated and percentage change data may not precisely reflect the change data of the rounded figures for the same reason.
This document contains alternative performance measures (APM) that are not defined under IFRS. The APMs (non-IFRS) can be reconciled to the key performance indicators included in the IFRS consolidated financial statements and should not be viewed in isolation, but only as supplementary information for assessing the operating performance. TeamViewer believes that these APMs provide an additional, deeper understanding of the Company's performance. For a complete overview of the APMs included in this report and the corresponding definitions, please refer to the Annual Report 2022.
TeamViewer SE Bahnhofsplatz 2 73033 G öppingen Germany
44 C_ Further Information
–
5 Disclaimer
www.teamviewer.com
TeamViewer SE
Half-Year
Report H1 2023
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