TeamViewer AG — Investor Presentation 2021

Nov 3, 2021

Q3 | 9M 2021 Results Investor/Analyst Presentation

3 November 2021

Important Notice

This presentation as well as any information communicated in connection therewith (the "Presentation") contains information regarding TeamViewer AG (the "Company") and its subsidiaries (the Company, together with its subsidiaries, "TeamViewer"). It is being provided for informational purposes only and should not be relied on for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for any other purpose.

All stated figures are unaudited.

Certain statements in this presentation 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, and we undertake no obligation to update or revise these statements. Our actual results may differ materially and adversely from any forward-looking statements discussed in these statements 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.

The Company 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. All subsequent written and oral forward-looking statements attributable to it or to persons acting on its behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Presentation.

This document contains certain alternative performance measures (collectively, "APMs") including billings and Adjusted EBITDA that are not required by, or presented in accordance with, IFRS, German GAAP or any other generally accepted accounting principles. TeamViewer presents APMs because they are used by management in monitoring, evaluating and managing its business and management believes these measures provide an enhanced understanding of TeamViewer's underlying results and related trends. The definitions of the APMs may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should, therefore, not be considered in isolation or as a substitute for analysis of TeamViewer's operating results as reported under IFRS or German GAAP. APMs such as billings and Adjusted EBITDA are not measurements of TeamViewer's performance or liquidity under IFRS or German GAAP and should not be considered as alternatives to results for the period or any other performance measures derived in accordance with IFRS, German GAAP or any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities.

TeamViewer has defined each of the following APMs as follows:

"Billings" represent the (net) value of invoiced goods and services charged to customers within a period and constitute a contract as defined by IFRS 15.

"Adjusted EBITDA" is defined as operating income (EBIT) as per IFRS plus depreciation and amortisation of tangible and intangible fixed assets (EBITDA), adjusted for change in deferred revenue recognised in profit or loss during the period under consideration and for certain transactions that have been defined by the Management Board in agreement with the Supervisory Board (income and expenses). Business events to be adjusted relate to share-based compensation models and other material special items of the business which are presented separately to show the underlying operating performance of the business.

"Adjusted EBITDA margin" means Adjusted EBITDA as a percentage of billings.

This document also includes further certain operational metrics, such as Net Retention Rate, and additional financial measures that are not required by, or presented in accordance with IFRS, German GAAP or any other generally accepted accounting principles (collectively, "other financial measures"). TeamViewer presents these operational metrics and other financial measures for information purposes and because they are used by the management for monitoring, evaluating and managing its business. The definitions of these operational metrics and other financial metrics may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should, therefore, not be considered in isolation or as a substitute for analysis of TeamViewer's operating results, performance or liquidity as reported under IFRS or German GAAP.

TeamViewer has defined these operational metrics and other financial measures for information purposes as follows:

"Levered free cash flow" (FCFE) means net cash from operating activities less capital expenditure for property, plant and equipment and intangible assets (excl. M&A), payments for the capital element of lease liabilities and interest paid for borrowings and lease liabilities.

"Net leverage ratio" means the ratio of net financial liabilities (sum of interest-bearing loans and borrowings, current and non-current, less cash and cash equivalents) to Adjusted EBITDA (LTM).

"Net retention rate" or "NRR" is calculated as recurring billings (subscription renewal, up-selling and cross-selling activities) over the last twelve months attributable to retained subscribers (subscribers who were subscribers in the previous twelve-month period) divided by the total recurring billings from the previous twelve-month period.

"Retained Billings" means recurring billings (renewals, up- and cross sell) attributable to retained subscribers who were subscribers in the previous twelve-month period.

"New Billings" means recurring billings attributable to new subscribers.

"Non-recurring Billings" means all billings that do not recur such as professional services and hardware reselling.

Business Overview

Oliver Steil

Mixed 2021 – positive outlook

Q3 2021 at a glance

Financials Billings (non-IFRS) Adj. EBITDA Margin (non-IFRS) € 394m +19% | +21% cc¹ 48% -9pp € 126m +18% | +18% cc¹ 34% -21pp 9M 2021 Q3 2021

¹At constant currencies 2 [Retained subscribers (LTM) divided by total subscribers (LTM-12)] -1 ³30 September 2021, LTM

Key developments

• Q3 2021 billings growth up compared to previous quarter (Q2 2021: +15%/+18% cc¹ )
• Improving subscriber churn rate² (14.6% LTM vs. 15.5% LTM in Q2 2021)
• Significant increase of NRR in Q3 2021 to 99% after 88% in Q2 2021 LTM now at 96% / 98% cc³
• 11% subscriber growth³ to 628,000 subscribers at quarter-end
• Very strong enterprise growth (LTM growth 75%), closed largest Augmented Reality deal ever (>€700k)
• Billings miss resulted in lower adjusted EBITDA in combination with ramp up of cost base
• Strong liquidity position with 1.5x net leverage ratio

Churn rate stable over time and slightly improving in Q3 2021

Subscribers (thousand) & Subscriber Churn Rate¹ (LTM)

• Churn rate slightly improving to 14.6% in Q3 2021
• New billings of €20m in Q3 2021 despite deceleration of net new subscribers

1 [Retained subscribers (LTM) divided by total subscribers (LTM-12)]-1

Over 2,400 enterprise customers with billings growth accelerating sequentially and now up 75% yoy (LTM)

¹Customers with invoiced billings across all products and services of at least €10,000 during the last twelve months (ACV or annual contract value) ²Total billings of all enterprise customers

Covering Unlimited Use Cases For All Industries

RICOH Japan – global leading imaging and electronics company

AR-powered remote support & training for on-site engineers to ensure high customer satisfaction & training-on-the-job.

Remote access & support for office devices at the customer's site to reduce response time for service requests by c. 2h in average.

Remote internal training to reduce travel costs and increase attendance rate.

Global leading designer and manufacturer of professional coffee machines Connectivity solution enables new digital customer service for Gruppo Cimbali.

Reliable and secure remote access to the coffee machine's file system and screen for efficient customer support.

Reduce machine downtime and minimize revenue loss for the customers. Less travel costs for technicians.

Financial Overview

Stefan Gaiser

Financial Highlights Revenue from subscription model up 24% in 9M

	9M 2021	Q3 2021
Billings (non-IFRS)	393.9 +21% cc1 +19%	125.8 +18% cc1 +18%
Change in Deferred Revenue	(25.0)	1.9
Revenue (IFRS)	368.8 +10%	127.7 +9%
Revenue from discon tinued perpetual model	2.5 -37.2 / -94%	0.2 -8.9 / -97%
Revenue from subscription model	366.3 +24%	127.4 +18%

Top Line (€m)
	9M 2021	Q3 2021
Billings (non-IFRS)	393.9 +21% cc1 +19%	125.8 +18% cc1 +18%
Change in Deferred Revenue	(25.0)	1.9
Revenue (IFRS)	368.8 +10%	127.7 +9%
Revenue from discon tinued perpetual model	2.5 -37.2 / -94%	0.2 -8.9 / -97%
Revenue from subscription model	366.3 +24%	127.4 +18%

¹At constant currencies ²Including non-cash relevant charges due to share-based compensation by TLO of € 20.6m in 9M 2021 (9M 2020: € 29.9m) and M&A related share-based compensation of € 19.9m (9M 2020: € 3.3m)

21% cc billings growth in 9M with c. 628,000 subscribers by 30 Sep 21

Billings by Category (€m)

Retained New Non-Recurring

Retained New

Billings by regions Americas and EMEA with solid performance, APAC lagging expectations

Industry-leading profitability including significant brand investments

€m	Q3 2021	Q3 2020	∆ %	9M 2021	9M 2020	∆ %
Billings	125.8	106.4	18%	393.9	332.1	19%
Cost of sales of billings %	(8.1) 6.4%	(9.4) 8.8%	-14%	(28.2) 7.2%	(26.3) 7.9%	7%
Gross profit Margin %	117.7 93.6%	97.1 91.2%	21% 2.4 pp	365.6 92.8%	305.8 92.1%	20% 0.8 pp
Sales of billings %	(17.6) 14.0%	(14.0) 13.2%	25%	(51.9) 13.2%	(41.5) 12.5%	25%
Marketing of % billings	(34.5) 27.4%	(7.6) 7.1%	>100%	(61.5) 15.6%	(21.8) 6.6%	>100%
R&D of billings %	(10.8) 8.6%	(8.9) 8.3%	22%	(31.1) 7.9%	(24.2) 7.3%	29%
G&A of billings %	(8.4) 6.7%	(6.5) 6.1%	29%	(22.6) 5.7%	(19.0) 5.7%	19%
Other1 % of billings	(4.2) 3.3%	(2.0) 1.8%	>100%	(9.2) 2.3%	(10.1) 3.0%	-8%
Total Opex of billings %	(75.4) 60.0%	(38.9) 36.5%	94%	(176.4) 44.8%	(116.5) 35.1%	51%
Adj. EBITDA	42.3	58.2	-27%	189.3	189.3	0%
Margin %	33 6%	54 7%	-21 pp	48 1%	57 0%	-9 pp

• Adjusted gross profit margin stable and well above 90%
• Investments across functions with focus on marketing, sales and R&D
• Q3 2021 first quarter with full P&L impact of brand investments

¹ incl. other income/expenses and bad debt expenses of € 4.4m in Q3 2021 and € 2.2m in Q3 2020 / € 12.3m in 9M 2021 and € 10.8m in 9M 2020

Strong and improving free cash flow in Q3 2021

Levered Free Cash Flow and Cash Conversion

€m	Q3 2021	Q3 2020	∆ %	9M 2021	9M 2020	∆ %
Pre-Tax net cash from operating activities (IFRS)	51.9	57.4	-10%	157.4	185.1	-15%
Income tax paid	(10.3)	(7.0)	47%	(39.9)	(24.7)	61%
Capital expenditure (excl. M&A)	(3.7)	(7.8)	-52%	(12.1)	(22.8)	-47%
Lease repayments	(1.0)	(1.6)	-36%	(4.6)	(3.4)	38%
Interest paid for borrowings and lease liabilities	(4.3)	(11.2)	-62%	(11.1)	(24.8)	-55%
Levered Free Cash Flow (FCFE)	32.5	29.7	9%	89.8	109.4	-18%

• Reduction of net trade receivables
• Significantly lower capex as well as lower interest paid in 9M

as % of adj. EBITDA	77%	51%	47%	58%
as % of EBITDA	104%	55%	79%	70%

Strong liquidity position - net leverage ratio at 1.5x Adj. EBITDA (LTM)

Development of cash & cash equivalents in Q3 2021 / Net Financial Liabilities at 30 Sep 2021 (€m)

¹Net cash from operating activities (after tax) ²Mainly consists of currency valuation effects 3Adjusted EBITDA (LTM): €261.4m

Guidance

	Outlook 2021	2022 and beyond
Billings (non-IFRS)	€555m1 €535m –	High teens percentage growth YoY
Revenue (IFRS)	€505m1 €495m –	Mid teens percentage growth YoY
Adj. EBITDA Margin (non-IFRS, as % of Billings)	44% – 46%	Margin recovery

¹Assumes USD/EUR exchange rate of 1.20 and broadly stable other currencies

Thank you for your attention!

10 November Capital Markets Day

Appendix

Q3 2021 reconciliation from management key metrics to IFRS

	Management view	Change in		Other non-IFRS	Accounting view
€m	adjusted P&L1	deferred revenue2	D&A	adjustments	IFRS P&L
Billings / Revenue	125.8	1.9			127.7
Cost of sales	(8.1)		(8.5)	(0.1)	(16.7)
Gross profit contribution	117.7 (94% of billings)				111.0 (87% of revenue)
Sales	(17.6)		(1.9)	(5.1)	(24.6)
Marketing	(34.5)		(0.4)	(1.4)	(36.3)
R&D	(10.8)		(1.6)	(2.5)	(14.9)
G&A	(8.4)		(0.7)	(2.9)	(11.9)
Other3	(4.2)		0.0	(0.8)	(5.0)
Adj. EBITDA	42.3 (34% of billings)
D&A (ordinary only)4	(5.6)
Adj. EBIT / Operating profit (EBIT)	36.7 (29% of billings)	1.9	(7.5)5	(12.9)	18.3 (14% of revenue)
D&A (total)4+5					13.0
EBITDA					31.4 (25% of revenue)

Margins and percentages of billings in adjusted view and IFRS revenue Included change in undue billings ³Incl. other income/expenses and bad debt expenses of € 4.4m D&A excl. amortization intangible assets from PPA

⁵Amortization intangible assets from PPA

9M 2021 reconciliation from management key metrics to IFRS

	Management view	Change in		Other non-IFRS	Accounting view
€m	adjusted P&L1	deferred revenue2	D&A	adjustments	IFRS P&L
Billings / Revenue	393.9	(25.0)			368.8
Cost of sales	(28.2)		(24.9)	(0.5)	(53.7)
Gross profit contribution	365.6 / (93% of billings)				315.2 / (86% of revenue)
Sales	(51.9)		(5.2)	(18.3)	(75.4)
Marketing	(61.5)		(1.2)	(4.9)	(67.6)
R&D	(31.1)		(4.6)	(9.2)	(44.9)
G&A	(22.6)		(1.8)	(14.1)	(38.5)
Other3	(9.2)		0.0	(3.5)	(12.7)
Adj. EBITDA	189.3/ (48% of billings)
D&A (ordinary only)4	(15.7)
Adj. EBIT / Operating profit (EBIT)	173.6 / (44% of billings)	(25.0)	(22.0)5	(50.5)	76.1 / (21% of revenue)
D&A (total)4+5					37.7
EBITDA					113.8 / (31% of revenue)

Margins and percentages of billings in adjusted view and IFRS revenue Included change in undue billings ³Incl. other income/expenses and bad debt expenses of € 12.3m D&A excl. amortization intangible assets from PPA Amortization intangible assets from PPA

Deferred revenue development in 9M 2021

€m	1 Jan	Additions from Billings	Other Addition / Release	Release to IFRS Revenue	31 Mar	1 Apr	Additions from Billings	Other Addition / Release	Release to IFRS Revenue	30 Jun	1 Jul	Additions from Billings	Other Addition / Release	Release to IFRS Revenue	30 Sep
Subscription Model	212.5	146.6	(15.2)	(116.6)	227.3	227.3	121.6	10.9	(122.3)	237.5	237.5	125.8	(0.6)	(127.4)	235.2
Perpetual Model	2.7	0.0	0.0	(1.7)	0.9	0.9	0.0	0.0	(0.5)	0.4	0.4	0.0	0.0	(0.2)	0.2
	215.2	146.6	(15.2)	(118.3)	228.2	228.2	121.6	10.9	(122.8)	237.9	237.9	125.8	(0.6)	(127.7)	235.4

Other Addition / Release mainly comprises change in undue billings:

• Undue billings represent the value of goods and services invoiced, but not yet due for payment at quarter end¹ .
• Under IFRS 15.107, this portion of billings are recognized as receivables with a corresponding increase in deferred revenue only at the earlier of the payment due date or the actual payment date.
• Once the invoice is paid or becomes due in the subsequent reporting period the full receivable and the corresponding deferred revenue is recognized.

¹Generally customers have a payment term of 14 days. In case of larger customers, it can be agreed individually.

Non-IFRS adjustments in EBITDA

€m	Q3 2021	Q3 2020	9M 2021	9M 2020
Total IFRS 2 charges	(11.0)	(13.8)	(40.8)	(34.2)
TeamViewer LTIP	1.3	(0.6)	(0.3)	(1.0)
M&A related share-based compensation	(5.4)	(3.3)	(19.9)	(3.3)
Share-based compensation by TLO	(6.8)	(9.9)	(20.6)	(29.9)
Other material items	(1.1)	(2.4)	(6.2)	(3.4)
Financing, M&A, transaction-related	(0.5)	(0.9)	(2.2)	(1.1)
Other	(0.6)	(1.5)	(3.9)	(2.3)
Valuation effects	(0.8)	1.3	(3.5)	1.1
Total	(12.9)	(14.9)	(50.5)	(36.5)

• M&A related and TLO share-based compensation not cash relevant
• Other relate mainly to IT projects (incl. ERP) and reorganization
• Valuation effects relate to a change in the mark-to-market of FX hedging instruments

Full time employees by functional area

In FTE	30 Sep 21	31 Dec 20	∆	30 Sep 20	∆ YoY
Sales	648	495	31%	469	38%
Marketing	104	94	10%	97	7%
Tech Support	78	85	-8%	79	-1%
R&D	436	384	13%	378	15%
G&A	240	198	22%	191	26%
Total	1,506	1,256	20%	1,213	24%

Financial Statements

Profit & Loss Statement

€ thousand	Q3 2021	Q3 2020	∆ %	9M 2021	9M 2020	∆ %
Revenue	127,684	117,197	9%	368,845	334,644	10%
Cost of sales	(16,702)	(16,352)	2%	(53,656)	(46,637)	15%
Gross profit	110,982	100,845	10%	315,189	288,006	9%
Other income	127	1,504	-92%	2,187	2,025	8%
Research and development	(14,873)	(12,067)	23%	(44,870)	(31,188)	44%
Sales	(24,570)	(19,145)	28%	(75,372)	(52,612)	43%
Marketing	(36,287)	(9,484)	283%	(67,589)	(27,218)	148%
General and administrative	(11,932)	(15,735)	-24%	(38,478)	(42,335)	-9%
Other expenses	(764)	62	<-300%	(2,627)	(230)	>+300%
Bad debt expenses	(4,354)	(2,228)	95%	(12,306)	(10,751)	14%
Operating profit	18,328	43,752	-58%	76,135	125,699	-39%
Finance income	(134)	2,752	-105%	399	2,902	-86%
Finance costs	(4,117)	(4,820)	-15%	(13,972)	(18,326)	-24%
Foreign currency income	5,109	18,859	-73%	12,366	28,208	-56%
Foreign currency costs	(8,160)	(6,106)	34%	(24,367)	(14,353)	70%
Profit before taxation	11,026	54,437	-80%	50,562	124,130	-59%
Income taxes	(7,340)	(22,812)	-68%	(28,952)	(50,042)	-42%
Profit/(loss) for the period	3,685	31,625	-88%	21,610	74,088	-71%
Basic number of shares issued and outstanding	200,159,088	200,000,000		200,053,612	200,000,000
Earnings per share (in € per share)	0.02	0.16	-88%	0.11	0.37	-71%
Diluted number of shares issued and outstanding	200,476,623	200,017,907		200,588,744	200,006,018
Diluted Earnings per share (in € per share)	0.02	0.16	-88%	0.11	0.37	-71%

Balance Sheet

€ thousand	30 Sep 2021	31 Dec 2020
Non-current assets
Goodwill	667,073	646,793
Intangible assets	256,839	255,330
Property, plant and equipment	44,225	40,469
Financial assets	4,480	4,516
Other assets	1,135	857
Deferred tax assets	276	159
Total non-current assets	974,029	948,124
Current assets
Trade receivables	11,245	19,667
Other assets	31,880	7,594
Tax assets	3,890	52
Financial assets	189	4,456
Cash and cash equivalents	502,491	83,531
Total current assets	549,694	115,301
Total assets	1,523,723	1,063,425

Balance Sheet (cont'd)

30 Sep 2021	31 Dec 2020
201,071	201,071
407,362	366,898
(305,244)	(326,854)
(58)	(61)
693	(343)
303,824	240,711
378	433
858,825	440,153
1,921	361
3,010	1,614
14,734	0
29,671	29,186
908,539	471,747
2,146	2,225
33,764	82,099
8,519	8,304
233,454	214,811
30,678	39,120
2,557	29
241	4,378
311,360	350,966
1,219,899	822,714
1,523,723	1,063,425

Cash Flow Statement

€ thousand	Q3 2021	Q3 2020	9M 2021	9M 2020
Cash flows from operating activities
Profit before taxation	11,026	54,437	50,562	124,130
Depreciation, amortisation and impairment of non-current assets	13,040	10,319	37,661	29,641
Increase/(decrease) in provisions	6	841	(134)	(137)
Non-operational foreign exchange (gains)/losses	2,901	(14,041)	13,739	(17,342)
Expenses for equity settled share-based compensation	12,235	12,782	40,464	33,193
Net financial costs	4,252	2,068	13,573	15,424
Change in deferred revenue	(2,518)	(11,915)	20,203	(5,116)
Changes in other net working capital and other	10,939	2,916	(18,632)	5,271
Income taxes paid	(10,333)	(7,040)	(39,879)	(24,707)
Cash flows from operating activities	41,546	50,366	117,558	160,357
flows from Cash investing activities
Capital expenditure for property, plant and equipment and intangible assets	(3,718)	(7,814)	(12,098)	(22,808)
Payments for acquisitions	0	(84,053)	(23,383)	(84,053)
Cash flows from financing activities	(3,718)	(91,867)	(35,481)	(106,862)

Cash Flow Statement (cont'd)

€ thousand	Q3 2021	Q3 2020	9M 2021	9M 2020
Cash flows from financing activities
Repayments of borrowings	0	(38,987)	(52,730)	(38,987)
Proceeds from borrowings	0	0	400,000	0
Payments for the capital element of lease liabilities	(1,027)	(1,602)	(4,647)	(3,358)
Interest paid for borrowings and lease liabilities	(4,310)	(11,201)	(11,054)	(24,837)
Cash flows from financing activities	(5,337)	(51,790)	331,569	(67,182)
Net change in cash and cash equivalents	32,491	(93,291)	413,647	(13,687)
Net foreign exchange rate difference	4,240	(4,083)	6,021	(4,614)
Net change from cash risk provisioning	187	588	(707)	117
Cash and cash equivalents at beginning of period	465,572	149,755	83,531	71,153
Cash and cash equivalents at end of period	502,491	52,969	502,491	52,969