TeamViewer AG

M&A Activity • Dec 10, 2024

TeamViewer

TeamViewer to acquire 1E

Strategic expansion into Digital Workplace Management

10 December 2024

Important notice / APMs

This presentation as well as any information communicated in connection therewith (the "Presentation") contains information regarding TeamViewer SE (the "Company") and its subsidiaries (the Company, together with its subsidiaries, "TeamViewer"). It is provided for information 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.
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 TeamViewer's 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. 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. 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.
All stated figures are unaudited.
Percentage change data and totals presented in tables throughout this presentation 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.
TeamViewer has defined each of the following APMs as follows:

• Adjusted EBITDA is defined as operating income (EBIT) according to IFRS, plus depreciation and amortization of tangible and intangible fixed assets (EBITDA), adjusted for certain business transactions (income and expense) defined by the Management Board in agreement with the Supervisory Board. Business transactions to be adjusted relate to share-based compensation schemes and other material special items of the business that are presented separately to show the underlying operating performance of the business.
• Adjusted EBITDA margin means Adjusted EBITDA as a percentage of revenue.
• Annual Recurring Revenue (ARR) is annualized recurring revenue for all active subscriptions at the end of the reporting period. SMR (ARR view) means customers with ARR across all products and services of less than EUR 10,000 at the end of the reporting period. If the threshold is exceeded, the customer will be reallocated. Enterprise (ARR view) means customers with ARR across all products and services of at least EUR 10,000 at the end of the reporting period. Customers who do not reach this threshold 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.
• Net leverage ratio means the ratio of net financial liabilities to Adjusted EBITDA of the last twelve-month period.
• Adjusted Net Income is the net income adjusted for certain income and expenses. These adjustments are: share-based compensation, amortization related to business combinations, other nonrecurring income and expenses and related tax effects.
• Adjusted basic earnings per share is calculated in line with basic earnings per share, whereby Adjusted Net Income is used as the basis for the calculation instead of the net income.

TeamViewer +1E:

creating an industry-leading player for Digital Workplace Management

Highly compelling strategic rationale

• Combining two category leaders with strong strategic product fit
• Significant TAM expansion and accelerated Enterprise transition
• Tangible cross-selling and synergy potential

Attractive enhanced financial profile

• Acceleration of combined revenue growth
• Pro forma Adjusted EPS expected to be broadly neutral in year 1
• Continued strong cash conversion

Disciplined capital allocation in line with existing policy

• Implied ARR multiple of 9.2x for Sep-241 and around 8x FY 2025 ARR
• Pro forma net leverage ratio of 3.3x after closing
• Fast deleveraging to <2.0x by end of 2026

Fast and clearly defined path to integration

• Closing expected early 2025
• Management continuity ensured in the combination (Mark Banfield, CEO of 1E, will join TeamViewer as CCO after closing)
• Operational integration to be undertaken during 2025

1E is a leader in Digital Employee Experience

1E's unique DEX offering enables IT teams to be proactive in remediation

Real-time diagnostics \& remediation
Controls and remediation processes implemented at the Client, achieving maximum speed

Holistic Insights

Advanced monitoring and analytics to provide real-time insights, detect anomalies, and predict potential issues, even operating offline if required

AI-Driven Automation

Predicts and fixes recurring issues, ensuring long-term stability and efficiency

3,000+ DEX Automations

1E rated as a clear leader by Gartner industry analysts

2024 Gartner ${ }^{\circledR}$ Magic Quadrant for DEX Management Tools Report ${ }^{1}$

$\square$ TeamViewer

Supports AI and Automation initiatives, driving proactive IT operations

1E earned the trust of global brands:

Double-digit ARR growth with strong profitability, strong N. American presence, and mostly Enterprise-focused customer base

(1) As per Sept-24, in line with TeamViewer's definition
(2) Equivalent to $€ 73$ million if $\$ 77 \mathrm{~m}$ converted to EUR at exchange rate of 1.0496
(3) Equivalent to $€ 68$ million if $\$ 69 \mathrm{~m}$ converted to EUR at exchange rate of 1.0496
(4) In the 12-month period post closing, there will be a revenue hair-cut in reported 1E-related revenue due to IFRS merger accounting effects, which a normal standard practice in IFRS accounting

TeamViewer +1E: leveraging the combined strengths of two category leaders

Category leadership

Strong strategic product fit

Significant market expansion

Strong revenue synergies

Enhanced financial profile

• TeamViewer is a global leader in remote connectivity and digital workplace solutions
• 1E is a leader in the Digital Employee Experience (DEX) management tools
• 1E offers a leading DEX platform that delivers real-time visibility on enterprise IT landscapes
• Best in class and truly complementary products and technologies
• Creating an industry-leading, one-stop-shop for IT operations, intelligent endpoint management, and enhanced user experience in the digital workplace
• Bridging the gap between IT and OT
• Significant TAM expansion to a multi-billion-euro market, growing double digits
• Expanding Enterprise and North American customer base, with potential for more market opportunities
• Leveraging each others client segment positioning, technology/product integration and GTM alignment
• 1E has strong Enterprise presence in North America in particular, with cross-selling opportunities and geographic expansion into EMEA and APAC
• Accelerate Enterprise transition \& return to double digit revenue growth
• 1E's complementary offering and customer base will accelerate TMV's Enterprise growth, shifting the revenue mix towards more ENT
• Around 3pp higher revenue growth over time due to mix and revenue synergies

Stronger together: pioneering the intelligent IT/OT endpoint for a frictionless Digital Workplace

Unparalleled
Visibility

End-to-End Device Control

Online/Offline edge automation in depth and at scale for real-time issue remediation

AI-Piloted Operations

AI Autopilot: Self-healing of endpoint friction and configuration drift

The

Intelligent Endpoint

RS/RA and DEX intelligence enrichment to baseline and contextualize IT/OT anomalies

Integrated IT/OT device control from continuous automation to seamless expert intervention

Synergetic blend of IT/OT autoand copiloting en route towards the Autonomous Endpoint

In-depth context of IT issues from ticket to resolution incl. in-session knowledge capture

Secure remote connectivity for device-agnostic attended and unattended expert support

AI Copilot: Augmentation of expert support with session insights and automation

Two secular growth engines: driving E2E digital transformation across IT \& OT

IT Operations
OT Operations

Transaction highlights

Valuation

Consideration

Financial overview

Timing

Integration

TeamViewer

• All-cash transaction at an enterprise value of $\$ 720$ million ${ }^{1}$ (i.e. on a cash-free, debt-free basis)
• Implied ARR multiple of $9.2 x$ for Sep- $24^{2}$ and around $8 x$ FY 2025 ARR
• Financing via existing credit lines and new debt instruments
• Expected Pro-forma net leverage ratio after closing of $\approx 3.3 x$ Adjusted (revenue) EBITDA
• Targeting to reduce net leverage ratio to below 2.0x by the end of FY 2026
• 1E ARR of $\$ 77$ million in Sep- $24^{3}$
• 1E and TeamViewer are both category leaders with complementary products, both exhibiting a strong "rule of $404^{\prime \prime}$, the acquisition will help accelerate TeamViewer's revenue growth rate
• $99 \%$ of 1E Sept-24 ARR derived from Enterprise customers
• Definitive agreement signed on December 10th, 2024
• Currently expected to close in early 2025 after obtaining all necessary regulatory approvals and subject to customary closing conditions
• Operational integration to be undertaken during 2025
• Management continuity ensured in the combination (Mark Banfield, CEO of 1E, will join TeamViewer as CCO after closing)
• Dedicated team focused on realizing cross-sell synergies
  (1) Equivalent to $€ 686$ million if $\$ 720 \mathrm{~m}$ converted to EUR at exchange rate of 1.0496 .
  (2) Based on pro forma ARR Sept-24 of 1E including Exoprise (acquired in October 2024)
  (3) Equivalent to $€ 73$ million if $\$ 77 \mathrm{~m}$ converted to EUR at exchange rate of 1.0496
  (4) Rule of 40 defined as revenue growth FY 2024 (vs FY 2023) and Adjusted EBITDA margin FY 2024

Key value creation levers from the combination

Truly complementary product suites

Strengthened global footprint

Accelerated Enterprise transition

Aligned GTM strategy

Enhanced partnership network

• Creating an End-to-End offering for tackling IT issues, covering the full spectrum from proactive autoremediation capabilities to remote expert support
• Bridging the gap between IT and OT, enabling seamless remote management across both digital and physical infrastructures
• Strengthen TeamViewer's global footprint, especially in the Americas, leveraging 1E's loyal customer base
• Tapping into underserved DEX markets in EMEA and APAC, increasing market penetration and driving growth across key international markets
• 1E's truly complementary offering and customer base will accelerate TMV's Enterprise growth and expansion
• Amplify expansion into larger enterprise segment, leveraging 1E's established presence with enterprise clients
• Redefine endpoint management in the SMB space in the medium term
• Mutual cross-selling opportunities of TeamViewer solutions to 1E customers and vice versa
• Unified GTM Strategy reinforces joint sales effectiveness and enable seamless cross sell
• Expanded network through immediate access to 1E's GSIs, VARs, strategic alliances and OEMS
• Accelerated reach through existing shared partnerships including ServiceNow and Microsoft
• Entrench deeper in the IT management ecosystem

Return to double digit growth and gradually expand profitability

How 1E will accelerate our growth profile

Indicative financial impact
based on Pro Forma figures
2025 guidance will be provided in February 2025

1E expected to add around 3pp to revenue growth in the mid-term to current analyst estimates ${ }^{1} \rightarrow$ TeamViewer to return to double digit revenue growth by the end of FY 2027

Expected to result in Adj. EBITDA margin of c. $43 \%$ in short-term before returning mid-term to c. $44 \%$

Adj. EPS impact expected to be broadly neutral in 2025

TeamViewer +1E:

creating an industry-leading player for Digital Workplace Management

Highly compelling strategic rationale

• Combining two category leaders with strong strategic product fit
• Significant TAM expansion and accelerated Enterprise transition
• Tangible cross-selling and synergy potential

Attractive enhanced financial profile

• Acceleration of combined revenue growth
• Pro forma Adjusted EPS expected to be broadly neutral in year 1
• Continued strong cash conversion

Disciplined capital allocation in line with existing policy

• Implied ARR multiple of 9.2x for Sep-241 and around 8x FY 2025 ARR
• Pro forma net leverage ratio of 3.3x after closing
• Fast deleveraging to <2.0x by end of 2026

Fast and clearly defined path to integration

• Closing expected early 2025
• Management continuity ensured in the combination (Mark Banfield, CEO of 1E, will join TeamViewer as CCO after closing)
• Operational integration to be undertaken during 2025

TeamViewer

Upcoming events

Technology Field Trip: 11 December 2024
Q4 2024 \& FY 2024 results: 12 February 2025