Claranova SE

Thank you all for taking the time to attend these sessions about our semester results for Clara Nova. Before jumping with Jean-Yves inside the number of the half year, I wanted to do a brief introduction about what we achieved these past five years, because actually, Clara Nova is a five-year-old company, not the entity itself, because Clara Nova as a name is just three-year-old, but the operational reality of Clara Nova is really five-year-olds. Back when we recapitalized the company in July 2015, at this occasion, we raised 20 million. 20 million euro and with these 20 million euro over the past five years we grew a 400 million euro company. Pretty much started from scratch. The historical, if you look at the 400 million pretty much nothing is left from what we started with five years ago. a very strong growth over 50 percent looking at the past three years and what is in my sense even more remarkable is that we generate profits pretty quickly and if you look at this first half year we're talking about eight percent profits for the company uh and beyond that we also generating quite uh a big amount of cash with a net cash at the end of 2020 of 47 million euro This success was built among three different companies. Some have somehow criticized us sometime about the complexity of Claranova. The fact that we have to deal with three different businesses with a certain level of potentially, again, the lack of focus. But on the contrary, I do think that one of the main reasons of our success is the fact that we have been able to build on these three different pillars, each of them being a growth relay we can leverage on as we move on. Obviously, Planet Tarte was the first part to very quickly grow to a significant amount. But if you look at today AvonQuest, which we completely transformed over the past five years, you know, it's actually starts to contribute to profitability and as time goes is going to improve that contribution more and more. Obviously my device is still a very small portion of Clara Nova revenue, but actually we still believe this will be a significant relay for revenue with Clara Nova in the years to come. So if you look at this growth, it's really started as essentially organic growth as we were rebuilding and reinventing these businesses. But over the past two years, we have been acquiring actually quite a bit of different companies, about six or seven of them. And really the plan moving forward is to continue to have these dual aspects about organic growth, but at the same time being able to accelerate through acquisition, obviously acquiring the right company at the right time at the right price, but still that is a very interesting perspective. And I think we have proven over the past two years that we had the capacity to did some pretty nice acquisitions at a pretty interesting price and really bring them on board pretty nicely over the past five years. So one of the other points I like usually to highlight is the fact that these are three different businesses. We've actually not a real synergies among them. And there's a real reasons about that. The first one, is essentially because each of these businesses have a very specific dynamic. Whatever it comes about the maturity of the domain itself, you know, internet, software is a 30-year-old business. Mobile has been around for 20 years and IoT has still to become. So in that sense, we have very different dynamics, but also, Maybe more importantly, there's also a difference at the value level. When we think about software, our focus is really about profitability because we know tomorrow will be value in terms of multiple of EBITDA. When we think about Planeta, we're more focusing on growth because we do believe it will be a revenue value. And my device is mainly still today about the technology. And the aim is at one point to have the opportunity to introduce this business separately or potentially to have some session, global or partial. And really we do think that will be a way to capture the most value working at this business level. So five years after we launched this business, I do think that we have now a fairly solid vision for each of these three businesses. If you take Planeta out to start, we really were the first one to disrupt the printing business with a mobile business model. In a very similar way to what Uber did with transportation, we were the first one to come with an intermediated model, working with suppliers so we can really grow extremely fast. So we came with a concept, FreePrints, which I think was a very powerful concept in the value propositions we were pushing toward our customers. Once we really had been convinced that that was something fairly powerful, what we did is to come up with new products where we could really monetize our install base, over 20 million today, with new products. If you look at two years ago, we really did a significant move going towards personalized gifts, which was a way to expand our portfolio outside the sole scope of photo and certainly opening a fairly large perspective about what we could achieve And really the visions we have tomorrow is about what we call this personalized e-commerce, which is the opportunity to offer our customer the capacity to acquire a very personalized product, whatever it could be tomorrow. And what is important to understand is that this is possible because over the past five years, we have built a... a platform upon which we can really build all this vision. And this platform starts from the logistical level, our suppliers, our logistics, and the bigger you are, the more you can mutualize your costs, the more you can improve your gross margin, And that's a very significant impact as we went through this journey from pretty much zero to 300 million with Planet Earth. But also at the IT level, we have built these past five years a significant infrastructure to really able to deal with a very important volume in terms of the transaction, which is over one transaction per second today with Planeta. And at the other side of the spectrum, the capacity to acquire customers through different digital marketing channels is also a key element of our strategy. And everything we do within Planeta, whether we're talking web, whether we're talking mobile, whatever the brands we are pushing to our customer, everything is built upon that platform. When we do an acquisition, we will bring that technology toward that platform. And we really have a foundation that we can really grow something very large in terms of scope. If you look at the visions of Avon Quest, what we really did over the past five years was to build a software publisher selling SaaS products. So we really, I will say today, a fairly standard SaaS software vendor with the best practice you can aim on that business model. But if you look at the larger vision of Planetat, I think we're looking at a different perspective beyond just being a software publisher. Because one of the main challenge when it comes to software today is your capacity to scale. And in the world where you have a monopolistic position from people like Google or Facebook, which essentially are taking all the value. It's actually very important to be able to control somehow portions of a capacity to attract traffic and monetize that traffic toward your product. What we have built is a very unique position as a software vendor where we actually have a certain level of control of that different layers. If you look at monetizations, we have an entity inside AvantQuest named Lavasoft, which is really dedicated to monetized traffic. And we will actually sell that traffic to some other software vendors, but as much as we could, if we think it's the right arbitrage, we will push that... monetization toward our products. And if you look at the past year, we started actually to acquire some content business, download portals, and the idea as you control the full chain is really to improve the profitability, and you can really chain all that value toward this SaaS product, which are building a very healthy inertia around what we want to do with AvonQuest. Last, my device. Our vision since the beginning was always to make IoT easy, to allow our customer to very easily and fast deploy pretty much any IoT solutions. And for that, over the past few years, we built an ecosystem where today we certainly have the platform with the most connected object which could be recognized on that single platform. And because we have over 500 of devices, we can pretty much for the same platform address any needs. Whatever we're talking about, smart building, agriculture, whatever, we actually have the capacity because we have the devices to address that needs. And on the same side, we also have built over the past five years, certainly the largest community of IoT developers using our internal tools named Cayenne. And if you look at our partnership, some of the big guys like Microsoft or ARM have been embracing our technology and really which is a very high level of recognitions of what we have built. But also our customers have been building on top of my device all their IoT strategy and we're talking about people like Sprint, BISF, Sodexo, Marriott. So we're talking about very large enterprise who really will depend on IoT tomorrow moving forward, and these people have selected my device because of that unique capacity to deploy easily a very large amount of solution, which I think is a really nice way of recognition of what we've built. I do think we have built some interesting things over the past five years, but maybe more interestingly, what is important is the future and our capacity to continue to grow. And actually we believe that the potential is still very large and as we further develop our vision, it keeps growing. So if you look at all the different ways we can grow Planetaerts, we can continue to acquire this customer. So within less than a year, we'll pay back the cost of acquisition and these people will keep coming back for many years afterward. But also we keep launching new products so we can monetize this growing install base. We continue to open more and more countries around the world, 15 today. We certainly are the unique printer in the world to access, to cover pretty much the three continents. We also have the capacity to go to different verticals. We've really been focusing on photo, now we're really working on personal or gift and really the plan is to continue to add new verticals so we can address more and more product. And if you look at the market size, we're talking about 50 billion at least for that concept of personalized e-commerce. We are 300 million size today with . So the room to grow, So it will be difficult, that's certainly a challenge, but we do believe that the opportunity to grow that business is ahead of us. And in a fairly similar way, you look at Avanquest, there's still a lot of product we can add. Even if you look at the different verticals we're focusing on, the PDF, the security and the photo, we still have room where we can complement with new products. We can continue to expand around the world, but also we keep thinking about new concepts like we are doing with Last Card, which is a fairly unique way to to pay on internet and we're just about to push at a larger scale. That's what we evaluate to 25 billion size markets. So that's still a realized potential when you think that today Avonquest remains a hundred million software vendor. So there's a lot of way we can grow this business moving forward. And when it comes to my device, I don't really like to throw a market number because today it doesn't mean anything. All the main people and some others are investing in IoT. We all believe that it's going to be one of the major trends in the tech business over the next five to 10 years. It's still work in progress. It's a fairly large and complex environment, which many pieces that has to fit in the same in place. So this is work in progress. And I think we're pretty nicely positioned to expand a lot of direction at this business ramp up. So as I was mentioning before, not only we can grow organically, but also we think that there's a lot of way we can continue to acquire more businesses. And again, if you look at PlanetHeart, the fact that we have already that platform, the fact that we have a certain site today, the capacity to keep adding essentially to mutualized cost throughout our suppliers and logistics is important because you know as we keep growing we'll get better price we have this unique capacity to deploy through web as much as mobile so as we did with cafe press we acquire a website but the first thing we can do is also to come with a mobile component but also we are again one of the pretty much the only printer in the world to be at the same time in the US and Europe. So the capacity to take a US business and bring that to Europe or the other way around in something that pretty much only us can do because we have all this capacity to access, especially through mobile, our customers. So as a target, when it comes to acquisition, we can continue to push our current verticals. whether it's photo or GIFs. But we keep thinking about different verticals we could address. It could be web, it could be mobile. We can go from web to mobile and the other way around. So we're really looking in too many directions there. We are interesting about acquiring always more traffic, especially when it comes to mobile, with the capacity to monetize that traffic on free print environments. And there's always some underlying technology that we're looking into, whether we're talking about personalization capacity, cloud, IA, whatever. So there's still some foundations that we keep developing on top of Planeta. And, you know, AvantQuest, You know, we would like to grow our portfolio in security. When you are selling antivirus, it's certainly easy to push VPN or password manager. So it is a full portfolio. We can grow in security. Same way in photo. And even in PDF, in different verticals, there's a lot of way we can grow that business. And still we have that mutualization capacity, whatever it's an install base, whatever is the infrastructure, R&D or IT, or our unique skill when it comes to monetization. This is really something that we keep continue to build on top. And again, whatever we're talking about product in our category, whatever we're talking about monetizations or traffic capacity, there's a lot of way we can grow when it comes to acquisition. And we constantly looking around places we can go. And again, the aim is always to try to acquire the right business at the right time and especially at the right price. So I think we have proven over the past five years our capacity to invent a new concept, from that concept to build a real company. I think we also have proven our capacity to acquire companies at a good price, to integrate, stabilize and further develop these businesses. I think we also have proven that even in today's time with the COVID health situation, we were extremely resilient and actually even benefit from that environment. So I think we have done a lot of things. We still have a lot of ways to go. The more it goes, the more there's such a disconnect in between our current value and the fundamentals and where the company has been delivered. The reality is if you look at, well, we have to agree that the share price was multiplied by 10 on the first three years of Clara Nova. But the reality for the past two years, the enterprise value has been divided by two. When the revenue has been multiplied by three, the profit has been multiplied by 10, we keep getting more and more cash. So the company today is by far more solid, healthier, with more potential than we had two years ago. But still, you have this dichotomy in between what we deliver as a company and the actual share of value. There's certainly... an issue around the capital structure of Clara Nova. The fact that we don't have a cornerstone investor, the fact that we have a lot of retail float, the fact that there's a lot of liquidity certainly preventing for the company to grow. So really the plan moving forward is to address this issue that I think all the fundamentals of Clara Nova are fairly strong. Really the plan for the semesters to come is to really ensure that the share price really reflect the value and the real performance of the company. So jumping now in the numbers and before letting Jean-Yves give you more details as a quick summary again a good half year we grew by 25% at 278 million euro of revenue. The organic growth was 17% maybe more significant for this semester was a stiff growth of EBITDA. We did more money this semester than the full year, which represents about 8% of that first half. And we have been multiplied by seven, the net income of the company, and continue to increase the net cash value. So I think it was a pretty good semester, but I'll let Jean-Yves give you more details.

Thank you, Pierre. Good evening, everyone. It's a pleasure to be with you tonight. As Pierre said, these are pretty good numbers to be presenting tonight, so quite happy, quite proud to be able to highlight the performance of the teams and the various businesses we operate at Claranova. To start with, so just to get our ideas straight about the growth in revenue, as Pierre said, so it's 25% growth at constant Forex. So it's very nice, 19% at actual Forex, 6%. in summary, of growth were actually taken away by the fact that some of the currencies we operate in depreciated against the Euros, our reporting currency. We will make a specific point about this. This really doesn't translate into any significant issue at EBITDA level, but we'll get to a specific slide about that later on. So, important impact of currency effects on the growth, limited impact of the growth, the consolidation effect on the 8%, which is just one month of personal creation we took out as personal creation was acquired in August 2019. and two months of the acquisition of personnel, sorry, of Cafe Press that took place in the early, in the first part of the semester of fiscal year 2021. Just to set the ideas, the growth that we had in the previous period was the organic growth was about 19% again. So in this case, it's 17% was called like-for-like sales growth. So we're still keeping the same trend, the same speed, so to speak. Even though the masses are just so much greater, it's arguably harder to grow by 90% when you're doing $280 million than it is to grow by 70% when you're doing 140 million euros. And so that's one of the best, the good numbers and the good performances we're able to highlight in this quarter. In terms of profitability, as Pierre said, the numbers are really quite impressive. Group level, we went from 4.8% of revenues being, you know, accounted as EBITDA, growing to 8.3%, 3.5% growth. What really is interesting is that all three divisions actually contributed to that increase. A good chunk of it obviously came from Planet Art, 9 million euros of EBITDA versus their performance of the same period last year. As we've mentioned several times in the past six months, this was due to the limited marketing impact And this limited marketing investment that we made was because we knew that there were some issues with the supply chain. And there was really little point in trying to acquire customers if we weren't sure that we were going to be able to provision the services that were buying from us. So that's why we sort of limited all of that limited marketing flow directly down into the EBITDA. At the Avanquest level, it's a 1 million euro appreciation in EBITDA, which from a percentage perspective is actually quite nice, but it's also a sign of the success of the transition of the business from a sales of perpetual licenses to a more software as a service business model. And so it's starting to generate really interesting EBITDA levels. We'll speak about this a bit more later, especially in Pierre's part of the performance of the businesses. And then finally, my devices. My devices contributed in the Slightly different way, what they did is because they had some impact on the potential growth of the sales from the COVID situation, they decided to limit their spend. And so the 2 million you see there is a limitation in losses that my devices did. My device is still very much at the technology development stage, but they were pragmatic enough to really recognize the fact that the COVID situation was going to take some time to resolve and really spent a bit less, 2 million. And so that's a total of 23 million euros that we have in EBITDA in the first semester of the year. As Pierre said, it's already bigger than the EBITDA that we had for the entire fiscal year of 2020. As I said earlier, I just wanted to have a slide specifically on the impact of the forex situation. So at constant ethics rate, we would have accounted something like 290 million euros in revenues. We did 278, so that's 14 million euros of revenues that were actually sort of taken away, if you wish, through foreign exchange rates. If that impact is really quite significant, 6% at the revenue level, its impact is really not so sensible at the EBITDA level. Basically, EBITDA levels remained in the same place, 8.3%. at constant forex or at real rates. Basically, where we make money is the place where we spend money. So when we make money in dollars, we spend in dollars, which is why you just don't see this much of an impact on the EBITDA levels. There's just a minus one million of EBITDA that was, again, lost in a way due to foreign exchange fluctuations. but really not an impact on the actual rate itself of 8.3% of revenues in EBITDA. Amongst the very good news of the quarter again is continued strong cash flow generation. Operations generated 40 million euros in cash flow. And since there was little financing activities, as I said, few acquisitions and little financing activities, basically all of it flowed down to the gross cash flow. position of almost 120 million euros at group level at the end of the semester. People who know the company know that we have a fairly strong seasonal effect at the end of Q4 calendar, and so usually that's the time of the year where we tend to have the largest cash balance, but still it's a very nice number, growing by 35 million euros. compared to the beginning of the period and what's really quite interesting as well is when we analyze the net cash position it's a multiplication by three more than three of the net cash balance when we take we take out of the gross cash balance the financial indebtedness of the company so 47 million euros in net cash is a really good number and there's a strong testimony of the of the excellent performance of the semester of the Yes, of this past semester.

Pierre? Thank you, Jean-Yves. So we didn't want to make this presentation too long, so we had the opportunity to answer your questions. So I have just one slide per business, just to highlight the performance of the semester. So Planet Up, we've been talking about that. So very strong growth, very strong impact on EBITDA. And as Jean-Yves was mentioning, one of the reasons was due to this growth logistical entanglements during the holiday seasons where there has been a strong surge of demands when it comes to e-commerce and really the incapacity for the transporter, the suppliers to deliver. So the UPS and the FedEx of the world didn't have the capacity to address that volume, especially when they were themselves impacted by the COVID and they had to assign less people to manage that volume. So we really were in situations where we can really push or take more product we can push to our customer. So essentially we refrain in our capacity to invest. So mechanically that difference is one of the reasons which is showing in term of the EBITDA performance, but I think it's also showing the dynamicity of our business model. If we want to get growth, the business is there. We keep coming, we keep getting market share from our competition. There's a very significant differentiation from our value proposition which is very unique in what we do in risk ratio price quality and we still are ahead uh the competition so real capacity to grow and gain market share but for whatever reasons and that was a unique situations where there was this capacity limitation when it comes to delivering package where we refrain acquiring new customer we cannot deliver and therefore we mechanically see that improvements on the EBITDA. So one of the important also elements of the semester was the ramp up of personal creation. It did a very good growth when it comes to S1. So remember, this is a business we bought in Chapter 11 a year or so ago. The business was declining. It was obviously always complicated to be in that Chapter 11 situation, which is the reason why we were able to acquire that $100 million business for $18 million, which is a very low amount of cash for a business which as soon as S1 was able to gain back growth, was able to start contributing to profits. And there's still a way to go. There's still room to grow the business. But it was a very interesting acquisition, not just in terms of vision moving forward, but also in capacity to grow the business when it comes to revenue and also profits. And when it comes to Café Presse, we're still in that process. It does take about 12 months to integrate the business. So we're really in that process of merging the team, bringing that business on top of the global Planeta infrastructure. So this is something we should be able to see results within 12 months. So it will take a little bit of time, but I think we have proven that with personal creation, we have a capacity to absorb these businesses, and it should be pretty much the same thing when it comes to Café Presse. If you look at AvantQuest, a fairly stable revenue, a little bit declining, but that's still the effect of the SaaS transition, so we still think to S1, some impact when it comes to revenue, but on the other side, we also start to see in S1 the value of making the migration with a 30% growth when it comes to profitability. And this is just the beginning. So we should see more in S2. And as we are building up that inertia, we are going to really see a stronger profitability coming from that business. And finally, as we were mentioning before, certainly my device was the most impacted business, especially that we were doing quite a bit of business with hospitality, hotels, and so forth. So that part of the business was stopped. We adjust our infrastructure so we can really go through that period. Now we are in the process of getting back in terms of signing new customers. Again, still business, which is under construction, but there's still a lot of hope that this is going to be our next relay. So as a last slide, as a conclusion, this is going to be the sixth consecutive quarter of growth since I joined the company. So it's thought to be a fairly healthy number of quarter with continuous growth, with more and more profits, which was really a very significant improvement when it comes to this first part of our fiscal year, which again is really a praise to our business model when it comes to this capacity to manage growth or profits. We also, I think, proved that our capacity to go through that COVID health situation which was major crisis but pretty much we gain out of it because as most of digital businesses we are leveraging from people being on internet so it was more traffic so therefore was more business for us and which means that moving forward whatever happened even though we're seeing the ends of that situation we won't be impacted one way or the other and I think even company like Clan Alva will get you stronger because certainly one of the trends that will come out of the COVID will be more and more digital company ramping up. So we still believe there's a lot more to go and a lot more potential ahead of us. And again, as a conclusion, it's certainly not yet reflected when it comes to our share price, but this is going to be our focus for the semesters to come. And at one point, we'll be confident that the market will catch up and understand all the value we're building with Clara Nova. Yeah, thank you very much for your time and taking the opportunity to listen to this conference. I hope next time we could do that face-to-face. And for those of you, feel free to contact us if you have any further questions. And again, thanks for your time.

Thank you.