Nordhealth As

Thank you. Hi, everyone, and welcome to the Q3 2024 presentation. For those joining us for first times, I'm Charles O'Bain, the CEO of Nord Health, and I have my colleague Mari Aina, the CFO, on the line as well. Today, as per usual, we'll go through a company update, then veterinary BU update, therapy BU update, Mari will walk us through a financial update, and we'll leave some time at the end for any questions. So please feel free to reserve your questions till the end. Thank you very much. Starting with the company update. So in Q3 2024, year over year, we grew 23.7% organically. That was ARR growth. The net retention was around 115% over the last 12 months ending Q3 2024. Our churn rate was 6.2% in the last 12 months 2024. And our CAC to new AR was 0.7. These numbers combine to come up with a lifetime value to CAC of 15.8. At the end of September, we were at an implemented AR of 41.8. So we reached the 40s. And our signed AR was 43.8. which means our AR per share was 0.53. It's good to look over time. So if we look year over year, we have had an analyzed CAGR of 56% over the last six years since Prince-Samantham took over. No acquisitions have been done in 2023 and 2024 up to date. If we break down this growth, we can see that organic signed AR growth has been increasing per period. And we have surpassed year-to-date 2024, the total amount of signed AR in 2023, which itself was a record year. Now, let's go through the AR bridge. As you can see, there's a slightly different slide based on the last one. So I'll go through it column by column. In Q3 2023, our AR was 32.3. In the last 12 months, we've been able to recruit 2.9 million euros of AR in net new customer. In addition, we have been able to have a net upsell, which is upsell minus downsell of 6.8. Good to note that given that CVS originally signed in previous quarters, that the majority of CVS revenue is in net upsell. And then we had a churn of 2 million over that period of time, which ends us having a Q3 2023 AR excluding other businesses of 40. Going a little bit more detail on churn, right? So the figure is 6.2%. However, if you exclude the one-time loss of the DRM enterprise customer, it would be 5.3. And if you exclude the sunsetting of profit, win, and bet serve, the churn would be around four. And as I said before, we foresee long-term average churn to be around 5%. Then unique in this report is we've had other businesses of 1.8, which we split out from the previous part, right? This includes two things. One is the work that we do in Auschwitz, which we acquired in 2021 around IT operations, which is not a PMS business. And the second is our online trading business, NaviCare, which was acquired before I joined in 2018. And those businesses will continue to fluctuate as we try to at least reduce the amount that we spend on or that we sell IT operations as we slowly wind that business down. That business will only be wound down when Aspit actually migrates all of its customers to the new platform as this part of the business also maintains that platform. And that gets us to 41.8. And as per usual, our private cloud signed not implemented AR is 2.1. Please note that the Vets for Pets rollout post-pilot is not included in these AR numbers.

Now looking quarter over quarter, we drew 2.4%.

Um, we started the quarter at, uh, last, uh, 39 million of AMR. We've added 0.6, 600,000 euros, roughly of new customers. We've had net upsell around 600,000 euros and churn of 0.3. So as you can see in Q3, if we analyze this churn, it would be around 2.6%. So we're coming back towards our lower churn once these one-time events are going away. From a profitability perspective, our adjusted EBITDA minus capex was positive again in Q3 2024. If we look at 2023 Q3 versus Q3 2024, we can see that the reason for the improvement from negative 0.8 to 0.1 million euros was driven by three primary factors. One was the revenue growth of one point, which added 1.8 million. The second is that our implementation is becoming more efficient, so we're able to have more implementation revenues. And the third, which is a negative impact, is that we've actually been investing to support our growth at 1.2 million. Then going through the adjustments, in Q3 2023, we each had a bonus accrual adjustment of 75,000. And in Q3 2024, a restructuring cost and earn-out adjustment of around 44,000 euros. Now, let's dive into veterinary. So, high level, on the veterinary side, we've had very strong growth in private cloud year over year, right? Driven by CVS. Second, the Nordic migration is progressing, albeit slower than anticipated. A lot of the resources were put on CVS. And we still have 4.1 million euros of ARR still on VetVision, ProfitNet, or Santa Malas, which are three softwares, legacy softwares, which are still alive today. Our product development efforts are focused on migrating to the new front end, which will be a big benefit for our customers in terms of the new design that they will receive then. And secondly, the speed at which new front end is dramatically better than the current front end. And the second thing, which is from a development perspective, it allows us to be way quicker with developments and to modularize the front end with components. The second thing is improving the core workflows, right? In ProVet Cloud, over the years, we've grown by adding a lot of different features. Now, we have a huge amount of features, and that's one of the reasons that a lot of the enterprise customers like ProVet Cloud. But we want to focus on refining those features, making sure that the core, most common workflows are very, very efficient and that we provide great information to enable our users to provide great care. And the last but not least is enterprise functionality. We're continuously adding improvements for how enterprise customers that have many different clinics can be able to manage all of their locations on one platform. Lastly, profitability has improved as we're growing revenues faster than costs. And particularly, we're improving onboarding profitability. Now, looking year over year again, we grew 35.4% in the last 12 months. 1.8 million euros came from new customers. 5.4 came from net upsell. As I reminded before, CVS post-planet rollout is included there. And we had a churn of 0.9. So churn is around 4.8%. This equates to a net retention rate of 125%. And in those numbers, we also have included the ProVetWin and Vetser product churn. If we extruded those, it'd be around 2.5%.