Nordhealth As

Great. So welcome everyone to our Q1 2025 presentation. As usual, it'll be me presenting, the CEO of Nordhoff and my colleague, Alex Cram, who's our CFO. So we'll start with company updates. Then we'll deep dive into different business units, the veterinary business unit, then the therapy business units. And then Alex will go through a financial updates and we'll leave time for questions at the end. Please hold your questions till the end. And you can ask questions either on the chat or you can raise your hand to be able to ask questions and the latter part of the presentation. Starting with the company update. At the end of Q1 2025, our signed AR stood at 44.9, which entails a 21.5% organic AR growth year over year. The source of the growth was a net retention rate of 115.5%, which was higher than the previous in 2024, and also a churn rate of 4.6, which is lower than the previous quarters. We also have been able to improve our EBITDA minus capex to negative 1.1, which is an adjusted EBITDA minus capex margin of 2.4%. Looking historically, so we've had a 51 organic and acquisition net growth CAGR since 2018. And you can see we've had a consistent history of growth As we have not, we always take a quite conservative approach with signed ARR. So it's only if there are current customers, such as Vet for Pets or Merivet, which are piloting the software. We actually do not, we include the pilot clinics in that number, but we do not include post-pilot rollouts ARR. Looking at how we've been able to grow year over year. The first, let's start all the way at the left. So at the end of Q1 2024 reported was 34.7. Every year we reset the currencies to make sure that we use the December 31st currencies. of the previous year. So that had a negative impact, decreasing the Q1 2024 AR by 34.1, mostly due to the weakening of the NOC. So that's our starting base that we'll be comparing to. If we look at the source of growth, we were able to sign 2 million euros of new AR in the last 12 months, net upsell of 6.9 million and churn of negative 1.6. That's how we break down the 21.5% year of growth. This 20.1% net upsell is primarily driven by this CVS implementation. And we also were able to have 2.1 million of signed not implemented AR, which is a reduction since last year as we've been able to successfully implement CVS clinics. And we also have 1.3 of other businesses which are not veterinary therapy related. If we look at the progression of CapEx, we mentioned that we had a goal to reach a break even plus or minus 2 million euros for the year. And so we can see that we've been consistently improving our profitability. And over the years with LTM Q1 2025 being 1.1. So roughly on par with where it was before year 2024. Now diving into veterinary. From a business standpoint, we can reveal now that Amerivet, which is a 200 plus location US clinic chain, was the US customer that we signed in 2024 and they're piloting this year. So we're really excited to have them as a partner in the US as a first enterprise partner. We've also signed a second, albeit slightly smaller, clinic chain called PetVet365, which is a 35 location US clinic chain in May 2025. In total, SME and Enterprise AR, we've been able to sign in new customers, around 900,000 of AR in Q1 2025. We've also implemented 410 CVS locations as of the end of 2025 and got 89 left to implement. And also, we've been able to acquire ProVet.com, which will be our future domain name. So we'll be dropping the cloud at some point. Now, breaking down how the growth has veterinary, we grew 33.2% year over year. which was driven 1.2 million came from new customers. Net upsell was 5.8, mostly driven by CVS, as we mentioned. And our churn was negative 0.6, which is a 3.4% churn, which is very, very good. And we still have 2.1 of signed, but unimplemented. And you can see that that has come down from 3.5 in Q1, 2024. Now we introduced this new chart to provide some historical view of the main KPIs on the AR side. So you can see the historical growth in 2021 to LTM Q1 2025, which has been roughly 28.3 over this period of time. There's lots of ups and downs, as you can see, because of these enterprise contracts, which can be implemented. in one year and then piloted another, but that has a big difference on AR. If you think about the sources of growth, one is new customer AR, which again has been going up now, but it's around 8.3%. Then we have net upsell of 22.6% as our current customers are spending more of us or implementing more clinics and we're selling net new products to them. And then we've got a churn rate of negative 2.6%. And that's probably the most unique number for us. in the deck, this 2.6% data. Basically, a 2.6% means that they'll stay with us for decades if you look at it mathematically. And the way you get the net retention is basically the net upsell minus the churn rates. And so I want to divide those up too, because I think it's good to highlight the churn rate, which is probably one of the most unique parts of our business. Good to note that churn in 2024 was slightly higher, and that happens because we actually sunsetted two products. And when we sunset products at the end of that period, when we turn off the software, some people decide not to move forward. And you can see the impact of that in 2024 and LTM Q1 2025. Then looking at profitability on the veterinary side, these figures are adjusted by you EBITDA minus capex. They actually include all group allocations. So it's a true view of profitability for the business units. If we can see that LTM Q1 2021 was at negative 2.4, so we've been able to consistently improve our profitability. The main drivers of the improvements in Q1 2025 versus 2024 have been, one is growth, which is the biggest one, which had a $1.5 million impact and recurring revenues. And then we had additional other revenues at around 400,000. However, we've had additional revenues Cost to be able to serve customers around 0.6, so 600,000. And we've continued to invest in product development around 400,000. And there's other costs about 300,000. That breaks down how we've been able to improve over time. Now, where does that growth come from? And let's focus this time on 2021 versus 2024. So we can see we've had growth in the UK as a result of being able to successfully implement CVS, but also implementing other clinics. And secondly, we've had some nice growth as well in Southern Europe, where in Spain, Portugal, we've had customers implement our software. And you can see as well that we've had continued success in the Nordics, which has grown quite nicely in Q1 2025. Looking at a different cut of the data, same data, we can see that a big part of our growth is actually coming from, the majority of our growth is coming from enterprise. So we've got 0.9 coming from enterprise and 0.4 million euros coming from SME customers, which are independents. But one thing that's really important to note is that despite our focus on enterprise, our customer concentration remains low with our top three customers composing around 22% of our AR. Now, looking at the migration, which is one of our other big goals as our strategy is to grow organically, but also by acquisition and migration. So we've been able to successfully migrate from 2023, which was 7.9, a lot of our customers over to our flagship product, Provence. And what we can see is that the cloud share of AR has increased from 40% in 2021 to 78% in 2025 Q1. This is a really important goal for us because if we migrate people on our customers onto the new platform, we have much better opportunity to upsell, much better data security. So we've got a lot of benefits, including not having to maintain two different softwares. We're currently working on the migration of salamalas in Norway and also the migration of VetVision in Denmark. Now, looking at therapy. So on the therapy side, the main focus of this year is migration of Aspet customers to the unified platform. So we were able to migrate 160 Aspet users to the unified platform with only one user journey. The rollout continues at a measured pace, so we can act on early feedback. Our approach to this is implement a certain specific user segment, wait till they're happy. Once they're happy, we roll out the full user segment, and then we go segment by segments. You can think of segments as like private psychologists or public psychologists, and then private physiotherapists and so on. So they've got different feature requirements, and we try to target them very specifically. So and we're being careful with migration as it's a very small market. We want to make sure we maintain a high quality and not make mistakes that others have made and being too aggressive and providing which could lead to churn. The second exciting thing is that we've actually launched an AI scribe in April. First, starting with Norwegian physiotherapists. And within two weeks, we already have over 250 plus or more daily active users. We'll do a demo of that actually later in the presentation. Then third, we also signed about half a million euros of new AR in Q1 2025. And on the booking portal, which we've mentioned a few times in previous presentations, it lists over 1,650 therapists in Finland only, and we process over 3,000 bookings a week. And so that number, we should see that number continue to increase over time as we unlock new different ways of booking, for example, insurance company bookings or telebookings and so on. So... And this is a really big part of our strategy as we want to make sure that we provide the best patient experience so that going through Nordhav.fi and then on the other side that will be powered by the PMS, having that two-sided marketplace. Looking at therapy, our focus is obviously on migration. And so we haven't focused as much on growth this year as we want to have all of our resources on the main priority. But still, we've been able to grow year over year around 6.6%. um as you can see uh the net retention it was one zero one um one of the big drivers of it is that we can have we've got a decision whether either a we can build add-ons to be able to upsell to our user base or b we can uh focus on migration we focused on d only this year uh once the migration is done we'll be able to focus uh more on uh net new add-ons but also on going into the new markets to continue growing this business, just like we've done in VetNec, same strategy. Looking at the therapy long-term averages, we can see we've been growing around 10% a year historically. Our new customer AR has, as you can see, gone down in 2024 and LTM Q1 2025 as a result of our focus on migration. And the fact that we are in our current markets in Norway and in Finland, we've got a lot of users already used our software. So we don't have too much headroom for growth on that one, except for our expansion. Net upsell was 7.2% on average, right? Which has remained relatively stable, right? But our net retention is only 102%. churn again is on average 5.1. There's a big difference between churn in 2021 thereafter, because we bought easy practice, which has a much higher churn, given that they're targeting a slightly different segment of the markets. Over time, however, as we compare easy practice customers, which are the same size and specialty as our DRM and Auspice customers, we actually see a lower churn rate for those customer types. So the churn rate is driven much more by customer mix than by product selection. Now looking at EBITDA minus capex for the BU, we've actually decided to invest a bit more on product development this year. And so that's the main driver in the reduction in BU EBITDA minus capex. These investments are all focused on being able to migrate faster at first, and then they'll be on to the next mission of going to a net new market or going after net new add-ons. similar to veterinary looking at uh how we've grown between 2024 and 2025 we can see that um There's been some growth in Finland. We also see that there's, in Norway, there's been a decrease actually in the AR. This is driven normally by seasonality in that like we have yearly contracts and every Q1, right? The people in yearly contracts, they actually decide to churn just all in the same time, right? So it's mostly due to seasonality, which peaks in Q1. And not a huge amount of changes in Denmark, as we're so focused on migration. The important thing about why this migration is very important is that the Aspet migration will unlock around over 3 million euros of savings by having the people move over, not because of price, but because of efficiency. For example, we don't have to have two development teams. Secondly, we do not have to pay for licenses to be able to provide the legacy software. And then third is our support, the number of support tickets per end user FTEs is significantly lower on the new platform than it is on the Aspect platform, given that it's more intuitive and automated to manage. Looking now at the migration, we can see that we have actually our cloud share of AR has increased from 34% in 2021 to 49%. And you can see an increase between 2024 and 2025 as well. Interestingly, churn for non-cloud products have been 3.7. So we've been able to keep our customers happy while they're on the legacy products. And then I thought we'd actually do a demo of our scribe to show you how we are implementing AI dictation, but also summarization. This is a huge thing for therapists as it enables them to spend more time with the patients interacting and less time looking at their computer while they're with patients. So let me play the video. This is the first one will be an AI dictation video where we'll show you how dictation works. And then the second video will be showing you how we convert that dictation to a summary. It's easy creating a journal entry.

Good morning, Mr. Patel. How have you been since our last session? Morning. It's been all right. The pain in my lower back has reduced a little, but I still feel stiffness, especially in the mornings. That's good to hear. There's some improvement. On a scale of 1 to 10, where would you rate the pain now? Maybe around a 3 in the morning, and it drops to about a 1 or 2 by the afternoon. Okay, that's a positive sign. Have you been doing the exercises we discussed, especially the lumbar stretches and core strengthening routines? Yes, I've been trying to do them daily. I sometimes skip the evening set if I'm too tired, though. That's understandable. Consistency is important, but we'll adjust the plan so it's manageable. Have you noticed any discomfort while doing the exercises? Not really pain, but sometimes there's a pulling sensation in the hamstrings when I do the forward bends.

So a couple of interesting things about this one is the main challenges. One is that we had to make it multilingual. So this is in English, but it's Norwegian. We've got it in Swedish and Finnish and so on. The second one is identify, like the pain points that we have to solve is, especially in a therapist, there are two people talking. It's very easy to figure out who's talking when you're on video call because it uses the microphone. But when you're in a room, right, you have to differentiate with certainty, like who's actually saying what. Is it the therapist saying something or is it a patient? So those are the two problems that we've solved. And also you can see real-time dictation. It's very high quality, actually. Even with background noise going on, we've tried it with music in the background. It's actually, the experience has been very nice for these users. Next is once you have the recording, and it also converts it to clinical notes. So here you can see an example of how that works. In this example, we'll just upload one to make it more efficient. So you got the transcription that was created, and this is for Norwegian, so some of the titles will be in Norwegian. We're not operating in markets for English domain. language, but still for want to show you this in English, because I'm guessing most people's Norwegians here are not great. So you can see it summarizing the the transcription. It's then polishing it to make sure it's according to the different formats that are required for different specialties. You can see here that it actually creates the notes based on this. The therapist is able to fully update these notes as needed and save those. So you'll be able to see the transcription and also the full notes. And this leaves the therapist a huge amount of time, but especially it ensures that they're able to focus on the patient, not focus on adding their notes. So thanks. Now off to Alex for the financial update.