Lasernet Group AB

Welcome to this live queue with FormPipe. I'm joined today by CEO Magnus Svenningsson and later also CFO Sofie Regenius. I will be back later for the Q&A session and you can already now post your questions below the stream. But now it's time for you, Magnus.

Thank you very much and as always a great pleasure to be here. Today is the first time we present LaserNet Group. As you know we are working with our divestment of public and are now coming closer to closing. We have named this report Continued Margin Improvement and Divestment. And before going into the LatheNet numbers, which of course are very different from the FormPipe numbers, I just want to mention that FormPipe as a group came in on 143 million SEK in revenues, and comparing that to the 130 we had last year. And then we had 28 million in EBIT compared to 16 million last year, which... leaves up that margin at 19.6% which is very close to our EBIT gold of 20% so this is to our team back home that you have worked very hard and good this quarter so we are seeing the margin improvement we want to see Now, coming to Leisenet, as I said, this are now Leisenet group that we will call ourselves. We will change name by the annual general meeting in April formally, but from now on it's Leisenet group. And good news here is that the net sales came in on 61 million SEK compared to 56 last year. And there we have a bit of a down, a headwind from the currency effect. So organically we had a growth of 13% approximately, which is a good number. And with lasers now, we also increase our recurring revenues to 91% of the net revenue. Which we are very pleased with, of course, as well. And then our HCV, we will talk a little bit more about that. It's 6 million sec. It's good. I think we can do more there going forward. But it is really a good number. We have some churns that Sofie also will talk about a little bit going forward. And then the really good thing here is the EBIT improvement that we have been talking about the last quarter that we are going to improve the EBIT. And now you can see that for yourself in the report. So very pleased with how we and the team have looked after our costs. Very, very good. A little bit highlighting then the ACV. We have done 70 new deals in Dynamics. And as you know, Dynamics has been delivering very well all through the years. So all the three last quarters has been great. very good and continue to be good so that's very very good news really really good is also that team in us and the bank and finance side of our business has started to generate business and they those are a little bit bigger in in terms of order value so they make an impact to the to the acv immediately as they they get going So very pleased to see that part of our business is now starting to move again. Also the margin improvement that we are able to get revenues in yet keeping track of our costs. And then that we meet one of the most important closing criteria. And that is moving 90% of our customers over to the new entity that will be transferred to SDG at closing. So that is a lot of hard work behind that to get there. So just shortly about the transaction now. So at closing we will receive 775 million SEK and then there is low note on 50 million running on two years and then there is an additional 25 million after a few years when SDG has got the development of their investment that they want. So that is sort of in short the transaction, a little repetition from previous presentations. I was thinking that I should explain a little bit today for some of you who haven't followed Laysenet in that much detail. I plan to talk a little bit about the Laysenet business in itself. We are around 100 employees today. We have a revenue of approximately 25 million euros. We were founded in 1989, so we've been around for quite some time with our softwares. And that is very important because this is a mission-critical software we are doing. That is, if our software doesn't work, then the supply chain stops and then the invoices doesn't go out. So this really has to be a well-proven and trustworthy software which we have and have had the chance to develop over the years and build competence around. Then we are vertical agnostic or horizontal. That means we serve basically all verticals. So a few examples. We have a partner in the U.S. called Xapt that... serves Caterpillar, they do the excavators. I've been talking about those in some of the previous reports. And when Caterpillars supply their feed service, for example, with spare parts, etc., then that is a very complicated value chain or logistic operation. And then you need to have very accurate and dynamic documents to control what kind of spare part they have millions, where does it go, where do you send the invoice, where do you send the manual. Exat has built around dynamics a ERP system that supports that flow and in that flow we are very important component to support the document handling. Another example that I like to talk about is Anaxco. It's a German partner. They serve small mid-sized logistics companies in Germany and you can just imagine how many documents you need to prepare in order to carry goods over Europe with dangerous goods, etc. And then, again, Anaxco has done a dynamic tweak that supports that flow, and we are a vital part of that. So that was two very different examples of verticals who are active. And then in the CEO letter, I mentioned also Dallas Cowboys, which is the American football, which is the third vertical. And, of course, also the bank and finance business of our side, which is sort of similar, very similar product, yet another application where we serve the need to distribute, for example, account statements and other type of documents that need to go out for regulatory purpose. So, complicated value chain or regulated markets, that's where our application is right. And then we are active, we have offices in a number of countries, Sweden, Denmark, UK, Americas of course, Germany and France. Something like 1300 paying customers out in the world and then 50, around 50 partners which then as I just explained are very important to take us to certain geographies. but also to truly understand the verticals where we are active. And this is also very important for us to have a scalable business model because as soon as you have trained the partner, part of the sales are sort of happening. They are driving parts of our sales. So very scalable business model going forward. If we look at this a little bit more technically, you can say that we have an application which is very, very API driven. That means it integrates with other sources of information, be it Salesforce, be it some sort of engineering tool, be it whatever you have in your enterprise architecture. then bring bringing that data so that a human being or a machine can read it which is of course very important to to support the supply chains out there and then distributing these documents in various forms so that is makes our applications very agnostic to ERP systems and other systems however the ERP systems are very important for our business model because that's how we enter the enterprise we get into the enterprise through the ERP system and that is a That is a key thing because that is a large investment as I said. We build our partners, we train them and then of course we see sales coming in. The ERP systems is a way in however we are agnostic in terms of how our application works. And then just looking a little bit at our customer list, which is again underpinning the fact that we are very, very horizontal. We have IKEA there. We have Caterpillar, as I mentioned. which is fashion goods and we have Continental which is in the automotive sector and then Santander Bank and D&B various banks that are using us as well so this was a short introduction to this very interesting company and there are some other aspects of this which is around our business model how we grow our ARR year after year. So that's why I hand over to you, Sofie, to talk a little bit more about our new set of figures, but with the same quality as they have always been with ARR etc.

Thank you, Magnus. Hello everyone, and my name is Sofie Vignes and I'm the CFO for FormPipe. I just want to highlight a little bit that now you are, of course, looking at numbers that you might not recognize before. So we have restated our interim reporting to comply with IFRS 5, and that means that public, including the product BG Link, are treated as business under divestment. So we have excluded public NBG link for most of the numbers presented in the interim report. And as the numbers you are seeing here, that means then that these numbers are then only constituting of laser net together with our supporting functions or group functions. So this is then the new remaining business then that we will rename to LaserNet Group. So hopefully this will make sense to you all. So if we start then on the top-hand side. Good. And I'm seeing some of these are not. Okay. I will click through all of these. If we start then on the top hand side, it's great to see the SaaS revenue growing year over year with 19%. If we looked at delivery, which used to be an important factor when we had FormPipe and the public business included. In LaserNet, we still have delivery. It's done mainly through subcontractors, so we do see some variation quarter by quarter. On the other hand, we're also then having higher costs for this as part of this. So that's included in sales expenses. So even though a delivery number is important to make sure that we can deliver and cater to our customers, it's not an important factor for us in terms of the P&L because if we do have an increase in delivery revenue, we will also have an increase in our sales expenses. So I just wanted to highlight that. so that it's clear for everyone going forward. And then if we look at net sales, so then not the total income, but net sales, we are up 9%. And then as we mentioned also in the report, excluding FX, that actually is then 13% for that organic growth, which is of course also nice to see. And then moving a little bit on the cost perspective, as I mentioned, sales expenses naturally then increases as we both have higher delivery revenue but then also of course related to the fact that we are selling more so we also have our partner margins included in our sales expenses and then we have other costs as well and as Magnus mentioned it's great to see that the margin improvements are having an effect so the work that we've been doing throughout the year is becoming more and more visible and we also then want to highlight them that we have a great Erica of 21% compare them to 8% last year so that actually shows both the continuous growth in top line but also then the margin improvements that we have worked on throughout the years or throughout the year We do have one-offs of approximately 4 million sick, which is related to the upcoming divestment of public. And that means we have then an adjusted EBITDA of roughly 8 million sick compared to minus 0.5 million sick last year. And then moving to the next slide, I want to just talk a little bit then about the laser net recurring revenue. So we are now at 215 million SEK on a rolling 12-month basis. We have roughly 89% of net sales, so not total income, but of net sales, and also 12% year-over-year growth from a rolling 12-month perspective. But I also want to highlight that the CAGR for the past 10 years in LaserNet has been over 21%. So it really shows the strong and stable growth journey we've been on in terms of recurring revenue for the LaserNet business. And in the past two years, it has been 13%. And I also want to highlight then that LaserNet Group, as a standalone business, including then supporting functions, that we are now covering more than 109% of our fixed operating costs. So that means we have a good basis for our continuous growth journey going forward. And I'm sure there will be lots of questions maybe going forward about our numbers and I will be happy to present those going forward. But with that I hand it over to me again because I have another slide which is then The ACV for LaserNet. So we have a negative FX effect of 3 million SEK, similar to last year. But it's also been, you know, strong headwinds that Magnus mentioned all throughout the year. And again, also then in Q3. We had a net ACV of plus 6, similar to last year. with an increase in SAAS of 8 million SEK and a reduction of 2 million in support and maintenance. And this reduction in support and maintenance, one of the main churns there is actually a customer called Skellefteå Kraft and it's not our own product. We were actually reselling e-docs by OpenText to Skellefteå Kraft and acting as as an intermediary there, so we had an agreement of 1.2 million that churned, but we also had selling costs of about 900, so that means we're losing a margin which was roughly 26%. So from an ACV perspective, the 1.2 million is of course large, but from an overall P&L perspective, it doesn't have that much of an effect. And we will come back to more information about these, you know, other revenue streams that we have. I mean, most of our ACV is coming from our core businesses and our core products. And I mentioned before last year we had the churn of a thought in our life science. So there are some products that aren't key for us, that we still have a little bit of ACV and revenue, but it's a very small portion of our total ACV. And that means then ending Q3, we had an outgoing ARR of 220 million SEK for the Latinx group, which is then a 7% increase compared to last year. And that's despite then the negative headwinds of FX that we are having. And with that, I'm handing it over back to you, Magnus.