Earnings Call: Q1 2021

Apr 28, 2021

So good morning, everyone, and welcome to this ClearSign ASA Q1 Presentation. My name is Johan Lindqvist, and I'm here together with our CEO, Dennis Hauger, and we will guide you through the results from the Q1. So the agenda for today is I will start with giving you a short summary and overview of the Q1, and then Dennis will making more dive into a review of Evimeria and AvanSoma and the performance during the quarter. We will come back briefly to the financials and give a brief outlook and then open up for some Q and A. So we actually had a really decent quarter. We had in Kerasent AESA consolidated revenues of 28 €200,000, which we can compare to €15,600,000 in the Q1 in 2020. That represents a growth of 81%. And if you look at the organic growth, meaning that you compare the full quarter for Avan Soma last year, the organic growth in both entities for KFZEN was 34%. Including expenses and charges for the stop option program, which represented SEK10.4 million, The net result in the group was a net loss of SEK7.7 million as compared to SEK4 million positive in Q1 2020. Cash balances in end of the first quarter was €217,700,000 Looking at Evimeria, revenues were SEK20,700,000, which represents an increase of 30% in local currency as compared to Q1 2020 and EBITDA of €8,000,000 as compared to €6,000,000 during Q1 2020. And EBIT was €5,300,000 as compared to €3,700,000 in Q1 2020. And what was really important in this quarter is that we had a really strong order inflow from new business, and we signed 34 new clinics during the Q1 in 2021, which means that we ended the Q1 with 5 29 active clinics. When it comes to Alansoma, revenues were SEK 7,300,000, which represent an increase of 32% as compared to Q1 in 2020. And EBITDA and EBIT also start to show some traction mainly because of selling to existing customer base, the XAU journey that they are starting, but also selling add on services to existing customer base. We also had a really good quarter in Avan Soma, signing up 24 new clinics during the quarter and ended the Q1 with 164 active units. So with that, I'd like to leave it to you, Damas, to review the different entities in more depth. Thank you, Johan. As Johan said, I will dive a little bit deeper into the Entities and show you the performance of the 1st quarter, as we said, we signed the 34 new clinics during the Q1 in Evaneria, which She proves that the market is heading back to normal state. We had Some postponed customer dialogues that we communicated earlier. And A sign of this is also that we signed a framework agreement with Alaris, which contained in the first wave the 6 New clinics that's going to change the EMARS to our offer, Webdoc. And the ambition with this framework agreement with Alaris is not to stop with those 6 clinics. They want to harmonize their IT and their digitalization within the organization. And the reason why they chose Hemimeria's offer is because they think that this will fit their digital journey on forth in the best way. And with this, we had a yearly growth from the quarter to quarter with 24% Neuthenics. And so for the growth, the revenue, We have been spoken a lot lately about our ecosystem, our integrated services. And Here we're also improving our offer, which shows in our revenues. In the Q1, we had relation to the webcast license revenue with 1 to 1. So we're selling equal the amount of integrated services as we sell Web Dot licenses. And we do this mainly because of two reasons. One is, of course, we are expanding the ecosystem and So the pandemic has shown a bigger interest for those kind of services where you have to For example, you have to communicate with the customer and the patient throughout the video or in digital ways When you can't meet the patients, so it's Our thought is starting to become true. So this is a positive thing with the pandemic. Although we still see some effects of the pandemic, now the healthcare is moving into the vaccination phase, which has shown some postponed customer dialogues again. But As of today, nothing much, but I'm we see some tendencies of it. And we ended the quarter with a revenue of SEK 20,700,000 Swedish krauts, which represents a 30% growth from the Q1 in 2020. And we still see some proof in our A scalable module, we ended the quarter with EBITDA of SEK 6,000,000 compared to EBITDA We ended the quarter with SEK 7,900,000 and the Q1 in 2020 was SEK 6,000,000 in EBITDA And the EBIT of SEK 3,700,000, which represents a 41% EBIT growth, and we are still above the 25% EBIT margin with 26% EBIT margin. And for the Avan Soma, they are not so new anymore to us, and we're starting to get to know the company. They signed 24 new clinics during the Q1, which is fantastic. Although a majority of those clinics comes from the customer, Shirkens Bingechon. So this we don't think this amount of new clinics will continue on 4th Because we predict the biggest revenue stream of Appenzoma will come from Add on services and the shift to the cloud services on existing customers. And this is that is what we'll show the growth on board within the Avon Sommer company. But this Results in total units of 164 as of today and The amount of clinics from the Q1 in 2020 to the Q1 in 2021 growth was 42%. And as I told a little bit on the other slide, The mission on forth for Avan Soma is to migrate customers To cloud services and also to upsell new services to existing customer base. They have a lot of focus on the product called Advoca, which is a communication platform between the caregiver and the patients. But we ended the Quarter with a revenue of NOK 7,300,000, which represents a 32% growth quarter to quarter. And as Johan told you earlier, the company Starts to show a little bit of the scalability because of this upselling and also the cloud shifting on the existing customers. So hopefully, we will see more of this scalability showing on Porf. But over the year, from the quarter to quarter, we had an 88 EBIT growth. So I leave it over to you, Johan, for some financials. Okay. Thank you very much, Dennis. So just a few words a few more words on the financials and divided into the different areas and the entities that Care Center represents. First, I'd like to start with showing the EBIT bridge for the result in Q1. And as you can see, we have All our revenues are related to Evaniria and AvanSoma, and we also have some differences in FX, not only in the quarter, but also compared year over year. So as you can see, We had the Carisent parent company, that entity had costs of approximately €1,000,000 which is in the range that we have guided on earlier. And we also have this depreciation from the previous acquisitions of Evimeria and Alansolma, which represents approximately €1,000,000 as well. So the EBIT for the group was SEK3,700,000 as compared to SEK1,700,000 in Q1 2020. And as I said to start with, We also have this stock option program, which is not that have any cash effect at all, but where we reserve on the balance sheet, which means that the net loss For the quarter, it was €7,700,000 So this slide basically represents the different entities that we will continue to track. As you can see, we have Evimeria and AvanSoma. And we have also started a company called Carasent AS, which will be the entity where we will but all the development efforts when we start to develop and launch Evimeria's offering in Norway together with Avans Soma. We also have, As I said before, the recurring part of the Terasand, which approximately represents EUR 1,000,000 in OpEx and another €1,000,000 in depreciation. And then we have kind of the non cash effect, non recurring effects of the soft option program. So this means that overall, SEK 28,300,000, which represents a growth of 81% in total and 34% when it comes to organic pro form a growth and a net result of a negative €7,700,000 So with that, I'd like to just share a few thoughts on the outlook and what we see going forward. So I mean, there's no need to say it's been Challenging and kind of strange year in many aspects. But as worried as we were a year ago, We're much more, of course, optimistic now. We have had not all that much effect on Epimeria and Avan Soma on the pandemic. But what we do see is this is a starting point where shortcomings and under investments in the healthcare sector has been made very clear. So we're very optimistic that the market will remain strong going forward. And we think we will see heavy investments within digitalization in healthcare over the coming years. And we also continue our strategic efforts to find new opportunities, and there are a lot of opportunities for us out there. And given the efforts that we put into this, we are pretty much certain that we will execute on our M and A strategy during the year. So with that, I think we'll open up for questions. So here we have a question maybe for Unenis. Can you talk a little bit about the newly added FinEx? It's a broad impact. Is it more specialist, primary or any other? I would say a majority of the new clinics is specialists, And most of them is private driven in the forms of Insurance financing and private financing. Next question is, how is the shift to cloud going for Avan Soma? How is the reaction from the customers? The reaction is mainly good. As we ourselves in EMEA is entering the knowledge into the Norwegian market, we see the demand for The cloud services is very high. The first question we get when we are talking to customers in the Norwegian market is The main need for a new system is that it's cloud based. So it's good. So I think we are on the right path. Good. Another question here. Under how long time And period, would the units from Schirke as being a loan be rolled out? Is it the next quarter or very more end of the year? It's more like a year. So we have implementations and implementation plan Bland Onfof, and it will be some clinics of those 20 that will be implemented in the early 2022. So from here and 12 months from now. And then we also have a question from Relating to AvanSvauma, I think, how many clinics did AvanSvauma migrate from kind of the legacy solution to the Do we have any numbers on that? I don't have any exact numbers in To tell you now actually, but maybe 5, 10 or so, it's a Newly added service, so it's just been We just started to roll it out. So another question here. Do you believe there is a And does demand from Primary Care Clinics to change the HR system after the pandemic? Or is it more related to other segments. So what's the trigger here? I guess you referred to the Swedish market for Abimeria. And I don't think we will see a big number from the primary care clinics In the near future, I think it will mainly be the specialist caregivers That we will see in our new clinics. Good. And then we have a question about M and A. What will the focus be? Is it mainly new geographies or is it adding products or segments? And I will say the answer to that is both. What we have said and what we will continue to focus on is we will most likely build Kerasan stronger in Norway and Sweden in terms of geographies before we enter another country. So We're focusing right now on Norway and Sweden, and we're focusing on adding new services as well. Okay. I think that was The last question. So with that, thank you very much for joining this morning.