Epsilon Net — Investor Presentation (November 2020)
37 slides from Epsilon Net's investor presentation, November 2020
Slide 1: Corporate Presentation November 2020
Corporate Presentation November 2020
Slide 2: Disclaimer
Disclaimer This document has been prepared by Epsilon Net S.A. (the “Company” or “Epsilon Net”) for use at presentations by Epsilon Net and/or the Advisors to Institutional Investors, held in connection with the proposed offering of shares of Epsilon Net (the “Offering”), and may not be used for any
Slide 3: Our Facilities
GE Our Facilities EPSILONNET —— yaks )S|LON SL ail
Slide 4: Epsilon Net Group at a glance
Epsilon Net Group at a glance 1H 2020 Group Sales 7 +370 €8.45 mn. +7,30 % Subsidiarie Employees 1H 2019: € 7.87 mn. s 6% EBITDA 6 +35 Growth (2017- Products 2019) 1H 2020 EBITDA +300 Partners/Reseller 1H€1.83mn. +17,07% +30.000 2019 : €1.56 mn. Clients s 12.000 Accountant offices 1H 2020 EBIT Sales
Slide 5: Epsilon Net Timeline
Epsilon Net Timeline 20 ,0 0 0 €17.977. Epsilon Net acquires 18 ,0 0 0 980 Development of 34% of HiT S.A. 1 company to be st PYLON, revolutionary listed in technological Dynamically 16 ,0 0 0 the ATHEX platform entering in the Alternative Market software 14 ,0 0 0 industry with «Extra Software» 1999
Slide 6: Epsilon Net Flexible Business Model
Epsilon Net Flexible Business Model Medium and Small enterprises are connected with accountant Large Corporation offices ERP s& Epsilon Net penetrates CRM ess in the market n Conglomera Busi gence of Large and MediumIn lenterprises t e li tes Medium through HRM & Payroll system Enterprise s ERP CRM
Slide 7: Epsilon Net Group Activity
Epsilon Net Group Activity Group activity is concentrated in IT& Innovation, with PYLON as the main platform for developing Business and IT solutions Software & Innovation PYLON Technology – Programming Software PYLON Technology has been a milestone for Epsilon Net, paving the Accounting & Tax offic
Slide 8: Epsilon Net Product Portfolio & Customer Base (Dec.2019)
silon Net Product Portfolio & Customer Base (Dec.2019) Accounting & Tax Office Software 8 Products PYLON Software 12.180 Clients 12 Products Customers 10.813 Clients Payroll & HRM Software 7 Products 6.120 Clients Vertical Markets (Hotel – Restaurant – Auto – Gas Station) Accounting & Tax Office PYL
Slide 9: PYLON Development & Key Milestones
PYLON Development & Key Milestones "Epsilon Smart", is a Web application for small and medium enterprises and freelancers, that issues all the tax documents needed by computer - tablet - mobile. Epsilon smart is a complete commercial 2020 application (purchases, sales, warehouse, receipts, payments,
Slide 10: PYLON at a glance
PYLON at a glance What is it? PYLON is a uniquely integrated, unified, pioneering software development platform developed by Epsilon Net. The PYLON system offers a series of unique advantages to all applications developed on it, extremely important and essential How does for it the success of a busi
Slide 11: e-Forologia.gr
e-Forologia.gr Leading Financial, Tax & Labor Legislation Portal with +65k monthly visits & +15k scientific Q&A’s Strong and trusted brand in the Greek Reliable information accounting industry Daily Articles New users per serving as a strong annum lead Calendar • 1,593,047 generation Online e-Bookst
Slide 12: Increasing Profitability Trends
Increasing Profitability Trends Increasing profitability trends showcased by a steady increase in Gross and pre-tax profit, sales and EBITDA. Steady increase of ROE exemplifies efficient capital employment & profit generation. Sales (€ th.) EBITDA (€ th.) +10,8% 3,500 3,265 20,000 17,978 +37,0%
Slide 13: Robust base of recurring revenue
Robust base of recurring revenue Strong customer retention builds resilient base of recurring revenue 51.20% 53.80% Recurring 56.15% 60.75% Recurring Revenue revenue Cloud 12% 48.80% 46.20% 43.85% 39.25% Maintena 2017 2018 2019 1H 2020 nce 88% Non Reccuring Reccuring Custom er Customer 97,5% 97,8% 9
Slide 14: Efficient cash conversion
Efficient cash conversion Operating Cash Flows (€th) 3,500 3,188.8 3,000 2,500 2,173.3 2,000 1,683.0 1,500 1,318.0 1,079.6 1,000 500 0 30.06.2019 30.06.2020 2017 2018 2019 • Positive cash flows throughout the period 2017 – June 2020 despite large investing cash flows. • Increasing trend in operating
Slide 15: Corporate Strategy
Corporate Strategy 15
Slide 16: Corporate Strategy – ACCOUNTING OFFICES
orporate Strategy – ACCOUNTING OFFICES Positioning Competitors 45 % Total Epsilon Net Market Competition Share 55 % Penetrating potential clients via Market share Accounting Offices Small & Medium 40% Epsilon Net Enterprises 60% Competition (+800k) * All figures are based on our estimations 16
Slide 17: Corporate Strategy - HR
Corporate Strategy - HR Positioning Competitors 30 % Epsilon Net Market Competition Share 70 % Market share 10% Large Corporations & Conglomerates Epsilon *(500+) Net Market 50% 40% Medium Enterprises Share *(100-499) breakdown Small Businesses *(30-99) * Number of Employees * All figures are based
Slide 18: Corporate Strategy – Commercial Software – ERP
orporate Strategy – Commercial Software – ERP Competitors Positioning 10% Total Market Epsilon Net Share Competition (Small, 45% Without 45% Medium & Software Large Enterprises) Market share 5% Large Corporations Epsilon & Conglomerates Net Market 35% *(500+) Share 60% Medium Enterprises breakdown *
Slide 19: Epsilon Net Acquires 80% of Data Communication (Oct. 2020)
silon Net Acquires 80% of Data Communication (Oct. 2020) TOTAL INVESTMENT €6,3m Accounting & Tax Office Large & Medium- Software sized businesses SOLID CLIENT BASE • 3,500 EXCELLENT BRANDNAME Clients EFFICIENT MANAGEMENT & Payroll & HRM Software WORKING FORCE • 800 Clients Commercial Software for SM
Slide 20: Business Opportunity
Business Opportunity 20
Slide 21: Strategy of increasing Market Share in Greece
Strategy of increasing Market Share in Greece Significant increase of Pylon ERP products through the penetration of existing clientele. Enlargement of market share in HRMS products and Accounting Offices. Non-stop investments for new PYLON sub products. Transfer of all existing clientele into new PY
Slide 22: Digital Transformation
Digital Transformation Utilizing the broadening of the market due to digital transformation of SME’s and new legislation of e- invoicing (official start Jan.2021)
Slide 23: e-invoice: Major Business Opportunity
e- invoice On line data sending to Major Business Opportunity! Official Launch Jan.2021
Slide 24: Leveraging superior route to market
Leveraging superior route to market Existing clients PYLON ERP & HRM Large & Tax Medium-sized accountin businesses +18.000 Clients g office +12.000 Clients Penetration in large PYLON Commercial New clients & medium-sized On average, there businesses through are 40 customers digitization, vertical pe
Slide 25: Uniquely positioned to navigate complicated regulatory environment
Uniquely positioned to navigate complicated regulatory environment Constantly changing tax framework for businesses 450 new directives that change the tax obligations of companies in 2020 55% } Live Phone market Constantly changing framework of labor and insurance legislation + Support Daily from 09
Slide 26: Evolution of customer growth
Evolution of customer growth 14,000 # Customers +2.0 12,000 41 Markets Vertical 10,000 ERP + +4.0 8,000 69 +3.4 6,000 +2.0 65 +1.02 30 4,000 5 2,000 1. The production 0 of Pylon Platform (1) 2015 2016 2017 2018 2019 1H 2020 began 2013 and # Customers 7,000 +20 the first products +47 0 6,000 +40 were
Slide 27: Offering leading cloud-based software solutions
Offering leading cloud-based software solutions cloud-based software products and platform simplifies the business and modernizes the control of a company. Revolutionary online services for accountants and accounting firms that combines information, and expense savings. cloud-based software solution
Slide 28: Leading provider of e-invoice solutions
Leading provider of e-invoice solutions Epsilon Smart is a web application that has been developed with the most modern development tools to make the most of the latest technologies. The result of these technologies is the unique user experience and the necessary functionality for professionals, in
Slide 29: Financial Overview
6. Financial Overview 29
Slide 30: P&L Statement 2019- June 2020
P&L Statement 2019- June 2020 in thousands of € 1.1-30.06.2019 1.1-30.06.2020 1.1-31.12.2018 1.1-31.12.2019 Sales 7.870,96 8.445,36 16.227,74 17.977,98 Cost of sales -3.642,10 -3.649,25 -7.676,29 -7.773,93 Operating income 4.228,86 4.796,11 8.551,45 10.204,05 Other operating income 29,79 29,30 143,3
Slide 31: Balance Sheet 2019- June 2020
Balance Sheet 2019- June2020 in thousands of € 30.06.2020 31.12.2018 31.12.2019 Assets Non-current assets Tangible fixed assets 2.723,87 1.095,07 2.881,60 Intangible Asets 4.633,32 5.542,69 4.837,22 Investments in Subsidiaries - - - Investments in Associates 1.200,84 179,97 1.145,89 Other equity ins
Slide 32: Cash Flow Statement 2019- June 2020
Cash Flow Statement 2019- June 2020 1.1-30.06.2019 1.1-30.06.2020 01.01 - 31.12.2018 01.01 - 31.12.2019 in thousands of € Operating activities Profit before tax 634,49 982,69 1.048,59 1.368,06 Reconciliation adjustments: Depreciation 758,50 703,84 1.114,43 1.510,55 Provisions 67,89 180,66 62,11 372,
Slide 33: Data Communication Financial Overview
Data Communication Financial Overview 30.06.201 30.06.201 30.06.2017 8 9 5.933.653,5 6.285.874, 6.153.820, Turnover (Sales) 2 51 22 Large & Medium- sized businesses Gross Operating Results 2.071.330,4 2.281.212, 2.267.922, Profit / - Loss 1 43 48 Operating Results Profit / - 117.376,29 106.945,64 94
Slide 34: Appendix
Appendix 34
Slide 35: Epsilon Net Management & HR Overview
Epsilon Net Management & HR Overview Administra tive 38 Technical & Women 47 Sales & 108 Financial / Labor % Marketi 70 Science ng Support Total 53% 374 Men R&D 158 61% 49% 87% Of employees Of employees Of employees have higher education degrees under 38 under 50 more than 20Years Experience in Info
Slide 36: Stock Statistics
Stock Statistics Epsilon Net Chart 3€ 2€ 1€ June ‘20 Source: Inforex July ‘20 August ‘20 September ’20 October ‘20 November ‘20 General Information Shareholders Structure - 31.10.2020 Capitalization (31.10.2020 23,90% €2,94) € 39,396,000 Shares Outstanding 13.400.000 6,51% 69.59 % ISIN GRS498003003
Slide 37: Thank you
Thank you Epsilon Net Α.Ε. https://www.epsilonnet.gr/ Contact Person: John Koutkoudakis – 0030 211 5007000 [email protected] 37