4 PRESENTATION OF FOURTH QUARTER AND PRELIMINARY FULL YEAR 2019 RESULTS President & CEO Håkon Volldal
Q-FREE AT A GLANCE 395 >50 000 2 FOURTH QUARTER 2019
SUMMARY
HIGHLIGHTS FOURTH QUARTER 2019 FULL YEAR 2019 • 246 MNOK in revenues, up 2% YoY driven by • 962 MNOK in revenues, up 8% YoY driven by parking and inter-urban segments tolling, parking and inter-urban segments • 11 MNOK in reported EBITDA and 15 MNOK in • 73 MNOK in reported EBITDA and 71 MNOK in adjusted EBITDA (6% margin) compared to 9 MNOK adjusted EBITDA (7% margin) compared to 71 and and 22 MNOK respectively in Q4-18 89 MNOK respectively in 2018 • 236 MNOK in order intake including a 75 MNOK • 950 MNOK in order intake compared to 972 MNOK tolling contract in Thailand in 2018 (1065 MNOK and BtB of 1.1 including ALPR frame agreement in the US) • 46 MNOK in net cash flow from operations and 11 • 1 080 MNOK in order backlog (excluding frame percent reduction in net interest-bearing debt agreements), versus 1128 MNOK at the end of 2018 • 32 MNOK impairment of parking assets related to • 25 MNOK in net cash flow from operations decision to divest parking and infomobility assets 5 FOURTH QUARTER 2019
SUMMARY FINANCIALS MNOK Q4 2019 Q4 2018 YoY FY 2019 FY 2018 YoY Change Change 962 889 +8.3% Revenues 246 241 +1.8% Gross contribution 137 151 -9.2% 542 569 -4.7% Gross margin 55.9% 62.6% -6.7pp 56.4% 64.1% -7.7pp OPEX 122 129 -5.2% 471 480 -1.8% Adj. EBITDA 15 22 -32% 71 89 -20.1% Margin 6.1% 9.2% -3.1pp 7.4% 10.0% -2.6pp Non-recurring items -5 -13 2 -18 EBITDA 11 9 +22% 73 71 +2.2% Margin 4.3% 3.6% +0.7pp 7.6% 8.0% -0.4pp EBIT -35 -3 -28 24 6 FOURTH QUARTER 2019
FINANCIAL UPDATE
REVENUE DEVELOPMENT QUARTERLY REVENUES Q4-19 REVENUES PER REGION/BUSINESS AREA NOK million Percent 251 246 APMEA 243 241 INTER- 8 % 223 URBAN EUROPE 18 % 58 % URBAN AMERICAS TOLLING 13 % 34 % 51 % INFOMOBILITY 9 % PARKING 9 % Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • EUROPE is the largest region with 58% of revenues. Nominally, Revenues up 2% from Q4 2018 revenues increased Y oY in all regions except AMERICAS • T olling revenues up 3% Y oY • Non-tolling businesses accounted for 49% of revenues in the • Non-tolling revenues up 1% Y oY quarter, down from 50% in Q4-18 8 FOURTH QUARTER 2019
SEGMENT REVENUE DETAILS NOK million SEGMENT Q4-19 Q4-18 FY 2019 FY 2018 YoY change Tolling 125 121 536 481 +11% Parking 23 13 71 52 +37% Infomobility 21 26 78 78 0% Urban 32 49 143 157 -9% Inter-Urban 44 33 134 121 +11% REVENUES 246 241 962 889 +8% 9 FOURTH QUARTER 2019
EBITDA DEVELOPMENT EBITDA EXCL. NON-RECURRING ITEMS EBITDA MARGIN EXCL. NON-RECURRING ITEMS NOK million Percent 12% 9,2 % 9,1 % 10% 9,0 % 8% 6,1 % 6% 23 22 22 3,8 % 4% 15 9 2% 0% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • Y • 2019 EBITDA negatively impacted by several low-margin tolling oY EBITDA decreased due to low SW sales in Urban projects that are now finalized and low urban SW sales • Q4-18 and Q4-19 have been adjusted with 13.5 and 4.5 MNOK respectively in non-recurring items 10 FOURTH QUARTER 2019
SEGMENT EBITDA DETAILS NOK million SEGMENT Q4-19 Q4-18 FY 2019 FY 2018 YoY change Tolling 8 18 77 83 -8% Parking 5 0 -5 -13 Infomobility 0 4 5 10 -51% Urban 0 11 4 30 -88% Inter-Urban 8 2 24 16 +43% Global Functions -7 -12 -34 -38 Adj. EBITDA 15 22 71 89 -20% Non-recurring -4 -13 2 -18 EBITDA 11 9 73 71 +2% 11 FOURTH QUARTER 2019
ORDER INTAKE ORDER INTAKE & BOOK-TO-BILL PER QUARTER ORDER INTAKE BREAKDOWN IN Q4-19 NOK million / ratio NOK million 350 1,5 298 300 151 262 TOLLING 1,4 236 250 209 1,3 206 19 PARKING 200 1,2 150 10 INFOMOBILITY 1,1 100 1,0 URBAN 31 50 0,9 0 0,8 INTER-URBAN 25 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • Order intake in the quarter driven by 75 MNOK contract in • T olling represented 64% of total order intake in the quarter, non- Thailand tolling 36% • The book-to-bill ratio for 2019 as a whole was 0.99, 1.1 if we include the ALPR frame agremeent in the USA in Q3-19 12 FOURTH QUARTER 2019
ORDER BACKLOG ORDER BACKLOG EXPECTED DELIVERY SCHEDULE NOK million NOK million 198 543 1192 1128 1120 1091 1080 339 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2-Q4 2020 2021 -> • Frame contracts with no comitted minimum volume are NOT included in the backlog 13 FOURTH QUARTER 2019
CASH FLOW AND AVAILABLE CREDIT/CASH AVAILABLE CREDIT AND CASH AT HAND RECONCILIATION OF Q4 AND Q3-19 AVAILABLE FUNDS NOK million 174 147 90 102 84 78 31 32 41 84 25 53 45 46 16 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Available EBITDA CAPEX Working Net Loan Available funds EO & R&D capital finance & repayment funds EO Q3-19 and tax currency and Q4-19 Available credit Cash at hand reduced credit lines 14 FOURTH QUARTER 2019
BALANCE SHEET AND NIBD BALANCE SHEET ITEMS NET INTEREST BEARING DEBT NOK million NOK million Equity & liabilities Assets 910 994 910 994 252 226 32 201 31 350 415 304 153 358 126 235 91 222 95 456 426 409 384 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Per 31 December Per 30 September Per September Per 30 June 2019 • NIBD decreased in Q4-19 due to strong cash management Cash • NIBD/EBITDA ratio is within loan covenant Current liabilities Current assets Non-current liabilities Other non-current assets Equity Intangible assets 15 FOURTH QUARTER 2019
OUTLOOK
OUR 2016-2020 STRATEGIC PLAN 2017 – 2018 2019 – 2020 2H 2016 ONGOING 1 2 3 4 INTEGRATE & RESTORE DEVELOP TRANSFORM EXPAND Restore a healthy capital Develop distinct and leading Integrate offerings and Transform Q-Free through structure and establish platform positions w ithin target expand presence to deliver game changing for profitable grow th segments on full ITS ambition partnerships/ transactions 17 FOURTH QUARTER 2019
Q-FREE HAS DELIVERED POSITIVE EBITDA FOR 3 CONSECUTIVE YEARS SINCE THE 2016 RESTRUCTURING ANNUAL REVENUES AND ADJ. EBITDA MARGIN MNOK / Percent, Year End December31st 973 962 1000 20% 889 877 900 15,2 % 789 15% 767 800 11,3 % 705 10,7 % 10,0 % 700 10% 7,4 % 606 598 568 600 500 5% 400 0% 300 -0,5 % -1,0 % -1,4 % 200 -5% 100 -5,2 % -5,2 % 0 -10% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 18 FOURTH QUARTER 2019
REVENUES AND BACKLOG HAVE GROWN DESPITE A REDUCED GEOGRAPHICAL FOOTPRINT AVERAGE ANNUAL REVENUES BACKLOG END OF YEAR / BACKLOG-REVENUE RATIO MNOK MNOK/Percent 1 600 942 1 405 1 400 811 240% 1 200 1 128 1080 1 049 636 1 000 190% 748 800 160% 140% 575 600 481 461 437 127% 379 400 112% 108% 90% 101% 98% 200 73% 65% 63% 61% - 40% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011-2013 2014-2016 2017-2019 -Brazil -Malta -Malaysia -South Africa -Serbia -Indonesia 19 FOURTH QUARTER 2019
SEVERAL KEY CONTRACTS HAVE BEEN WON DURING THE PAST 3 YEARS ALPR border control Toll collection system Nationwide truck tolling Toll collection system for Great Belt Bridge, Toll collection system for system, Norway for Cross City Tunnel, system, Slovenia Denmark Ruta 68, Chile Australia New statewide ATMS for New statewide ATMS PGS for 5 Charles Schwab G-DOT Connected Vehicle Toll collection system for TU Virginia DOT, USA for Iowa DOT, USA garages, USA deployment, USA in Queensland, Australia Large tag orders from France, Roadside solutions for Intrada Insight for AutoPass Central System Toll collection system Digital Tacograph Chile, Portugal, Russia, ferry operators, Norway MassDOT, CFX, FTE, extensions, Norway for Don Muang Tollway, orders Thailand, Australia, Norway MDX, TXDOT etc. Thailand etc. in the USA 20 FOURTH QUARTER 2019
WIN RATE ON TARGET CONTRACTS ABOVE 10 MNOK IN 2019 >60% of value 21 FOURTH QUARTER 2019
WE HAVE BUILT/MAINTAINED TOP MARKET POSITIONS IN 3 OUT OF 5 TARGET SEGMENTS MARKET POSITIONS BY ANNUAL REVENUES IN RELEVANT TARGET MARKETS Top 2 Top 10 Top 10 Top 5 Top 3 DSRC only PGS only North America only 22 FOURTH QUARTER 2019
HIGH LEVEL EVALUATION OF 2016-2020 STRATEGIC PLAN WHAT HAS WORKED WHAT HAS NOT WORKED Initial restructuring Liquidity and cash generation Contract wins and backlog replenishment Cross-selling and bundling Development of Tolling Urban and Inter- Development of Parking and Infomobility Urban businesses businesses 23 FOURTH QUARTER 2019
OUR UPDATED 2020-2023 STRATEGIC PLAN 1H 2020 2020-2021 2022-2023 1 2 3 FOCUS LEAD SCALE Reduce business complexity Keep building reputation as the #1 Scale standardized solutions to improve execution and technology provider in tolling and to selected target markets resource allocation traffic management and standardize solutions 24 FOURTH QUARTER 2019
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