Flemming Breinholt, CEO and Dora Brink Clausen, CFO | 29 August 2019 - PowerPoint PPT Presentation

Flemming Breinholt, CEO and Dora Brink Clausen, CFO | 29 August 2019 Q2 Second quarter 2019 Q2 2019 PRESENTATION 1

Q2 highlights and operational update Flemming Breinholt 2 Q2 2019 PRESENTATION

Karnov – The leading B2B platform For legal and tax professionals in Denmark and Sweden PRACTITIONERS PUBLIC CONTENT SOURCES Enabling users to make better decisions, faster – every day Legal Accounting and practitioners audit firms CORPORATE Nordic Small & medium PROPRIETARY CONTENT blue-chips enterprises ➔ >1,500 expert authors PUBLIC ➔ ~80 in-house editorial staff Government Courts administration Q2 2019 PRESENTATION 3

Q2 business highlights Preparations for the roll-out of new joint offering Key comments Preparations for the roll-out of JUNO, the new common platform for Norstedts Juridik and Karnov Group Sweden Customer satisfaction remains high The Karnov share listed on Nasdaq Stockholm on 11 April (ticker “KAR”) IPO over-subscribed and new financing agreement enabling greater financial flexibility Karnov Groups executive management team Q2 2019 PRESENTATION 4

Q2 financial highlights Steady growth with continued higher margin +4% +3% +1.4 pp 2.7x Net sales Organic growth Adjusted EBITA Leverage margin Q2 2019 PRESENTATION 5

Continued strong performance in Denmark Key comments 6% net sales growth 2% increase in adjusted EBITA Strong upselling to existing customers Tax advisor offering supplemented with 5,000 Q&As and 450 appendices Q2 2019 PRESENTATION 6

Start of roll-out of Juno in Sweden Key comments One organisation operating from 1 May Over 250,000 documents migrated to JUNO from the separate platforms of Norstedts Juridik and Karnov Group Sweden ”Teaser campaign ” for JUNO in June Extensive product testing during summer Onboarding of customers for JUNO started 26% growth in adjusted EBITA and 5 pp improvment in adjusted EBITA margin Q2 2019 PRESENTATION 7

Financial development Dora Brink Clausen Q2 2019 PRESENTATION 8

Stable sales growth with improved profitability 4% sales growth and 9% adjusted EBITA growth GROUP Adjusted EBITA, SEKm and Net Sales, SEKm margin % +9% +4% 200 60 150 50 35% 33% 40 100 30 20 50 10 166 173 55 60 0 0 Q2 2018 Q2 2019 Q2 2018 Q2 2019 Q2 2019 PRESENTATION 9

Steady sales growth In both segments UP GROUP Net Sales, SEKm Key comments + 4.4 % Steady net sales growth of 4.4% 200 Q2 normally weakest quarter due to seasonality in non-subscription sales 150 Organic growth of 3% in line with expectations Organic growth driven by online sales, partly offset 100 by a decline in offline books Both DK and SE contributed to higher sales 50 Currency effect added 1.4% 194 166 176 179 205 173 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2019 PRESENTATION 10

Continued profitability improvement Seasonality in Q2 margins GROUP Adjusted EBITA and margin, SEKm and % Key comments 90 +9% Continued margin improvement with 9% 80 growth in adjusted EBITA 70 Improvements due to higher sales, better 60 product mix and good cost control 42% 50 40% 39% 35% Improvements partly offset by higher 34% 33% 40 amortisation due to finalised development 30 projects and implementation of IFRS 16 20 10 76 55 70 61 85 60 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2019 PRESENTATION 11

Continued focus on driving online-based sales Increased share of subscription-based and online sales GROUP Sales split subscription/non-subscription, % Sales split online/offline, % 100% 100% 10% 9% 18% 17% 20% 24% 80% 80% 60% 60% 83% 80% 76% 91% 90% 82% 40% 40% 1 pp increase in 3 pp increase in 20% 20% subscription-based online sales sales 0% 0% Q2 2018 Q2 2019 FY 2018 Q2 2018 Q2 2019 FY 2018 Online Offline Subscription Non-subscription Q2 2019 PRESENTATION 12

Continued strong performance in Denmark DENMARK Net Sales, SEKm Adjusted EBITA, SEKm and % Key comments +6% 6% net sales growth +2% 3% organic growth in line with expectations 100 Currency effect added 3% 80 42% 44% 50 38% 41% 41% Sales driven by upselling to existing customers 34% 60 40 Improvement in adjusted EBITA with stable high 30 margin 40 20 20 10 102 94 105 96 109 99 35 40 46 36 44 41 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2018 2019 2019 2018 2018 2018 2018 2019 2019 Q2 2019 PRESENTATION 13

Significant profit improvement in Sweden SWEDEN Net Sales, SEKm Adjusted EBITA, SEKm and Key comments margin, % Net sales growth of 3% +3% +26% 100 Sales driven by both existing and new customers 45% 50 43% Expected fluctuations in sales due to seasonal 80 40 33% effects 29% 60 26% 30 Adjusted EBITA growth of 26% and adjusted margin 21% up 5 pp 40 20 Profit improvement driven by to higher sales, better 20 10 product mix and good cost control 92 72 72 82 96 74 41 16 24 24 41 20 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2018 2019 2019 2018 2018 2018 2018 2019 2019 Q2 2019 PRESENTATION 14

Expected cash conversion development GROUP Adj. operating cash flow, SEKm and cash conversion, % Key comments 219% 177% 200 Q2 cash conversion as expected 168% Seasonality in adj. operating cash flow 150 Change of processes in Norstedts Juridik with positive impact on cash generation from higher 100 invoicing in first part of 2018 37% 50 25% 177 120 163 23 -16% 18 0 -12 -50 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2019 PRESENTATION 15

New capital structure following IPO New financing agreement in place GROUP Net debt, SEK m, and leverage, times Key comments 1 800 Net proceeds of SEK 670 m from IPO 9,0 1 600 8,0 SEK 206 m in loans from related parties converted 7,4 1 400 6,5 into shares 7,0 5,8 1 200 5,3 5,3 6,0 Remaining loans from related parties repaid 1 000 5,0 New financing agreement with better terms 800 4,0 2,7 Net debt cut by half to SEK 841 m 600 3,0 Leverage ratio at 2.7 times adjusted EBITDA 400 2,0 200 1,0 Lower interest expense to external loans going 1 572 1 620 1 623 1 529 1 618 841 forward; estimated to less than SEK 20 m/year 0 0,0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2019 PRESENTATION 16

Performing in line with financial targets Growth Profitability Capital structure Annual organic net sales growth of A higher adjusted EBITA margin Net debt to adjusted EBITDA 3-5% in the medium term, in the medium term. of no more than 3.0. This level may supplemented by selective acquisitions. temporarily be exceeded, for example as a result of acquisitions. 3% 2.7 x +1.4 pp Q2 2019 PRESENTATION 17

Summary of first six months 1 3 H1 as communicated at listing Continued strong customer satisfaction – Organic growth of 3% in both DK and SE – Adjusted EBITA margin up 1.9 pp – Leverage below 3x 2 4 JUNO ready to be rolled out in H2 Solid capital structure created 5 Good conditions to grow business further 18 Q2 2019 PRESENTATION

Q&A Better decisions, faster Find what you need, trust what you find and do it quickly. For more information visit www.karnovgroup.com/en/section/investors/ Q2 2019 PRESENTATION 19

Appendix Q2 2019 PRESENTATION 20

Key ratios per quarter Key ratios per quarter Q2 Q1 Q4 Q3 Q2 TSEK 2019 2019 2018 2018 2018 Net sales 173.440 204.931 178.817 176.175 166.124 Organic growth, % 3,0% 3,2% 0,8% 4,8% 5,5% EBITA 30.458 67.501 36.529 60.194 44.905 EBITA margin, % 17,6% 32,9% 20,4% 34,2% 27,0% Adjusted EBITA 60.123 85.331 60.642 69.632 55.260 Adjusted EBITA margin, % 34,7% 41,6% 33,9% 39,5% 33,3% Net result -44.303 7.852 -15.261 6.540 -17.020 Adjusted cash flow from operating activities 18.097 163.384 120.397 -12.152 22.774 Q2 2019 PRESENTATION 21

Items Affecting Comparability Items affecting comparability Q2 Jan-Jun Jan-Dec TSEK 2019 2018 2019 2018 2018 Acquisition costs - - - 20.965 20.965 Integration costs 6.566 - 10.051 4.490 12.042 IPO costs 23.099 10.355 37.444 15.617 38.668 Other - - - 4.238 7.204 Total 29.665 10.355 47.495 45.310 78.879 Q2 2019 PRESENTATION 22