Annual Report 2023 | | |
Annual | |
Report | |
2023 |
LINK Mobility Group Holding ASA
1 Back to the Table of Contents
Annual Report 2023 |
LINK in short | 03 |
Message from the CEO | 05 |
LINK strategy | 07 |
LINK product portfolio and the digital messaging industry | 16 |
Sustainability statement | 25 |
Report from the Board of Directors | 129 |
Financial statements | 150 |
2 Back to the Table of Contents
Annual Report 2023 | LINK in short
LINK has 686 employees in 29 offices across | LINK | ||
17 countries in Europe | IN | ||
LINK's 50 000 customers worldwide last year sent | |||
17 billion messages, averaging more than 300 000 | |||
messages per customer | SHORT | ||
2023 revenue NOK 6.3 billion. | |||
Adjusted EBITDA NOK 613 million | |||
=> EBITDA margin 10% | |||
8000
6000
4000
2000
0
900
600
300
0
Revenue NOKm
+21% | 6,282 |
4,914
4,291
3,539
2020 | 2021 | 2022 | 2023 |
Adjusted EBITDA NOKm
+16%613
491486
391
2020 | 2021 | 2022 | 2023 |
3 Back to the Table of Contents
Annual Report 2023 | LINK in short
LINK was founded more than 20 years ago and relisted on the Oslo Stock Exchange in 2020 following its privatization in 2018. Since returning to the stock market, LINK has completed 6 new acquisitions in Europe.
LINK has offices in most European countries
2024
2023
2022
2021
Altiria (Spain) DEC
Chatbot Xenioo NOV
AMM (Italy) APR
MarketingPlatform (Denmark) APR
Tismi (Netherlands) FEB
2020
WebSMS (Austria) NOV
2019
2018
2017
2016
4 Back to the Table of Contents
Annual Report 2023 | LINK in short
Message from the CEO
LINK made significant commercial progress throughout 2023. The refocusing of sales and streamlining of costs resulted in an organic adjusted EBITDA growth of 15% in fixed FX. High leverage at the beginning of the year was transformed into a solid financial position, providing significant room for value creation through M&A. Our US subsidiary was divested for an enterprise value of USD 260 million at a highly attractive valuation.
Organically, new, more advanced solutions with a significant potential for increased Return On Investment (ROI) for our customers continued to gain traction from a low base. Organic volume growth for the year was 11% and LINK advanced commercially despite the ongoing challenging macroeconomic situation in Europe. Upon entering 2024, LINK had a record contract backlog and a rightsized cost level to generate organic growth and solid financials to pursue additional inorganic growth.
Last year, after an extensive strategic review and following a bid, LINK's board of directors concluded that a divestment of the US subsidiary Message Broadcast was an attractive path to maximize shareholder value. The divestiture enhanced earnings predictability for LINK and provided a new capital structure to fast-track accretive M&A, leveraging our proven track record for inorganic growth during
5 Back to the Table of Contents
Annual Report 2023 | LINK in short
the last decade. LINK's now divested US subsidiary performed well in 2023, with several new contract signings supporting the attractive valuation. LINK is to gain an earnout based on Message Broadcast's 2024 performance.
In 2023, LINK completed the implementation of new revenue enhancing and cost reducing initiatives which commenced the previous year. Commercial priority was placed into the development plans and the sale of products on preferred customer channels like SMS, RCS and WhatsApp and selected CPaaS solutions. All with proven market demand for our chatbot Xenioo and email marketing product MarketingPlatform. The result was a quarterly forecasted gross profit contribution from new contract wins, close to doubling in 2023.
LINK's Environmental, Social and Governance (ESG) strategy set in 2021 was followed in 2023 by integrating a sustainability statement based in principle on the ESRS in the annual report, and by including extended collection of carbon data not only from Scope 1 and 2, as in 2022, but also- for the first time- from Scope 3. The results are visible in this report, with further information in the sustainability section on our webpage.
LINK is now positioned for value generation in 2024 and beyond, with a transparent and highly cash generative European business and a significant excess cash position. Organically, substantial upsell and new sale potential exists for new multi-channel and two- way messaging solutions, whilst a strong M&A pipeline provides material scope for inorganic EBITDA growth through acquisitions at attractive multiples. The M&A approach is to be disciplined, accretive and opportunistic within the framework of a conservative financial policy. The remaining EUR bond, maturing in December 2025, is to be refinanced with net debt in the 2 - 2.5x adjusted EBITDA range, well below the current incurrence test at 3.5x adjusted EBITDA.
As our dedicated employees continue their relentless work together with our numerous customers, partners, and business prospects. LINK's global ambitions remain undeterred.
Thomas Berge, CEO
Oslo, 25 April 2024
6 Back to the Table of Contents
Annual
LINK strategy
Annual Report 2023
7 Back to the Table of Contents
Annual Report 2023 | LINK strategy
LINK strategy
Because every communication matters, LINK constantly enhances how messages are delivered and conversations are created for our customers.
At the heart of LINK's strategy is our continuous effort to offer businesses, public sectors and organizations communication solutions that increase customer engagement, satisfaction, and loyalty. By implementing our solutions, LINK's customers can greatly improve their customer satisfaction.
All communication services, from a simple one- way SMS to a rich omnichannel conversation, must bring real value, both to LINK's customer and to the end user. The communication needs to be carried and delivered by the most appropriate channel, depending on the type of message, profile and preference of the customer, location or device.
From our longstanding legacy as the leading enterprise business A2P provider in Europe, focusing on one-way ubiquitous communication, LINK has evolved its strategy to become a worldwide Communication Platform as a Service (CPaaS) provider.
LINK has maintained and strengthened its enterprise customer focus. We cover the requirements and needs of large corporations and multinationals, typically offering our solutions for worldwide deployment. Our larger enterprise clients and government customers are served through dedicated local sales teams speaking the local language, situated in 29 offices across Europe. This local business model is, in our view, exceptional in the industry and very difficult to copy or replicate. LINK has spent more than a decade building up a strong local presence by winning and supporting thousands of enterprise clients with our bespoke solutions. The needs of smaller enterprises, or Small and Midsize Enterprises (SMEs) are covered through Self-Sign Up (SSU) portals, where onboarding can be done in minutes with off the shelf product offerings.
LINK's Go-to-Market (GTM) approach includes an extensive partner strategy, enabling our partners to embed LINK solutions into their own product offerings. From independent software vendors to large-
8 Back to the Table of Contents
Annual Report 2023 | LINK strategy
scale software integration providers, resellers and telecommunication operators, the LINK Partner Community has grown to hundreds of partners.
M&A is an important part of LINK 's growth history and continues to be a key part of our strategy. Acquisitions help us achieve scale in existing markets and expand into new geographies. The divestment of LINK's US subsidiary last year provides ample financing for several potential level-up cases in Europe and beyond. Smaller bolt-ons in Europe are however a priority.
LINK observes increased market adoption of more advanced and higher margin CPaaS products, like marketing automation and conversational solutions, and channels with a richer feature set, like RCS
CPaaS GP - Closed won contracts (NOKm)
+120%
11 | ||||
7 | 6 | 8 | ||
5 | ||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 |
and WhatsApp, particularly within the mobile marketing and customer service areas. We are therefore further strengthening our development efforts and product portfolio in these areas, preparing for future growth, both from upselling to our fifty thousand existing customers and from new clients.
The dedicated, enthusiastic and united employees who make up our organization are instrumental in delivering industry leading products and services to our customers. We strive to be an attractive employer for passionate and driven individuals who want to take part in our journey as a top global CPaaS player. In our strategic and operational work and in our attitudes and behaviours towards colleagues, customers and suppliers, we regard diversity, equity and inclusion as levers for innovation, development and profitability. Our ESG criteria form an integral part of LINK 's strategy. For more, please refer to the Sustainability Statement in this report.
9 Back to the Table of Contents
Annual Report 2023 | LINK strategy
LINK's recurring and growing business model
LINK derives revenue from three main use cases: notifications, mobile marketing and customer service, with a solid footprint in a growing European market.
Revenue by use case*
70% 22% 8%
Notifications | Mobile marketing | Customer service |
*Estimated from industry classification of customer data
LINK's largest share of traffic comes from notification use cases, with around 70% of group revenue. Notifications are linked to essential activities such as healthcare, utilities and critical supplies and include reminders, alerts, updates and mission critical communications. The market for essential communication tends to be stable with a growth momentum in the high single-digits.
LINK is less exposed to mobile marketing use cases, contributing around a fifth of revenue. Digital messaging for marketing has for years been an important channel for large retailers. With higher engagement scores and click-through rates for RCS and WhatsApp, we are now also seeing accelerated interest from smaller retailers across Europe. Mobile marketing use cases are more sensitive to changes in consumer confidence as compared to essential notifications.
Customer service or Contact Center as a Service (CCaaS) is an area with significant value creation potential from CPaaS solutions. As an example, a business may wish to introduce chatbots to resolve most of their inbound customer enquiries, bringing large cost savings and increasing end user satisfaction with its ease and timeliness. Customer service, still to a large extent, is based on Interactive Voice Response (IVR) or automated telephone systems. This is a huge and potentially counter cyclical growth area for CPaaS players due to the large cost savings possible for clients.
10 Back to the Table of Contents
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Link Mobility Group Holding ASA published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 14:36:24 UTC.