Hi, and welcome to today's event where we have the pleasure to present Penneo and their half-year 2021 reporting. We have a full lineup, Nicolaj Højer, which is the former CEO and co-founder will start it, and then we both have the new CEO, Christian Stendevad, and Casper Christiansen, CFO. The reasons for today is the half-year, 2021 report. Impressive numbers, 130% net retention rate, 61% growth, third upgrade this year, so congrats guys with a very, very strong report. As always, questions, ask it in your right sides. Just do it through the presentation. I will see if it fits in, or no worry, I will pick up in the end and we will get through all the questions. Just ask through the presentation, but if it doesn't fit in, I will wait with it. Nicolaj, I think you should start from here. Yeah, thanks. My name is Nicolaj. I'm one of the co-founders, and just to take any drama out of that, I was the Interim CEO because our former CEO unfortunately had a severe disease in his family. He had to retire last year. I, as a co-founder, stepped in, and I'm also happy that we have Christian, the new CEO, who has joined the company, you could say nine days ago. That's basically also the reason why I'm still here. It's a little bit unfair to have him as a hostage for numbers he didn't really participate in. I'll do a main introduction, then Christian will tell a little bit about himself, and we'll give the words over to Casper, who will tell about the numbers. I guess some of you have been here before and know what Penneo is, but for the rest, I'll just give the one-minute introduction to what we are. We are a software service company, fully focused on business to business. Many of you know us from digital signature if you have your annual report signed, but we also do a lot within document workflows and know your customer and AML regulation. We have more than 2,000 customers. We see Denmark, Norway, Sweden as our home markets. We have grown up also to be active in Finland, Belgium, and also a single customer in Germany. To tell a little bit about our position in the home market in Denmark, we can say that approximately 66% of all annual reports were signed with Penneo last year. Maybe it's Penneo, maybe it's Casper and Christian that should mute your phones or something like that. Yeah, good idea. Yeah. Are you muted, Casper? There's a little bit of echo here. Yeah. Okay. I don't know. Let's live with that. Our goal is to take our position and run it out across Europe. We're 90 employees, approximately a little more than 20 nationalities, and we got listed at First North Copenhagen last year. What have we spent the first half of 2021 on? Don't worry, Casper will go through the figures. I'll here give the headlines. I think the first one is, of course, we increased our revenue, our software service revenue with 61%. We're extremely happy about that, and also we improved the guidance. I think it is now the third time we improved the guidance for this year. We expect to end up between DKK 56 million and DKK 60 million. We're also extremely happy that we got Christian as our new CEO. We hired Christian in March, and his former company were so happy about him that they wouldn't let him go until last week. Don't worry, Christian will talk more about himself. We also have strengthened our board of directors. I'd like to highlight here that we have a new chairman, Christian Sagild, who have an impressive background, both as CEO but also as a board member from large companies. Also we have hired Rikke Stampe Skov as board member. She has a background both from one of the big accounting companies, but also she's currently a CEO of another listed software company. In other words, we're going through that process where we were all shareholder board to now a more professional, independent board. We're very happy with these new members. We also announced just before the summer vacation that we intend to migrate to the main market. As you know, we are at the small stock exchange, First North, and now we think we have the results and the size to prove that we are able to go to the real stock exchange. We'll do that with our 2021 annual report in Q1. As part of that, we have announced a new growth plan that I will come back to in one slide. What we did in Q4 last year were that we bought a Danish startup called CLA Reply, who had developed a know your customer software. We had the intention, which we also announced at that point in time, to roll out this piece of software not only to our Danish customers and also abroad. That's why we're so happy that we, during this half, announced the first major deal where KPMG Norway, which is one of our existing accounting companies for the signing part, now also bought the KYC solution. Finally, we got our first customer in Germany. We downplay that a little bit because we're based in the process of developing the German market, finding out what solution should be. That's why we're not really having that as a big splash. It's very important to say it's not like we are going really, really big in Germany right now. We're in the process of finalizing our product for the German market, and we do that together with our first customer. Finally, we announced before the summer break this intention to go to the Nasdaq main market, also that we, as part of that, basically saw that we under-invested. I think when you see the figures which Casper will communicate, you basically hopefully say, "Oh my god, this is really well done." When we see this figure, we're both happy and not so happy because you can say we actually think we under-invest, and that's why we want to grow faster or at least keep the current growth rate. That's why we identified some areas that we would really like to invest harder into. The first one is that, as you just saw, we've already sold the KYC software to some of the auditors, but we basically have plus 700 auditors in our customer database, which we would like to sell our KYC solution through. That's one area. In the past, we have narrowed our strategic vertical down to auditing and accounting. Now we see a strong pull from the financial sector in regards to both our products, both the signing and the KYC. We basically want to replicate what we have done in the auditing and do that in the financial sector. That is growth area number two. Growth number three is that we have this ambition to be the European de facto standard in these verticals. We would like to invest hard into that, meaning that go deeper into some of the countries we are already in, and maybe more longer term, also go into new countries. In other words, we are very proud of what we have done in the first half, both on, you can say the management and leadership side, also on the revenue, and also now with the new strategy going forward. Sorry? Nicolaj, just to get a clarification, I don't know whether you went a little bit too fast, but there's a question here. Do we also make a large capital increase when you go to the main market? If you can just elaborate a little bit on that note. Good point. We have announced that we, as no later than when we go to the main market, will raise up to approximately DKK 100 million. You can say, is that large? I don't know. For a company like us, we think it's large. Yes, we want to raise money to invest into these areas. It can be before the main market introduction or at the same point in time. Perfect. Cool. I'll give the words now to Christian. You're muted, Penneo. Thank you very much, Nicolaj. As you can see here, this is now my day number nine at Penneo, I'm so happy to have joined this company. When I look at the numbers, it's really great to see how good you have performed so far, I'm very humbled in this position to try to support the scale-up. I will, for this presentation, talk a little bit about myself. I think that will be the first and the last time. Going forward, I will only talk about Penneo and the journey we are on. As a background here, before I joined Penneo, I was co-heading the international scaling and growth of another business-to-business SaaS company called Omada. It is a Danish company, and I joined them 17 years ago, when they were very small and a startup, invested in and then co-headed it, meaning that the founder, Morten Borg Jakobsen, I basically joined him in the exec management team and then together with him and then all the colleagues built it up. It was a startup from the very beginning until what it is today, 300 employees. At the same time, as part of that growth journey, we started out in Denmark, had headquarters close to Penneo in Copenhagen, and then we expanded into the Nordic countries first and then into Germany, Austria and Switzerland, and had a very strong footprint there, continued into the Benelux and grew that up. We continued into both other regions in the Europe and into the U.S. A very similar path as we also can see now with Penneo building up strong in Denmark, going to the Nordics and already now have plans on going further ahead. From an industry point of view, I have been used to sell and deliver to the regulated industries and enterprises with a very strong focus on security and compliance and governance. As Omada, what they were doing is identity governance and administration, very much about the security governance and compliance of who has access to what. Now with the digital signature as an example and customers, that's another type of identities we are looking at here. It was a very similar agenda. With that, I have been used to sell to, for example, the finance sector. I know very well the finance sector in Germany as well here in Denmark and the Nordics. I met a lot of them. As part of this growth journey, it also very much been focused on ramping up the whole organization to make a scalable, standardized, repeatable business. really when you have a startup, then you build a product and you sell to a visionary customer. later on when you want to scale up, it's really to build the whole organization from the marketing to sales to the product innovation, support, finance, et cetera. that has been a very important part of that business. The fifth point is we did a transition from a traditional license sale to a SaaS subscription business. As a part of that, accelerating the growth and international expansion with substantial investment as Omada got investment first in 2015 from C5 in the U.K., and then in 2018, Omada got CVC Growth Capital and GRO Capital as part of the investors into it that helped us on accelerating that growth. When I didn't compare that and basically why I chose Penneo, I would very much like to do this journey all again. With all the experience from a similar journey, then start an earlier stage and then do it. Happy that also Penneo found me as they, Penneo have now been doing a similar and are really doing well. From now on and continue on that basis to grow up. That is what it's all about. If with that I can use all my experience and then together with the team and the foundation we have, really scale up Penneo. that I'm extremely excited about and especially now also with the more people I meet here at Penneo, the more excited I get. I'm grateful that I have joined. that was a little bit about me and why I did it, and then we can continue with the financial numbers. Perfect. when we are talking about being exciting, I've chosen to bring out the usual slides to you guys, and I'll also added some new slides. yeah, first of all, let's start out with the cohort analysis. We have chosen to divide all our cohorts into the year that the customers became customers. the dark blue column in the bottom here is customers becoming customers in 2014. This is the ARR, and what you can see out of this slide is that year over year over year, since we started up, has seen every cohort is growing. We are proud that if one customer is leaving us, the rest of the customers is actually filling out this empty spaces and more to add on it. Yeah, that's the historical reason why we now announced that we are ready for taking a new jump, a new gear up since the IPO with a raise of DKK 100 million. This is the period one year back, so 12 months back. Overall, we have grown our ARR by 61%. As Nicolaj mentioned, we are proud of these numbers. It's cool to be there. If we divide it into our existing customers and to new customers, we see that the churn is, in our opinion, very low, 2%. As you can see, if you look back in the old quarters, we are about 2% or 3% every time we are reporting on the quarters 12 months back. Yeah, we're happy that we are succeeding keeping those low churn rates. We are not taking it for granted. For us, it's a daily job to ensure that our customers are still happy and we are in front of the markets when it comes to auditors, especially auditors. What we have seen in the past quarter is that we succeed selling new clients, adding that to the uplift list. We're not only upselling the old signing tool to our clients, which we also saw as a success. Now we have added this new product. If you look a quarter back, you'll see our numbers where we are now starting selling this system. Now we are slowly starting selling a new product to our current customer space. Yeah, we are up from 25% last quarter to 32% this quarter. Yeah, we're pretty amazed about it, and I want to see that actually succeed. Also pretty satisfied about the 32% uplift on ARR based on new customers. It's the same growth rate as last quarter, but in Danish crown, it's a big number. Yeah, we are okay with the numbers. This time we have included new numbers in our report. Some investors are asking, "Why you are not disclosing your SaaS numbers since you're a SaaS company?" We have actually been proud of our numbers the past year, so why not disclose it? It's been a journey to take the next step since we become listed. Now we have included the SaaS numbers. What we have seen since we became listed at the end of Q2 last year is that we succeed in growing the numbers of customers that we're actually getting in. What we have planned and what we have succeeded is that we are also getting bigger and bigger clients in on our platform. That's an outcome of our focus on the heavy regulated markets, for instance, auditors or finance. Our customer acquisition cost here is defined as the inbound lead spend and the staff cost directly related to the sales reps. What we see is it is approx DKK 20,000-DKK 22,000 to get one customer in. afterwards, what you can see on the chart below this slide deck is that the first time here, our cohort show that we grow historically 7.5% year-over-year. Started out with the ARR on 18,000, 19,000, and then we expect the customers to grow from there. compare that numbers with the 21 crown to get the customers on boarded. we are satisfied about it, and that's also one of the reason why we now think it's time for us to speed up the process, getting more clients in at the time, more customers in at the time. Another number, speaking of SaaS metrics, is net ARR retention rate. We are very proud that we're now on a 130% retaining AR rate, meaning that we're not only keeping track on our numbers, we are actually growing it. Yeah. As the last number here, I'll just say that if you see all the customers in average, cut it out, one point in time, Q3, four, one, two here, that if we are having an average revenue per account, we're growing. That's also part of the strategy we disclosed during the IPO. When we come to the P&L here, we can see that we grow the top line. Of course, we are just talking about the top line here. What satisfies me is that we are not only having a contribution margin on approx 80%, we are also increasing it a bit. Compared to other companies, I think we could be satisfied about this high gross margin. What we also see is that our other external expenses is growing when we look 12 months back, and that's one of the reasons for the IPO, was also to invest into our entire value chain, see where can we actually optimize some process and automate them. One of the things we have done is to implement new ERP system, a new CRM system. On top of that, we have grown our staff cost. Of course, the main reason why we raised money was to invest heavily into scaling the team, especially when it comes to product and sales development. By sales, when I mean marketing and sales reps. Combined with the previous slide, I think it's pretty cool to see that the CAC isn't increasing, even that we have increased the numbers of sales reps, meaning that they're actually ramping up faster than we expect back then. Yeah. The result of the H1 is that we came out in the top of our guidance, a bit above our guidance. What we also could see is that we need to raise our guidance for the entire year. Now we guided that we will have a growth rate between 51 and 62, and of course, I hope it will come in the high end, but no promise from here. It's an expectations to be within this area and of course, we're working for getting the high goal here. That's all from me, Michael. Michael, you muted? Yes, I know. I just needed the computer to react. Yeah, there's a question. There's a suggestion here, I'm not reading it up, but do we want to buy our way a little bit into the financial sector? Like you bought this KYC, AML tool. Thinking about buying your way in a little bit into the financial sector, or do you see your full product supply as you have now enough to go into the more financial institutions segment as you are planning? Well, it's a very broad question, right? Could we in the future acquire some companies? Of course, we could. I think the strategy we have now is we basically see that our existing products satisfy the needs of a customer. I think that's a fluffy answer, but yeah. That's basically what I mean. We already have financial industry customers on a platform, and especially after we added the KYC part, we see a strong pull from that sector. What we'll do in the future, who knows? I think that's the normal answer, Nicolaj. You don't need to excuse it. Yeah. Can I elaborate a bit here, if it's okay, Michael? Perfect. I think it's important to understand that we have now disclosed that our journey is going into the finance sector, and that's one of the reasons why we raised DKK 100 million. We have not disclosed that we have raised the DKK 100 million yet, so we are pretty early stage in that journey. First of all, we need to build a team focusing on the financial sectors, and after that, we'll investigate what is the opportunity, and then I'll just say like Nicolaj, of course, maybe. It could be. There's a very direct question. Will it be to existing shareholder? You're meaning that the existing shareholder will get a chance of the 100 million, or will it be placed in the market at 100 million? I don't know how- We have not disclosed that yet, what we're going to do. What we have disclosed is that no later than at main market introduction are we planning to raise the money. Whether we do a direct offering or what we're doing, we haven't communicated that yet. Perfect. there's a question here, whether the stock market don't seem so impressed about the numbers. Do we have some initiative to nurse the share price and within the legal frame? I will leave that to you, Nicolaj. Well, basically, we've decided from the beginning that when our stock price go up or down, we don't really comment on that. We keep focusing on operational performance, and we let the figures speak for itself. We think right now that when you compare our performance with the 61% ARR growth, which by the way, is organic, that's very important, right? With the net retention rate and what we have done so far, we're extremely proud. Well, I think that's also one of the things you see on First North is that ups and downs can go quickly, right? Because there's limited liquidity in the stock. no, we don't have any plans for nursing that. I can, of course, say I'm a happy shareholder myself, and so of course, we all have an interest in that. no, honestly, it's not our focus. It's not what we spend our management time on. That is on ensuring that we can grow in the future. The way you want to nurse is keep delivering those strong numbers. Noted. there's, what is your average contract length? Do we have longer contracts, one year, one month? your contract lengths and how often do the clients pay, looking at the cash flow? I don't know whether you have disclosed that or you want to comment on it, Casper? I think we can comment on it. The main of that, I would say the majority. Majority. Yeah, of course, of our customers is signing up for one year, and they're also paying for the first year up front. yeah, that's the main part of our customers. Perfect. Do we disclose your EBIT margin? There's some bookkeeping, I think, Casper? No. No. There's a question here, do we have some bottlenecks in your production for growing, or are you seeing it pretty free? This is a general question, do we have a bottleneck in getting customers in or somewhere? It's a general question. I don't know who- I think maybe we should separate, right? Because first of all, we are business to business, right? that typically means that it's some kind of manual process you're delivering. yes, it might be that you have a standalone software as we have, which you can basically plug in, but you can say the bottleneck is typically on the customer side who do some kind of implementation program, right? when we sell our software to an organization with 1,000 employees who are going to use Penneo, of course, there's some, you can say, bottlenecks on their side. it's important to say that we're basically selling a plug-and-play solution. are there still bottlenecks? Of course, there are. I think the main bottleneck is, of course, that we are operating in Europe, and Europe is not one market. Europe is many markets with different maturity levels, with different kind of pieces of software you have to integrate to. Yes, there are bottlenecks there, and you can see that as a disadvantage. You could actually also see as advantages, right? Because that means that, I guess we as a European company, we're used to that. We've already succeeded on that in a number of markets, and we can continue doing that. For us, it's basically just the rules of the game. To answer the question, no, in terms of our product, so if you're a company that wants to have access to a platform, you can basically get it right now. There's no bottleneck there. Of course, as we grow to new industries or to new countries, we need to integrate with our API to new pieces of software. Perfect. there's, I think to Casper, can you please further discuss the declining gross margin versus first half of 2020? I'm not sure there is a declining gross margin, but let's get the numbers up and the underlying mix effect from KYC on new markets, excluding the variable marketing spend. Yeah. First of all, I think the gross margin has increased. I think it's a good rate here. I'm not sure I'll go that into the details here. Yeah, to be honest, the delivery cost, for instance, the AML, like CLA Reply, it has a lower cost than the signing part. I think it's too deep to dive into those kind of details. Perfect. I have a question then regarding this increasing upselling you're doing, the net retention rate, impressive 130. How much of that is driven by your KYC, AML that you're rolling it out to your customers? I can get a feeling, is it something you can continue with, or you're already far in the rolling out of this to your customers? We're still in the early days. We basically acquired the company in Q4 last year. We announced the first major deal here in Q2, I think. It's early days. We haven't disclosed the mix and how many, but it's still early days because we basically acquired a startup that has to be integrated to us. We have to educate our team to go out and market that solution. What we've disclosed is that we see a strong pull for the market. We have disclosed the first major deal, but it's still in the early days. It's not what is driving the upselling. It's still the normal one. maybe a question, and I know this will be hard, how big a potential? Is it all your clients, if you're looking at your big, large, 2,000 client portfolio base, is it all that will be relevant for getting this rolled out? I know it's a little bit of a difficult question, but just in ballparks, is it a large part of your client base who could actually see a benefit from implementing this and your possibility to upsell it? I'll answer it a different way, right? We are focusing on regulated industries. It's basically those industries that are regulated by AML and KYC thing, right? We have announced we have more than 700 accounting companies. If you add all accounting and law firms and finance, I'll basically say that all of them need to have a KYC solution because that's basic demand. I guess, Michael, if you have a holding company, I'm very sure that once a year at least, you need to validate your identity to both your accountant and to your lawyer. Most of that is manual. If we dream two, three years ahead, will they have a piece of software to do that? I think so. Could we sell it to a big part of our customer base? Yes. So n o, it's not everyone, but a very significant part of our customers need that kind of software. I think it's a little bit, there's a question here. The ability to keep your retention rate at the same high level. I know you're not guiding, but your own feeling. You're just in the start of rolling this out. Is there something looking into the future that should not keep the retention rate so high? I know as a growing business, it gets harder and harder and harder, but besides the numbers, are you seeing anything that should keep you from reaching those higher retention rates in the future, or keeping at this level? It's really hard to say. It would be a fluffy answer, right? It's really hard to say. 130% is really extremely high. Far, we don't see any sign that it's changing, right? What's driving that is increased use of our existing software designing. We think it will continue also in the future by this new KYC, and of course, we are not done innovating, right? We think that we can help our customers solve a lot of problems, either organic or products that we buy in. What will it be in two, three years from now? We have no clue, honestly, right? It's really hard. I think what we've shown over time, that we have a very high net retention rate, and we don't see any signs so far that it should be significant differently. I don't know, Casper, if you have some comments on that? No, I just want to elaborate a bit. As we just said, we have had this deal with KPMG Norway that we have disclosed this quarter, who is a part of the 2% upper tier. That's only the start of CLA, the AML tool selling into current customers. What we see in the roadmap is that we are building a stronger solution, end-to-end solution for it, and they'll also be added some new features on that. We are not guiding, so it's not an exact answer, but I'm confident about the growth rate on the coming period. Of course, I cannot guarantee that kind of high numbers continue year over year over year. It would always be a fluffy answer or not a fluffy answer when you don't guide on it. Christian, I think maybe we listen a little bit too literally, and I understand the reason, but something I always like to see when a CEO comes from the same journey and he now needs to replicate it. Was there some mistakes you did in your former company that you maybe now think you can avoid? Not small mistakes, but in the thinking, maybe to give an idea on what you want to avoid when you take this journey again with Penneo. Yeah. I've been giving that a lot of thought, of what would I do that went well and what maybe should I avoid, because it is true that I have not only done successes, but also I have my experience of things not to do. One of the things that I would have done personally different would be to invest much earlier, because when we made the transition to a SaaS, then we really did a heavy investment, and that was basically from 2018. If I would have to be done it, I would have already pressed the accelerator in 2015. This thing about having, we say, high growth rate and have a focus on that, and then yes, it has some costs associated with it. It might have a negative EBITDA. Yeah. I would still have done it. That's one of the things that I would have changed, but I can see here that Penneo has, we say, done that on a much earlier part of the journey. With the capital raise, I think it feeds into your how did you- Yeah. I had that experience because we could compare. We have our competition at that point in time. We had several competitor who was doing that earlier. Basically investing DKK 1 million- DKK 2 million a month that had negative. We were always profitable month after month. That was what we're up against. I think we should then simply done it earlier to have on the same growth as they did. That had nothing to do with the innovation because we became number one in what we did. The same here. A lot of innovation can be done, but you can simply do it faster in doing this. That's what we are doing. If you have all the metrics correct, and that's at least now I'm coming from outside. I know I'm now in charge. Going forward, I will do all the things that Nicolaj is doing now. simply coming from outside and see some of these metrics and comparing that up against, because we had access to 30 different SaaS company that we compare up against. These are amazing numbers. if you have this, you win this. That's my feeling. Maybe to end up with a question from the audience, what is the biggest company-specific risk of Penneo? I know again, it's broad. What keeps you up at night, I always say also is a good question. What is your worst nightmare keeping you up at night, if you should mention just one thing? I think that we have seen a company being kind of so confident when they have succeeded. When we're showing numbers like this, we could actually lean back and say, "Oh, it's cool." If you want to be a market leader in a specific vertical, you also need to be in front of your competitors. I think the risk could be that you'll turn down the investment into being innovative and so on in the product, just focusing on scale. I think it's important also to invest into the future when it comes to a product. Nicolaj, is that the same by you? Yeah, I think that basically it's down to this, that we're in this phase where we've been a startup, and now we're a scale-up. Scale-up means, as Christian rightly said, that we have the right metrics. That's of course important because then you can put gas or put speed down, but you still need to innovate, right? How do you make sure that you innovate, at the same time and keep that energy that made Penneo what we are today? Because that was basically about doing stuff in innovative ways with no money. Now we have money, and that's great because that means we can do it faster, but we also need to innovate ourselves, right? Perfect. I think that is a good way to round off. I also think we are way over time, so. Thank you, Christian, Casper, and Nicolaj for taking us through the presentation. Thank you for a lot of good questions. Thank you. You're welcome. Thank you very much.