17.03.2020

Board of Directors Information on the situation of the LiveChat Software Group in a pandemic situation

Wrocław, 15 March 2020

Board of Directors Information

We present information on the operation and situation of the LiveChat Software Group in a pandemic situation.

Introduction

In the current situation, ensuring safety for all employees of the LiveChat Software Group is our top priority. At the same time, the Board of Directors currently sees no risk in the following areas:

- continuity of the company’s services or deterioration in their quality,

- a sharp decline in operating results,

- suspension of ongoing development work.

Current status of the Group’s operations

The specific nature of the Company’s operations enables a complete transition to a model that is 100% based on remote work. Over the course of our history, we have tested this possibility several times, and it has never adversely affected the continuity or quality of our services.

In response to the epidemiological situation in Poland, at the beginning of the week of March 9-15, we decided to allow employees to work remotely. By the end of the week, the vast majority of LiveChat Software employees decided to work remotely. At the end of the week, we completely switched to “work from home”. 

We follow our business situation very closely, with particular regard to the following KPIs:

- the number of new “trials” (companies starting a free trial period),

- churn and ARPU indicators,

- the number of chats, including industries and countries where the epidemiological situation is the most serious.

Currently (as of 15 March 2020), we do not see any significant changes in these indicators that should be attributed to the epidemiological situation. The observed changes seem to be mainly seasonal and consistent with the trends observed in previous years. 

Implications of declaring the state of epidemiological threat in Poland and similar states in other countries on the Group operations

The most serious business risk for the Group, related to the state of the pandemic, is the possibility of an increased number of insolvencies in the industries directly affected by this situation. LiveChat Software currently provides services to clients of virtually all sectors of the economy from approx. 140 countries around the world. Therefore, this risk appears to be widely distributed. At the same time, it seems that many companies may place greater emphasis on communicating with their clients online. 

On Saturday, 14 March, we announced the possibility of extending free trial periods and special discounts for customers who switch to a remote working model. We reminded that we run the “LiveChat for Nonprofits” programme under which we provide our services free of charge to non-profit institutions. For more information on these activities visit our website. 

Ensuring business continuity

Due to the transition to a model based entirely on remote work, we do not anticipate any risks to the continuity of the Group’s operations.

Ensuring management continuity

As a result of very close cooperation of the Board of Directors with the management of the Company (the so-called “CXOs”: chief operations officer, chief technology officer, chief marketing officer, chief creative officer, chief financial officer) and between them, and also between them and team leaders, and constant coordination of activities in these groups, we see no risk in ensuring continuity in the management of the Group.

Communication with investors

In order to provide investors with an opportunity to assess their financial standing, from the beginning of 2020, we publish quarterly information on preliminary estimates of the Group’s consolidated revenue. The publication of next report (with data for the period January – March 2020) is scheduled for 16 April 2020. In the current situation, due to the recommendations of the European (ESMA) and Polish (KNF) market regulators, we do not exclude that its publication may be accelerated or provided with additional commentary. 

Summary

The complete transition to the remote working model is certainly an important change for all of us, but we are fully prepared for it. The first days of work using this model convince us that it should not significantly affect our productivity, and the continuity and quality of our services. We follow our situation very closely, in particular the indicators mentioned above. We will keep the Supervisory Board and Shareholders informed of all significant changes.

Regards

LiveChat Software SA Board of Directors