Origo

Interim / Quarterly Report • Aug 30, 2022

Origo hf. Condensed Consolidated Interim 30 June 2022 Financial Statements

*These condensed consolidated interim financial statements are translated from the original which is in Icelandic. Should there be discrepancies between the two versions, the Icelandic version will take priority over the translated version.

Origo hf. Borgartúni 37 105 Reykjavík

Reg. no. 530292-2079

Contents

Endorsement and Statement by the Board of Directors and the CEO	3
Consolidated Statement of Comprehensive Income	4
Consolidated Statement of Financial Position	5
Consolidated Statement of Changes in Equity	6
Consolidated Statement of Cash Flows	7
Notes to the Consolidated Financial Statements	8

Endorsement and Statement by the Board of Directors and the CEO

The consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34. The statements include the consolidated accounts of Origo hf. and its subsidiaries. The Group consists of seven companies. The consolidated interim financial statement is neither audited nor reviewed by the groups auditors.

According to the statement of comprehensive income, profit amounted to ISK 562 million for the period 1 January to 30 June 2022. Sale of goods and services amounted to ISK 9,262 million during the period. According to the statement of financial position, the Group's equity at the end of the period amounted to ISK 8.925 million.

In the first half of the year, Origo has worked on strategic projects and defined what the company stands for. On April 1st, organizational changes were made with the goal of helping Origo's customers better in their digital journeys, while also strengthening each software product so that it can be sustainable in terms of technology, sales and marketing. In operational services and infrastructure, emphasis has been placed on the transformation of sources of income with the aim of simplifying the solution offering and further adapting it to the needs of customers. Syndis has grown a lot recently and the first half of the year is marked by considerable investments, but the company set up an establishment in the field of security monitoring in Poland during the period. In addition, the company has significantly increased its investment in software production during the year.

Origo has exercised a call option to buy 14.54% of the share capital of Datalab ehf., and at the end of June, Origo owns 47.87% in the company. The company becomes part of the group Origo hf. as of March 1 2022, since Origo has control over Datalab ehf. due to stock options, in addition to having a majority in the company's board of directors. At the beginning of July, Origo's holding in Datalab was 51%. Datalab's operation during the period was characterized by investment in software development, but the opportunities in the core market of data exploitation for increasingly smarter solutions are large and the future prospects are therefore good.

There has been good demand for solutions and products in user equipment during the period. There are still challenges on the supply side, even though the effects of Covid-19 are receding in the group's operations. Delays in product delivery and price increases can still be expected due to general product shortages internationally.

Statement by the Board of Directors and the CEO

According to our best knowledge the consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and it is the Board of Directors' and the CEO's opinion that the consolidated interim financial statements give a true and fair view of the consolidated interim financial performance of the Group for the period 1 January to 30 June 2022, its assets, liabilities and consolidated financial position as at 30 June 2022 and its consolidated cash flows for the period 1 January to 30 June 2022.

Furthermore, it is the Board of Director's and the CEO's opinion that the consolidated interim financial statements and the Endorsement by the Board of Directors and the CEO gives a fair view of the development and performance of the Group's operations and its position and describes the principal risks and uncertainties faced by the Group.

The Board of Directors and the CEO of Origo hf. have today discussed the consolidated interim financial statements of the Company for the period 1 January - 30 June 2022 and confirm them by means of their signatures.

Reykjavík, 30 August 2022.

Board of Directors:

Hjalti Þórarinsson

Auður Björk Guðmundsdóttir Ari Daníelsson

Hildur Dungal Ari Kristinn Jónsson

CEO:

Jón Björnsson

Consolidated Statement of Comprehensive Income 1 January to 30 June 2022

			Second quarter		First half
	Notes		2022		2021		2022		2021
			1.4.-30.6.		1.4.-30.6.		1.1.-30.6.		1.1.-30.6.
Sales of goods and services	5		4.516.203		4.425.362		9.261.564		8.598.874
Cost of goods sold and cost of services		(	3.301.646)	(	3.307.671)	(	6.755.157)	(	6.387.146)
Gross profit			1.214.557		1.117.691		2.506.407		2.211.728
Operating expenses	6	(	1.095.311)	(	960.190)	(	2.283.664)	(	1.946.091)
Operating profit			119.246		157.501		222.743		265.637
Finance income			14.726		12.659		31.455		26.513
Finance expenses		(	60.845)	(	30.106)	(	114.717)	(	59.596)
Net finance expense	7	(	46.119)	(	17.447)	(	83.262)	(	33.083)
Share of profit in associate			261.191		47.246		427.278		149.889
Profit before income tax			334.318		187.300		566.759		382.443
Income tax		(	36.841)	(	33.174)	(	31.316)	(	47.452)
Profit for the period			297.477		154.126		535.443		334.991
Other comprehensive income:
Foreign currency translation differences
for foreign operations	9		118.715	(	70.314)		26.178	(	87.872)
Total comprehensive profit
for the period			416.192		83.812		561.621		247.119
EBITDA			370.301		356.743		707.748		657.641
Profit for the period is attributable to:
Shareholders in parent company			309.249		152.639		554.724		332.266
Minority interest		(	11.772)		1.487	(	19.281)		2.725
Profit for the period			297.477		154.126		535.443		334.991
Total comprehensive income is attributable to:
Shareholders in parent company			427.964		82.325		580.902		244.394
Minority interest		(	11.772)		1.487	(	19.281)		2.725
Total comprehensive income
for the period			416.192		83.812		561.621		247.119
Earnings per share:
Basic earnings per share (ISK)			0,69		0,35		1,24		0,77
Diluted earnings per share (ISK)			0,69		0,34		1,24		0,77

Consolidated Statement of Financial Position as at 30 June 2022

	Notes	30.6.2022	31.12.2021
Assets:
Property and equipment		2.271.181	2.244.668
Intangible assets	9	3.090.323	3.171.012
Deferred income tax asset		9.011	9.011
Investment in associate		4.446.122	3.991.058
Securities and long-term receivables		337.059	325.933
Non-current assets		10.153.696	9.741.682
Inventories		1.831.296	1.775.954
Trade receivables and other receivables		1.715.006	1.831.710
Cash and cash equivalents		1.168.948	1.794.624
Current assets		4.715.250	5.402.288
Total assets		14.868.946	15.143.970
Equity:
Share capital		430.923	434.857
Share premium		0	121.456
Reserves	10	3.835.039	3.787.415
Retained earnings		4.602.485	4.217.016
Equity of shareholders in the parent company		8.868.447	8.560.744
Minority interest		56.962	57.972
Total Equity		8.925.409	8.618.716
Liabilities:
Non-current loans and borrowings		894.059	950.000
Lease liability		1.715.596	1.674.713
Deferred tax liability		142.752	108.013
Non-Current liabilities		2.752.407	2.732.726
Next year payment of lease liability		413.369	417.153
Current loans and borrowings		120.708	112.375
Trade payables and other payables		2.657.053	3.263.000
Current liabilities		3.191.130	3.792.528
Total liabilities		5.943.537	6.525.254
Total equity and liabilities		14.868.946	15.143.970

Equity 30 June 2022 Consolidated Statement of Changes in

	Share capital	Share premium	Reserves	earnings	Equity of shareholders Retained in the parent company	Minority interest	Total Equity
1. January to 30. June 2022
Equity at 1.1.2022 Total comprehensive	434.857	121.456	3.787.415	4.217.016	8.560.744	57.972	8.618.716
income for the period . Recognized in			26.178	554.724	580.902 (	19.281)	561.621
restricted reserves Accrued cost due to			21.446 (	21.446)	0		0
stock option agreem. Acquisition of				26.800	26.800		26.800
treasury shares ( Minority interest	3.934) (	121.456)		( 174.609)	( 299.999)	18.271	( 299.999) 18.271
Equity at 30.6.2022	430.923	0	3.835.039	4.602.485	8.868.447	56.962	8.925.409
1. January to 30. June 2021
Equity at 1.1.2021 Total comprehensive	434.857	121.456	3.133.371	3.294.060	6.983.744	28.692	7.012.436
income for the period .			( 87.872)	332.266	244.394	2.725	247.119

Recognized in
restricted reserves			51.385 (	51.385)	0		0
Accrued cost due to
stock option agreem.				5.000	5.000		5.000
Equity at 30.6.2021	434.857	121.456	3.096.884	3.579.941	7.233.138	31.417	7.264.555

Consolidated Statement of Cash Flows 1 January to 30 June 2022

	Notes		2022		2021
			1.1.-30.6.		1.1.-30.6.
Operating activities:
Profit for the period			535.443		334.991
Adjustments for:
Depreciation			485.005		392.004
Net finance expenses	7		83.262		33.083
Share of profit of associate		(	427.278)	(	149.889)
Income tax			31.316		47.452
			707.748		657.641
Changes in operating assets and liabilities:
Inventories, (increase)		(	77.586)	(	555.140)
Trade receivables and other receivables, decrease			119.950		22.065
Trade payables and other payables, (decrease) increase		(	420.905)		71.606
Changes in operating assets and liabilities		(	378.541)	(	461.469)
Interest income received			31.455		13.081
Interest expenses paid		(	93.814)	(	59.596)
		(	62.359)	(	46.515)
Net cash from operating activities			266.848		149.657
Investing activities:
Investment in property and equipment		(	141.653)	(	82.449)
Investment in associates			0	(	31.038)
Investment in business operations less acquired cash		(	18.693)	(	113.647)
Capitalized intangible assets	9	(	99.669)	(	100.601)
Long-term receivables, change		(	4.935)	(	9.559)
Other short-term payables, change		(	70.573)		0
Investing activities		(	335.523)	(	337.294)
Financing activities:
Acquisition of treasury share		(	299.999)		0
Repayment of long-term of borrowings		(	51.667)	(	60.587)
Repayment of lease liabilities		(	199.912)	(	173.757)
Financing activities		(	551.578)	(	234.344)
Decrease in cash and cash equivalents		(	620.253)	(	421.981)
Effect of exchange rate fluctuations on cash held		(	5.423)	(	10.659)
Cash and cash equivalents at beginning of the period			1.794.624		1.172.714
Cash and cash equivalents at the end of the period			1.168.948		740.074
Non-cash investing and financing activities
Investment in business operations			0	(	160.000)
Other payables			0		160.000

1. Reporting entity

Origo hf. ("the Company") is a limited company domiciled in Iceland. The address of the Company's registered office is Borgartún 37, Reykjavík. The consolidated interim financial statements include the interim financial statements of the Company and its subsidiaries, together referred to as the "Group" and individually as "Group entities".

The Company's aim is to provide its customers complete solutions in the field of information technology with developing software, providing hardware and software, office equipment and technical services.

2. Statement of compliance

The consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34. The condensed interim financial statements of Origo hf. do not include all of the information required in complete annual financial statements and should be read together with the Group's 2021 annual financial statements.

The Company's Board of Directors approved its interim financial statements on 30 August 2022.

3. Significant accounting policies

The same accounting policies are followed in preparing the interim financial statements as were used in preparing the Group's annual financial statements for 2021.

The annual financial statements can be obtained from the Company or its website, www.origo.is, and on the website of OMX Nordic Exchange in Iceland, www.nasdaqomxnordic.com.

The interim financial statements are prepared in Icelandic krónur (ISK), which is the Company's functional currency. All financial information presented has been rounded to the nearest thousand. The statements have been prepared on the historical cost basis.

4. Estimates and judgements

The preparation of interim financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

5. Segment reporting

	Goods and related	Operational service and	Software, and related
	services	infrastructure	services		Total
1.1. - 30.6.2022
Sales of goods and services	3.890.973	2.559.276	2.811.315		9.261.564
Segment result (EBITDA)	355.204	121.493	231.051		707.748
Depreciation (	94.269)	( 174.407)	( 216.329)	(	485.005)
Net finance income				(	83.262)
Share of profit from associate					427.278
Income tax				(	31.316)
Profit for the period					535.443
Foreign currency translation
differences for foreign operations					26.178
Total comprehensive income for the period					561.621

5. Segment reporting, contd.:

	Goods and related services	Operational service and infrastructure		Software, and related services		Total
1.1. - 30.6.2021
Sales of goods and services	3.525.270	2.321.163		2.752.441		8.598.874
Segment result (EBITDA)	308.353	112.477		236.811		657.641
Depreciation	( 71.506)	( 165.457)	(	155.041)	(	392.004)
Net finance income					(	33.083)
Share of profit from associate						149.889
Income tax					(	47.452)
Profit for the period						334.991
Foreign currency translation
differences for foreign operations					(	87.872)
Total comprehensive income for the period						247.119
6 Operating expenses
Operating expenses are specified as follows:				2022		2021
				1.1-30.6.		1.1-30.6.
Salaries and salary related expenses				1.489.453		1.349.305
Properties operations				43.691		37.609
Sales and marketing costs				39.549		74.430
Depreciation				230.585		173.181
Other staff expenses				104.601		66.702
Travel expenses				12.666		1.219
Advisory and other purchased services				101.122		74.630
Other operating expense				261.997		169.015
Operating expenses total				2.283.664		1.946.091
7 Finance income and expense
Finance income are specified as follows:				2022		2021
				1.1-30.6.		1.1-30.6.
Interest income				31.455		13.081
Net currency gain				0		13.432
Total financial income				31.455		26.513
Finance expenses are specified as follows:
Interest expense			(	93.814)	(	59.596)
Net currency loss			(	20.903)		0
Total financial expense			(	114.717)	(	59.596)
Net finance expense			(	83.262)	(	33.083)

8 Investment in associates

Investment in associates is 40.4% shares in Tempo Parent LLC. Datalab ehf. became part of the group Origo hf. as of March 1 2022.

Investment in associates are specified as follows

	2022		2021
	1.1-30.6.		1.1-30.6.
Balance at 1.1.	3.991.058		2.940.938
Reclassified as part of group (	27.575)		31.038
Share of profit in associates	427.278		149.889
Effect of changes in exchange rates	55.361	(	72.899)
Balance at 30.6.	4.446.122		3.048.966
Effect in income statement specified as follows:

Share of profit in Tempo Parent LLC		428.528		151.620
Share of profit in Datalab ehf.	(	1.250)	(	1.731)
Share of profit in associates		427.278		149.889

Tempo's operations went well in the first half of the year and the revenue growth was 26% and total revenue of over 46 million USD. The company's adjusted EBITDA ratio is about 28% in the first 6 months of the year.

9 Intangible assets

Intangible assets, amortisation and impairment losses are specified as follows:

	Goodwill	Software	Total
Cost
Balance at 1.1.2021	2.059.453	1.569.239	3.628.692
Investments in internal software	0	138.000	138.000
Taken over at acquisition of operating units	366.826	25.000	391.826
Investments during the year	0	45.428	45.428
Effect of changes in exchange rates	( 18.860)	0	( 18.860)
Balance at 31.12.2021	2.407.419	1.777.667	4.185.086
Taken over at acquisition of subsidiary	35.299	0	35.299
Investments in internal software	0	86.500	86.500
Investments during the year	0	13.169	13.169
Effect of changes in exchange rates	( 24.314)	0	( 24.314)
Balance at 30.6.2022	2.418.404	1.877.336	4.295.740
Amortisation and impairment losses
Balance at 1.1.2021	222.596	500.077	722.673
Depreciation	0	291.401	291.401
Balance at 31.12.2021 Depreciation	222.596	791.478	1.014.074
Balance at 30.6.2022	0	191.343	191.343
	222.596	982.821	1.205.417
Carrying amounts
1.1.2021	1.836.857	1.069.162	2.906.019
31.12.2021	2.184.823	986.189	3.171.012
30.6.2022	2.195.808	894.515	3.090.323
Depreciation ratios		10 - 25%

9 Intangible assets

A part of Origo hf.'s operations is developing and selling software. In accordance with international financial reporting standards ISK 86.5 million were booked as assets as a result of the group's development of Tempo software. When estimating the values of development costs, costs are measured from the day a projects fulfils all requirements for capitalisation. Other development cost is moved to expenses when incurred.

Intangible assets developed within the group are booked at historical costs minus the accumulated depreciation as if a purchased asset. The booked value of intangible assets is reviewed in order to estimate possible impairment. If there is a possible impairment the recoverable amount of the asset is revalued. Impairment tests for goodwill are conducted at least once a year.

10 Equity

Reserves are specified as follows:

	Translation	Revaluation	Restricted
	reserves	reserves	reserves	Total
Balance at 1.1.2021	326.009	2.541.424	265.938	3.133.371
Change during the period	( 87.872)	15.421	35.964	( 36.487)
Balance at 30.6.2021	238.137	2.556.845	301.902	3.096.884
Balance at 1.1.2022	396.033	3.081.849	309.533	3.787.415
Change during the period	26.178	( 4.705)	26.151	47.624
Balance at 30.6.2022	422.211	3.077.144	335.684	3.835.039

The Company's share capital according to its Articles of Association amounts to ISK 435 million. Each share has the nominal value of one ISK. One vote is attached to each share in the Company. The Company holds treasury shares in the nominal value of ISK 4 million, recognised as decrease in equity.

11 Other matters

In the first half of the year, Origo has worked on strategic projects and defined what the company stands for. On April 1st, organizational changes were made with the goal of helping Origo's customers better in their digital journeys, while also strengthening each software product so that it can be sustainable in terms of technology, sales and marketing.

12 Financial ratios

Financial ratios for the consolidated interim financial statements:	2022	2021
	1.1.-30.6.	1.1.-30.6.
Statement of comprehensive income:
Inventory turnover - Cost of goods sold / Inventory at end of period	5,0	5,4
Receivables turnover - Receivables at end of period / Sales of goods
and services	23	22
Salary and salary related expenses / Sales of goods and services	42,8%	42,4%
Operating expenses / Sales of goods and services	24,7%	22,6%
EBITDA / Sales of goods and services	7,6%	7,6%
EBIT / Sales of goods and service	2,4%	3,1%
Statement of financial position:	30.6.2022	31.12.2021
Current ratio	1,48	1,42
Equity ratio	60,0%	56,9%

Quarterly statements

Summary of the Group's results by quarters:

		1 Q 2022		2 Q 2022		Total
Sales of goods and services Cost of goods sold and cost of sold services	(	4.745.361 3.453.511)	(	4.516.203 3.301.646)	(	9.261.564 6.755.157)
Gross profit		1.291.850		1.214.557		2.506.407
Operating expense	(	1.188.353)	(	1.095.311)	(	2.283.664)
Operating profit		103.497		119.246		222.743
Finance income		16.729		14.726		31.455
Finance expense	(	53.872)	(	60.845)	(	114.717)
Net finance expense	(	37.143)	(	46.119)	(	83.262)
Share of profit in associate		166.087		261.191		427.278
Profit before income tax		232.441		334.318		566.759
Income Tax		5.525	(	36.841)	(	31.316)
Profit for the period		237.966		297.477		535.443
Other comprehensive income: Foreign currency translation differences
for foreign operations	(	92.537)		118.715		26.178
Total comprehensive income for the period		145.429		416.192		561.621
EBITDA		337.447		370.301		707.748

Quarterly statements, contd.:

		1 Q		2 Q		3 Q		4 Q
Year 2021		2021		2021		2021		2021		Total
Sales of goods and services Cost of goods sold and cost of		4.173.512		4.425.362		4.257.451		5.334.799		18.191.124
sold services	( 3.079.475)			( 3.307.671)	(	3.115.630)	(	3.869.010)		( 13.371.786)
Gross profit		1.094.037		1.117.691		1.141.821		1.465.789		4.819.338
Operating expense	(	985.901)	(	960.190)	(	938.024)	(	1.203.063)	(	4.087.178)
Operating profit		108.136		157.501		203.797		262.725		732.159
Finance income		13.854		12.659		2.843		18.028		47.384
Finance expenses	(	29.490)	(	30.106)	(	38.718)	(	47.415)	(	145.729)
Net finance expenses	(	15.636)	(	17.447)	(	35.875)	(	29.387)	(	98.345)
Share of profit in associate		102.643		47.246		60.413		755.797		966.099
Profit before income tax		195.143		187.300		228.335		989.135		1.599.913
Income tax	(	14.278)	(	33.174)	(	35.849)	(	22.176)	(	105.477)
Profit for the period		180.865		154.126		192.486		966.959		1.494.436
Other comprehensive income Foreign currency translation
differences for foreign operat.	(	17.558)	(	70.314)		172.484	(	14.588)		70.024
Total comprehensive income
for the period		163.307		83.812		364.970		952.371		1.564.460
EBITDA		300.898		356.743		440.841		502.738		1.601.220