Huddlestock Fintech

Investor Presentation • Aug 29, 2024

Q2 2024 Øyvind Hovland, Chairman of the Board

Second quarter and half year results presentation | August 29, 2024

Leif Arnold Thomas, Group CEO

Empowering modern financial services

We enable any company to launch new investment services or transform existing ones

• Revenue of NOK 18 million vs. to NOK 21 million in Q1 2024
  • IaaS revenue growth of 7 percent
  • Consulting revenue down due to staffing changes, with continued high profitability
• EBITDA of NOK -6 million vs. NOK -4 million in Q1 2024
  • Personnel cost reductions offset by increased Other operating expenses related financing and restructuring activities
  • Short-term ambition of turning EBITDA-positive, with effects of cost control and reduction initiatives expected in H2'24 and 2025
• IaaS platform integration development on track
  • Ongoing migration of Norwegian customers to the IaaS-platform
  • Ambition to harmonize all customers on the platform in 2025, set to unlock cost reductions
• Pursuing opportunities to enable an accelerated market entry into Germany
  • Subsequent event: LOI signed with Tradevest with potential to deliver combined IaaS-platform offering to German AVL
• Acting on ambition to grow Consulting (Visigon) business
  • Subsequent event: New Danish Consulting customer signed because as a result of collaboration across IaaS and Consulting

Q2 2024 Last twelve months revenue development

Last twelve months (LTM), NOK million

A two-sided business model Investment-as-a-Service Consulting services

Business areas

Customized strategic and technical solutions assisting customers

improving their operations

Investment solution based on Huddlestock's own scalable technology, infrastructure, trade routing and regulatory permissions Offering

Recurring based on monthly licenses, assets under management/Administration and transaction fees Model

Multiyear relations to large multinational institutions

Our customers Financial products and services companies

Incumbents

Competitive pressures and evolving client demands rapidly evolving; New products and features, more personalization and seamless digital and hybrid experiences.

• Access to distribution network for technology
• Higher immediate revenue gains
• Higher customer acquisition costs

Startups

New investment services requires complex and resource heavy work; Acquiring licenses, developing user experiences and establishing compliance processes

• Lower immediate revenue gains
• Lower customer acquisition costs

Tapping into a large self reinforced growth market

Disruptive digital investment market globally

Assets under management (USD billion)

Investors served through customers

Assets under Administration

NOK bn under management

High value to capture in existing markets

Norway + Sweden: Technology integration

• Large serviceable market for IaaS offering identified
• High priority-platform technology integration enabling cross border new sales and up-sales to existing customers

Germany: Additional upside potential

• Large growing market for Huddlestock platform services
• M&A opportunities with potential to accelerate time to market
• Continued discussions with AVL (LOI announced in January)
• LOI signed with Tradevest for potential local cooperation

Grow consultancy business

• Strong foothold in Denmark and Sweden
• Started to explore growth avenues within financial services, including geographical expansion and new business areas
• New customer agreement signed

Large Nordic markets with high upside potential in Germany

A self-reinforced growth market

Norway Germany Customer development In the first half 2024

Letter of intents (LOIs)

Upselling (subsequent event)

Norway

+

LOI with German Fintech company Tradevest - Exploring combined investment solution in Germany - Potential to speed up time-to-market (Subsequent event)

The only complete investment as a service offering

IaaS platform integration activities

Securing long-term scalability and efficiency

Tech Integration

Combining Bricknode tech with Huddlestock tech and the daily financial administrative operations

Client Migration

Migration pending finalized technology integration and holds potential for synergy realization

Tech Development

Fast development and deployment of solutions for Huddlestock and its customers based on evolving needs

Increased Automation

Increasing the potential for Huddlestock's scalability

Priorities In the second half 2024

Added support around Norwegian Share Savings Account (ASK)

Full tax handling and reporting in Norway

Elevated automation for fund trading and currency exchange

Migration of more Norwegian customers to the IaaS-platform

Expansion of real time equity trading / investing capabilities

Acting on ambition to grow Consulting Broaden Visigon offering

New contract securing continued high utilization

• New undisclosed wealth management customer located in Denmark
• Result of combined sales efforts across IaaS and Consulting

• New website to be launched Q3

Consulting LTM revenue development

Last twelve months (LTM), NOK million

Business Analysts

Project Manager

Calypso Services

Financial review

7% IaaS growth offset staffing changes in Consulting

• +7% Investment-as-a-Service revenue development compared to the first quarter 2024
• Consulting negatively impacted by staffing changes in the second quarter 2024
• Recurring IaaS revenue drivers impacted by number of B2B customers and products offered, as well as stock market development through: - Monthly recurring licenses - Transaction fees - Assets under management (AuM/AuA) • Consulting business from professional services related 39% 39% 18.4
  • 47%
    -
    -
    • to technology implementation

Second quarter profit and loss

Profit and loss

Unaudited, NOK million

	Q2 2024	Q1 2024	Q2 2023
Total operating income	18.4	20.6	29.4
Cost of materials/subcontractors	-0.1	0.1	-6.4
Personnel cost	-14.8	-17.1	-20.9
Other operating expenses	-9.1	-7.4	-3.9
EBITDA	-5.6	-3.8	-1.8
Depreciation, amortization and impairments	-12.2	-12.0	-7.6
EBIT	-17.8	-15.8	-9.5
Net financial items	-0.8	-0.6	-0.6
Result before tax	-18.6	-16.3	-10.0
Net result	-18.8	-16.4	-10.4

• Total operating income of NOK 18 million, from 7% IaaS growth offset staffing changes in Consulting
• Personnel cost reduction to NOK 15 million, both compared to last quarter and to Q2 2023
• Increased Other operating expenses related financing and restructuring activities
• Short-term ambition to turn EBITDA positive, with cost reduction effects to be materialized in the second half 2024 and into 2025
• Higher depreciation, amortization reflecting acquisitions in 2023
• Net result of negative NOK 19 million

Second quarter cash flow

• Cash flow from operations reflects a profitable Consultancy business and an IaaS-business with high growth potential
• Investments represents net additions in intangible assets related to technology development
• Financing mainly reflects increased debt in addition to sale of treasury shares
• Cash position of NOK 10 million at period end
• Ongoing work to identify potential financing partners to support strategy including non-organic growth

Summary and outlook

Building on a unique market position The only complete Investment as a Service offering

• Continued profitable consultancy business
• Unlocking growth in Investment-as-a-service (IaaS) business through technology and platform integration
• Pursuing accelerated market entry into Germany
• Short-term ambition to become EBITDA-positive
  • Focus on recurring 'Investment as a service'-sales
  • Enhance sales efforts in existing sales organization
  • Continue to grow professional services business
  • Increase efficiency and enhance structures
  • Cost control and cost reduction

Q&A

Chairman of the Board

Leif Arnold Thomas CEO

Appendix

Consolidated income statement Unaudited in NOK

in NOK
Unaudited
Consolidated income statement
	Q2 2024	Q1 2024	YTD 2024	YTD 2023	Year 2023
Operating income
Other operating income	18 392 898	20 613 359	39 006 257	45 971 122	85 150 101
Total operating income	18 392 898	20 613 359	39 006 257	45 971 122	85 150 101
Operating expenses
Cost of materials/subcontractors	-86 425	86 425	0	-11 621 588	-457 150
Personnel costs	-14 780 517	-17 119 365	-31 899 881	-35 233 363	-75 304 819
Other operating expenses	-9 111 147	-7 371 618	-16 482 764	-3 309 472	-25 801 808
Total operating expenses	-23 978 088	-24 404 557	-48 382 646	-50 164 423	-101 563 778
EBITDA	-5 585 190	-3 791 199	-9 376 389	-4 193 301	-16 413 677
Depreciation, impairment and amortisation	-12 208 453	-11 972 874	-24 181 328	-14 197 172	-63 973 602
EBIT	-17 793 644	-15 764 073	-33 557 717	-18 390 473	-80 387 279
Financial income
Interest income Other financial income	819 190 690	12 257 55 174	13 076 245 864	9 605 148 814	790 434 329 879
Total financial income	191 509	67 431	258 940	158 419	1 120 313
Financial expenses
	-875 576	-560 357	-1 435 932	-621 260	-2 696 548
Interest expenses		-72 131 -632 488	-184 296 -1 620 229	-467 364 -1 088 624	-5 165 920 -7 862 468
Other financial expenses	-112 165
Total financial expenses	-987 741			-930 205	-6 742 156
Net financial items	-796 231	-565 057	-1 361 289
Result before tax	-18 589 875	-16 329 131	-34 919 006	-19 320 678	-87 129 435
Income tax Net result	-228 950 -18 818 825	-48 306 -16 377 437	-277 256 -35 196 262	-129 321 -19 449 999	805 539 -86 323 896

Consolidated statement of financial position Unaudited in NOK

Consolidated statement of financial position
Unaudited in NOK	30.06.2024	30.06.2023	31.12.2023
Non-current assets				Equity
Intangible assets				Intangible assets Paid-in capital
Research and development	55 151 154	70 550 551	58 138 522
Goodwill	108 936 741	141 109 686	116 449 291
Technology	16 081 598	25 542 560	18 515 698
Customer contracts and relations Licenses	10 876 903 24 751 766	17 329 996 33 794 439	14 171 778 28 469 988
Total intangible assets	215 798 161	288 327 232	235 745 276
				Other equity
Fixed assets				Fixed assets
Investment in equities	333 986 179 105	569 621 451 041	322 719 199 483
	513 091	1 020 658	522 201
	216 311 252	289 347 889	236 267 478
	13 128 369	15 808 227	11 347 040
	1 330 226	12 012 650	5 952 937
	14 458 595	27 820 877	17 299 977
	9 851 510	10 830 604	10 183 903
Property, plant & equipment Total fixed assets Total non-current assets Current assets Receivables Trade receivables Other short-term receivables Total receivables Bank deposits, cash and cash equivalents
Total current assets	24 310 105	38 651 481	27 483 880
Total assets Equity	240 621 357	327 999 370	263 751 358	Equity

	30.06.2024	30.06.2023	31.12.2023
Non-current assets Equity
Intangible assets Paid-in capital
Research and development Share capital	55 151 154 362 215	70 550 551 536 916	58 138 522 350 957
Goodwill Own shares Technology Capital increase not registered	108 936 741 -14 16 081 598 0	141 109 686 -8 380 25 542 560 0	116 449 291 -5 335 18 515 698 13 561 756
Customer contracts and relations Share premium	10 876 903 193 927 505	17 329 996 187 244 303	14 171 778 180 377 457
Licenses Total paid-in capital	24 751 766 194 289 706	33 794 439 187 772 839	28 469 988 194 284 835
Total intangible assets	215 798 161	288 327 232	235 745 276
Other equity
Fixed assets Other equity	-73 145 170	0	-38 548 773
Investment in equities Total other equity	333 986 -73 145 170	569 621 0	322 719 -38 548 773
Property, plant & equipment	179 105	451 041	199 483
Total fixed assets equity	513 091 121 144 537	1 020 658 187 772 839	522 201 155 736 062
Total non-current assets Liabilities	216 311 252	289 347 889	236 267 478
Current assets Long-term liabilities
Other long-term liabilities	7 510 558	16 042 974	675 778
Receivables Deferred tax	6 774 203	11 620 912	8 144 578
Trade receivables Total long-term liabilities	13 128 369 14 284 761	15 808 227 27 663 886	11 347 040 8 820 356
Other short-term receivables	1 330 226	12 012 650	5 952 937
Total receivables Short-term liabilities	14 458 595	27 820 877	17 299 977
Accounts payable Bank deposits, cash and cash equivalents Payroll taxes, VAT etc.	2 882 043 9 851 510 439 556	6 323 533 10 830 604 8 605 230	6 661 053 10 183 903 8 422 709
	28 468 700	8 560 569	19 336 874
	24 310 105 64 401 761	38 651 481 89 073 314	27 483 880 64 774 304
Loans and borrowings Total current assets	105 192 059	112 562 646	99 194 940
Other short-term liabilities Total short-term liabilities		327 999 370	263 751 358
Total assets	240 621 357		108 015 296
Total liabilities	119 476 821	140 226 532
Equity
Total equity and liabilities	240 621 357	327 999 370	263 751 358

Consolidated statement of cash flows Unaudited in NOK

Unaudited in NOK
Consolidated statement of cash flows
	Q2 2024	Q1 2024	YTD 2024	YTD 2023	2023
Profit/loss before tax	-18 589 875	-16 329 131	-34 919 006	-19 320 678	-87 129 435
Depreciation and amortisation	12 208 453	11 972 874	24 181 328	14 197 172	63 973 602
Changes to accounts receivable	1 581 124	-3 362 454	-1 781 330	-2 158 422	-527 235
Changes to accounts payable	-184 737	-3 594 273	-3 779 010	-4 612 789	-2 870 269
Changes to other accruals and prepayments	-460 176	4 265 161	3 804 985	251 279	53 849 179
Net cash flow from operating activities from continuing operations	-5 445 211	-7 047 822	-12 493 033	-11 643 438	-23 829 236
Net additions intangible assets	-2 987 905	-2 413 675	-5 401 580	-9 562 224	-51 045 929
Aquisition of subsidiaries, net of cash aquired	0	0	0	12 086 429	29 522 000
Transaction cost	0	0	0	-1 101 000	12 086 429
Net cash flow from investment activities from continuing operations	-2 987 905	-2 413 675	-5 401 580	1 423 204	-9 437 501
Proceeds from capital increase	0		0	5 000 000	22 500 000
Treasury shares	1 660 000		1 660 000	1 366 000	0
	7 033 111	9 758 913	16 792 024	11 781 000	6 307 579
Loans obtained	-305 652	-584 152	-889 804	0	12 531 000
Repayment of loans		9 174 761	17 562 220	18 147 000	40 546 802
Net cash flow from financing activities from continuing operations	8 387 459
Net changes to cash and cash equivalents from continuing operations	-45 657	-286 737	-332 394	7 926 766	7 280 066
Bank deposits, cash and cash equivalents per 1.1. Bank deposits, cash and cash equivalents end balance	10 183 903 10 138 246	10 183 903 9 897 167	10 183 903 9 851 510	2 903 838 10 830 604	2 903 838 10 183 903

Disclaimer 1/2

This presentation has been prepared by Huddlestock Fintech AS (the Huddlestock) solely for the use at the presentations to investors held in connection with the presentation of the past results of the certain period and anticipated future performance. This presentation is being made only to, and is only directed at, person to whom such presentation may lawfully be communicated (Recipients). Any person who is not a Recipient should not act or rely on this presentation or any of its contents. This presentation is provided to the Recipients for information purposes only. This presentation is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. 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Disclaimer 2/2

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Huddlestock Fintech AS Kanalsletta 2, 4033 4005 Stavanger Norway