Smartoptics Group AS

Earnings Release • May 8, 2024

Smartoptics Group AS (SMOP) - Q1 2024 financial results

Smartoptics Group AS (SMOP) - Q1 2024 financial results

Oslo, 8 May 2024 - Smartoptics Group AS (Smartoptics, OSE: SMOP) today reported

revenues of USD 12.6 million in the first quarter of 2024 (14.1), and an EBITDA*

of USD 1.1 million (2.6), following the previously communicated softness in the

market. The company maintains its revenue ambition in the range of USD 100

million by 2025/2026, assuming the market sentiment in its markets return to

normal during 2024, and the Board of Directors has proposed a dividend of NOK

0.50 per share.

"Our revenue declined by 10 percent in the first quarter, which reflects the

soft sentiment of the general telecom equipment market, caused by weak macro,

curbing the investment spendings in the industry. While we compare ourselves

with a strong first half of 2023 with certain larger projects, the first quarter

was, like the previous two quarters, dominated by steady development of smaller

projects in Smartoptics' core markets Enterprise and Smaller service providers.

Clearly, these market areas are growing, which proves our attractiveness," says

Magnus Grenfeldt, Chief Executive Officer of Smartoptics.

Smartoptics reported revenues in the first quarter of 2024 of USD 12.6 million,

compared to USD 14.1 million in the first quarter of 2023. The gross margin for

the quarter was 48.6% (50.7%). The EBITDA was USD 1.1 million (2.6), equal to an

EBITDA margin of 8.4% (18.5%) and the EBIT ended at USD 0.5 million (2.2).

The operating cash flow for the quarter was USD 2.5 million (5.8) and the cash

balance was USD 11.5 million at the end of the period. The Board of Directors

has proposed a dividend of NOK 0.50 per share to be distributed following the

Annual General Meeting.

"Our EBITDA margin remained acceptable, though lower than normal, resulting from

the relatively low revenue number. At the same time, it is satisfactory to

conclude that we continue to deliver high gross margins and a strong cash flow.

During the quarter, we continued to develop Smartoptics along our strategic

path. We strengthened our product portfolio and improved our marketing and sales

capabilities, broadening our addressable market," Grenfeldt continues.

The market for fiber optical network equipment is worth USD 16 billion

worldwide, of which Smartoptics addresses approximately 30%. The key driver is

data growth, following cloud migration, new data centers, migration to

400Gbit/s, fiber access roll-out with associated government funding and emerging

AI related demands.

In 2024, several factors can contribute to a reinstallation of growth with a

high activity level in Americas, and with early signs of an improvement in

Europe. In addition, new product launches and the emergence of new markets will

add momentum. The company announced in April 2024 that a larger regional US

operator had placed a first order for delivery of 400G services to an end user.

"We are thrilled to have reached this milestone and our ambition is to grow our

business by adding larger accounts. This milestone paves the way for further

development and larger purchase volumes in the future. Despite a soft first

quarter of 2024, and assuming the market sentiment in our main markets return to

normal during 2024, we maintain our long-term ambitions of growing our revenue

up to USD 100 million by 2025/2026 and continue to produce strong profitability

with an EBITDA margin of 17-20 percent and EBIT margin of 13-16 percent,"

Grenfeldt concludes.

QUARTERLY PRESENTATION:

Smartoptics will host a presentation of the results by CEO Magnus Grenfeldt

and CFO Stefan Karlson at 09:00 CET 8 March 2024 at Hotel Continental in Oslo.

The presentation will also be streamed live.

Date: Wednesday 8 March 2024

Time: 09:00 CET

Venue: Hotel Continental, Oslo

Language: English

Link: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20240508_17

A recorded version of the presentation will be available after the live stream

is concluded.

Please find the full financial report and presentation enclosed.

*) EBITDA and other alternative performance measures (APMs) are defined and

reconciled to the IFRS financial statements as a part of the APM section of the

first quarter 2024 financial report on page 13.

For further information, please contact:

Magnus Grenfeldt

CEO Smartoptics

+46 73-366 88 77

E-mail: magnus.grenfeldt@smartoptics.com

About Smartoptics:

Smartoptics provides innovative optical networking solutions and devices for the

new era of open networking. Our customer base includes thousands of enterprises,

governments, cloud providers, Internet exchanges as well as cable and telecom

operators. We have an open networking approach in everything we do which allows

our customers to break unwanted vendor lock-in, remain flexible and minimize

costs. Our solutions are used in metro and regional network applications that

increasingly rely on data center services and specifications. Smartoptics is a

Scandinavian company founded in 2006. We partner with leading technology and

network solution providers such as Brocade, Cisco and Dell and have a global

reach through more than 100 business partners.

For additional information about Smartoptics, please visit

https://smartoptics.com

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to Section 5-12 the Norwegian Securities Trading Act. This stock exchange

announcement was published by Per Burman, Chief Marketing Officer of

Smartoptics, at the time and date set out above.