Smartoptics Group AS

Investor Presentation • May 8, 2024

Financial Presentation

Q1 2024 May 8, 2024

Q1'24 Continued investments for growth and strong cash flow

Revenue drop caused by challenging market conditions in EMEA.

Continued investments for growth. Investments in products, organization and selected markets prioritized

Growth in Americas and continued strong cash flow

Drivers for revenue growth acceleration

Progress on large account strategy

• First order from larger US regional operator
• Agreement with global cloud operator (presence in >800 datacenters)

Very high activity level in Americas

• Significant growth in qualified leads YoY
• Meaningful contribution from LATAM

New product portfolio progressing nicely

• 34 Degree ROADM on track to be released in Q2
• More relevant in regional networks
• Larger projects and deals

• AI as a service being rolled out in larger scale across USA
• Expected to result in increased traffic

Smartoptics in brief

Optimizing the usage of optical fiber

A reliable and competitive offering targeting a wide range of network applications

OUR EDGE

We stand out by offering cost-efficient solutions, leading the transition to modern and open networks with focus on ease of use with no ties to legacy technology

TECHNOLOGY

Our solutions are designed by a world class team using best of bread merchant technology and modern software design principles, allowing a flexible approach and minimal time-to-market.

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

Smartoptics addressable market is 4-5 billion USD

Q1'24 deep dive

Positive development in Americas curbed by lower activity in EMEA

Revenue per region and quarter – Last 5 quarters

Healthy growth in Software & Services and Devices

Revenue per business area and quarter – Last 5 quarters

Strong financial position - Board recommends dividend of NOK 0.50 per share

Balance sheet Mar 31, 2024 Working capital development past 5 quarters

Summary of Q1 financial performance

Growth drivers towards 100 MUSD by 2025/26

Continuously growing core business

Long-term ambitions stay firm

	2024 Q1 RESULTS	2025/26 ASPIRATIONS
REVENUE	12.6 MUSD (LTM 57.1 MUSD)	~100 MUSD
GROSS MARGIN	48.6%	~45%
EBITDA MARGIN	8.4%	~17-20%
EBIT MARGIN	4.0%	~13-16%

Profit and Loss Statement

Profit and Loss Statement Q1 2024 Comments

Amounts in USD 1 000	2024 Q1	2023 Q1
Total revenue and other operating income	12 649	14 079
Direct cost of sales	-6 502	-6 940
Employee benefit expenses	-4 063	-3 502
Other operating expenses	-1 022	-1 035
Total operating expenses	-11 587	-11 477
Depreciation	-477	-351
Amortization of intangible assets	-81	-69
Total depreciation and amortization	-558	-420
Operating profit/(loss)	504	2 182
Financial income	2	1
Financial expenses	-101	-44
Net foreign exchange gains (losses)	1 061	1 040
Net Finance Items	962	996
Profit/(loss) before income tax	1 466	3 178
Estimated income tax	-345	-699
Profit/(loss) for the year	1 120	2 479
Shares outstanding (Basic)	97 459 212	96 286 593
Shares outstanding (Diluted)	97 618 927	97 250 275
Earnings per share (Basic) USD	0.011	0.026
Earnings per share (Diluted) USD	0.011	0.025
Earnings per share (Basic) NOK	0.121	0.281
Earnings per share (Diluted) NOK	0.120	0.278

Cash Flow Statement

Cash Flow Statement Q1 2024 Comments

Amounts in USD 1 000	2024 Q1	2023 Q1
Cash flows from operating activities
Profit/(loss) before income tax	1 466	3 178
Adjustments for
Taxes paid	0	-173
Depreciation and amortization	558	420
Interest	80	120
Change in inventory	666	55
Change in trade receivable	1 464	4 419
Change in contract liabilities (deferred revenue)	-236	721
Change in trade payable	-346	-657
Change in other current assets and other liabilities	-1 204	-2 290
Interest received	2	1
Net cash inflow from operating activities	2 452	5 794
Net cash (outflow) from investing activities	-635	-391
Net cash inflow from financing activities	977	-291
Net increase/(decrease) in cash and cash equivalents	2 795	5 112
Cash and cash equivalents at the beginning of period	9 321	5 660
Effects of exchange rate changes on cash and cash equivalents	-629	-353
Cash and cash equivalents at the end of period	11 488	10 419

Balance Sheet

Balance Sheet Mar 31, 2024

Amounts in USD 1 000	2024 Q1	2023 Q1	Amounts in USD 1 000
Intangible assets	1 287	904	Share capital
Property, plant and equipment	2 876	2 014	Share premium
Right of use assets	1 699	2 342	Other paid in capital
Noncurrent receivables against related party	-	-	Foreign currency translation reserves
Deferred tax assets	1 002	1 248	Retained earnings
Total Non Current Assets	6 864	6 508	Total Equity
Inventories	13 532	15 368	Lease liabilities (noncurrent portion)
Trade receivable	15 489	11 495	Contract liabilities (noncurrent deferred revenue)
Receivables to related party	0	0	Other noncurrent liabilities
Other current assets	1 047	1 097	Total noncurrent liabilities
Cash and cash equivalents	11 488	10 419
Total Current Assets	41 556	38 380	Lease liabilities (current portion)
			Trade payable
TOTAL ASSETS	48 419	44 887	Contract liabilities (deferred revenue)

Q1	Amounts in USD 1 000	2024 Q1	2023 Q1
	Trade payable	4 137	5 174
	Current tax liabilities	2 689	606
	Other current liabilities	1 975	1 588
	Total current liabilities	12 501	10 259
	Total Liabilities	17 597	15 593
	TOTAL EQUITY AND LIABILITIES	48 419	44 888

Thank you