StrongPoint

Investor Presentation • Apr 25, 2024

Strategy Update Session

25 April 2024

Agenda & Speakers

• About StrongPoint
• Update on financial results vs. ambitions
• Big wins from big investments
• Deep dive on Scandinavia, UK and Spain
• Financial update
• Concluding comments
• Q&A

Our purpose: Impact on grocery retailers Impact on end consumers

"Retail technology in every shopping experience for a smarter and better life"

Improving both the in-store and online experience for shoppers

StrongPoint at a glance

Our grocery retail solutions - aisle to aisle & door to door

Update on financial results vs. ambitions

What we in 2020 communicated as our 2025 financial ambitions

Where we are today and our 2025 estimates

Why did we hold onto ambitions for so long?

Business developed far weaker than anticipated

Revenue 2023 MNOK

.

EBITDA 2023 MNOK

All markets significantly weaker than anticipated in Q4 except Baltics

* EBITDA shown for 2023 is excluding 21 MNOK in non-recurring items

Three major challenges in 2023 and continuing into 2024

Challenge 1:	Challenge 2:	Challenge 3:
Difficult market for grocery retail and retail technology	Currency depreciation in Norway and Sweden against EUR and USD	Specific challenges in UK business unit

CEOs about the grocery industry 2024*

Disposable household income under pressure… …leading to more discounter growth… …pushes supermarkets and high-end grocery retailers to

invest more in price than in technology

*McKinsey report, The State of Grocery Retail Europe, published April 2024

.

https://www.mckinsey.com/industries/retail/our-insights/state-of-grocery-europe-2024-signs-of-hope#

Overview

M&A is part of long-term strategy

ALS business: great team and outstanding customer service reputation

Important contributor in winning Sainsbury's

• Replacement of UK executive management initiated
• New MD and SVP with significant grocery retail and technology experience appointed

H2 2023 Q1 - 2024

• As result of changes, are experiencing shortterm negative repercussions in shopfitting business

Challenges summarized – now, what actions?

Actions taken in Scandinavia and Baltics

Transformational actions in our traditional markets:

Immediate cost reduction, reorganisation and commercial actions taken following signs of challenges:

• 25 MNOK gross cost reduction announced in Q4 2023 with full effect from January 1, 2024
• Additionally, 20 MNOK gross cost reduction following Q1 2024 with full effect from July 1, 2024
• Reorganization of Norway and Sweden with teams under one MD & SVP, Magnus Rosén

Actions taken in UK and Spain

Further investments in key markets of UK and Spain to leverage recent large customer successes

Recruitments and reorganization:

• Alex Eveleigh, former Aldi, Ocado, ASDA and Takeoff Technologies executive, as new MD SVP for UK and Ireland
• Strengthening UK and Spain teams to capitalise on Sainsbury's and Mercadona projects
• Neil McCourt, former Tesco Retail MD and Amazon Director, as new strategic advisor
• Reorganization of product team to support customer opportunities in UK and Spain

Continuing to develop strong base of recurring and re-occuring revenue

We are still to a large extent a project driven company.

Focus going forward is to grow recurring and re-occuring base of revenue, in particular for new large-scale customer projects

Big wins from big investments

Our investments are bearing fruit

Exporting our world-class Order Picking solution to the UK driving essential efficiency savings

Developed new cash management solution with Mercadona to improve efficiency of cash operations

Contextualising the size of these grocery retailers

2023 Revenue

Value in project opportunities are very large in themselves

As an incumbent we are well placed to upsell additional solutions

average number of solutions

4.7

Large serviceable customer base of grocery retailers

*Source: Kantar, IGD

.

Large opportunities in key markets

Deep dive on Scandinavia, UK and Spain

Deep dive on selected core markets

Scandinavia

Decades of grocery customer trust

Scandinavia

StrongPoint currently serves all the grocery retailers in Norway and Sweden representing amazing starting point

Took us 30+ years to get there, and are now a solid and trusted supplier

Position as trusted supplier = long-term prospects remain strong

Transformational actions

Organisational efficiency:

• One SVP for Norway and Sweden
• More synergy effects
• More best practice sharing

Commercial steps:

• Pricing measures
• Harder sales targets and incentives
• More targeted marketing and selective campaigns

Commercial overview of Scandinavia

UK

Introduction to StrongPoint ALS UK

• StrongPoint invested in the UK and Ireland with acquisition of Air link Group Ltd (ALS) in June 2022
• ALS served largest UK and Irish grocery retailers for 25+ years
• Building a total retail solution provider on top of existing shopfitting business
• ALS pedigree combined with StrongPoint products and solutions, Sainsbury's win is recent example
• Full sales, installation, service & support team

UK priorities

Bolster shopfitting business and expand customer base

Penetrate UK market with StrongPoint 1 2 solutions that have good product market fit

UK trends continue to drive opportunities

UK facing challenges, some already overcome by Scandinavian retailers:

• Labour costs increasing
• Labour scarcity
• Inflation means frequent price changes/promotions
• Rising theft and retail crime

Driving opportunities

Market opportunities: UK

Sainsbury's picked StrongPoint

Contract signed Q1 2024 Potential additional StrongPoint solutions

Electronic Shelf Labels

Spain

Increasing focus on grocery retail

Spain

Today, majority of business is serving non-grocery retailers

Only ~15% of StrongPoint Spain's revenue comes from grocery retailers

Successes:

We have been successful in a number of retailers with our 4.7 strategy and are starting with a first solution to more than 5 new grocery retailers from a list of approx. 50

Breakthrough grocery success as a door opener

About

• 1,600 stores in Spain, 50 in Portugal
• Employs over 95,000 people
• Dominiates Spanish market with >26% market share
• Almost half of all transactions in Mercadona are made using with cash = 10% of allcash transactions in Spain
• Mercadona looked for partner to develop solution to drastically reduce the costs of handling cash

CashGuard Connect

World's first end-to-end cash automation solution

from customer to cash-in-transit pickup with zero staff intervention at checkout or back office

Cash automatically sent to back office via legacy pneumatic tube systems

Notes are counted, checked and flattened. Cash-in-transit partner alerted when pickup is needed

Customers deposit cash into the built-in coin and note feeders at either staffed or self-service checkouts

CashGuard Connect: Purpose built for grocery retail

+ Makes cash transactions easier and safer for customers and store staff

Market opportunity for CashGuard Connect

First installation in-store. Plans for industrialised production underway with first output expected H2 2025

Spain €1/4BN

5+ grocery retailers have relevant infrastructure: pneumatic tube system

Europe €2BN

Many European grocery retailers use similar pneumatic tube systems (ALS = Air Link System)

Market opportunities: Spain

Financial update

Where we are today and our 2025 estimates

2025 estimates: Scandinavia

• Overall challenging market conditions in 2023 and so far in 2024
• Norway: Increase in in-store deliveries, off-set by expected reduction in payment solutions
• Sweden: Increase in in-store and checkout
• Stable margins, continuous measures to maintain and strengthen through operational excellence

2025 estimates: International

• Mixed performance in 2023
• Baltics and Finland: Increase in Checkout, plus recurring revenue from POS/ ERP
• Spain: CashGuard Connect rollout anticipated H2 2025
• UK: Restore Shopfitting volume, growth in E-commerce
• Margin improvement through scalability and operational leverage

2025 estimates: in-store & e-commerce split

In-store

• Increase in ESL projects, Self-checkout and CashGuard Connect

E-commerce

• Increase in Order Picking, Grocery Lockers and AutoStore projects

M&A update

Integration of completed acquisitions M&A activities and looking ahead

StrongPoint ALS (UK and Ireland) – June 2022

• Revenue of MNOK 283 in 2023
• Stand-alone first year (Shopfitting)
• Integration completed ~summer 2024 with new leadership team
• Expanded offerings, e.g. ESL, Vensafe, Order Picking

StrongPoint Hamari (Finland) – October 2023

• Revenue of MNOK 14 in 2023

• Operating stand-alone, but included in the Baltics region, focusing on commercial synergies

• Short-term focus on improving current operations

• M&A could be important lever going forward at the right time and in the right conditions
• Complementary solutions which could add to our current offering and strengthen our USP

Financing update

Net interest-bearing debt and IFRS 16 lease obligations (MNOK)

• Increase of (not interest-bearing) lease obligations in 2023 due to new premises in Norway
• Gone from almost zero interest bearing debt to debt situation
• Secured new financing better suited to our growth ambitions in UK and Spain with bigger, more demanding customers
• Equity ratio covenant of 30%
• Solid balance sheet with 46% equity ratio

IFRS 16 Leases (not interest-bearing) Net interest-bearing debt

Strong history of dividend payment

• Policy continues to be to pay dividend and increase
• No dividend for 2023
• Focus on managing debt

Concluding comments

StrongPoint 2020 vs. 2024

Challenges and opportunities

Facing multiple challenges and working to overcome them: reduced costs, transformation program incl. operations and products Lots of opportunities in traditional and future key markets: and our investments are now starting to bear fruit

Long-term financial aspirations

Transform traditional core markets of Norway, Sweden and further grow Baltics and Finland

Build on initial success for large-scale operations in UK and Spain

Thank you