LINK Mobility Group Holding

Investor Presentation • Nov 28, 2023

Financial presentation

Q3 2023

28 November 2023

LINK in short

> 20 years in the business - European #1 for enterprise digital messaging - Global ambitions

Proven M&A track-record with more than 30 acquisitions last decade

590 employees in 29 offices across 17 countries

17 billion messages sent annually by ~ 50,000 customers

Adjusted EBITDA NOKm

2 Interim Report Q3 2023

Q3 2023 highlights for Europe

Gross profit growth amplified by executed cost reduction initiatives

Revenue reported at NOK 1 597 million. Organic growth in fixed currency 17%

• Topline growth driven by unusually high activity in Global Messaging
• Enterprise segments in Europe grew as expected in seasonally low quarter

Gross profit reported at NOK 317 million. Organic growth in fixed currency 6%

• European Enterprise segments reported stable organic growth momentum of 7%
• Global Messaging neutral due to unusual traffic mix effects

Adjusted EBITDA reported at NOK 147 million. Organic growth in fixed currency 16%

• YTD Q3 23 organic adjusted EBITDA growth in fixed currency was 12%

LINK signed 507 new and expanding agreements in the third quarter

• New signings increased 21% YoY supporting long-term growth momentum

After close of quarter Message Broadcast was divested for USD 260 million

• US subsidiary divested at highly attractive valuation
• Closing expected in Q1 2024 following customary closing conditions

Group leverage significantly reduced to 1.0x post transaction

• Providing ample financing capacity for inorganic growth through M&A

Reported figures impacted by NOK depreciation

Q3 2022	Organic growth	FX effect	Q3 2023
1 229	204	164	1 597
	17%
270	17	30	317
	6%
116	18	12	147
	16%

Continued profit growth across core business segments

Group gross profit growth of 6% in fixed currency

Stable growth for European enterprise segments

• Growing 7% organically contributing NOK 17 million
• Supported by high contract backlog
• Stable market conditions and improved margin YoY

Global Messaging neutral due to traffic mix effects

Large positive NOK 30 million FX effect with NOK depreciation

• Reported gross profit growth of 17% to NOK 317 million

Gross margin diluted by high activity in Global Messaging

• Enterprise margin +0.3 percentage points YoY
• One-off lower margin in Global Messaging reflected unusual traffic mix effects
  • Margins expected to normalize, returning to high single digits

Continued growth in European contract backlog

Forecasted contribution from new contract wins grew 13% YoY in seasonally low third quarter

Gross profit contribution from new contract wins NOKm

Clear step up in contract backlog with commercial refocus

• Forecasted gross profit contribution from new wins NOK 24 million in Q3 23
  • Historically 75% of gross profit recorded in P&L within 12 months

New contract wins increased 13% YoY in Q3 23

• A2P SMS grew from high base
• Strong CPaaS growth from higher margin new channels and solutions
  • RCS, WhatsApp and marketing automation

LINK continues to grow customers and agreements

New contract wins grew 21% YoY in Q3 23

Customer accounts

New agreements signed in quarter / customer churn (%)

~ 50' active customers

• Organic growth of 530 customer accounts
• Upselling on existing customer base essential
  • Top 100 customers contribute ~50% of revenue
  • 114% net retention in stable currency in the third quarter

New signed agreements grew by 21%

• Contract wins in Q3 23 rose to 507 from 420 in the same quarter last year

Stable customer churn at 2.0 percentage points in Q3 23

• Enterprise churn at 1.2 percentage points
• Additional churn linked to one large aggregator client

Well positioned for value generation in 2024 and beyond

LINK Europe transparent and highly cash generative business

• Large and diverse customer base with very low churn
• High and growing contract backlog
• Significant upsell and new sale potential from new multi-channel / two-way messaging solutions

Proceeds from US divestment enables LINK to fast-track accretive M&A

• LINK established M&A track record with > 30 acquisitions completed in Europe last decade
• Significant scope for inorganic EBITDA growth through multiple arbitrage use of proceeds
• Low risk approach to M&A with leverage to remain substantially < 3.5x adjusted EBITDA
  • EUR 370 million bond maturing in December 2025 to be partly refinanced

Large and diverse M&A pipeline

• Actionable bolt-ons in Europe
• Level-up cases on other continents with longer timeline to fruition

LINK's global ambitions remain unchanged and the US market is a priority

Disposal of Message Broadcast voids forward-looking statement

Previous forward-looking statement included the US business and is no longer valid

LINK's European business is stable and highly cash generative

• Gross profit growth in high single digits historically

Market trends confirm shift towards conversational solutions

• Organic adjusted EBITDA is expected to grow at a higher rate than gross profit

Financial review

Q3 2023

Reported revenue growth of 30%

FX tailwind contributed 13 percentage points to revenue growth

Reported revenue NOKm

Reported volume (mill transactions)

Organic revenue growth of 17% in fixed currency

• European enterprise segments grew 6% organically in fixed currency
  • High comparable hyperscaler traffic in Q3 23
  • Ongoing implementation of contract backlog
• Global Messaging segment delivered organic growth of 54% in fixed currency
  • High activity due to unusual traffic mix effects

Reported volume growth for Q3 23 at 15%

• Volume growth lower than revenue growth in fixed currency
  • Increased average price per message
• Higher priced OTT channels continued to gain traction in selected markets
  • Improving ROI for clients compared to traditional SMS messaging

Reported gross profit growth of 17%

FX tailwind contributed 11 percentage points to gross profit growth

Gross profit NOKm

Organic gross profit growth 6% in fixed currency

• European enterprise segments delivered stable 7% organic growth
• Global Messaging with slight negative growth effect YoY
  • Unfavorable traffic mix isolated to the third quarter

Europe Enterprise Gross Margin (%)

Enterprise gross margin expanded YoY and remains stable LTM

• Enterprise margin +0.3 percentage points YoY
  • Positive client mix effects with higher price per message
  • High volume of OTP hyperscaler traffic last year

Reported adjusted EBITDA growth of 26%

FX tailwind contributed 10 percentage points to adjusted EBITDA growth

Adjusted EBITDA NOKm

Organic growth in adjusted EBITDA of 16% in fixed currency

• Gross profit growth contribution across Europe
• Opex decline of 1% in stable currency due to executed cost initiatives
  • YoY opex reduction from cost initiatives of NOK 14 million

Adjusted EBITDA margin (%)

Stable adjusted EBITDA margin YoY

• Enterprise Europe margin expanded 0.6pp to 15.8% YoY
  • Reflecting higher gross margin and execution on cost initiatives
• High activity for Global Messaging diluted overall margin

P&L - Last quarter with non-recurring RSU cost

NOK in millions		Q3 2023 Q3 2022	YID 2023	YID 2022	Full Year 2022
Total operating revenues	1 597	1 229	4 486	3 491	4 914
Direct cost of services rendered	(1 280)	(ଚିହିତ)	(3 523)	(2 662)	(3 775)
Gross profit	317	270	963	829	1138
Operating expenses	(170)	(153)	(531)	(476)	(653)
Adjusted EBITDA	147	116	432	353	486
Non-recurring costs	(27)	(29)	(89)	(85)	(147)
EBITDA	120	87	343	268	339
Depreciation and amortization	(113)	(102)	(336)	(300)	(406)
Impairment cost					(180)
Operating profit (loss)	7	(15)	7	(32)	(248)
Net financials	2	73	(106)	135	24
Profit (loss) before income tax	9	58	(99)	103	(224)
Income tax	(7)	(15)	21	(49)	4
Profit (loss) from continuing operations	1	43	(78)	54	(220)
Profit (loss) from discontinued operations	41	46	107	73	68

Non-recurring costs of NOK 27 million

• Costs related to M&A and restructuring costs of NOK 2 million
• Options cost of NOK 25 million with no cash effect in the quarter
  • Quarterly LTIP options cost of NOK 15 million
  • Accounting effect related to last RSU's tranche NOK 5 million
  • Social security cost accrual increase of NOK 5 million

Depreciation and amortization NOK 113 million

• Depreciation of intangible assets from R&D NOK 21 million
• Depreciation of PPA's NOK 85 million
• Depreciation of leasing and fixed assets NOK 7 million

Net financials

• Currency effect gain of NOK 35 million with limited cash effect
• Net interest costs of NOK 35 million mainly related to bond loan
• Other financial items of NOK 2 million

Strong cash on balance sheet

NOK in millions	Q3 2023	Q3 2022	Year 2022
Non-current assets	9 249	9 407	8 924
Trade and other receivables	1 399	1 118	1 244
Cash and cash equivalents	1 104	916	827
Total assets	11 752	11 441	10 994
Equity	5 578	5 620	5 226
Deferred tax liabilities	475	602	533
Long-term borrowings	4 121	3 858	3 837
Other long term liabilities	45	57	45
Total non-current liabilities	4 641	4 517	4 416
Trade and other payables	1 447	1 141	1 331
Other short term liabilities	86	163	22
Total current liabilities	1 533	1 304	1 353
Total Liabilities	6 174	5 821	5 769
Total liabilities and equity	11 752	11 441	10 994

Non-current assets increased mainly due to currency effects

• Goodwill of NOK 6.1 billion – whereof NOK 1.9 billion related to US

Cash on balance sheet up NOK 188 million YoY to NOK 1.1 billion

• Expanding QoQ from FCF generation partly offset by negative FX effect
• WC increased seasonally and with high activity in Global Messaging

Equity NOK 5 578 million and equity percentage of 47%

Receivables and payables increased with organic growth and FX effects

Net interest-bearing debt* of NOK 3 063 million

• Expected leverage level after US transaction of 1.0x

European business generates high recurring cash flows

Commercial refocus and execution on cost initiatives support high cash conversion

Stable and solid cash generation from European footprint

• Cash conversion from adjusted EBITDA consistently high
  • Averaging 43% since Q3 22
• WC stable over time and modest capex to sales ratio

LTM FCF growth 12% or NOK 27 million since Q3 22

• Uptick following commercial refocus last year
  • Higher contract backlog support gross profit growth
  • Executed cost reductions amplify effect
• Negative WC effect from high Global Messaging growth

Divestment of Message Broadcast results in strong cash position

• Estimated cash position NOK 3.5 billion after close
• Return on cash > than cash interest payments
• EUR 370 million bond until December 2025 carries 3.375% coupon

LTM free cash flow generation excluding US NOKm

* Excluding non-recurring costs and US related WC, capex, lease payments and interest on EUR 170 million tap issue June 2021 for acquisition of Message Broadcast

Appendix

Q3 2023

Northern Europe

Central Europe

Western Europe

Global Messaging

Q&A

linkmobility.com/investors

28 November 2023