Volue ASA

Investor Presentation • Nov 10, 2023

Third Quarter 2023 Financial Results

10 November 2023

Disclaimer

This presentation has been produced by Volue ASA (the "Company" or "Volue") exclusively for information purposes. This presentation is confidential and may not be reproduced or redistributed, in whole or in part, or disclosed by any recipient, to any other person. To the best of the knowledge of the Company and its board of directors, the information contained in this presentation is in all material respect in accordance with the facts as of the date hereof, and contains no material omissions likely to affect its import.

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CEO CFO

Trond Straume Arnstein Kjesbu

Volue in brief

One of the largest software companies in Norway

Working across three major industry segments

Help customers master the energy transition by enabling end-to-end optimisation of the green energy valuechain

Q3 revenues (% of total)	NOK 180m (54%)
Recurring revenues share (Q3)	74%
EU Taxonomy eligibility	HIGH

Enable power distributors to support electrification of society by unlocking flexibility and digital management of the power grid

Q3 revenues (% of total)	NOK 180m (54%)	Q3 revenues (% of total)	NOK 65m (19%)	Q3 revenues (% of total)	NOK 57m (17%)
Recurring revenues share (Q3)	74%	Recurring revenues share (Q3)	62%	Recurring revenues share (Q3)	98%
SaaS revenues (Q3)	37%	SaaS revenues (Q3)	9%	SaaS revenues (Q3)	56%
EU Taxonomy eligibility	HIGH	EU Taxonomy eligibility	HIGH	EU Taxonomy eligibility	MEDIUM

Energy * Power Grid Infrastructure

Deliver flexible capabilities for digital water management and help automate processes and machines for the construction industry

Q3 revenues (% of total)	NOK 57m (17%)
Recurring revenues share (Q3)	98%
EU Taxonomy eligibility	MEDIUM

⁷ * From Q3 Volue IIoT is reported under «other segment» (see appendix slide 31)

Highlights for the Quarter

Recurring revenues

NOK 254 mill

40% growth from Q3 2022 14% growth from Q3 2022

Operating revenues

NOK 334 mill

SaaS revenues

NOK 105 mill

50% growth from Q3 2022

Adjusted EBITDA

NOK 63 mill

19% margin, 27% growth from Q3 2022

Q3 Highlights: Strong uplift in SaaS and ARR

Performance, sales and operations

• Annualised ARR base broke through NOK 1 billion barrier, ending at 1,081 million
• Record growth in ARR outweighs expected head-winds on non-recurring revenues for Energy segment
• Very solid growth for Power Grid segment, combined with uplift in margins
• Infrastructure segment continues the trend of growth and uplift in ARR and margins
• Profitability in line with guidance and uplift from Q3 and last year
• 22 customers in Japan, Smart Power entry under consideration

Adjusted EBITDA and other alternative performance measures (APMs) are defined as part of the APM section in this presentation on page 33.

Fast-growing and profitable model with highly attractive growth strategy

Robust foundation providing long cash flows & churn protection (< 2%)

Building SaaS revenues with goto-market strategy. 151% growth since listing

Solid and growing European position with ongoing geographical expansion to Japan

Large and fastgrowing markets. 20 billion NOK today, doubling in size towards 2030

Perfect position for profitable growth and business model transformation, with proven ability to execute. ARR base broken 1 billion NOK barrier

Robust foundation providing long cash flows & churn protection

• Mission critical solutions
• Decades of proven reliability
• Longstanding relationships with conservative customers

A

Highly attractive vendor position

Battle proven portfolio

• Sticky customer base with high switching cost
• Volue on the right side of the fence with industry titans

• Robust ARR foundation Predictable recurring revenue stream from current solutions
  • Industry leading customer churn below 2%

Building SaaS revenues with go-to-market strategy

Insight platform 1

• Industry leading analytics platform
• Best-in-class APIs utilised 650 billion times in 2022
• Sales cycle of 6 hours to 6 weeks

Smart Power 3

• Next generation optimisation platform built on decades of experience
• Unique multi-asset, multi-market platform
• Sales cycle of 6 to 18 months

Trading solutions 2

• Market leading algo-trader
• 45M algo trades LTM
• Sales cycle of 6 weeks to 6 months

⁴ Increased SaaS

Geographical expansion to Japan

Q4'22 Q3'23 Q4'23

Market platform readiness

Sufficient customer base in place to start up-selling Smart Power. Entry under consideration

Large and fast-growing markets

Markets set to double to NOK 40 billion ARR towards 2030

Installed renewable capacity growing with a CAGR of 10%

Number of power producers growing with a CAGR of 6%

Fuelled by global electrification megatrend

Attractive current market size of NOK 20 billion ARR

37

Million algo trades

+114% on the Volue platform

45

Perfect position for profitable growth and business model transformation, with proven ability to execute

Third Quarter 2023 Financial Results

Financial highlights

Financial highlights (NOKm)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	LTM
Operating revenues	334	294	1,049	878	1,388
Adjusted EBITDA1	63	50	181	139	243
Adjusted EBITDA margin	19%	17%	17%	16%	18%
EBITDA	58	46	185	124	197
EBITDA margin	17%	16%	18%	14%	14%
Recurring revenues growth (%) Recurring revenues (% of	40%	19%	30%	15%	24%
revenues)	76%	62%	68%	63%	67%
SaaS revenues growth (%)	50%	27%	43%	31%	37%
SaaS revenues (% of revenues)	31%	24%	28%	23%	27%
R&D CAPEX (% of revenues)	8%	11%	9%	10%	9%

Sales

• Strong underlying financial performance with growth for all segments, despite expected declining non-recurring revenue
• 40% ARR growth, one of Volue's strongest quarters
• 14% revenue growth from Q3 2022, 4% organic growth,
• 19% revenue growth YTD, 16% organic growth
• Growth in SaaS revenues of 50%
• 5 percentage points positive impact from exchange rates
• Enerim acquisition reflected results with full quarterly effect

Profitability

Adjusted EBITDA in Q3 2023 improved from last year and Q2 2023

• Growth in top-line paves way for improved profitability
• Decline in high-profit non-recurring revenues from Q3 2022 outweighed by uplift in ARR with improved overall margin
• Increased growth from recurring revenues impacts margins over time

Capex

• Higher growth rates lead to decreased R&D CAPEX of total sales

Cash flow

• Cash position will decrease during the year due to prepayments from customers at the start of the year

Excellent growth in annual recurring revenues (ARR)

Annual Recurring Revenues1 Annual SaaS Revenues2

1. Recurring revenues are defined as revenues from recurring contracts including Software-as-a-Service (SaaS)

300

18

400

500

600

700

800

900

1 000

Accelerating shift towards SaaS

1. SaaS revenues are defined as revenues from software & services operated by Volue in the cloud

2. 10

40

90

140

190

240

290

340

390

440

0%

10%

20%

30%

40%

50%

60%

70%

80%

0.0 %

0.5 %

1.0 %

1.5 %

2.0 %

ARR Milestone achieved

And highly sticky customer base

Customers stay with Volue

19

-

200

400

600

800

1 000

1 200

-

5

10

15

20

25

30

Energy segment

In Q3 IIoT is reported under «other segment» (see appendix slide 31)

Growth

• Segment with 16% growth from Q3 22
• Non-recurring revenues from Energy Market Operations coming down from an abnormal 2022, approximately 30MNOK decline vs Q3 22
• Strong sales due to increased demand for forecast and analytics services
• Powerful growth in recurring revenues

Profitability in the quarter

• Stable margins from the business, despite lower contribution from Market Operations
• Industrial IoT, excluded from the Energy segment, highlighting performance of underlying business
• Large increase in R&D capacity for further investments in new products and services has been onboarded throughout 2022

Main drivers for uplift in contribution going forward

• Sales closing mainly from scalable SaaS products within Trading and Insight, giving uplift in contribution without adding new cost
• Few new headcounts planned to be added throughout 2023
• Synergies on cost level through more integrated product lines that reduce OPEX level

Investments

• CAPEX level at approx. 8% of revenues, mainly R&D investments
• Significant investments into new products related to Optimisation and Trading Solutions

Power Grid Segment

Growth

• Healthy growth rates at 18% from strong sales
• Delivery capacity increased, enabling further growth
• Solid market outlook with large pipeline

Profitability in the quarter

• Adjusted EBITDA margin increased in the quarter compared to Q3 2022
• Reduced consulting activity during the summer
• Investments in market expansions with new products for European markets impact the margins in the quarter

Main drivers for uplift in contribution going forward

• Mid- to long-term increased contribution following sale of scalable products from the Spark program
• Current team scaled to capture growth
• Shift in business models and growth on top line on scalable SaaS products
• Uplift in contribution from improved profitability in consulting activities

Investments

• CAPEX in the quarter maintained at~10 % of revenues
• Ongoing investments in international expansion
• CAPEX level expected to be on same level going forward

Infrastructure Segment

Growth

• Continued growth momentum at 20% compared with Q3 2022
• Successful shift in business models giving solid uplift in ARR
• Strong sales in 2023, giving increased order backlog, positively impact growth rates going forward

Profitability

• Uplift in margins from Q2 2023 and 2022 following uplift in ARR and SaaS
• Ongoing investments in market expansions combined with shift to SaaS business models impacting EBITDA margins

Main drivers for uplift in contribution going forward

• Strong growth in sales closing on SaaS platform will drive uplift in margins with main investments completed
• Current team scaled to capture growth
• Improved time-to-cash process will provide margin uplift

Investments

• CAPEX level at approx. 13% of revenues, expected at same levels in the near-term and decline over time

Guidance

Classification: Private

Update on guidance

Annual long-term organic growth of 15% reiterated

Target of NOK 2 billion in revenues 2025, including M&A, reiterated

Year-by-year increase of adjusted EBITDA margin, cash conversion, share of ARR and SaaS revenues

Appendix Financial and Operational Information

Group P&L and KPIs

Group financial performance

Key metrics (NOKm)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	LTM
Operating revenues	334	294	1,049	878	1,388
COGS	53	51	158	144	222
Gross profit	281	243	892	734	1,167
Gross margin %	84%	83%	85%	84%	84%
Personnel expenses (excl. capitalised R&D)	161	134	531	430	703
Other OPEX	57	59	180	165	220
Adjusted EBITDA	63	50	181	139	243
Adjusted EBITDA margin %	19%	17%	17%	16%	18%
Non-recurring items	5	4	-3	15	39
EBITDA	58	46	185	124	197
EBITDA margin %	17%	16%	18%	14%	14%
Depreciation and amortisation	33	27	88	80	114
EBIT	25	19	97	44	102
EBIT margin %	7%	6%	9%	5%	7%
Net financial items	-5	3	-2	4	-10
EBT	20	22	94	48	92
Tax	3	3	26	13	22
Profit (loss)	16	19	69	36	66

Balance sheet

Balance sheet (NOKm)	Q3 2023	Q2 2023	Q3 2022	Q4 2022	Balance sheet (NOKm)	Q3 2023	Q2 2023	Q3 2022	Q4 2022
ASSETS					LIABILITIES AND EQUITY
Property, plant and equipment	111	119	123	124	Equity	870	878	811	809
Intangible assets	1,024	1,037	594	623	Total Equity	870	878	785	809
Pension assets	6	6	8	6
Non-current receivables and
investments	47	47	38	35	Non-current debt	345	275
Total non-current assets	1,188	1,209	763	788	Lease liabilities	69	73	75	77
					Other non-current liabilities	10	10	14	15
					Deferred tax liabilities	25	9	-1	23
					Total non - current liabilities	449	367	88	116
					Borrowings	5	5	10	7
					Lease liabilities	17	18	21	19
Inventory	27	27	32	29	Trade and other payables	87	109	112	397
Contract assets	88	108	69	54	Current tax liabilities	42	52	54	24
Trade and other receivables	340	330	337	543	Contract liabilities	129	236	101	31
Cash and cash equivalents	270	361	513	446	Other current liabilities	316	370	515	458
Total current assets	726	827	950	1,073	Total current liabilities	596	790	814	936
Total assets	1,914	2,036	1,713	1,861	Total liabilities and equity	1,914	2,036	1,713	1,861

Cash flow statement

	Cash flow statement (NOKm)	30.09.2023	30.09.2022
	Profit before tax	94	48
	Adjusted for depreciations	86	80
	Net finance	4	-4
	Change in inventories	3	-12
	Change in other current assets	186	137
	Change in other current liabilities	-286	-16
	Change in other provisions	2	-12
	Change in tax paid	-7	6
	Net cash flow from operating activities	81	228
	Interest received Purchase of property, plant and intangible assets	12 -119	4 -100
	Cash flows related to acquisitions	-94	-1
	Acquisition of non-controlling interests	-363	-
	Net cash flow from investing activities	-565	-97
	Movement in borrowings	315	-28
	Interest paid	-20	2
	Acquisition of non-controlling interests	-	-2
	Purchase of own shares	-	-4
	Net cash flow from financing activities	295	-32
	Net change in cash and cash equivalents	-188	99
	Cash and cash equivalents opening balance	446	404
	Effects of exchange rate changes on cash and cash
	equivalents	12	10
29	Cash and cash equivalents closing balance	270	513

Segment overview

30

Energy Segment (NOKm)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	LTM
Operating revenues	180	155	530	441	700
Adjusted EBITDA	38	45	124	111	170
Adjusted EBITDA margin	21%	29%	23%	25%	24%
R&D CAPEX (% of revenues)	8%	8 %	9%	9%	13%
Power Grid Segment (NOKm)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	LTM
Operating revenues	65	55	230	179	289
Adjusted EBITDA	7	-2	34	7	37
Adjusted EBITDA margin	10%	-3%	15%	4%	13%
R&D CAPEX (% of revenues)	10%	20%	12%	12%	16%
Infrastructure Segment (NOKm)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	LTM
Operating revenues	57	48	173	147	218
Adjusted EBITDA	16	9	26	27	28
Adjusted EBITDA margin	28%	19%	15%	19%	13%
R&D CAPEX (% of revenues)	13%	17%	12%	15%	18%
Other Segment (NOKm)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	LTM
Operating revenues	32	36	115	111	160
Adjusted EBITDA	2	-3	-3	-6	-7
Adjusted EBITDA margin	7%	-7%	-3%	-6%	-4%
R&D CAPEX (% of revenues)	-2%	-2%	2%	2%	2%

Revenue splits within segments, Q3 2023

% of segment revenue	Energy	Power Grid	Infrastructure	Other Segment
Total ARR	74 %	62 %	98 %	76 %
of which is SaaS	37 %	9 %	56 %	0 %
License fee	0 %	0 %	0 %	0 %
Consulting	9 %	28 %	2 %	0 %
Energy Market Operations	14 %	0 %	0 %	0 %
Other Revenue non-recurring	4 %	10 %	0 %	24 %

Revenues from Energy Market Operations came down from 2022

The Energy segment experienced abnormal trading revenues from power market volatility in the region of 60MNOK in 2022. As expected, and indicated, these revenues are trending significantly down in Q3 2023. Bear in mind that parts of old Enerim's non-recurring revenues are classified as "Energy Market Operations"

Power Grid displays seasonal low consultancy combined with uplift in ARR

Infrastructure continue to display stellar ARR and SaaS numbers

Alternative performance measures (APMs)

Basis for preparation

This presentation provides financial highlights for the quarter for Volue. The financial information is not reported according to the requirements in IAS 34 and the figures are not audited.

Volue ASA presents alternative performance measures as a supplement to measures regulated by IFRS. The alternative performance measures are presented to provide better insight and understanding of operations, financial position and the basis for future developments.

The definitions of these measures are as follows:

Adjusted EBITDA - In order to give a better representation of underlying performance, EBITDA is adjusted with non-recurring items.

ARR – Annual Recurring Revenues is defined as revenues from recurring contracts including software as a service.

EBIT - Profit/loss before tax and net finance cost.

depreciation, amortisation and impairment.

SaaS – Software as a service. SaaS revenues are defined as revenues from software & services operated by Volue in the cloud.

Non-recurring items - items that are not part of the ordinary business, such as external costs related to implementation of corporate backoffice cloud-based systems (e.g. ERP), M&A related costs and costs related to the share-based remuneration schemes. In accordance with IFRS IC agenda decision (Configuration or Customisation Costs in a Cloud Computing Arrangement) from April 2021, these costs have not been capitalised, as they previously would have been.