ECIT AS

Investor Presentation • Mar 14, 2023

ECIT & Key Financials 2022

3

4

Division performance

Acquisitions

Financial review

5 Overall

Peter Lauring CEO

Mads Skovgaard CFO

ECIT – fundamental drivers

• Integrating IT, Accounting & Software
• Managed by entrepreneurs
• Dual Ownership
• Buy & Integrate
• Tech driven Services provider

• ~ 28% Revenue CAGR
  • ~ 36% EBITDA CAGR

ECIT in short

Founded in 2013
+130 acquisitions
~250 partners
People business (+ 2300)
9 countries
Strategic partner

Performance – full-year 2022

Financial summary

(NOKm)	FY 2022	FY 2021	Revenue development
Revenue	2,826	2,318	32.3%	30.1%	21.9%
COGS	-529	-441
Gross Profit	2,297	1,877	1,782	2,318	2,826
PEX	-1,677	-1,384
OPEX	-203	-154
EBITDA*	418	339	FY 2020	FY 2021	FY 2022
KPIs			Adj. EPS development
Total revenue growth	21.9%	30.1%			0.21
Organic revenue growth	10.0%	5.5%
M&A revenue growth	13.0%	27.8%	0.07	0.13
EBITDA-margin	14.8%	14.6%

Highlights

• 10% organic growth Improved across all divisions.
• Revenue growth ~22%
• EBITDA improvement.
• EPS improvement.

FY 2020 FY 2021 FY 2022

Divisions

Integration (mergers) & building ECIT

• "Building a group not a group of 4 Large mergers affecting 2022 companies".
• 15 largest companies represent ~70% of Group revenue.
• New Division management team
• Strengthening ECIT.

20 companies 4 companies

Revenue: ~NOK 1 billion

FTE: ~425

F&A division

Financial overview – FY 2022
(NOKm)	FY 2022	FY 2021
Revenue	1,543	1,298
EBITDA	263	225
Total revenue growth	19.3%	32.2%
EBITDA-margin	17.0%	17.4%

• Organic growth improvement.

• Consolidation 5 largest F&A companies equals ~57% of division revenue.
• Nearshoring utilisation.

Financial overview – Q4 2022

(NOKm)	Q4 2022	Q4 2021
Revenue	410	316
EBITDA	77	63
Total revenue growth	29.2%	22.0%
EBITDA-margin	18.6%	19.9%

EBITDA and margin development

• Internal education

IT division

Financial overview – FY 2022
(NOKm)	FY 2022	FY 2021
Revenue	1,260	1,047
EBITDA	164	140
Total revenue growth	20.4%	23.0%
EBITDA-margin	13.0%	13.4%

Revenue development Comments

• Revenue recognition – from gross to net of 78m (58m).

• Good organic growth.
• Normalised delivery situation (Q4 2022).

Financial overview – Q4 2022

(NOKm)	Q4 2022	Q4 2021
Revenue	365	307
EBITDA	52	56
Total revenue growth	18.8%	13.9%
EBITDA-margin	14.3%	18.2%

EBITDA and margin development

• Consolidation – 5 largest IT companies ~75% of division revenue.

Tech division

Financial summery – FY 2022
(NOKm)	FY 2022	FY 2021
Revenue	143	97
EBITDA	6	-2
Total revenue growth	46.9%	37.1%
EBITDA-margin	4.0%	-2.1%

Annual recurring revenue Comments

• Revenue recognition from gross to net of 25m (7m).
• Reasonable organic growth consulting revenue – ARR.
• ECIT system implementation.

• Several systems are gaining revenue traction.

Financial summery – Q4 2022

(NOKm)	Q4 2022	Q4 2021
Revenue	46	34
EBITDA	6	4
Total revenue growth	33.3%	39.6%
EBITDA-margin	13.4%	13.1%

Acquisitions in 2022

Acquisitions in 2022

M&A acquired revenue (NOKm)

Acquisitions

• In general, acquisitions is adding volume, competence base, capacity, product & services, technology, and geographical presence.
• Cloud-based ERP system
• Cloud-based HR-system

Financial review

Financial review

Profit & loss summarized Comments

(NOKm)	Q4 2022	Q4 2021	Growth	FY 2022	FY 2021	Growth
Revenue EBITDA Profit for the year Adj. profit for the year	792 135 67 60	629 113 51 54	25.9% 19.5% 30.7% 10.4%	2,826 418 177 159	2,318 339 115 118	21.9% 23.1% 53.9% 35.1%
P&L items: Retructuring & transaction costs Financial income Financial expenses	-1 12 -8	-1 15 -17	-37.8% -20.0% -52.9%	-13 50 -38	-9 27 -41	45.9% 85.9% -6.8%
KPIs Total revenue growth Organic revenue growth M&A revenue growth Currency impact	25.9% 16.2% 9.6% 0.1%	22.7% 2.4% 22.6% -2.3%		21.9% 10.0% 13.0% -1.1%	30.1% 5.5% 27.8% -3.2%
EBITDA-margin Diluted EPS Adj. diluted EPS	17.0% 0.09 0.08	18.0% 0.04 0.02	102.9% 246.8%	14.8% 0.23 0.21	14.6% 0.12 0.13	91.7% 61.3%

• Reasonable 2022 revenue growth.
• Good Q4 2022 organic growth.
• IFRS 15 Changed accounting for thirdparty software revenue and some Tech revenue – in total 103m (65).
• Consolidation impacting a third of the business.
• Limited impact from cost inflation in 2022.
• Sale of Cloud Connection AS (ass. Comp.) and ECIT Invent AS (F&A subsidiary).
• EPS improvement.

EBITDA margin development

Three-year EBITDA margin development Comments

	2020	2021	2022	margin.
1 Reported EBITDA-%	14.4%	14.6%	14.8%	2021).
2 Integration (acquisition)		+ ~0.5%p Norian Group*	+ ~0.4%p Norian Group*
3 Consolidation (mergers)			+ ~0.4%p Merger impact	2023.
4 Est. underlying EBITDA-%	14.4%	~15.1%	~15.6%

• Acquisitions and mergers affect EBITDA margin.
• Lower margin in Norian Group (from 2021).
• A third of ECIT was merged late 2021 / start 2022.
• Integration improvement continue in

Notes

Underlying business = EBITDA-% for the group excluding large acquisitions (Norian Group) and large mergers (+20 companies merged into four) EBITDA = EBITDA before transactions- and restructuring costs

*) Norian Group was acquired in April 2021 – consequently only included in nine months in 2021.

Cash Flow & financial position

(NOKm)	FY 2022	FY 2021
EBITDA	418	339
Transaction and restructuring costs	-13	-9
Corporation tax, paid	-58	-40
Change in NWC	-20	-42
Cash flow from operations	327	249
Cash flow from investing	-315	-319
Cash flow from financing	-94	95
Cash flow for the year	-83	25
Free cash flow	221	154
Covid-19 impact on NWC	1	33
Free cash flow incl. Covid-19	222	187

Cash Flow Statement Free cash flow (NOK million) Comments

Financial position (NOK million)

(NOKm)	FY 2022	FY 2021
Net-interest-bearing-debt (NIBD)	350	137
Leverage ratio	0.8x	0.4x
NIBD ex. leasing debt	124	-99
Undrawn revolving facility	423	588

• FCF increase from higher EBITDA reduction from higher NWC.
• Comparable figures adjusted for Covid-19 impact.
• Financing activities leasing & dividends in 2022 versus listing 2021.
• NIBD at NOK 350 million (137) incl. IFRS16.
• NIBD at NOK 124 million (excl. IFRS 16).
• Leverage ratio 0.8x (0.4x).
• NOK +400 million in financial headroom.
• Partly hedged interest rate

Key financial targets (mid-to-long term ambitions)

Key Financial targets	FY 2022 ex. Adj.	FY 2022 incl. Adj.	Mid-to-long term targets
Growth
Total revenue growth	22.9%	21.9%	> 15.0%
Organic revenue growth	11.2%	10.0%	> 5.5%
Recurring & repeatable revenue	77.0%	77.0%	> 75.0%
Earnings EBITDA-margin	14.3%	14.8%	> 17.0%
Leverage Leverage ratio (NIBD/EBITDA)	0.8x	0.8x	< 2.5x
Mergers & acquisitions M&A acq. Revenue, NOKm	302	302	350

Management comments

• Financial targets unchanged including acquisition target.
• Based on an assumption of stable macro economic development.
• Price increases are expected to impact revenue growth in 2023 to offset the effect of cost inflation.

Overall evaluation