Smartoptics Group AS

Investor Presentation • Feb 11, 2022

Q4 2021 presentation

Strong financial performance in 2021 and continued high demand

*) 5.0 MUSD in Revenue is delayed until 2022 due to semi-conductor shortage

Note: 1) EBITDA adjusted for 175 KUSD in one-off IPO costs in Q2

2021 Highlights – Delivering on strategy

Growing Smartoptics to become a recognized leader in Open Optical Networking Solutions

Leveraging new trends

Disaggregated and Open networks

Solutions, SW & services

Metropolitan area optical networks. Targeting Enterprise, Cloud and Network Operators

Filling the gap

Excellent market opportunity caused by recent years' consolidation

Breakthrough orders from large Operator

Solutions, software and services grew by 46%

High customer and partner endorsement of open and dissagregated networks

World class customer and employee satisfaction NPS: 82 eNPS: 46

Financial development on track toward goal of 100 MUSD

Revenue and EBITDA development 2017-2021 Comments

Revenue EBITDA

Note: EBITDA adjusted for 175 KUSD in one-off IPO costs in Q2

17,0 22,6 26,6 34,9 45,9 -0,6 0,2 1,6 2,4 5,4 2017 2018 2019 2020 2021 +17.5% +31.4% +33.1% +31.3% (-3.5%) (1.1%) (6.2%) (6.8%) (11.8%) CAGR 28% • Consistent growth over the past five years ranging between 17%-33% • Improving profitability as a result of revenue growth • Market success driven by new products in the solution area • 5.0 MUSD in revenue delayed to 2022 due to semi-conductor crisis • On track toward 100 MUSD in 2025/2026 (MUSD)

Smartoptics product offering is evolving to meet demands of larger customers and more applications

netFLEX is a SW product and registered trademark of LighRiver Technologies INC. Smartoptics products are integrated in netFLEX by Lightriver. Smartoptics and LightRiver may partner in certain projects, but are independent entities in all respects.

Our market is driven by mega trends that generate strong demand for data traffic and higher capacity – generating massive data growth

Market – Compact Modular EMEA + North America

Optical networking technology is a prerequisite for growth

Strong order booking in 2021, growing by 39% YoY

• Continued strong business momentum driven by both large customer orders and high demand from repeat customers • Solid long-term trend in order booking, two years of 39% growth Orders booked 2019, 2020 and 2021 Comments 27,2 37,9 52,5 0 10 20 30 40 50 60 1 2 3 +39% (MUSD) +39% 2019 2020 2021

Communication Service Providers (CSP) is the largest customer segment in 2021 and the fastest growing segment

Growth in all Regions, EMEA showing highest revenue growth while Americas' growth is slightly dampened by supply constraints

Americas EMEA APAC 2,8 4,0 3,9 5,2 4,3 6,9 5,9 4,5 0 5 10 15 20 25 2020 2021 3,5 5,7 3,3 5,9 4,8 4,1 4,1 7,3 0 5 10 15 20 25 2020 2021 Q1 Q2 Q3 Q4 0,3 0,6 0,7 0,3 1,1 0,7 1,6 0,8 0 1 2 3 4 5 6 7 2020 2021 +20% (MUSD) +46% +6% 17.0 20.5 15.7 22.9 2.9 3.1

Invoiced Revenue per Region and Quarter – 2020 and 2021 Comments

• EMEA consumed more of the delivery capacity during the quarter
• The estimated 5.0 MUSD of delayed revenue relates wholly to the CSP segment in Americas

Summary of financial performance 2020 and 2021

Performance in the upper range of guidance – long term ambitions maintained

	2021	2021 Guidance	2025/26 aspirations
Revenue	+31.3%	20-35% organic growth	~100 mUSD
Gross margin	44.1%	~41-44%	~45%
EBITDA margin	11.8%	~9-12%	~15-18%
Capex/sales	1.3%	~2%	~2%

Profit and Loss Statement

Profit and Loss Statement Q4 and full year of 2021 and 2020

Profit and Loss Statement	2021 Q4	2020 Q4	2021 12m	2020 12m	Q4 21 vs Q4 20	2021 vs 2020
Invoiced Revenue	12 654	12 091	46 596	35 852
Net Change Deferred Revenue	-151	-448	-730	-918
Total Recognized Revenue	12 503	11 643	45 866	34 934	+7.4%	+31.3%
Total COGS	-6 964	-7 416	-25 649	-21 387
Gross profit	5 539	4 227	20 218	13 546	+31.0%	+49.2%
Gross margin	44,3%	36,3%	44,1%	38,8%
Operating expenses	-4 073	-3 189	-14 788	-11 173	+27.7%	+32.9%
Adjusted EBITDA1)	1 466	1 038	5 430	2 373	+41.3%	+128.8%
EBITDA in %	11,7%	8,9%	11,8%	6,8%
Total Depreciation	-220	-158	-479	-618
EBIT	1 246	880	4 767	1 755	+41.7%	+171.6%
EBIT in %	10,0%	7,6%	10,4%	5,0%
Net Finance Items	-121	-108	135	-106
Earnings before taxes	1 125	772	4 902	1 649	+45.8%	+197.2%
EBT in %	9,0%	6,6%	10,7%	4,7%
Tax	-248	-5	-1 078	-16
Earnings after tax	878	766	3 824	1 633

Comments

• Q4 Adjusted EBITDA grew by 41.3% compared to Q4 2020 and 128.8% for the full year
• SkatteFUNN had a contributing effect of about 220 KUSD (reduction of Operating Expenses) in Q4 2021
• Paid taxes will be negligible as Smartoptics Group has deferred tax assets consist of historical net operating losses which corresponds to NOK 35 million

Note: 1) EBITDA adjusted for around 175 KUSD in one-off IPO costs in Q2 2021

Cash Flow Statement

Cash Flow Statement	2021 Q4	2020 Q4	2021 12m	2020 12m	Comment
Cash at the beginning of the period	8 533	1 503	3 628	2 094
EBITDA	1 466	1 038	5 516	2 419
Changes in Accounts Receivables	1 020	-63	-1 713	-1 359
Changes in Accounts Payable	2 589	1 066	2 198	1 728
Changes in Inventory	-3 746	-1 586	-3 993	-3 259
Changes in Deferred Revenue	126	566	675	988
Other Working Capital Changes	595	380	-947	504
Cash Flow from Operating Activities	2 050	1 400	1 736	1 022
Changes in Non-Current Assets	-247	-450	-589	-594
Cash Flow from Investing Activities	-247	-450	-589	-594
Changes in short term financing	0	866	-2 163	-114
Changes in long term financing	-73	158	-249	1 097
Interest paid	-36	-39	-81	-154
Cash Flow from Financing Activities	-109	986	-2 494	829
Dividend	0	0	-2 231	0
New shares issued	0	0	11 159	0
Translation Differences	-835	189	-1 817	278
Net Cash Flow	859	2 122	5 763	1 534
Cash at the End of Period	9 391	3 628	9 391	3 628

Cash Flow Statement for Q4 and full year of 2021 and 2020

Comments

• Q4 had 2.1 MUSD in Operating Cash Flow
• 12 months Operating Cash Flow was 1.7 MUSD
• Increase in Working Capital reduced the Operating Cash Flow
• The increase in Working Capital was mainly due to higher Inventory, as an effect of component shortages, as shipments are delayed
• Solid cash position to continue growth journey
• In addition, Smartoptics Group has a credit facility amounting to around 2.8 MUSD

Balance Sheet

Balance Sheet for Dec 31 2021 and Dec 31 2020

Assets (MUSD)	Dec 31, 2021	Dec 31, 2020
Non-Current Assets	6 266	6 583
Capitalized Development Cost	904	1 040
Deferred Tax Asset	3 968	4 053
Property Plant and Equipment	1 394	676
Financial Assets	0	814
Other Non-Current Assets	0	0

Current Assets	30 935	18 830
Inventory	11 988	8 103
Accounts Receivables	8 207	6 112
Prepaid Expenses	1 349	949
Cash and Cash Equivalents	9 391	3 628
Other Current Asset	0	38

Total Assets	37 201	25 413

Equity and Liabilities (MUSD)	Dec 31, 2021	Dec 31, 2020
Total Equity	24 238	12 201
Non-Current Liabilities	3 558	3 537
Liabilities to Financial Institutions	1 984	2 233
Deferred Revenue	1 574	1 304
Other Non-Current Liabilities	0	0
Current Liabilities	9 406	9 676

Liabilities to Financial Institutions	0	2 163
Deferred Revenue	1 379	974
Accounts Payable	6 208	4 010
Public Duties	49	945
Other Current Liabilities	1 769	1 583

Total Liability	12 964	13 213
Total Liability and Equity	37 201	25 413