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Addnode Group

Annual Report Feb 4, 2022

3001_10-k_2022-02-04_3690ec96-f3af-46f9-a016-4078a6ff0898.pdf

Annual Report

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YEAR-END REPORT 1 JANUARY–31 DECEMBER 2021

This is a translation of the Swedish original of Addnode Group's Year-End Report for the period 1 January–31 December 2021. In the event of inconsistency between the two, the original Swedish version shall apply.

FOURTH QUARTER SUMMARY, OCTOBER–DECEMBER 2021

  • Net sales increased by 21 per cent to SEK 1,114 m (921), of which 13 per cent was organic. Currency-adjusted organic growth was 12 per cent.
  • EBITA increased to SEK 148 m (108), and the EBITA margin increased to 13.3 per cent (11.7).
  • Operating profit rose to SEK 106 m (76), and the operating margin widened to 9.5 per cent (8.3).
  • Profit for the period increased to SEK 80 m (55).
  • Earnings per share increased to SEK 2.39 (1.65).
  • Cash flow from operating activities increased to SEK 257 m (181).
  • Changes to Group Management.
  • The Board of Directors is proposing a dividend of SEK 3.00 (2.50) per share.

SUMMARY OF SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

  • Acquisition of Claytex Services Ltd. of the UK, with net sales of SEK 25 m.
  • The Board of Directors is proposing a 4:1 share split.
  • Office property in UK divested with an estimated capital gain of approx. SEK 20 m.

Q4

KEY FIGURES

Q4
2021
Q4
2020
2021
Full year
2020
Full year
Net sales, SEK m 1,114 921 4,077 3,807
EBITA, SEK m 148 108 461 3561
EBITA margin, % 13.3 11,7 11.3 9.41
Operating profit, SEK m 106 76 305 229
Operating margin, % 9.5 8.3 7.5 6.0
Profit for the period, SEK m 80 55 223 163
Earnings per share, SEK 2.39 1.65 6.65 4.88
Cash flow from operating activities, SEK m 257 181 437 579
Return on shareholders' equity2, % 13.9 11.2 13.9 11.2
Return on capital employed2, % 13.0 10.6 13.0 10.6
Shareholders' equity per share, SEK 50.64 45.23 50.64 45.23

1 EBITA in the preceding year was charged with restructuring costs totalling SEK 28 m for adapting the organisational structure and cost base of the Product Lifecycle Management division.

2 Key financial ratios have been restated to reflect annualised returns.

For more information, please contact:

Johan Andersson, President and CEO, [email protected] +46 (0)70 420 5831

Lotta Jarleryd, CFO, [email protected] +46 (0)72 247 9201

All amounts are presented in millions of Swedish kronor (SEK m) unless indicated otherwise. Rounding differences of SEK +/– 1 m may occur in totals. In cases where an underlying figure is SEK 0 m when rounded, it is presented as 0.

"In 2021, Addnode Group achieved its best-ever earnings. The value creation we are currently generating is the result of hard work, investments in expertise and products, acquisitions and wellfounded strategic decisions. In the five-year period 2017- 2021 our average yearly EPS growth was 20 per cent.

HARD WORK AND INVESTMENTS PAY OFF

GROWTH AND SHARPLY IMPROVED EARNINGS

Addnode Group's growth and positive earnings trend continued in the fourth quarter. Our people made fantastic efforts in another year of Covid. Compared to the corresponding period of the previous year, net sales increased by 21 per cent, of which 12 per cent currency-adjusted organic, EBITA was up by 37 per cent, and our EBITA margin expanded to 13.3 per cent (11.7). All three divisions achieved good growth and improved earnings, but Design Management and Process Management were special contributors to the strong earnings boost.

In 2021, Addnode Group achieved its best-ever earnings. Net sales increased by 7 per cent, of which 3 per cent currency-adjusted organic. EBITA was up by 29 per cent to SEK 461 m, and the EBITA margin increased to 11.3 per cent (9.4). Addnode Group is getting even stronger in our focus segments: digital solutions for design and engineering, construction and facility management, as well as public administration. The important enablers here are the expansion of our product and service offerings, complementary acquisitions and expansion into new geographical markets.

DIGITALISATION, AUTOMATION AND SUSTAINABILITY

The need for digitalisation and automation of processes is a growth driver for all Addnode Group companies. Our biggest positive contributors to a more sustainable society are the digital solutions we deliver for customers, which in turn can make positive contributions to, for example, digital simulations benefiting the environment and health, design choices for sustainable development, product lifecycle management, facility management, and improved interaction and dialogue with citizens. In the year, we enhanced our companies' value and sustainability work with a Groupwide Code of Conduct and Sustainability Policy.

VALUE-CREATING ACQUISITIONS—STRUCTURAL CAPITAL

Acquisitions are an important part of our growth strategy. Since its formation in 2003, Addnode Group has executed nearly 70 acquisitions. On this journey, we've accumulated experience and structural capital. We acquired four companies in 2021 with total yearly net sales of some SEK 220 m. We made our first acquisition this year, of Claytex, a specialist in advanced simulation and testing focused on automotive systems and autonomous vehicles, in January 2022. Claytex complements the advanced simulation initiative in Addnode Group company TECHNIA. We still see great potential for value-creating acquisitions in 2022.

SUSTAINABLE EARNINGS GROWTH GENERATING SHAREHOLDER VALUE

In 2021, earnings per share increased by 36 per cent to SEK 6.65 (4.88). In the five-year period 2017-2021 our average yearly EPS growth was 20 per cent. The value creation we are currently generating is the result of hard work, investments in expertise and products, acquisitions and wellfounded strategic decisions. We intend to keep generating sustainable earnings growth by executing our strategy of acquiring and developing cutting-edge companies that deliver digital solutions for a sustainable society.

Johan Andersson President and CEO

SIGNIFICANT EVENTS

FOURTH QUARTER 2021

Changes in the composition of Group Management

In December 2021, we reported that Rolf Kjaernsli, Division President of Design Management, have decided to leave Addnode Group. CEO and President Johan Andersson took over as Interim Division President effective 1 January 2022. At this time, Jens Kollserud, President of our subsidiary Symetri, became a member of Addnode Group's Group Management.

Share repurchase

In October 2021, Addnode Group repurchased 200,000 class B shares on Nasdaq Stockholm, with the authorisation of the AGM 2021, mainly to enable the delivery of shares related to implementation of Addnode Group's sharebased incentive programme. The repurchased shares remain in treasury.

AFTER THE END OF THE REPORTING PERIOD

Acquisition of Claytex

In January 2022, Addnode Group acquired Claytex Services Ltd. (Claytex) of the UK, a company specialised in advanced simulation and testing for the automotive industry. Claytex is a partner of Dassault Systèmes, and also delivers complementary proprietary software. This company has sales of some SEK 25 m, and it will become part of TECHNIA in the Product Lifecycle Management division.

Real estate sale

In January 2022, Addnode Group divested the office property in Enfield, UK, included in the acquisition of Excitech in 2020, which was intended for sale at the time of acquisition. The remaining purchase consideration was settled to the sellers of the shares of Excitech in tandem with this. Addnode Group's estimated capital gain is approx. SEK 20 m, and is accounted in the Interim Report for the first quarter of 2022.

ADDNODE GROUP IN BRIEF

WHAT WE DO

Addnode Group is a listed group that acquires, manages and develops cutting-edge enterprises that digitalise society. The Group had sales of approximately SEK 4.1 bn in 2021.

FOR WHOM

Our subsidiaries develop and deliver digital solutions for customers in industries such as construction and real estate, manufacturing, automotive and medical devices, as well as the public sector.

THE BENEFITS

The solutions that Addnode Group deliver enable our customers to use digital working methods to rationalise their operations, quality-assure their production and communicate better with customers and citizens.

WHERE WE'RE ACTIVE

Addnode Group has 1,900 employees in 19 countries. The company's shares are listed on Nasdaq Stockholm.

FINANCIAL TARGETS

We aim to achieve annual net sales growth of at least 10 per cent. Our minimum operating margin before amortisation and impairment of intangible assets (EBITA margin) shall be at least 10 per cent. At least 50 per cent of consolidated profit after tax will be distributed to shareholders, provided that net cash is sufficient to manage and develop our business.

29 April 2022 Interim Report for the first quarter of 2022

15 July 2022 Interim Report for the second quarter of 2022

4 May 2022 AGM

28 October 2022 Interim Report for the third quarter of 2022

CONSOLIDATED NET SALES, EARNINGS AND CASH FLOW

FOURTH QUARTER, OCTOBER–DECEMBER 2021

The Group's operations concluded the year strongly. In the fourth quarter, net sales increased to SEK 1,114 m (921), growth of 21 per cent. Organic growth was 13 per cent, and currency-adjusted organic growth was 12 per cent. All three divisions contributed to the organic growth.

Demand for Design Management's and Product Lifecycle Management's digital solutions and services was positive on all the main Nordic markets, the UK and Germany. The positive progress of Process Management corroborated the leadership status and good market positioning of the division's offering to Sweden's public sector. Operations acquired in the year performed well.

Licence revenue increased to SEK 92 m (81), recurring revenue increased to SEK 702 m (571), service revenue increased to SEK 305 m (258), and other revenue increased to SEK 15 m (11). The share of recurring revenue rose to 63 per cent (62).

EBITA increased to SEK 148 m (108), and Addnode Group's EBITA margin strengthened to 13.3 per cent (11.7). The Group's personnel costs were temporarily reduced by SEK 12 m in the fourth quarter of 2020 from government support mainly related to short-term furlough.

Net financial items amounted to SEK -6 m (-6). Profit for the period increased to SEK 80 m (55). Earnings per share increased to SEK 2.39 (1.65).

Cash flow from operating activities increased to SEK 257 m (181), the increase related partly to positive earnings performance, and partly to a greater contribution from changes in working capital than in the previous year.

JANUARY–DECEMBER 2021

Net sales increased to SEK 4,077 m (3,807), representing growth of 7 per cent, of which 2 per cent was organic. Currency-adjusted organic growth was 3 per cent. Growth was negative in the first quarter of the year, partly because the comparative quarter was strong, and partly because Design Management and Product Lifecycle Management had lower demand. Owing to favourable demand from public sector customers in the Process Management division, and a growing willingness to invest from industrial customers in Design Management and Product Lifecycle Management, the Group reported organic growth in the following three quarters.

Licence revenue increased to SEK 255 m (221), recurring revenue increased to SEK 2,707 m (2,560), service revenue increased to SEK 1,056 m (963), and other revenue amounted to SEK 59 m (63).

EBITA increased to SEK 461 m (356), and the EBITA margin increased to 11.3 per cent (9.4). In 2021, personnel costs were temporarily reduced by SEK 3 m (51) through government support measures mainly related to shortterm furlough. EBITA in 2020 was charged with restructuring costs of SEK 28 m.

Net financial items amounted to SEK -20 m (-18). Reported tax on profit for the period was SEK -62 m (-48). Profit for the period increased to SEK 223 m (163). Earnings per share increased to SEK 6.65 (4.88). 2017 2018 2019 2020 2021 Övriga 20 13 10 12 15 Tjänster 234 263 270 258 304

Cash flow from operating activities was SEK 437 m (579). The lower cash flow in 2021 was attributable to a lower contribution from the change in working capital. The Group's operations are in growth, both acquisition led and organic. Increased sales and more projects are tying up more capital in trade receivables and accrued project revenue, among other things. In 2020 cash flow was positively affected by temporarily improved payment terms from suppliers and customers, as well as government support measures. 2017 2018 2019 2020 2021 Återkommande 389 465 589 571 702 Licenser 135 99 64 81 92 Totalt 778 840 933 921 1 114

Licences Recurring revenue Services Other 2017 2018 2019 2020 2021

REVENUE BREAKDOWN, Q4 2017–2021, SEK M

Återkommande 389 465 589 571 702 Licenser 135 99 64 81 92

REVENUE BREAKDOWN, Q4 2021

PERFORMANCE BY DIVISION

NET SALES AND EBITA, Q4

Net sales EBITA
SEK m 2021
Q4
2020
Q4
Change
%
2021
Q4
2020
Q4
Change
%
Design Management 471 384 23 59 36 64
Product Lifecycle Management 352 312 13 44 39 13
Process Management 297 231 29 59 45 31
Eliminations/central costs -6 –6 -14 –12
Addnode Group 1,114 921 21 148 108 37

NET SALES AND EBITA, FULL-YEAR

Net sales EBITA
SEK m 2021
Full-year
2020
Full-year
Change
%
2021
Full-year
2020
Full-year
Change
%
Design Management 1,852 1,860 0 204 190 7
Product Lifecycle Management 1,227 1,141 8 117 57 105
Process Management 1,020 827 23 195 151 29
Eliminations/central costs -22 –21 -55 –42
Addnode Group 4,077 3,807 7 461 356 29

Addnode Group operates through three divisions: Design Management, Product Lifecycle Management and Process Management. Each subsidiary manages and develops its operations in compliance with strategies, guidelines and Group-wide values.

The decentralised governance model means business-critical decisions are made close to customers and markets. The divisions constitute the operating segments that Addnode Group uses to monitor business performance.

DESIGN MANAGEMENT DIVISION

Design Management is one of Europe's leading providers of digital solutions for design, BIM and product data for architects and engineers in the construction and manufacturing industries. The division also has a strong offering in project collaboration and facility management in the Nordic countries and UK.

PROGRESS IN THE QUARTER

Net sales increased to SEK 471 m (384) in the fourth quarter of 2021, growth of 23 per cent. Organic growth was 19 per cent, and currency-adjusted growth was 15 per cent.

Symetri achieved especially positive growth and earnings performance. Demand was favourable in the Nordics and UK. Customers appreciate the value of an Autodesk partner with proprietary related products, as well as broad-based, in-depth design and BIM skills. Demand for proprietary digital solutions for facility management remained positive.

EBITA increased to SEK 59 m (36), and the EBITA margin widened to 12.5 per cent (9.4). Personnel costs reduced temporarily in the fourth quarter of 2020 due to short-term furlough.

NEW BUSINESS

The division secured business from the following customers in the quarter: Akademiska Hus, Dellner Couplers, Einar Mattson, Jernhusen, Keller Group, Morgan Sindall Group, Östergötland County regional authority and Sitowise.

MARKET

The division's operations are conducted through the companies Symetri, Service Works Global and Tribia. Customers' willingness to invest is driven by urbanisation and the need to build and manage efficiently and sustainably. To improve efficiency, customers are digitalising their processes and adopting new ways of working. Regulatory authorities are demanding more widespread adoption of digital working methods based on BIM, i.e., digital modelling of buildings or infrastructure and accompanying assets over complete lifecycles.

Service Works Global is assisting the Municipality of Nyköping, south of Stockholm, in its work on digitalising its real estate portfolio, using realistic BIM models of construction components, areas and associated characteristics in FM ACCESS graphic support, integrated with the Facilitate FM system. This offers technicians access to drawings and operating instructions through mobile devices in the field, rationalising their traveling time and working-hours.

NET SALES Q4 2021 BY REVENUE TYPE

  • Licences, 2%
  • Recurring revenue, 82%
  • Services, 14%
  • Other, 2%

NET SALES GROWTH Q4 2021 COMPARED TO Q4 2020

EBITA Q4 2021 COMPARED TO Q4 2020

KEY FIGURES

SEK m Q4
2021
Q4
2020
Change
%
Net sales 471 384 23
EBITA 59 36 64
EBITA margin, % 12.5 9.4
Operating profit 44 22 100
Operating margin, % 9.3 5.7
Average no. employees 548 566 -3

PRODUCT LIFECYCLE MANAGEMENT DIVISION

Product Lifecycle Management is a global provider of solutions for digitalising a product's or facility's complete lifecycle—from idea, design, simulation and construction to sale, aftermarket and recycling. For our customers this means shorter lead-times, more innovation, increased efficiency, and traceability.

PROGRESS IN THE QUARTER

Net sales increased to SEK 352 m (312) in the fourth quarter 2021, growth of 13 per cent. Organic growth was 11 per cent, and currency-adjusted growth was 11 per cent.

In the Nordics and Benelux, demand for the division's PLM systems and related services remained favourable. The fourth quarter brought greater willingness to invest from industrial customers in the German market, which is important to the division. The division's initiative in advanced simulation solutions is continuing, and is being well received on the market.

EBITA increased to SEK 44 m (39), equivalent to an EBITA margin of 12.5 per cent (12.5). The restructuring programme executed in 2020 yielded the intended cost savings. Virtually all short-term furlough initiated in 2020 terminated in 2021.

NEW BUSINESS

The division secured business from the following customers in the quarter: Fisker, Geely, Jidu Auto, Koeningsegg, Scitegrity Ltd, Stadler Rail, Vanderlande and Volta Trucks Ltd.

MARKET

Intäktsfördelning till delårsrapport The division's operations are conducted through the company TECHNIA, one of Europe's leading providers of PLM– software and consulting services. Customers' willingness to invest is driven by a need to develop and design products, maintain product information through complete lifecycles and comply with regulatory standards.

B. Braun is one of the world's leading producers of healthcare

products. In a business environment that is changing faster than ever, B. Braun faces challenges from more stringent standards from regulators, markets and customers. B. Braun collaborates with TECHNIA to address the evolution of its business environment using a PLM system built on Dassault Systèmes 3DEXPERIENCE platform.

NET SALES Q4 2021 BY REVENUE TYPE

  • Licences, 19%
  • Recurring revenue, 52%
  • Services, 28%
  • Other, 1%

NET SALES GROWTH Q4 2021 COMPARED TO Q4 2020

EBITA Q4 2021 COMPARED WITH Q4 2020

KEY FIGURES

SEK m Q4
2021
Q4
2020
Change
%
Net sales 352 312 13
EBITA 44 39 13
EBITA margin, % 12.5 12.5
Operating profit 31 30 3
Operating margin, % 8.8 9.6
Average no. employees 617 628 -2

PROCESS MANAGEMENT DIVISION

Process Management is a leading provider of digital solutions to the public sector in Sweden. Its solutions streamline case management, simplify administration and qualityassure processes in contacts between public authorities and their citizens.

PROGRESS IN THE QUARTER

Net sales increased to SEK 297 m (231) in the fourth quarter 2021, growth of 29 per cent. Organic growth was 8 per cent.

The division finished the year strongly, and the operations acquired in the year performed well. Demand for the division's solutions for document and case management, public services and municipal engineering information systems and peripheral services remained healthy. The division's businesses are well positioned for public sector tendering owing to their attractive digital solutions, in-depth experience and good references.

EBITA increased to SEK 59 m (45), and the EBITA margin widened to 19.9 per cent (19.5).

NEW BUSINESS

Intäktsfördelning till delårsrapport The division secured business from the following customers in the quarter: the Swedish National Board for Consumer Disputes (ARN), the Municipality of Borås, DNB Norge, the Municipalities of Klippan and Nacka, Halland County regional authority and VafabMiljö.

MARKET

The division is a leading provider of software and digital solutions for the public sector in Sweden. Customers' willingness to invest is driven by automation, simplified administration and more effective communication with citizens. A growing base of public authorities and municipalities are seeking to partner for the long term on developing innovative operations compliant with statute.

S-GROUP Solutions has been partnering with Karlskrona, a Municipality with a population of 70,000, in developing a digital twin with real-time urban information. The digital twin is a 3D city information model, or CIM, enabling the monitoring of environmental, social and economic sustainability factors for urban planning.

NET SALES Q4 2021 BY REVENUE TYPE

  • Licences, 4%
  • Recurring revenue, 44%
  • Services, 49%
  • Other, 3%

NET SALES GROWTH Q4 2021 COMPARED TO Q4 2020

EBITA Q4 2021 COMPARED TO Q4 2020

KEY FIGURES

SEK m Q4
2021
Q4
2020
Change
%
Net sales 297 231 29
EBITA 59 45 31
EBITA margin, % 19.9 19.5
Operating profit 45 35 29
Operating margin, % 15.2 15.2
Average no. employees 619 539 15

CONSOLIDATED BALANCE SHEET AND CASH FLOW

LIQUIDITY AND FINANCIAL POSITION

Cash and cash equivalents held by the Group amounted to SEK 406 m (644) as of 31 December 2021.

In June 2021, Addnode Group entered into a multi-currency SEK 1,600 m revolving credit facility with Nordea and SEB. This facility can be used to refinance existing debt, acquisitions and general corporate purposes. This new facility runs for 3 years with an extension option of 1+1 years. It replaces the previous acquisition and credit overdraft facilities with Nordea, which totalled SEK 1,100 m. The credit facility has financial covenants, including certain financial key ratios, such as net debt/EBITDA and the interest coverage ratio, which may not deviate negatively from levels stipulated in the agreement.

Of the total credit facility, SEK 669 m (698) was utilised as of 31 December 2021, implying remaining credit of SEK 931 m. The utilised portion of the new credit facility has been classified as non-current liabilities. The previous credit facility was classified under current liabilities, as its maturity date was 30 June 2021.

Interest-bearing liabilities relating to the utilised portion of the credit facility were SEK 669 m (698). In addition, SEK 105 m (125) of interest-bearing liabilities related to leases. There were no interest-bearing liabilities related to completed acquisitions (SEK 3 m). This meant that the Group's interest-bearing liabilities totalled SEK 774 m (827). Accordingly, the Group's net debt was SEK 368 m (182), and its equity/assets ratio was 39 per cent (40).

Non-interest bearing liabilities related to completed acquisitions amounted to SEK 7 m (-), and estimated contingent consideration for completed acquisitions amounted to SEK 92 m (111).

CASH FLOW

Cash flow from operating activities was SEK 437 m (579) in January-December 2021. The lower cash flow in 2021 was attributable to a lower contribution from the change in working capital. The Group's operations are in growth, both acquisition led and organic. Increased sales and more projects are tying up more capital in trade receivables and accrued project revenue, among other things. In 2020 cash flow was positively impacted by temporarily improved payment terms from suppliers and customers, as well as government support measures.

Investments in subsidiaries and businesses resulted in a negative cash flow of SEK 289 m (271), of which SEK 33 m related to company acquisitions completed in previous years. Cash flow from investing activities also includes outgoing payments of SEK 80 m (80) for proprietary software.

In tandem with the redemption of the previous credit facility and arrangement of the new facility in June 2021, Addnode Group repaid bank loans of SEK 744 m (0) and bank borrowing of SEK 770 m (263) was arranged. An additional SEK 110 m was subsequently repaid. Financing activities were negatively impacted by SEK 70 m (70) for amortisation of the lease liability. A dividend of SEK 84 m (-) was paid to shareholders in May 2021 in accordance with an AGM resolution. A repurchase of treasury shares generated a negative cash flow of SEK 72 m (-).

INVESTMENTS

Investments in intangible non-current assets and property, plant and equipment amounted to SEK 157 m (181), of which SEK 80 m (80) related to proprietary software.

GOODWILL AND OTHER INTANGIBLE ASSETS

The Group's carrying amount of goodwill on 31 December 2021 was SEK 2,107 m (1,763). Other intangible assets amounted to SEK 467 m (380) and relate mainly to customer contracts, trademarks and software.

DEFERRED TAX ASSETS

Deferred tax assets amounted to SEK 22 m (18) on 31 December 2021, of which SEK 11 m (12) relates to tax loss carry-forwards. As of 31 December 2021, the Group's accumulated tax loss carry-forwards amounted to approximately SEK 80 m (80).

SHAREHOLDERS' EQUITY

Shareholders' equity on 31 December 2021 amounted to SEK 1,693 m (1,512), corresponding to SEK 50.64 (45.23) per outstanding share.

On completing the acquisition of S-GROUP Solutions AB on 1 April 2021, Addnode Group issued 204,802 new Class B shares as part of the total purchase consideration. The remainder was paid in cash. This non-cash issue was supported by a previous authorisation from Addnode Group's AGM. The issue caused dilution of Addnode Group's share capital of 0.61 per cent and 0.48 per cent of the number of votes.

Pursuant to a resolution by the AGM 2021, Addnode Group created a long-term incentive plan for managers and senior executives. In June 2021, 195,800 call options on Class B shares were issued to some 60 participants. The market-valued call option premium of SEK 29.80 resulted in a total purchase price of approximately SEK 6 m, which has been added to the Group's shareholders' equity. The options can be converted into Class B shares in the period 25 October 2024 to 10 June 2025, during specific periods stipulated by the agreement. Since the call options' exercise price of SEK 374.90 exceeded Addnode Group's average quoted share price of SEK 360.93, there was no dilutive effect on earnings per share for the period.

SHARE REPURCHASE

In September 2021, Addnode Group's Board of Directors decided to repurchase Class B shares of Addnode Group, supported by authorisation of the AGM 2021. The main aim of exercising this mandate is to enable delivery of shares related to implementation of Addnode Group's share-based incentive programme. This decision was for the re-purchase of a maximum of 200,000 class B shares on Nasdaq Stockholm. The re-purchase of 200,000 class B shares had been completed as of 31 December 2021, which accordingly, was the Group's holding of treasury shares.

EMPLOYEES

The average number of employees of the Group increased to 1,776 (1,758). There were 1,897 employees as of 31 December 2021 (1,833 as of 31 December 2020).

DISCLOSURES OF ACQUISITIONS Completed acquisitions

In 2021 Addnode Group acquired all the shares of four companies: S-GROUP Solutions AB ("S-GROUP"), Elpool i Umeå AB ("Elpool"), Procad Ltd ("Procad"), and Budsoft Sp. z o.o. ("Budsoft"). These acquisitions, executed in the second and third quarters of 2021, contributed SEK 151 m to net sales and SEK 29 m to EBITA. SEK 0 m (0) of expenses for completing these acquisitions are included in the Group's other external costs for the fourth quarter and SEK 4 m (4) for the period. If the acquisitions had been completed as of 1 January 2021, consolidated net sales for the period January-December 2021 would have amounted to approximately SEK 4,152 m and EBITA would have been approximately SEK 474 m.

S-GROUP, acquired on 1 April 2021, specialises in spatial information and geographical information systems (GIS) for municipalities, water and sewage networks, and land surveying operations, and strengthens Addnode Group's offering in this segment. S-GROUP had net sales of SEK 144 m in the financial year 2020 and an employee headcount of just over 70. Consideration for the acquisition was paid part in cash and part in new Class B shares issued to the seller. See also "Shareholders' equity" on page 9. This operation was consolidated effective April 2021 as part of Addnode Group's Process Management division.

Elpool, acquired on 3 May 2021, brings expertise in digital solutions for the expansion and maintenance of power networks. The company had sales of SEK 6 m for the split financial year 2019/2020. This operation was consolidated effective May 2021 as part of Addnode Group's Process Management division.

Procad, acquired on 1 June 2021, is a leading Autodesk partner on the Irish market and consolidates Addnode Group's position as the leading Autodesk partner in northern Europe. The company has 18 employees and had sales of some SEK 50 m in 2020. This operation was consolidated effective June 2021 as part of Addnode Group's Design Management division.

Budsoft, acquired on 1 September 2021, is a leading Polish partner of Dassault Systèmes providing advanced simulation services including consulting services, training and support. Budsoft had sales of approximately SEK 20 m in 2020. This operation was consolidated effective September 2021 as part of Addnode Group's Product Lifecycle Management division.

After the end of the period, Addnode Group divested the office property in Enfield, UK, that was included in the acquisition of Excitech in 2020, and that was intended for sale at the time of acquisition. The remaining purchase consideration was settled to the sellers of the shares of Excitech in tandem with this. Addnode Group's estimated capital gain is approx. SEK 20 m, and is accounted in the Interim Report for the first quarter of 2022.

In connection with the acquisitions, the following purchase price allocation analysis has been prepared. The calculation is preliminary and pertains to the companies S-GROUP, Elpool, Procad and Budsoft.

Acquisition analysis (SEK m)

Acquired net
assets in the
companies at
the acquisition
date
Carrying
amount in
the
companies
Fair value
adjustment
Fair value in
the Group
Intangible
non-current
assets
130 130
Other non
current assets
3 3
Current assets 63 63
Cash and cash
equivalents
71 71
Other liabilities –110 –26 –136
Net identifiable
assets/liabilities1
27 104 131
Goodwill 278
Calculated
purchase price1
409

1 The acquisition of Procad includes a liability for contingent consideration of SEK 12 m, which is 100 per cent of the maximum outcome, and a current non-interest bearing liability of SEK 3 m. The acquisition of Budsoft includes non-current non-interest-bearing liabilities of SEK 1 m, and current non-interest-bearing liabilities of SEK 3 m.

Acquisitions after the end of the period

In January 2022, Addnode Group acquired Claytex Services Ltd. (Claytex) of the UK, a company specialised in advanced simulation and testing for the automotive industry. Claytex is a partner of Dassault Systèmes, and also delivers complementary proprietary software. This company has sales of some SEK 25 m, and it will become part of TECHNIA in the Product Lifecycle Management division.

RELATED PARTY TRANSACTIONS

During 2021 and via a company, Chairman of the Board Staffan Hanstorp invoiced the Parent Company SEK 2 m (3) in fees for consulting services associated with the Group's acquisition opportunities, financing matters, strategic partnerships and overarching strategic issues.

PARENT COMPANY

Net sales in 2021 amounted to SEK 24 m (18), mainly invoicing of subsidiaries for premises rent and services rendered. Profit after financial items totalled SEK 200 m (44) including dividends from subsidiaries of SEK 218 m (30), Group contributions received from subsidiaries of SEK 227 m (151), impairment of shares in subsidiaries of SEK 168 m (125), and the reversal of impairment of shares in subsidiaries of SEK 35 m (40). Cash and cash equivalents amounted to SEK 301 m (518) on 31 December 2021. Investments relating to shares in subsidiaries amounted to SEK 413 m (450). No significant investments have been made in intangible non-current assets or in property, plant and equipment.

SEASONALITY

Historically, the fourth quarter has the highest level of revenue and EBITA, but as the share of recurring revenue increases, the Group's seasonality is reducing.

ACCOUNTING POLICIES

General

This Year-end Report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU and the Swedish Annual Accounts Act. The Parent Company's accounts have been prepared in accordance with the Annual Accounts Act and recommendation RFR 2 Accounting for Legal Entities. Amendments and interpretations of existing standards that became effective in 2021 have not had any impact on the Group's financial position or the financial statements. The accounting policies and calculation methods are unchanged compared with the description in the Annual Report for 2020.

Deferred tax assets

Deferred tax assets attributable to tax loss carry-forwards are reported as assets to the extent it is likely that the loss carry-forwards can be offset against surpluses in future taxation.

Disclosures of financial instruments

Measurement of financial assets and liabilities shows that there is no significant difference between their carrying amounts and fair value. The Group had no outstanding currency forward contracts as of 31 December 2021.

Stock option programme

The Group's incentive programme enables managers and senior executives to acquire Class B shares of the company by investing in call options. Call option premiums received, measured at market value at the time of acquisition, are recognised in shareholders' equity as transactions with owners.

Government assistance

.

In 2020, the Group accepted government assistance as part of the measures taken by the authorities in response to the Covid-19 pandemic in several countries in Europe where Group companies are active. The government assistance was for short-term furlough, reduced social security contributions, and compensation for sick pay. The use of government assistance measures decreased successively in the second half of 2020, and in 2021 only limited government assistance has been accepted, for short-term furlough in companies outside Sweden. Approximately 17 employees (approx. 7 full-time equivalents) were covered by short-term furlough in the period January–December 2021. In accordance with IAS 20, the effects of the government assistance measures, totalling SEK 3 m (51), are reported net in the Group's personnel costs.

SIGNIFICANT RISKS AND UNCERTAINTIES

Addnode Group's significant risks and uncertainties are described in the Annual Report for 2020 on pages 28, 44–45 and in the "Risks and uncertainties" section on pages 58–59, as well as notes 36 and 37 on pages 109– 113.

Uncertainty persists regarding the extent of the Covid-19 pandemic's impact on wider society and the global economy. Estimating how long the pandemic will last is also problematic. However, the Group's operations are diversified in terms of offerings, customer segments and geography, which inherently implies risk diversification. This is a proven strength in challenging times, as during the Covid-19 pandemic.

FUTURE OUTLOOK

The Board of Directors has not altered its assessment of Addnode Group's long-term future outlook compared to the preceding quarter. In the Interim Report for the third quarter of 2021, the Board of Directors stated the following outlook: In the long-term, Addnode Group regards the segments where it is active to have strong underlying potential. Addnode Group's growth strategy is to grow organically and by acquiring new businesses in the aim of adding new, complementary offerings and additional expertise.

Because the extent and duration of the current Covid-19 pandemic remains uncertain, the Board of Directors notes that there may still be a risk of a financial impact for Addnode Group in coming quarters.

Addnode Group is retaining its decision not to issue a forecast.

PROPOSAL ON DIVIDEND AND SHARE SPLIT

The Board of Directors proposes that the Annual General Meeting approves a dividend of SEK 3.00 per share (2.50) for the financial year 2021, corresponding to a total dividend of SEK 100 m (84). The assessment is that after payment of the proposed dividend, the company will have sufficient funds to be able to achieve its financial targets. Friday 6 May 2022 has been proposed as the record date for payment of dividends. If the Annual General Meeting approves this proposal, dividends are expected to be disbursed on Wednesday 11 May 2022.

The Board of Directors also proposes a 4:1 share split.

ANNUAL GENERAL MEETING 2022

The Annual General Meeting (AGM) will be held on 4 May 2022.

ANNUAL REPORT

The Annual Report for 2021 will be published and uploaded to www.addnodegroup.com in the first week of April 2022.

Stockholm, Sweden, 4 February 2022 The Board of Directors

This Year-end Report has not been subject to auditor review.

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

SEK m 2021
Oct–Dec
2020
Oct–Dec
2021
Full year
2020
Full year
Net sales 1,114 921 4,077 3,807
Purchases of goods and services -478 –380 -1,768 –1,715
Other external costs -77 –73 -285 –270
Personnel costs -410 –361 -1,558 –1,461
Capitalised work performed by the company for its own use 20 22 80 80
Depreciation/amortisation and impairment of
– tangible non-current assets -21 –21 -86 –88
– intangible non-current assets -42 –32 -156 –127
Profit/loss on sale of business - 1 3
Operating profit 106 76 305 229
Financial income 0 0 2 3
Financial expenses -11 –6 -27 –21
Restatement of contingent considerations 5 5
Profit before taxes 100 70 285 211
Current tax -16 –2 -71 –47
Deferred tax -4 –13 9 –1
Net profit for the period 80 55 223 163
Attributable to:
Owners of the Parent Company 80 55 223 163
Share data
Earnings per share before and after dilution, SEK 2.39 1.65 6.65 4.88
Average number of shares outstanding:
Before and after dilution 33,432,058 33,427,256 33,548,080 33,427,256

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEK m 2021
Oct–Dec
2020
Oct–Dec
2021
Full year
2020
Full year
Net profit for the period 80 55 223 163
Other comprehensive income, items that
will not be reclassified to profit or loss:
Actuarial gains and losses on pension obligations 0 0 0 0
Other comprehensive income, items that may
be reclassified to profit or loss:
Exchange rate difference upon translation of foreign operations 34 –51 106 –124
Hedge of net investments in foreign operations -9 24 -52 63
Total other comprehensive income after tax for the period 25 –27 54 –61
Comprehensive income for the period 105 28 277 102
Attributable to:
Owners of the Parent Company 105 28 277 102

CONSOLIDATED BALANCE SHEET

SEK m 2021
31 Dec
2020
31 Dec
Assets
Goodwill 2,107 1,763
Other intangible non-current assets 467 380
Property, plant and equipment 162 187
Financial assets 48 40
Total non-current assets 2,784 2,370
Inventories 0 1
Current receivables 1,132 803
Cash and cash equivalents 406 644
Total current assets 1,538 1,448
Total assets 4,322 3,818
Shareholders' equity and liabilities
Shareholders' equity 1,693 1,512
Non-current liabilities 892 235
Current liabilities 1,737 2,071
Total shareholders' equity and liabilities 4,322 3,818
Interest-bearing receivables amount to - 1
Interest-bearing liabilities amount to 774 827
Pledged assets 11 8
Contingent liabilities 40 18

SHAREHOLDERS' EQUITY AND NUMBER OF SHARES

Specification of changes in shareholders' equity, SEK m 2021
Oct–Dec
2020
Oct–Dec
2021
Full year
2020
Full year
Shareholders' equity, opening balance 1,660 1,484 1,512 1,410
Dividend -84
New issue 54
Call options issued 6
Repurchase of treasury shares -72 -72
Comprehensive income for the period 105 28 277 102
Shareholders' equity, closing balance 1,693 1,512 1,693 1,512
Shareholders' equity attributable to:
Owners of the Parent Company 1,693 1,512 1,693 1,512
Number of shares outstanding, opening balance 33,632,058 33,427,256 33,427,256 33,427,256
New issue 204,802
Repurchase of treasury shares -200,000 -200,000
Number of shares outstanding, closing balance 33,432,058 33,427,256 33,432,058 33,427,256

Addnode Group held 200,000 (-) treasury shares as of 31 Dec. 2021.

CONSOLIDATED STATEMENT OF CASH FLOWS

SEK m 2021
Oct–Dec
2020
Oct–Dec
2021
Full year
2020
Full year
Operating activities
Operating profit 106 76 305 229
Adjustment for non-cash items 61 56 222 242
Total 167 132 527 471
Net financial items -5 –6 -21 –18
Tax paid -10 6 -59 –38
Cash flow from operating activities
before changes in working capital
152 132 447 415
Total change in working capital 105 49 -10 164
Cash flow from operating activities 257 181 437 579
Investing activities
Purchases and sales of intangible assets and
property, plant and equipment
-29 –29 -105 –104
Acquisitions of financial assets -1 -4
Acquisitions of subsidiaries and operations -5 –47 -360 –343
Cash and cash equivalents in acquired companies - 15 71 72
Cash flow from investing activities -35 –61 -398 –375
Financing activities
Paid dividend -84
Issued call options 6
Repurchase of treasury shares -72 -72
Borrowings - 770 263
Repayment of loans -28 –19 -925 –70
Cash flow from financing activities -100 –19 -305 193
Change in cash and cash equivalents 122 101 -266 397
Cash and cash equivalents at start of period 281 563 644 294
Exchange rate difference in cash and cash equivalents 3 –20 28 –47
Cash and cash equivalents at end of period 406 644 406 644

PARENT COMPANY FINANCIAL STATEMENTS

PARENT COMPANY INCOME STATEMENT

SEK m 2021
Oct–Dec
2020
Oct–Dec
2021
Full year
2020
Full year
Net sales 8 6 24 18
Operating expenses -23 –18 -78 –59
Operating profit -15 –12 -54 –41
Profit/loss from participations in Group companies 246 152 312 97
Other financial income 0 0 2 5
Financial expenses -10 –4 -60 –17
Profit after financial items 221 136 200 44
Provision to tax allocation reserve -29 –25 -29 –25
Profit before taxes 192 111 171 19
Tax -18 –16 -18 –16
Net profit for the period 174 95 153 3

PARENT COMPANY BALANCE SHEET

SEK m 2021
31 Dec
2020
31 Dec
Assets
Intangible non-current assets 0 0
Financial assets 2,715 2,438
Current receivables 34 50
Cash and cash equivalents 301 518
Total assets 3,050 3,006
Shareholders' equity and liabilities
Shareholders' equity 1,339 1,281
Untaxed reserves 126 96
Provisions 93 117
Non-current liabilities 660
Current liabilities 832 1,512
Total shareholders' equity and liabilities 3,050 3,006

OPERATING SEGMENTS

The following figures are for full years.

REVENUE AND PROFIT

Design PLM Process Central Eliminations Addnode
Group
SEK m 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Revenue
External sales 1,848 1,855 1,217 1,135 1,010 816 2 1 4,077 3,807
Transactions between
segments
4 5 10 6 10 11 13 13 -37 –35 0 0
Total revenue 1,852 1,860 1,227 1,141 1,020 827 15 14 -37 –35 4,077 3,807
EBITA 204 190 117 57 195 151 -55 –42 461 356
EBITA margin, % 11.0 10.2 9.5 5.0 19.1 18.3 11.3 9.4
Operating profit 146 133 72 23 142 115 -55 –42 305 229
Operating margin, % 7.9 7.2 5.9 2.0 13.9 13.9 7.5 6.0
Average number of
employees
560 565 613 654 595 532 8 7 1,776 1,758
REVENUE DISTRIBUTION
Design PLM Process Central Eliminations Addnode
Group
SEK m 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Licences 46 64 168 126 41 31 - 0 0 255 221
Recurring revenue 1,550 1,520 696 680 462 363 - -1 –3 2,707 2,560
Services 231 232 349 327 486 410 - -10 –6 1,056 963
Other 25 44 14 8 31 23 15 14 -26 –26 59 63
Total revenue 1,852 1,860 1,227 1,141 1,020 827 15 14 -37 –35 4,077 3,807

Addnode Group's operations are organised and governed based on the Design Management, Product Lifecycle Management (PLM) and Process Management divisions, which make up the Group's operating segments. Within Addnode Group's three divisions, the subsidiaries deliver software and digital solutions to customers in sectors including construction and real estate, manufacturing, the auto industry, medical devices and the public sector. The solutions that Addnode Group deliver enable our customers to use digital working methods to rationalise their operations, quality-assure their production and communicate better with customers and citizens. Segment division is based on the Group's products and services.

There has been no change to segment division since the most recent Annual Report.

The difference between the total of the segments' operating profit and consolidated profit before tax consists of financial income of SEK 2 m (3) and financial expenses of SEK -27 m (-21), as well as a restatement of contingent considerations of SEK 5 m (-).

Completed acquisitions mean that operating capital in segments increased in 2021 compared to the disclosures in the Annual Report for 2020: Design Management by SEK 27 m, Product Lifecycle Management by SEK 13 m, and Process Management by SEK 323 m. Operating capital is defined as the total of goodwill and other intangible non-current assets, property, plant and equipment excluding leases, financial assets, trade receivables and other operating assets, less trade payables and other operating liabilities.

KEY FIGURES – QUARTERLY

2021 2020
SEK m Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net sales, SEK m 1,114 925 1,002 1,036 921 806 846 1,234
Design Management 471 409 439 533 384 375 379 722
Product Lifecycle Management 352 293 299 283 312 258 267 304
Process Management 297 230 268 225 231 177 205 214
EBITA, SEK m 148 108 98 107 108 84¹ 56¹ 108
Design Management 59 44 40 61 36 42 36 76
Product Lifecycle Management 44 28 27 18 39 17¹ –9¹ 10
Process Management 59 49 48 39 45 33 37 36
EBITA margin, % 13.3 11.7 9.8 10.3 11.7 10.4¹ 6.6¹ 8.8
Design Management 12.5 10.8 9.1 11.4 9.4 11.2 9.5 10.5
Product Lifecycle Management 12.5 9.6 9.0 6.4 12.5 6.6¹ –3.4¹ 3.3
Process Management 19.9 21.3 17.9 17.3 19.5 18.6 18.0 16.9
Average number of employees 1,793 1,797 1,794 1,723 1,740 1,756 1,789 1,788
Design Management 548 563 562 570 566 580 569 562
Product Lifecycle Management 617 616 612 607 628 646 682 685
Process Management 619 610 612 539 539 523 531 534
Net sales per employee, SEK 000s 621 515 559 601 529 459 473 690
Change in net sales, % 21 15 18 –16 –1 3 –2 44
Operating margin, % 9.5 7.2 5.9 7,0 8.3 6.5 2.8 6.2
Equity, SEK m 1,693 1,660 1,607 1,605 1,512 1,484 1,447 1,471
Return on shareholders' equity, %² 13.9 12.6 12.2 10.4 11.2 11.1 10.9 12.0
Equity/assets ratio, % 39 43 39 39 40 41 40 38
Return on capital employed, %² 13.0 11.7 11.1 9.7 10.6 10.6 10.6 11.2
Net debt, SEK m 368 484 396 88 182 271 117 175
Investments in equipment, SEK m 3 4 5 3 4 3 2 5

¹ In Q2 and Q3 2020, EBITA was charged with one-off costs of SEK 20 m and SEK 8 m respectively for adapting the organisational structure and cost base of the Product Lifecycle Management division. Excluding these restructuring costs, consolidated EBITA would have been SEK 76 m and SEK 92 m respectively, and EBITA margins would have been 9.0 per cent and 11.4 per cent respectively. The EBITA of the Product Lifecycle Management division in Q2 and Q3 2020 would have been SEK 11 m and SEK 25 m respectively, and EBITA margins would have been 4.1 per cent and 9.7 per cent respectively.

² Key financial ratios have been restated to reflect annualised return.

SHARE DATA

2021 2020
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Average number of shares outstanding
before and after dilution, m
33.4 33.6 33.6 33.4 33.4 33.4 33.4 33.4
Total number of shares outstanding, m 33.4 33.6 33.6 33.4 33.4 33.4 33.4 33.4
Total number of registered shares, m 33.6 33.6 33,6 33.4 33.4 33.4 33.4 33.4
Earnings per share before and after dilution, SEK 2.39 1.46 1.19 1.62 1.65 1.11 0.42 1.71
Cash flow from operating activities per share, SEK 7.69 –0.62 1.52 4.49 5.41 –1.97 5.62 8.26
Shareholders' equity per share, SEK 50.64 49.36 47.78 48.01 45.23 44.39 43.29 44.01
Share price at end of period, SEK 429.00 347.50 315.00 262.00 286.00 206.50 178.00 146.00
Share price/shareholders' equity 8.47 7.04 6.59 5.46 6.32 4.65 4.11 3.32

ALTERNATIVE PERFORMANCE MEASURES USE AND RECONCILIATION

The European Securities and Markets Authority (ESMA) has issued information on Alternative Performance Measures (APMs) for companies with securities listed on a regulated market in the EU, which apply to Alternative Performance Measures in published mandatory information. Alternative Performance Measures are financial metrics on historical or future performance of earnings, financial position, financial results or cash flows that are not defined or stated in the applicable rules for financial reporting. Certain performance metrics are used in this Year-end Report that are not defined in IFRS, with the intention of offering investors, financial analysts and other stakeholders clear and relevant information on the company's operations and performance. The use of these performance metrics and reconciliation with the financial statements are presented below.

EBITA

EBITA is a metric the Group considers relevant to investors, financial analysts and other stakeholders to understand earnings generation before investments in intangible non-current assets. This measure is an expression of operating profit before the amortisation and impairment of intangible non-current assets.

NET DEBT

The Group considers this key ratio useful to the readers of financial statements as a complement to evaluating dividend potential, making strategic investments and assessing the Group's potential to satisfy financial obligations. This key ratio is an expression of the level of financial borrowing in absolute terms after deducting cash and cash equivalents.

Definitions on page 19.

RECONCILIATION OF EBITA

2021
Oct–Dec
2020
Oct–Dec
2021
Full year
2020
Full year
Operating profit 106 76 305 229
Amortisation and impairment of
intangible non-current assets
42 32 156 127
EBITA 148 108 461 356
RECONCILIATION OF NET DEBT
2021
31 Dec
2020
31 Dec
Non-current liabilities 892 235
Current liabilities 1,737 2,071
Non interest-bearing non-current and current liabilities -1,855 –1,479
Total interest-bearing liabilities 774 827
Cash and cash equivalents -406 –644
Other interest-bearing receivables - –1
Net debt (+)/receivable (–) 368 182

DEFINITIONS

Average number of employees

Average number of employees in the period (full-time equivalents).

Capital employed

Total assets less non-interest-bearing liabilities and non-interest-bearing provisions including deferred tax liabilities.

Cash flow per share

Cash flow from operating activities divided by the average number of shares outstanding.

Currency-adjusted organic growth

Change in net sales, restated using the preceding year's exchange rates, excluding acquired entities in the most recent 12-month period.

Earnings per share

Net profit for the period divided by the average number of shares outstanding.

EBITA

Earnings before amortisation and impairment of intangible non-current assets.

EBITA margin

EBITA as a percentage of net sales.

Equity/assets ratio

Shareholders' equity (including shareholders' equity attributable to non-controlling interests) as a percentage of total assets.

Net debt

Interest-bearing liabilities less cash and cash equivalents and other interest-bearing receivables. According to this definition, negative net debt means that cash and cash equivalents and other interest-bearing financial assets exceed interest-bearing liabilities.

Net sales per employee

Net sales divided by the average number of employees (full-time equivalents).

Operating margin

Operating profit as a percentage of net sales.

Organic growth

Change in net sales excluding acquired entities in the most recent 12-month period.

Recurring revenue

Revenue of an annually recurring character such as revenue from support and maintenance contracts and revenue from subscription agreements, rental contracts and SaaS solutions.

Return on capital employed

Profit before tax plus financial expenses as a percentage of average capital employed. It is based on profit for the last 12 months and the average of the opening and closing balance of capital employed.

Return on equity

Net profit for the period as a percentage of average shareholders' equity. Based on profit for the last 12 months and the average of the opening and closing balances of shareholders' equity.

Share price/shareholders' equity

Share price in relation to shareholders' equity per share.

Shareholders' equity

Reported shareholders' equity plus untaxed reserves less deferred tax at the current tax rate.

Shareholders' equity per share

Shareholders' equity divided by the total number of shares outstanding.

This information is mandatory for Addnode Group AB (publ) to publish pursuant to the EU Market Abuse Regulation. This Report has been prepared in Swedish and English versions. In the case of inconsistency between the two, the Swedish version shall apply. This information was submitted for publication at 8:30 a.m. CET on 4 February 2022.

ADDNODE GROUP AB (publ.) Hudiksvallsgatan 4B, SE-113 30 Stockholm Corporate identity number: 556291-3185 +46 (0)8 630 70 70 [email protected] www.addnodegroup.com Stockholm, Sweden 70

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