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IP - SmartCraft ASA (SMCRT) - Q2 2025: ARR surpasses NOK 500 million milestone, profitability strengthens - Attachment: SmartCraft_ASA_Q2_2025_Presentation.pdf

Company: SmartCraft ASA Date: 2025-08-26 Language: English Register to download
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# Q2 2025 report **AUGUST 26TH, 2025**

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## Disclaimer

IMPORTANT – You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by SmartCraft ASA (the "Company") or any person on behalf of the Company, and any question-andanswer session that follows the oral presentation (collectively, the "Information"). In accessing the Information, you agree to be bound by the following terms and conditions.

The Information does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase shares or other securities of the Company, and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding such shares or other securities. Any shares or other securities of the Company may not be offered or sold in the United States or any other jurisdiction where such a registration would be required unless so registered, or an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended, or other applicable laws and regulations is available. The Information is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Information is not for publication, release or distribution in any jurisdiction in which offers or sales would be prohibited by applicable law.

The Information has been prepared by the Company, and no other party accepts any responsibility whatsoever, or makes any representation or warranty, express or implied, for the contents of the Information, including its accuracy, completeness or verification or for any other statement made or purported to be made in connection with the Company and nothing in this document or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future.

The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target", "ambition", "outlook", "believe", "expect", "aim", "intend", "may", "anticipate", "estimate", "plan", "project", "will", "can", "have", "likely", "should", "would", "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future. Furthermore, information about past performance given in this Information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance.

No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information or the opinions contained therein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its parent or subsidiary undertakings or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. The Information has not been independently verified and will not be updated. The Information, including but not limited to forward-looking statements, applies only as of the date of this document and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the Information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company's expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document.

This presentation contains statistics, data, statements and other information relating to the group's markets and the industry in which it operates. Where such information has been derived from third-party sources, such sources have been identified herein. In addition, the Company has been named as a source for certain market and industry statements included in this presentation. Such "Company information" reflects the Company's views based on one or more sources available to it (some of which are not publicly available, but can be obtained against payment), including data compiled by professional organisations, consultants and analysts and information otherwise obtained from other third party sources.

By reviewing this Information you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the businesses of the Company. This Information must be read in conjunction with the recent financial reports of the Company and the disclosures therein.

This Information shall be governed by Norwegian law, and any disputes relating to hereto is subject to the sole and exclusive jurisdiction of Norwegian courts.

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Agenda

3

- o Q2 in brief
- o Financials
- o Summary and Q&A

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We're SmartCraft

Smarter digital solutions for stronger projects, better margins, and happier clients.

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270 employees

Norway, Sweden, Finland and the UK

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180 000+ users

13 800+ construction companies that want to scale, simplify, and succeed

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# Driving profitable growth

Connecting people, data, and workflows so every project runs smoother and pays off

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- o Streamlined workflows
- o Smart scheduling & resourcing
- o Less admin, more billable work

#### Time efficiency Clear communication Safer projects Overview & control

- o One source of truth
- o Real-time updates
- o Fewer disputes

- o HSE & QA built-in
- o On-site checklists
- o Fewer incidents

- o Live cost vs. budget
- o Change orders under control
- o Compliance-ready docs

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Large total addressable market (TAM)

- o TAM of NOK 50 billion\*
- o ~700.000 addressable construction companies
- o ~10-15% penetration of mission critical solutions
- o Ongoing digitalization of a digitally immature market

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*\*Analysis by SmartCraft, August 2024. Calculated on basis of ARPC, penetration and addressable companies (ADL model, 2020)*

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Solid growth and stronger margins.

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Solid growth across the funnel More customers, more traffic, and record-high leads in the pipeline

- o 8% increase in new customers (YoY)
- o 22% more sales leads (YoY)
- o 45% more leads in pipeline (YoY)
- o 21% increase in web traffic (YoY)

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Lead generation

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# New business initiatives

#### **SmartCraft Spark launched in Norway and Sweden**

- o Strong traction with nearly 200 new paying customers.
- o New, in-demand features coming later in 2025 to boost ARPC and strengthen product value

### **BIM capability launched in May**

- o Rapid adoption: 60 users and 20 customers within weeks
- o Additional features planned for late 2025 to drive higher usage and conversion

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## Digimeter survey confirm strong underlying demand

- o Released in June
- o Responses from over 840 construction professionals in Norway, Sweden and Finland

#### **Some highlights:**

- o 6 out of 10 have experienced business improvements through digital tools
- o 87% say that digital tools are essential to their business
- o 30% plan to increase their investments in digital tools
- o About 40% of all office workers and 55% of all field workers in the survey use paper and pen or excel to solve core tasks

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# Financials

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### Focus on recurring revenue as basis for success

- o Increased growth in a challenging market
	- o 9% growth YoY
	- o Passing milestone of NOK 500m
- o 7% organic growth
	- o Sweden primary driver of growth
	- o Increasing churn and continued high level of downgrades

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Organic growth heavily affected by bankruptcies and downgrades

- o Customer churning due to bankruptcies increase by ~4-5 p.p last years
- o Downgrades from existing customers as their business activities slow down, reduces organic ARR growth by ~5-8 p.p compared to a normalized market situation
- o In Q2'25 organic growth increased while downgrades declined

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# Continued growth in revenue and strong profitability

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- o Focus on transitioning revenue from non-recurring to recurring. Expecting to consistently be in the mid/high 90s.
- o Transition dampening growth in the short-term.

- o Increased margin 3.5 p.p quarter over quarter
- o 0.4 p.p dilution from acquisitions compared to Q2'24
- o A continued pressure on margin from the revenue transition
- o Proven track-record of ability to increase profitability in acquired solutions

o Continued investments in strategic development projects

R&D capex

mNOK

- o Level of capitalization varies depending on project lifecycle
- o Expecting ~9 % for FY'25

## Strong revenue growth in Sweden

#### o Continued strong growth

- o High sales activity generating leads
- o Continued elevated level of churn and downgrades
- o Locka non-recurring revenue last year hampering total growth
- o Adjusted EBITDA margin increase of
	- 3.5%-pts YoY
		- o Locka continues to operating at a lower margin due to the ongoing revenue transition

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## Continued challenging market in Norway

- o Lower growth in revenue
	- o Negative short-term effect by the relocation of one sales office
	- o Growth hampered by high churn and downgrades
- o Future growth upside in Spark based on high traction among customers
- o Decrease in adjusted EBITDA margin YoY due to lower revenue growth and capitalizations, but increased margin by 2pp QoQ

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## Positive signals in a challenging Finnish market

- o Organic growth positive despite a downgrade from a large customer
- o Positive signals
	- o More contract starts in new build sector
	- o User activity increasing among existing customers
- o Profitability decline
	- o Increased spending on marketing and events
	- o Lower capitalizations

#### Finland (mNOK)

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## Solid financial position and strong cash flow

- to support growth strategy and M&A activity

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- o Continuing strong performance in operating cash flow
- o Cash positive all quarters (Q1 is historically stronger, but a shift towards other quarters started in 2023)

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- o Net cash positive and negative net working capital
- o Holds 3,42% (~5,9m) shares

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## Key focus to drive continued profitable growth

- o Passing the 500 mNOK ARR milestone
- o Increased organic ARR growth
- o Strong sales & marketing execution keeps demand high
- o New initiatives launched with significant growth potential
- o Growth temporarily dampened by higher churn, downgrades and softer price increases YoY
- o Solid financial position provides stability to invest in product development, efficiency and readiness for market recovery
- o Evaluating potential change in listing venue from Oslo to Stockholm

Medium-term financial targets

**15-20%** Organic growth

Bolt on M&A

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#### Margin expected to increase due to scalability of the business

#### **Short-term considerations: Impact from acquired companies last 12 months**

19

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## We continue on our profitable growth journey

- o Continue our strategy to build a great and solid company
- o Reduced operational risk
- o Consistent strong operational cash flow

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Make sure to follow us for the latest news!

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