Arribatec Group ASA

Earnings Release • Nov 15, 2022

Quarterly presentation

Q3 2022 ^

Geir Johansen, CEO

Shows continued strong growth

Organic Growth +12.7%

Revenue Recurring Adj. EBITDA 11% Q3-22/Q3-21

NOK 44.2

Recurring is 37% of total Q3 revenue

Margin – 5.7% NOK -6.7m

Geographic revenue growth & share of total

| EA&BPM – some significant contracts won in Q3^

Combined value NOK 42m for the 4 contracts

Norwegian Directorate for Higher Education

• Value: 11,5 MNOK
• ARR 1,5 MNOK
• Start Nov. 2022
• Duration 6 years

• Implementing QualiWare and Hypergene

• Global IT firm

• Value: 17,5 MNOK
• ARR 2,5 MNOK
• Start July 2022
• Duration 7 years
• Implementation of QualiWare-based management system

Large Norwegian bank

• Value: 3 MNOK
• ARR 1 MNOK
• Start Nov 2022
• Duration 2 years. Thereafter annual extension, no min/max
• Upgrade to QualiWare

Statens Vegvesen

• Value: 5 MNOK

• ARR 1,25 MNOK
• Start: Nov 2022
• Contract duration: Annual extensions. No min/max
• Implement and support Management System.

Norwegian energy company

• Value: 5 MNOK

• Contract duration: 1 years
• Framework for improvement, revise process architecture, establish ownership and perform process mapping.

| BizS: – some significant contracts won in Q3

Combined value NOK 27m for the 5 contracts

OsloMet

• Total contract value 5,4 MNOK.
• Start of project November 2022
• Contract duration minimum 4 years

• Scope: migrate old onprem environment to Hypergene private cloud

• HK-Dir (Public entity)

• Total contract value 4,0 MNOK.
• Start of project November 2022
• Contract duration minimum 3 years

• Implement complete new solution for Budget and Planning to follow up projects in the Higher education public sector.

• Electronic Manufacturer

• Total contract value 2,5 MNOK.
• -Start of project September 2022
• Contract duration minimum 3 years
• -Scope: Implement complete new and standard best practice Cloud ERP solution for manufacturing industry, digitizing and improving processes and system support

Ferry and logistic service in public sector.

• Total contract value 1.5 MNOK.

• Start of project November 2022
• Contract duration minimum 3 years
• Implement complete new solution for Budget and Planning and financial reporting in the ferry sector. Digitizing and improving processes for financial reporting and system support

Large European engineering group

• Total extension value 13.9 MNOK.
• Contract duration minimum 3 years
• Extension of existing scope

Value of deals closed year to date

For the first 10 months of the year Arribatec Group has signed a total of 530 new contracts and scop extensions with a combined value of NOK 399 million.

Four Cloud the numbers excludes the contract announce in Q2 2022 for a large civil engineering contractor in Norway, as the final contract is not yet signed.

| Arribatec's five business areas ^

Q3 performance

46% Revenue Growth	10.3% EBITDA margin
67m*	6.9m**
Revenue	EBITDA

• So far in 2022 BizS secured 250 new deals/scope extensions for a combined value of approx. NOK 140m
• Organic growth for the quarter is 20% when adjusting for the Integra acquisition in Q4-21.
• Good collaboration with our global partners Unit4, Rambase, Hypergene where the two latter is fuelling growth in the Nordics.
• Expecting similar activity in H2 compared to H1

1.0 % Revenue Growth	8.8% EBITDA margin	28% Revenue Growth	1.0% EBITDA margin
20m*	1,7m**	28m*	0.3m**
Revenue	EBITDA	Revenue	EBITDA

• So far in 2022 EA&BPM secured 130 new deals/scope extensions for a combined value of approx. NOK 74m
• Delayed start of 3 larger projects impacted revenue and EBITDA for the quarter
• +22% increase in staff on the back of new contracts won during first half of the year

• ✓ Several large public sector bids are coming to market next two quarters

• So far in 2022, Cloud secured 70 new deals/scope extensions for a combined value of NOK 48m

• Contract for NOK 60m announced in Q2 is now near finalization
• EBITDA reduced due to delay in recharge of price increases from our suppliers to all our customers
• Robust pipeline going forward
• New sales reps in Bergen, and potential candidates in process for Oslo and Stavanger

8

Q3 performance

a lot +500% Revenue Growth	-181.0% EBITDA margin
1.2m*	-2.2**
Revenue	EBITDA

• Significant shift upwards in demand for HspT's products after a busy summer for hotels
• So far, the BA is winning all tenders they bid on
• Interest from large Norwegian hotel brand names
• Pilot project agreement signed with Flytoget for delivering prototype of new ticketing machine. Protype installed at Oslo S on 7 November- great exposure for the Arribatec Hospitality brand

-6.3% Revenue Growth	4.2% EBITDA margin
13.3m*	0.6m**
Revenue	EBITDA

• Shows positive EBITDA for the first time since acquisition
• Adjustment of staff levels is major contributing factor to positive financials
• Considering to divest parts of own IP and associated production resources
• Going forward the focus is growth, and Marine is having good dialog with existing clients regarding system upgrades.

9

People & organisation

11

Offices around the globe

Employees across 5 business areas

23 440 1200+

Customers across different industries

Headcount*

*Includes long term contracted personnel which constitute 60 persons in Q3 where the majority is in Business Services. A reduction from 82 in Q2

Financial Review

Revenue development for each BA per quarter

| Q3-22 Business area size and profitability ^

* Includes external- and group internal revenue

**BA EBITDA is calculated before Group overhead allocation

Cash flow development

• Financing Q3 includes repair issue and repayment of credit facilities
• New credit facility (kassakreditt) of NOK 20m established in July. This facility is not included in the chart.
• Of the total cash balance, restricted cash accounts for NOK 14m.
• Pr today NOK 62 in cash and credit facilities

Balance sheet development

Equity development

Outlook

• Increased focus on efficiency and chargeability to improve profitability
• Partnership with Hypergene and Rambase will drive growth in Nordics and UK
• EA&BPM will expand outside of Norway in 2023
• Planning for Hospitality to go break even during 2023
• Marine has completed adjustment of cost base growth focus for 2023
• All internal integration projects

Appendix Financial Figures

Profit & Loss

		For the quarter end		Year to date
NOK thousand	Note	30 Sep 2022	30 Sep 2021	30 Sep 2022	30 Sep 2021	Full year 2021
Revenue	$\overline{3}$	118 235	94 361	364 419	297 961	413 938
Materials, software and services		(29923)	(23102)	(88310)	(67822)	(92859)
Gross profit		88 312	71 260	276 108	230 139	321 079
Salary and personnel costs		(73172)	(74161)	(243336)	(192386)	(272679)
Other operating expenses		(21810)	(10992)	(57163)	(40017)	(55201)
Total operating expenses		(94982)	(85 153)	(300 499)	(232 403)	(327879)
EBITDA		(6671)	(13893)	(24391)	(2 265)	(6800)
Depreciation, amortization and impairment		(13716)	(8076)	(39683)	(22883)	(42970)
EBIT		(20386)	(21969)	(64073)	(25148)	(49770)
Financial income	$\overline{4}$	1733	2 7 7 4	4 3 1 4	3 9 0 4	2 5 9 8
Financial expense	$\overline{4}$	(1038)	(3544)	(3173)	(5543)	(6487)
Profit/(loss) before tax		(19691)	(22739)	(62933)	(26787)	(53660)
Tax expense		2 3 8 0	3 0 8 4	6437	649	4 8 0 2
Profit/(loss) after tax		(17312)	(19655)	(56496)	(26137)	(48858)
Attributable to:
Equity holders of the parent company		(17312)	(19655)	(56496)	(26137)	(48858)
Earnings per share: basic	10	(0.03)	(0.04)	(0.09)	(0.06)	(0.10)
Earnings per share: diluted	10	(0.03)	(0.04)	(0.09)	(0.06)	(0.10)

Balance Sheet

NOK thousand	Note	30 Sep 2022	31 Dec 2021
ASSETS
Non-current assets
Property, Plant and equipment		6989	7445
Right-of-use assets	$6 \overline{6}$	45 926	30 266
Goodwill	$\overline{5}$	205 220	205 279
Customer relations	$\overline{5}$	37 279	46 031
Other Intangible assets	$\overline{5}$	59 0 27	65 047
Other non-current assets		6713	10 678
Deferred tax assets		16 908	9511
Total non-current assets		378 063	374 259
Current assets
Accounts receivable		99 626	88 674
Other receivables		1 7 4 1	2 2 9 0
Contract assets		17 321	19 549
Inventory		5 7 5 2	3 1 7 9
Other current assets		15 131	20 320
Cash and cash equivalents		38 699	43758
Total current assets		178 269	177 771
TOTAL ASSETS		556 332	552 029

NOK thousand	Note	30 Sep 2022	31 Dec 2021
EQUITY AND LIABILITIES
Equity
Share capital	9	192 788	163 773
Other paid in capital		216 414	196 700
Exchange differences		1 0 2 1	398
Other equity		(100861)	(44365)
Total equity		309 362	316 506
Non-current liabilities
Interest bearing loans	$\overline{1}$	20 20 5	27 902
Non-current lease liabilities	$6\phantom{1}6$	30 171	19 148
Other non-current financial liabilities		$\overline{0}$	96
Deferred tax liabilities		14 796	17084
Provisions		22914	22789
Total non-current liabilities		88 087	87018
Current liabilities
Current financial liabilities	$\overline{1}$	11986	9523
Current lease liabilities	6	17 341	12 346
Accounts payable		20 670	21 2 2 7
Contract liabilities		32 019	21 483
Current tax payable		2 2 0 2	1046
Other current liabilities		74 665	82 880
Total current liabilities		158 883	148 505
Total liabilities		246 970	235 523
TOTAL EQUITY AND LIABILITIES		556 332	552 029

Cash flow

		For the quarter end		Year to date
NOK thousand	Note	30 Sep 2022	30 Sep 2021	30 Sep 2022	30 Sep 2021	Full year 2021
Operating activities
Profit/(Loss) before tax		(19691)	(22739)	(62933)	(26787)	(53660)
Taxes paid		(693)	0	(1566)	(982)	(982)
Adjustments for:
- Finance income and expense	$\overline{4}$	(695)	762	(1140)	1639	3890
- (Increase)/decrease in trade receivables		(5623)	3 2 2 8	(10951)	(7608)	(6874)
- (Decrease)/increase in trade payables		634	1 4 6 8	(557)	(17080)	(13257)
- Depreciation and amortization	5.6	12 8 8 9	8076	38 856	22 8 83	39 611
- Impairment losses on intangible assets	5	827	$\overline{0}$	827	$\overline{0}$	3 3 5 9
Change in other current accounts		(1182)	(6317)	9 2 4 4	(4985)	1 7 1 5
Net cash flows operating activities		(13535)	(15523)	(28 221)	(32919)	(26197)
Investing activities			1 2 5 5		21 967	29 857
Cash received through business combination Cash consideration Investment in subsidiaries	$\underline{8}$	$\mathbf{0}$ $\overline{0}$	(258)	$\mathbf{0}$ $\mathbf 0$	(101730)	(118299)
	$\underline{8}$ $\sqrt{5}$	(4002)	(1913)			(27416)
Capitalized tangible and intangible assets Interest received		247	99	(9654) 256	(15158) 99	212
Net cash flows investing activities		(3755)	(817)	(9398)	(94822)	(115647)
Financing activities
Proceeds from borrowings		$\mathbf{0}$	(71)	$\mathbf{0}$	15722	18 4 45
Change in overdrafts		2 2 7 3	1932	(2432)	(7451)	(2067)
Repayment of debt		(1702)	(2348)	(4292)	(2348)	(3006)
Interest paid		(315)	(342)	(503)	(1186)	(2507)
Instalments lease liabilities		(3599)	(4508)	(12152)	(6926)	(13 293)
Proceeds from shares issued		1813	$\overline{O}$	51813	0	$\mathbf{0}$
Share issue cost		(927)	(544)	(3084)	(544)	(600)
Net cash flows financing activities		(2457)	(5882)	29 350	(2735)	(3028)
Net change in cash and cash equivalents		(19836)	(22 222)	(8359)	(130 476)	(144872)
Cash and cash equivalents at beginning of period		55 730	78 586	43 7 58	188 270	188 270
Currency translation		2 8 0 4	(253)	3 2 9 9	(1682)	361
Cash and cash equivalents at end of period, incl. restricted cash		38 699	56 111	38 699	56 111	43 758
-whereof restricted cash		15 2 35	9 2 7 7	15 2 35	9 2 7 7	11810

Equity

	Equity related to the shareholders of the parent company
	Restricted
NOK thousand	Share capital	Other paid in capital	Exchange differences	Other equity	Total Equity
Balance on 1 January 2021	117 203	194 510	8	4 4 9 3	316 214
Result of the period				(48858)	(48858)
Comprehensive income for the period			390		390
Total comprehensive result for the period	$\overline{0}$	$\overline{0}$	390	(48858)	(48469)
Other equity transactions		(2 870)			(2870)
Share consideration relating to business combination 2020 (Facil, Microsky and Innit)		(45607)			(45607)
Capital increase related to business combinations	11 628	74 929			86 557
Conditional share consideration relating to acquisition of Integra – shares to be issued during 2022 and 2023		11 281			11 281
Capital increase related to merger with subsidiary Arribatec AS	34 941	(34941)			$\Omega$
Share issue cost		(600)			(600)
Closing balance 31 Dec 2021	163 773	196 700	398	(44365)	316 506
Balance on 1 January	163773	196 700	398	(44365)	316 506
Result of the period				(56, 496)	(56 496)
Comprehensive income for the period			623		623
Total comprehensive result for the period	$\overline{0}$	$\overline{0}$	623	(56, 496)	(55 873)
Capital increase	29 0 15	22 7 98			51813
Share issue cost		(3084)			(3084)
Closing balance 30 Sep 2022	192 788	216 414	1 0 2 1	(100 861)	309 362