Arribatec Group ASA — Interim / Quarterly Report 2021

Nov 11, 2021

Q3 – 2021 presentation

Agenda

Q3 – Financial performance

Organization & Integration

1

2

3

Appendixes

Highlights Q3 and subsequent events

• Revenue at NOK 94.4m - solid growth of 253% y/y – organic growth of 32%
• Recognized recurring revenue of NOK 40.0m, NOK 34.4m higher than Q3-2020
• Growth of 614% compared to last year and 6% higher than Q2-2021
• Strong growth despite delay in recognition of revenue (COVID)
• EBITDA of NOK -13.9 m due to;
• Continued to hire to deliver on backlog and future growth
• Strong focus on internal projects to integrate the 6 acquisitions future platform
• Approx. 60% of our revenue is still deriving from services, and we experienced lower service revenue during the quarter due to vacation periods in all regions
• Strong result in September – showing potential with normal activity level

Subsequent events

• Signed and closed the acquisition of Integra Associates in UK
• Abandoned and terminated acquisition of Grupo Hodei in Spain

Snapshot Financials Q3-21 vs Q3-20

32% Organic growth in "Old Arribatec"

Revenue share & Growth - Q3-21 vs Q3-20

By geography:

24m / 180% Share & Growth

8m / 99% Share & Growth

Q3 Performance

Q3 Year-to-Date Performance

Balance sheet development

Cash flow

Equity Development

Total equity at the end of Q3 was NOK 329m, a reduction of NOK 20m compared to end of Q2.

Equity ratio of 66% at the end of the reporting period

Structure & Performance

Organizational structure and performance

The Arribatec core

Transformed into five main Business Areas

Our business proposition

What we deliver

Business Services	Cloud	EA-BPM	Marine	Hospitality
Services/Solutions	Services/Solutions	Services/Solutions	Services/Solutions	Services/Solutions
SolaaS/SaaS ERP Implementation BI & Analytics System Integration Customization Software Development DevOps	Deployment of SolaaS/SaaS Cloud service Outsourcing Security Azure Data Lakes DevOps Device Management	SolaaS/SaaS Enterprise Architecture Business Process Mng Process Automation Compliance & Security GDPR RPA Business Mng Systems Business Process Syst.	SolaaS/SaaS System Implementation System Integration Technical deployment	SolaaS/SaaS Implementation Integration Deployment Azure AWS Device Management
Products	Products	Products	Products	Products
Unit4 ERP Hypergene	Azure AWS	Qualiware Boson	InfoSHIP ASSET InfoSHIP Quality	Holographic Solution Housekeeping
PowerBI Arribatec Research Management	Google Private Cloud GDPD / ISO / Risk		InfoSHIP ELB InfoSHIP Planning InfoSHIP Performance	Software Self-service check in/out

Arribatec Integration

Splunk MS 365

Platform

Old Arribatec focusing on ERP, BI & Analytics, DevOps, Integrations, research management, SolaaS etc

• Serving customers globally and counting for 47% of total rev.
• Hit in July and August due to holiday period in Nordics and Europe
• Strong results in September on normal activity level
• 13 new customers taken over from Unit4 in Spain
• Strong growth and continuous new projects in southern Europe
• New sales resources hired in Norway and UK

Enterprise Architecture & Business Process Management

• Strong growth and traction in the market
• Many new large strategic customers added
• Increased the organization with 50% over the last few months
• Negative result in July, but positive in August and historical high in September
• Moved into new offices in Stavanger and further extension in process due to the strong growth
• First own products launched and deployed for Aker

Cloud Solutions – hybrid, Azure, Splunk, GDPR

• Majority of revenue is recurring revenue
• Strong performance and strong organic growth
• Delivering profit every month
• ISO certification in process to be completed Q1-2022
• Centralized internal IT on own infrastructure
• Supporting entire group with IT services
• Shutting down data center in Bergen and relocate all to Oslo & Hamar (cost savings)
• Strong potential to cross sell globally horizontal solution

Software solutions to the hospitality industry

• Still investing in products and market penetration
• New contracts signed with a total value of NOK +3 million
• Strong pipeline and an industry on its way back to normal and beyond
• Lacking capacity to deliver / roll-out solutions
• Supply chain for required hardware working again

New ISO requirements expected for the industry the coming months! Arribatec have solutions ready to deliver on these new requirements!

Software solutions to the maritime sector - InfoShip Asset Management and Performance

• Continued investment in product and market
• Challenges to restructure due to Italian COVID-legislations
• Potential pipeline increased by € 9 million since January
• Solid interest for our solutions and sales activities, but long processes to get contracts signed
• Developed and deployed a new Hotel Defect Management System for MSC Cruises – large potential
• Several LOI's and confirmations for large contracts received
• An industry recovering and booming after COVID

Corporate

• Increased investments in Corporate Functions to build a platform appropriate to support future growth
• Internal ERP platform to support all 5 BAs globally is under implementation and roll-out
• A new Executive Management Team in place
• Employed a new EVP for Business Development
• New shared service center established in Poland
• Lease for new headquarter at Økern Portal signed.
• Co-locating three offices in Oslo into one

Group Management Group Finance Group HR Group IT

Corporate functions

Summing up Q3

• Q3 Continued solid growth in revenue 253% y/y 32% organic
• Q3 614% y/y growth in Recognized Recurring Revenue
• Q3 is EBITDA of NOK -13.3
• Losses due to vacation periods
• Strong focus on growth, integration and organizational alignment
• Q3 Terminated Grupo Hodei acquisition process
• Q4 Closed acquisition of Integra
• Expect contribution of NOK 50 mill in revenue 2022 + positive EBITDA
• Q3/Q4 continued focus on; integration, global sales and recruitment
• 2021 Estimated total revenue of NOK 410-420m incl. Integra (Q4 only)
• 2022 Expected 2022 revenue of NOK 550m which represents a +30% growth vs. 2021
• 2022 Expect full effect of integrations of acquired companies on EBITDA from early 2022

Appendix Financial Figures

Profit & Loss

		For the quarter end		Year to date
NOK thousand	Note	30 Sep 2021	30 Sep 2020	30 Sep 2021	30 Sep 2020	Full year 2020
Revenue	3	94 361	26728	297 961	93 210	154 024
Materials, software and services		(23102)	(2447)	(67822)	(8219)	(17609)
Gross profit		71 260	24 281	230 139	84 991	136 415
Salary and personnel costs Cost from reverse takeover		(74161)	(19871) 0	(192386) O	(66 830) $\mathbf{0}$	(99143) (56 822)
Other operating expenses		(10992)	(3752)	(40017)	(10194)	(25710)
Total operating expenses		(85153)	(23623)	(232 403)	(77024)	(181 674)
EBITDA		(13893)	659	(2265)	7967	(45259)
Depreciation and amortization EBIT		(8076) (21969)	(1670) (1011)	(22883) (25148)	(3800) 4 1 67	(7240) (52499)
Financial income Financial expense	4 4	2774 (3544)	210 (820)	3904 (5543)	574 (1657)	1247 (2945)
Profit/(loss) before tax		(22739)	(1621)	(26787)	3 0 8 4	(54197)
Tax expense		3084	374	649	(712)	(1424)
Profit/(loss) after tax attributable to equity holders of the parent company		(19655)	(1247)	(26137)	2 3 7 2	(55620)
Earnings per share: basic Earnings per share: diluted	10 10	(0.04) (0.04)	(0.01) (0.01)	(0.06) (0.06)	0.03 0.03	(0.18) (0.18)

Balance Sheet

		rear to date
NOK thousand	Note	30 Sep 2021	31 Dec 2020
ASSETS
Non-current assets
Property, Plant and equipment		6 116	3 2 5 8
Right-of-use assets	6	20832	20768
Goodwill	6	188 107	93827
Customer relations	6	31929	13 14 5
Other Intangible assets	6	64 090	18 310
Other non-current assets		11494	945
Deferred tax assets		4 4 7 0	2436
Total non-current assets		327 038	152 689
Current assets
Trade receivables		69 395	32956
Other receivables		4 160	22 090
Contract assets		24 3 66	12 3 8 7
Other current assets		20 20 9	2746
Cash and cash equivalents		56 111	188 270
Total current assets		174 241	258 448
TOTAL ASSETS		501 279	411 137

		Year to date
		30 Sep	31 Dec
NOK thousand	Note	2021	2020
EQUITY AND LIABILITIES
Equity
Paid in capital
Issued capital	9	163773	117 203
Other paid in capital		188 347	194 510
Total paid in capital		352 120	311 713
Other equity
Other reserves		(1953)	8
Other equity		(21644)	4493
Total other equity		(23597)	4 5 0 1
Total equity		328 523	316 214
Non-current liabilities
Interest bearing loans	7	25 990	1344
Lease liabilities	6	14 163	15 500
Other non-current financial liabilities		84	$\mathbf 0$
Deferred tax liabilities		12 4 4 1	$\mathbf 0$
Provisions		16746	$\mathbf{0}$
Total non-current liabilities		69 4 25	16 843
Current liabilities
Short term financial liabilities	7	4 2 5 5	7046
Current lease liabilities	6	7831	7125
Accounts payable and other current liabilities		15 657	23 966
Contract liabilities		10869	1283
Current tax payable		4551	3596
Other current liabilities		60 168	35 0 64
Total current liabilities		103 332	78 080
Total liabilities		172 756	94 923
TOTAL EQUITY AND LIABILITIES		501 279	411 137

Cash flow

		For the quarter end			Year to date
		30 Sep	30 Sep	30 Sep	30 Sep	Full year
NOK thousand	Note	2021	2020	2021	2020	2020
Operating activities
Profit/(Loss) before tax		(22739)	(1621)	(26787)	3084	(55620)
Taxes paid		0	(598)	(982)	$-598$	(1196)
Adjustments for:
- Calculated cost from reverse takeover		$\Omega$	$\Omega$	$\Omega$	$\Omega$	56822
- Finance income and expense	4	762	610	1639	1083	1698
- (Increase)/decrease in trade receivables		3 2 2 8	(3115)	(7608)	(1901)	1328
- (Decrease)/increase in trade payables		1468	(1759)	(17080)	905	6089
- Depreciation and amortization	5,6	8 0 76	1669	22883	3800	7240
Change in other current accounts		(6317)	(2798)	(4985)	4 3 8 1	(17369)
Net cash flows operating activities		(15523)	(7612)	(32919)	10 754	(1009)
Investing activities
Cash received through business combination	$\overline{7}$	1255	$\mathbf 0$	21967	$\mathbf 0$	34 741
Cash consideration Investment in subsidiaries	8	(258)	$\mathbf 0$	(101730)	$\mathbf 0$	(59942)
Capitalized development costs and tangible assets	5	(1913)	(2643)	(15158)	(9909)	(12548)
Interest received		99	$\Omega$	99	$\mathbf 0$	236
Net cash flows investing activities		(817)	(2643)	(94822)	(9909)	(37514)
Financing activities
Proceeds from borrowings		(71)	$\mathbf{0}$	15722	$\mathbf{0}$	5472
Change in overdrafts		(417)	5 3 5 1	(9800)	7 2 7 5	(3821)
Repayment of debt		$\bf{0}$	$\mathbf 0$	$\mathbf 0$	$\mathbf 0$	(1179)
Interest paid		(342)	(303)	(1186)	(502)	(755)
Calculated interest lease liabilities		0	$\Omega$	$\mathbf 0$	$\Omega$	$\Omega$
Installments lease liabilities		(4508)	$\mathbf{O}$	(6926)	$\mathbf 0$	$\Omega$
Other changes in equity		0	$\mathbf{0}$	$\mathbf 0$	$\mathbf 0$	(1110)
Proceeds from shares issued		0	847	$\overline{0}$	847	234 954
Share issue costs	(544)	$\mathbf{0}$	(544)	$\mathbf 0$	(12891)
Net cash flows financing activities		(5882)	5895	(2735)	7620	220 671
Net change in cash and cash equivalents		(22 222)	(4360)	(130 476)	8465	182 149
Cash and cash equivalents at beginning of period		78 586	18945	188 270	6 1 21	6 121
Currency translation		(253)	$\mathbf 0$	(1682)	$\mathbf 0$	$\Omega$
Cash and cash equivalents at end of period		56 111	14 585	56 111	14 585	188 270

Equity

Restricted Share Other paid Exchange Retained earnings and Total Treasury NOK thousand in capital differences capital profit for the year Equity shares 16 28 6 (52) 2589 (312) 3 2 9 1 21802 Balance on 1 January 2020 Result of the period (55620) (55620) Comprehensive income for the period 60 60 $\mathbf{0}$ $\mathbf{0}$ 60 Total comprehensive result for the period $\mathbf{0}$ (55620) (55 561) (276) Treasury shares acquired (276) (834) (834) Other equity transactions 847 83824 84 670 Issue of share capital in Arribatec AS Reverse take over reclassification of Arribatec AS 2848 (3436) 588 $\Omega$ Reverse take over Arribatec Solutions ASA (64614) 56822 91204 83 412 2800 6600 9400 Capital Increase employees offer, Nov 9 1 9 9 21684 Capital increase repair issue, Nov 30884 14 000 96 000 110 000 Capital increase, Private placement Dec Cost of share issue (12891) (12891) Share consideration relating business combinations - shares to be issued in 2021 45 607 45 607 Closing balance on 31 December 2020 117 203 194 510 8 $\mathbf{0}$ 4 4 9 3 316 214 194 510 8 Balance on 1 January 2021 117 203 $\mathbf 0$ 4 4 9 3 316 214 Result of the period (26137) (26137) Comprehensive income for the period (1961) (1961) $\mathbf{0}$ Total comprehensive result for the period $\mathbf{0}$ $\mathbf{0}$ (1961) (28098) (26137) Share consideration relating to business combination 2020 (Facil, Microsky and Innit) (45607) (45607) 11628 Capital increase related to business combinations 74929 86 557 Capital increase related to merger with subsidiary Arr. AS 34 941 (34941) $\Omega$ Share issue cost (544) (544) 163 773 Closing balance 30 Sep 2021 $\mathbf{0}$ 188 347 (1953) (21644) 328 523			Equity related to the shareholders or the parent company

Q3 Reporting Arribatec Group ASA

Per Ronny Stav – Group CEO Geir Johansen – Group CFO

Oslo 11 November 2021