Arribatec Group ASA

Quarterly Report • Nov 2, 2023

Contents | Highlights Operation & sales Financial review Financial statements & notes APMs, terms and abbreviations

2021 Artbox Report Temlt TemplateAldetdubbel space här?rihts reserved © Artbox AS 2021 All rights reserved © Artbox AS 2021

Quarterly report Q3 2023 ^

Highlights	3
Operation & sales	4
Financial review	6
Financial statements & notes	8
APMs, terms and abbreviations	32

Highlights ^

Arribatec Group delivers a total revenue of NOK 131.8m for the third quarter 2023, a growth of 11% compared to the same period last year (118.2m). The equivalent amounts for YTD was NOK 430.0m, a growth of 18% compared to the same period last year of NOK 364.4m. The Group reports an EBITDA for the third quarter of NOK 9.0m which is an increase of NOK 15.6m compared to same period 2022 (-6.7m). YTD, the EBITDA was NOK 22.6m, which is 47.0m above the same period last year.

Recurring Revenue (RR) increased by NOK 10.0m compared to Q3 last year, to NOK 54.3m for Q3 2023. The cash balance at the end of the quarter was NOK 40.2m.

Key consolidated figures and ratios		Q3 2023	Q2 2023	Q1 2022	Q4 2022	Q3 2022	YTD 2023	Full year 2022
Revenue	TNOK	131 812	148 164	150 047	140 550	118 235	430 023	504 968
Gross profit	TNOK	100 029	113 334	115 441	113 825	88 312	328 804	389 934
EBITDA	TNOK	8 965	8 396	5 286	(9 716)	(6 671)	22 648	(34 107)
Adjusted EBITDA	TNOK	8 965	8 396	5 286	(4 478)	(6 775)	22 648	(25 090)
Operating profit/(loss), EBIT	TNOK	(3 907)	(4 219)	(6 342)	(26 266)	(20 386)	(14 468)	(90 339)
Net profit/(loss)	TNOK	(2 917)	(3 830)	(5 944)	(26 897)	(17 312)	(12 691)	(83 393)
Revenue growth y/y for the quarter/full year	%	11.5%	23.2%	19.1%	21.2%	25.3%	74.7%	22.0%
Gross profit margin	%	75.9%	76.5%	76.9%	81.0%	74.7%	76.5%	77.2%
EBITDA margin	%	6.8%	5.7%	3.5%	(6.9%)	(5.6%)	5.3%	(6.8%)
Adjusted EBITDA margin	%	6.8%	5.7%	3.5%	(3.2%)	(5.7%)	5.3%	(5.0%)
Earnings per share	NOK	(0.04)	(0.06)	(0.09)	(0.04)	(0.03)	(0.18)	(0.13)
Cash at end of period	TNOK	40 161	41 574	61 964	40 449	38 699	40 161	40 449
Equity	TNOK	272 611	277 058	278 471	281 927	309 362	309 362	281 927
Equity ratio	%	53.6%	52.3%	50.2%	54.7%	55.6%	53.6%	54.7%
Price per share at end of reporting period 1	NOK	5.450	5.300	3.260	0.369	0.352	5.450	0.369
FTEs, employed	Number	329	334	335	353	367	329	353
No. of outstanding shares, beg. of period 1	Number	69 057 322	69 057 322	690 573 217	688 528 217	684 903 064	690 573 217	584 903 064
New shares issued 1	Number	0	0	3	2 045 000	3 625 153	3	105 670 153
No. of outstanding shares, end of period 1	Number	69 057 322	69 057 322	69 057 322	690 573 217	688 528 217	69 057 322	690 573 217
Average number of shares, year to date	Number	69 057 322	69 057 322	69 057 322	658 988 513	648 756 580	69 057 322	658 988 513

¹ Reversed share split (10:1) in Q1 2023

Operation & sales ^

Arribatec had 11% revenue growth in Q3 compared to last year's period. As expected, activity slowed down in the third quarter due to the Nordics and Central Europe vacation periods. The growth is primarily driven by EA & BPM and Cloud, albeit all BA's recorded growth compared to Q3 2022. Recurring revenue grew by 23%, accounting for NOK 54.3m, of a total revenue of NOK 131m in Q3. Consulting revenue increased by 4%, or NOK 3.0m, to NOK 71.2m.

We can report a positive EBITDA of NOK 9m, a NOK 15.6m improvement compared to last year's third quarter. The EBITDA improved in all business areas, notably Arribatec Marine, where revenue levels have increased beyond what we recorded in 2022, driving gross margin beyond 93% and EBITDA margin to a record high of 43%.

For Hospitality, the summer months typically mark a drop in self-service kiosk installations for new hotel clients. Despite this, Hospitality recorded high revenue, partly due to the

start-up of the recently awarded Flytoget project (value NOK 22m) in Q3. EBITDA was negative NOK 2.2m as the number of new kiosk installations slowed down, and preparations for the Flytoget project required significant time and attention.

EA&BPM continues its growth journey and shows a 23% increase in revenue compared to last year. The activity level remains very high. To meet the increase in demand, we plan to nearly double the number of consultants that deliver projects to our customers over the next two to three quarters.

Cloud continues its growth with an 18% revenue increase compared to last year. Several new contracts had been signed and implemented during the year.

Business Services grew by 5% compared to a year ago while increasing EBITDA to NOK 9.1m and the EBITDA margin to 14%, up from 10% in Q2 2022.

Business development

Q3 resulted in 344 sales contracts signed at a total value of NOK 135m, including scope extensions and new agreements. The five most significant contracts account for 41% of the new contracted volume. The total number of signed contracts year-to-date is 798.

Regionally, the Nordic remains the largest, with 60% of the new contracts in Q3. Value vice, the distribution is as follows:

Business Services 32%, Hospitality 29%, Cloud 18%, EA&BPM 15%, and Marine 6%. The top 5 industries are civil engineering, energy, public sector, maritime, and higher education.

The total current pipeline has now grown from NOK 445 in Q1 to NOK 560 in Q3.

New sales in NOK per quarter

• Q3 2023 NOK 135m
• Q2 2023 NOK 121m
• Q1 2023 NOK 191m
• Q4 2022 NOK 127m
• Q3 2022 NOK 63m

Won (Cloud) Won (Marine)

Business Development - signed Q3 compared to previous quarters

Financial review ^

Profit & loss

Arribatec Group's Q3 revenue growth QoQ was 11% and was reported at NOK 131.8.m. The equivalent number for Q3 2022 was 118.2m. Recurring revenue (RR) accounted for NOK 54.3m in Q3 2023, or 41% of total revenue, where Region Norway delivered 82% of the total. Compared to Q3 2022, RR increased by NOK 10.0m. In Q3, consulting services accounted for NOK 71.2m of the total revenue, whereas Region Norway had NOK 33.7m, Europe NOK 28.5m, and Americas NOK 8.9m.

Cost relating to material, software and services (Cogs) amounted to NOK 31.8m compared to Q3 last year of NOK 29.9m. Gross profit increased by NOK 11.7m to NOK 100.0m in Q3 compared to last year.

Total operating expenses for Q3 amounted to NOK 91.1m compared to NOK 95.0m same period last year, a decrease of NOK 3.9m. The main expense in Operating expense is salary and personnel cost, equal to appr. 83% of total operating expenses in the quarter. The decrease in other operating expenses from last year is mainly less professional services spent, less hardware lease, as well as software expenses.

EBITDA for Q3 2023 amounted to NOK 9.0m which is NOK 15.6m above the same period last year. The increase is explained by higher gross margin, 75.9% (74.7%), due to higher revenue. EBITDA margin Q3 was 6.8%. No adjustments (APMs) have been applied to the EBITDA in Q3.

Depreciation, amortization and impairment (D&A) amounted to NOK 12.9m for Q3 compared to NOK 13.7m in same period 2022. The two main components of the D&A are amortizations of intangible assets from acquired companies (3.7m), internally developed software and technical software (2.8m), depreciation of fixed assets (0.7m) and depreciation of right-of-use assets such as office lease contracts calculated according to IFRS 16 (4.9m).

Finance, tax & net result

Net financial items for the third quarter were NOK -1.8m and calculated tax income for the same period was NOK 2.8m leaving a net loss after tax of NOK -2.9m for Q3 2023.

The balance sheet

Total assets of the Group at the end of September 2023 were NOK 509.0m compared to 515.4m at the end of year 2022. Non-current intangible assets at the end of the period accounted for NOK 272.1m. Intangible assets consist of goodwill of NOK 206.6m, which stems from the acquisitions done by Arribatec since Q4 2020. Additionally, as at the end of period, NOK 27.1m of the purchase price paid for the companies was allocated as the value of the customer relations in those same companies. Finally, technical and custom-made software accounts for NOK 38.4m of the intangible assets. Total intangible assets at the end of 2022 were NOK 281.2m.

Current assets of NOK 177.0m consist of account receivables of 99.3m and cash balance at the end of the quarter of NOK 40.2m. Other receivables, contract assets, inventory and other current assets add up to NOK 37.6m. Total current assets at the end of 2022 were NOK 168.3m.

Non-current liabilities at the end of Q3 were NOK 59.0m, of which 15.3m were drawdowns on smaller revolving credit facilities in Italy. Lease liabilities related to office and equipment with a remaining lease period above twelve months calculated under IFRS 16 accounted for NOK 21.0m, while deferred tax totalled to 8.5m. Total non-current liabilities at the end of last year was NOK 71.4m.

Current liabilities amounted to NOK 177.4m at the end of the quarter. Other current liabilities accounted for 79.1m, which mainly includes accruals for employee tax and VAT. The total amount of other current liabilities at the end of last year was NOK 162.1m.

At the end of the quarter, total equity was NOK 272.6m, giving an equity ratio of 53.6%.

After the reverse split in March 2023, Arribatec has a total of 69 057 322 shares outstanding.

Cash flow and liquidity

Arribatec's cash flow from operating activities in Q3 was zero, which compares to negative 13.5m in Q3 2022. The net change in accounts receivables and payables had a negative impact of NOK 3.9m. Furthermore, a change in other current accounts decreased cash from operation by another NOK 13.0m. Of this, -10.3m is related to changes in contract liabilities as deferred revenue that appears on advanced invoicing to customers (annually, quarterly, or monthly), hence contract liabilities will increase when the customers are invoiced and will drop along with the revenue being recognized in the profit and loss in the correct period.

Net cash flow from investing activities was NOK -3.3m in Q3. Of the capitalized assets, main part is capitalized development costs and purchased software.

Net cash flow from financing was positive by NOK 3.8m in the quarter.

Arribatec had NOK 40.2m in cash and cash equivalents at the end of the quarter.

Subsequent events after reporting date

There have been no subsequent events after the balance sheet date.

Go back

Condensed consolidated financial statements & notes ^

Condensed consolidated statements of profit and loss ^

			For the quarter end		Year to date
NOK thousand	Note	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
Revenue	3	131 812	118 235	430 023	364 419	504 968
Materials, software and services		(31 783)	(29 923)	(101 218)	(88 310)	(115 035)
Gross profit		100 029	88 312	328 804	276 108	389 934
Salary and personnel costs		(75 832)	(73 172)	(253 520)	(243 336)	(338 800)
Other operating expenses		(15 232)	(21 810)	(52 637)	(57 163)	(85 241)
Total operating expenses		(91 064)	(94 982)	(306 157)	(300 499)	(424 041)
EBITDA		8 965	(6 671)	22 648	(24 391)	(34 107)
Depreciation, amortization and impairment	4, 5	(12 872)	(13 716)	(37 116)	(39 683)	(56 232)
EBIT		(3 907)	(20 386)	(14 468)	(64 073)	(90 339)
Financial income	6	(104)	1 733	2 742	4 314	5 191
Financial expense	6	(1 717)	(1 038)	(6 197)	(3 173)	(5 280)
Profit/(loss) before tax		(5 728)	(19 691)	(17 923)	(62 933)	(90 428)
Tax expense		2 811	2 380	5 232	6 437	7 035
Profit/(loss) after tax		(2 917)	(17 312)	(12 691)	(56 496)	(83 393)
Attributable to:
Equity holders of the parent company		(2 917)	(17 312)	(12 691)	(56 496)	(83 393)
Earnings per share: basic	7	(0.04)	(0.03)	(0.18)	(0.09)	(0.13)
Earnings per share: diluted	7	(0.04)	(0.03)	(0.18)	(0.09)	(0.13)

Consolidated statement of comprehensive profit and loss ^

		For the quarter end		Year to date
NOK thousand	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
Profit/(loss) after tax	(2 917)	(17 312)	(12 691)	(56 496)	(83 393)
Items that may be classified subsequently to profit or loss
Foreign currency translation differences - foreign operations	(1 530)	916	3 382	623	282
Other comprehensive income/(loss) for the period	(1 530)	916	3 382	623	282
Total comprehensive income/(loss) for the period	(4 448)	(16 396)	(9 309)	(55 873)	(83 111)
Attributable to:
Equity holders of the parent company	(4 448)	(16 396)	(9 309)	(55 873)	(83 111)

Interim consolidated statement of financial position ^

NOK thousand	Note	30 Sep 2023	31 Dec 2022
ASSETS
Non-current assets
Property, Plant and equipment		6 129	6 517
Right-of-use assets	4	34 449	41 719
Goodwill	5	206 582	204 581
Customer relations	4	27 112	34 637
Other Intangible assets	4	38 402	41 934
Other non-current assets		4 024	5 323
Deferred tax assets		15 328	12 322
Total non-current assets		332 027	347 034
Current assets
Accounts receivable		99 263	88 214
Other receivables		3 215	1 128
Contract assets		17 384	16 276
Inventory		3 866	3 777
Other current assets		13 118	18 484
Cash and cash equivalents		40 161	40 449
Total current assets		177 007	168 328
TOTAL ASSETS		509 034	515 362

NOK thousand	Note	30 Sep 2023	31 Dec 2022
EQUITY AND LIABILITIES
Equity
Share capital	8	193 361	193 361
Other paid in capital		215 638	215 645
Exchange differences		4 061	679
Other equity		(140 449)	(127 758)
Total equity		272 611	281 927
Non-current liabilities
Interest bearing loans	9	15 349	18 883
Non-current lease liabilities	4	20 961	26 727
Other non-current financial liabilities		1 089	967
Deferred tax liabilities		8 512	10 590
Provisions		13 072	14 202
Total non-current liabilities		58 982	71 369
Current liabilities
Interest bearing loans - current portion	9	20 800	12 328
Current lease liabilities	4	15 426	16 765
Accounts payable		28 903	31 879
Contract liabilities		31 873	16 476
Current tax payable		1 369	650
Other current liabilities		79 070	83 969
Total current liabilities		177 441	162 066
Total liabilities		236 423	233 435
TOTAL EQUITY AND LIABILITIES		509 034	515 362

Interim consolidated statement of changes in equity ^

		Equity related to the shareholders of the parent company
NOK thousand	Restricted
	Share capital	Other paid in capital	Exchange differences	Other equity	Total Equity
Balance on 1 January 2022	163 773	196 700	398	(44 365)	316 506
Result of the period				(83 393)	(83 393)
Other comprehensive income for the period			282		282
Total comprehensive result for the period	0	0	282	(83 393)	(83 111)
Capital issue, April	28 000	22 000			50 000
Share issue, repair offer, July	1 015	798			1 813
Share issue cost		(3 280)			(3 280)
Share consideration relating to acquisition of Integra		(2 872)			(2 872)
Capital issue in relation to acq. of Integra, Nov	573	2 299			2 872
Closing balance 31 Dec 2022	193 361	215 645	679	(127 758)	281 927
Balance on 1 January	193 361	215 645	679	(127 758)	281 927
Result of the period				(12 691)	(12 691)
Other comprehensive income for the period			3 382		3 382
Total comprehensive result for the period	0	0	3 382	(12 691)	(9 309)
Capital issue, Feb	0				0
Share issue cost		(6)			(6)
Closing balance 30 Sep 2023	193 361	215 638	4 061	(140 449)	272 611

Interim consolidated cash flow statement ^

		For the quarter end		Year to date
NOK thousand	Note	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
Operating activities
Profit/(Loss) before tax		(5 728)	(19 691)	(17 923)	(62 933)	(90 428)
Taxes paid		(58)	(693)	(1 110)	(1 566)	(1 566)
Adjustments for:
- Finance income and expense	4	1 886	(695)	3 452	(1 140)	73
- (Increase)/decrease in trade receivables		(998)	(5 623)	(11 048)	(10 951)	460
- (Decrease)/increase in trade payables		4 885	634	(2 976)	(557)	10 652
- Depreciation and amortization	5, 6	12 872	12 889	37 116	38 856	50 618
- Impairment losses on intangible assets	5	0	827	0	827	5 614
Change in other current accounts		(12 985)	(1 182)	14 091	9 244	(2 190)
Net cash flows operating activities		(126)	(13 535)	21 602	(28 221)	(26 766)
Investing activities
Sale of intangible assets	5	0	0	0	0	9 347
Purchase of property, plant and equipment		(278)	(515)	(1 637)	(1 692)	(1 964)
Purchase and development of intangible assets	5	(3 111)	(3 487)	(6 853)	(7 961)	(13 881)
Interest received		99	247	411	256	291
Net cash flows investing activities		(3 290)	(3 755)	(8 079)	(9 398)	(6 207)

		For the quarter end		Year to date
NOK thousand	Note	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
Financing activities
Change in overdrafts		13 722	2 273	7 639	(2 432)	(2 432)
Repayment of debt		(1 648)	(1 702)	(4 405)	(4 292)	(5 464)
Interest paid		(305)	(315)	(860)	(503)	(697)
Received Gov.grants (SkatteFUNN)		0	0	0	0	3 493
Instalments lease liabilities		(8 001)	(3 599)	(15 534)	(12 152)	(15 932)
Proceeds from shares issued		0	1 813	0	51 813	51 813
Share issue cost		0	(927)	(6)	(3 084)	(3 280)
Net cash flows financing activities		3 768	(2 457)	(13 167)	29 350	27 501
Net change in cash and cash equivalents		352	(19 746)	356	(8 269)	(5 472)
Cash and cash equivalents at beginning of period		41 574	55 730	40 449	43 758	43 758
Currency translation		(1 765)	2 715	(644)	3 210	2 163
Cash and cash equivalents at end of period, incl. restricted cash		40 161	38 699	40 161	38 699	40 449
-whereof restricted cash		9 332	15 235	9 332	15 235	13 492

Notes to the condensed consolidated interim financial statements ^

Note 01 Basis for the preparation

The parent company Arribatec Group ASA (Company) is a company domiciled in Norway. These condensed consolidated interim Statements ("interim financial statements") comprise the Company and its subsidiaries (together referred to as "the Group"). These interim financial statements are unaudited for 2023 and it is prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the EU. The accounting policies adopted are consistent with those used in the annual financial statements for the year ended 31 December 2022. Changes to IFRSs which have been effective from 1 January 2023 have had no material impact on the Group's financial statements. All presented figures in this interim report have been rounded and consequently, the sum of individual figures can deviate from the presented total figure.

Note 02 Risk and uncertainties

In preparing these interim financial statements, management has made judgments and estimates that effects the application and accounting policies and the reported amounts of assets and liabilities, income, and expenses. Actual results may differ from these estimates. Critical Accounting estimates and judgments in terms of accounting policies are more comprehensively discussed in the Company's Annual report for the Financial Year 2022, available on Arribatec's website: www.Arribatec.com.

Note 03 Revenue per geography and segment

Segment

The management of the Group follows up the revenue by Business Area and geography.

Business services are focusing on ERP, BI & Analytics, DevOps, integrations, and software solutions for research institutes. Arribatec Business services provide simplicity by implementing, customizing, maintaining, and supporting the entire business landscape, with ERP as the core engine. We integrate it with other marked leading systems that provide better operational support and insight than a single ERP system does.

EA & BPM provides Enterprise Architecture and Business Process Management. Arribatec EA&BPM delivers solutions and long-term services within the spaces of business process management, enterprise architecture, and corporate governance to major Norwegian and Nordic customers, both in the private and public sectors.

Cloud provides cloud services such as hosting IT infrastructure within f ex hybrid, Azure, Splunk, and GDPR. Arribatec Cloud provides consulting, outsourcing, and cloud services to private and public enterprises. In addition to offering market-leading cloud services from Microsoft and Google, Arribatec Cloud also operates its own public cloud offering based on Norwegian data centers to accommodate special use cases for our customers.

Hospitality delivers solutions for self-check-in/check-out and payments for the hospitality industry.

Marine focus on the Maritime sector. BA Marine's competencies are the development, implementation, and consulting of the owned asset management system solutions: Infoship.

For the quarter end 30 Sep 2023

						Corporate/
NOK thousand	Business services	EA & BPM	Cloud	Hospitality	Marine	Other	Eliminations	Total
Revenue	65 084	24 229	31 652	2 097	12 511	46	(3 807)	131 812
Materials, software and services	(11 995)	(5 826)	(15 602)	(1 167)	(867)	(22)	3 695	(31 783)
Gross margin	53 088	18 404	16 050	930	11 644	24	(111)	100 029
Salary and personnel costs	(40 188)	(11 912)	(9 624)	(2 076)	(5 400)	(6 631)	0	(75 832)
Other operating expenses	(3 780)	(1 330)	(3 057)	(1 078)	(868)	(5 231)	111	(15 232)
Total operating expenses	(43 968)	(13 242)	(12 681)	(3 154)	(6 267)	(11 863)	111	(91 064)
EBITDA	9 120	5 161	3 370	(2 224)	5 377	(11 839)	0	8 965
Depreciation, amortization and impairment	(4 626)	(1 657)	(1 963)	(1 153)	(1 949)	(1 525)	0	(12 872)
EBIT	4 494	3 504	1 407	(3 377)	3 428	(13 363)	0	(3 907)
Net financial items	(1 027)	70	61	(187)	(564)	(175)	0	(1 821)
Profit/(loss) before tax	3 467	3 574	1 468	(3 563)	2 864	(13 538)	0	(5 728)
Gross margin %	81.6%	76.0%	50.7%	44.4%	93.1%	na	na	75.9%
EBITDA %	14.0%	21.3%	10.6%	(106.1%)	43.0%	na	na	6.8%

For the quarter end 30 Sep 2022

						Corporate/
NOK thousand	Business services	EA & BPM	Cloud	Hospitality	Marine	Other	Eliminations	Total
Revenue	66 948	19 689	28 361	1 209	13 268	1 211	(12 450)	118 235
Materials, software and services	(14 202)	(5 694)	(13 546)	250	(2 498)	(4 783)	10 550	(29 923)
Gross margin	52 746	13 995	14 815	1 459	10 770	(3 572)	(1 901)	88 312
Salary and personnel costs	(38 174)	(10 991)	(9 085)	(2 509)	(8 857)	(3 557)	0	(73 172)
Other operating expenses	(7 707)	(1 269)	(5 459)	(1 144)	(1 361)	(6 771)	1 901	(21 811)
Total operating expenses	(45 881)	(12 260)	(14 544)	(3 652)	(10 218)	(10 328)	1 901	(94 983)
EBITDA	6 865	1 734	272	(2 194)	552	(13 900)	0	(6 671)
Depreciation, amortization and impairment	(3 847)	(1 381)	(1 357)	(658)	(3 987)	(2 485)	0	(13 716)
EBIT	3 017	353	(1 086)	(2 852)	(3 435)	(16 384)	0	(20 387)
Net financial items	38	0	(171)	45	(151)	934	0	695
Profit/(loss) before tax	3 055	354	(1 256)	(2 807)	(3 587)	(15 451)	0	(19 691)
Gross margin %	78.8%	71.1%	52.2%	120.7%	81.2%	na	na	74.7%
EBITDA %	10.3%	8.8%	1.0%	(181.5%)	4.2%	na	na	(5.6%)

Year to date 30 Sep 2023

						Corporate/
NOK thousand	Business services	EA & BPM	Cloud	Hospitality	Marine	Other	Eliminations	Total
Revenue	224 438	82 028	95 793	4 832	34 866	534	(12 468)	430 023
Materials, software and services	(43 783)	(19 254)	(45 123)	(2 278)	(1 740)	(1 407)	12 366	(101 218)
Gross margin	180 655	62 774	50 670	2 554	33 126	(873)	(102)	328 804
Salary and personnel costs	(139 193)	(42 815)	(31 908)	(4 765)	(17 968)	(16 872)	0	(253 520)
Other operating expenses	(14 960)	(3 842)	(9 816)	(3 815)	(4 653)	(15 653)	102	(52 637)
Total operating expenses	(154 153)	(46 658)	(41 724)	(8 579)	(22 621)	(32 525)	102	(306 157)
EBITDA	26 502	16 117	8 946	(6 025)	10 505	(33 398)	0	22 647
Depreciation, amortization and impairment	(13 359)	(4 942)	(5 927)	(2 622)	(5 573)	(4 694)	0	(37 116)
EBIT	13 144	11 174	3 020	(8 648)	4 932	(38 091)	0	(14 468)
Net financial items	(231)	(406)	(368)	(480)	(1 143)	(826)	0	(3 455)
Profit/(loss) before tax	12 913	10 768	2 652	(9 127)	3 789	(38 918)	0	(17 923)
Gross margin %	80.5%	76.5%	52.9%	52.9%	95.0%	na	na	76.5%
EBITDA %	11.8%	19.6%	9.3%	(124.7%)	30.1%	na	na	5.3%

Year to date 30 Sep 2022

						Corporate/
NOK thousand	Business services	EA & BPM	Cloud	Hospitality	Marine	Other	Eliminations	Total
Revenue	216 724	62 314	83 629	2 534	38 809	569	(40 160)	364 419
Materials, software and services	(46 876)	(16 720)	(36 166)	(1 187)	(10 019)	(15 164)	37 821	(88 310)
Gross margin	169 848	45 594	47 463	1 347	28 791	(14 595)	(2 339)	276 108
Salary and personnel costs	(125 808)	(37 574)	(29 005)	(7 047)	(30 931)	(12 971)	0	(243 336)
Other operating expenses	(17 060)	(4 219)	(15 973)	(2 495)	(3 735)	(16 021)	2 339	(57 163)
Total operating expenses	(142 867)	(41 793)	(44 978)	(9 542)	(34 665)	(28 992)	2 339	(300 499)
EBITDA	26 981	3 801	2 485	(8 196)	(5 875)	(43 587)	0	(24 391)
Depreciation, amortization and impairment	(10 264)	(3 805)	(5 320)	(1 182)	(10 182)	(8 930)	0	(39 683)
EBIT	16 717	(4)	(2 835)	(9 377)	(16 056)	(52 517)	0	(64 074)
Net financial items	137	87	(388)	(215)	452	1 068	0	1 140
Profit/(loss) before tax	16 853	83	(3 223)	(9 592)	(15 605)	(51 449)	0	(62 933)
Gross margin %	78.4%	73.2%	56.8%	53.1%	74.2%	na	na	75.8%
EBITDA %	12.4%	6.1%	3.0%	(323.4%)	(15.1%)	na	na	(6.7%)

Full year 2022

						Corporate/
NOK thousand	Business services	EA & BPM	Cloud	Hospitality	Marine	Other	Eliminations	Total
Revenue	291 362	89 789	113 726	3 642	47 066	1 166	(41 781)	504 968
Materials, software and services	(64 177)	(19 812)	(48 862)	1 948	(6 365)	(17 561)	39 794	(115 035)
Gross margin	227 185	69 977	64 864	5 590	40 701	(16 395)	(1 988)	389 934
Salary and personnel costs	(177 970)	(52 108)	(41 291)	(10 192)	(39 066)	(18 172)	0	(338 800)
Other operating expenses	(21 768)	(5 437)	(22 031)	(3 678)	(11 702)	(22 613)	1 988	(85 241)
Total operating expenses	(199 739)	(57 545)	(63 322)	(13 870)	(50 768)	(40 785)	1 988	(424 041)
EBITDA	27 446	12 432	1 542	(8 280)	(10 067)	(57 180)	0	(34 107)
Depreciation, amortization and impairment	(15 110)	(5 707)	(7 116)	(2 762)	(14 696)	(10 842)	0	(56 232)
EBIT	12 336	6 725	(5 573)	(11 042)	(24 764)	(68 022)	0	(90 339)
Net financial items	(331)	(9)	(357)	(223)	74	757	0	(89)
Profit/(loss) before tax	12 005	6 717	(5 931)	(11 265)	(24 690)	(67 265)	0	(90 428)
Gross margin %	78.0%	77.9%	57.0%	153.5%	86.5%	na	na	77.2%
EBITDA %	9.4%	13.8%	1.4%	(227.4%)	(21.4%)	na	na	(6.8%)

Disaggregation of revenue

In the following table, revenue is disaggregated by primary service line, geography and recurrence. In presenting the geographic information, revenue has been based on the geographic location of legal entity.

For the quarter end 30 Sep 2023

NOK thousand	Consulting services	Recurring Revenue	One-time revenue	Total
Norway	33	44	4	82
	712	516	198	425
Europe	28	8	1	38
	532	232	815	580
Americas	8 909	1 516	381	10 807
Total revenue	71	54	6	131
	153	264	394	812

NOK thousand	Consulting services	Recurring Revenue	One-time revenue	Total
Norway	122	129	11	264
	769	656	728	152
Europe	102	24	4	131
	879	556	544	980
Americas	27	4	1	33
	496	795	600	891
Total revenue	253	159	17	430
	143	007	873	023

For the quarter end 30 Sep 2022

NOK thousand	Consulting services	Recurring Revenue	One-time revenue	Total
Norway	29	37	3	70
	422	689	044	154
Europe	31	5	2	38
	292	039	636	967
Americas	7 509	1 512	94	9 114
Total revenue	68	44	5	118
	223	239	773	235

Year to date 2022

Year to date 2023

NOK thousand	Consulting services	Recurring Revenue	One-time revenue	Total
Norway	100	110	9	221
	325	980	777	082
Europe	94	19	4	118
	850	417	341	608
Americas	19 807	4 269	653	24 729
Total revenue	214	134	14	364
	982	666	771	418

Full year 2022

NOK thousand	Consulting services	Recurring Revenue	One-time revenue	Total
Norway	140	149	15	305
	157	666	472	295
Europe	129	27	5	163
	395	911	819	126
Americas	28 902	6 917	728	36 548
Total revenue	298	184	22	504
	454	495	019	968

Note 04 Leased assets

Right-of-use assets

Year to date 30 Sep 2023

NOK thousand	Buildings	Vehicles	Hardware	Other	Total
Right-of-use assets per 1 Jan 2022	18 149	430	3 139	8 548	30 266
Addition of right-of-use assets	18 336	0	37	9 836	28 209
Depreciation in the period	(10 791)	(345)	(1 561)	(4 518)	(17 215)
Reclassification between categories	6 631	1	191	(6 822)	0
Translation difference	447	3	9	0	459
Right-of-use assets per 1 Jan 2023	32 773	89	1 814	7 043	41 719
Addition of right-of-use assets	4 740	724	1 135	270	6 869
Depreciation in the period	(10 379)	(166)	(1 341)	(2 813)	(14 699)
Reclassification between categories	(41)	41	0	(0)	0
Translation difference	556	2	1	0	559
Carrying amount of right-of-use assets, end of period	27 649	690	1 609	4 500	34 449
Remaining lease term	1-6 years	1-4 years	1-3 years	1-3 years
Depreciation method	Linear	Linear	Linear	Linear

Lease liabilities

NOK thousand	30 Sep 2023
Undiscounted lease liabilities and maturity of cash outflow
< 1 year	16 284
1-2 years	10 676
2-3 years	7 125
3-4 years	2 783
4-5 years	1 111
Total undiscounted lease liabilities, end of period	37 978
Discount element	(1 592)
Total discounted lease liabilities, end of period	36 386

NOK thousand	30 Sep 2023	31 Dec 2022
Total lease liabilities, end of period	36 386	43 492

Note 05 Intangible assets

Year to date 30 Sep 2023
			Other intangible	Other intangible	Other intangible
NOK thousand	Goodwill	Customer relations	assets; Custom software	assets; Technical software	assets; Licenses	Total
Cost at 1 Jan 2023	204 581	56 799	51 883	13 654	7 752	334 669
Additions	0	0	0	0	733	733
Additions - internally developed	0	0	6 120	0	0	6 120
Reclassifications between categories	0	0	(2 249)	2 249	0	0
Disposals	0	0	(5 559)	(0)	(161)	(5 720)
Translation difference	2 001	1 657	1 118	954	35	5 765
Cost, end of period	206 582	58 457	51 314	16 856	8 360	341 568
Accumulated amortizations at 1 Jan 2023	0	(22 162)	(21 290)	(6 684)	(3 381)	(53 517)
Amortization	0	(8 768)	(7 523)	(2 305)	(1 675)	(20 271)
Reclassifications between categories	0	0	1 253	(1 253)	0	0
Disposals	0	0	5 559	(0)	84	5 644
Translation difference	0	(415)	(440)	(455)	(17)	(1 327)
Accumulated amortization and impairment, end of period	0	(31 345)	(22 441)	(10 698)	(4 989)	(69 472)
Carrying amount at 30 Sep 2023	206 582	27 112	28 873	6 158	3 371	272 096
Useful life	Infinite	5 yrs	5–10 yrs	5 yrs	3–10 yrs

Full year 2022

	Goodwill	Customer relations	Other intangible assets;	Other intangible assets; Technical software	Other intangible assets; Licenses
NOK thousand			Custom software			Total
Cost at 1 Jan 2022	205 279	57 526	29 975	54 353	4 979	352 112
Additions	0	0	887	0	1 240	2 127
Additions - internally developed	0	0	11 755	0	0	11 755
Less government grants	0	0	(1 006)	0	0	(1 006)
Reclassifications 1	0	(691)	44 003	(32 619)	1 551	12 243
Sale of asset	(910)	0	0	(9 202)	0	(10 113)
Disposals	0	0	(35 302)	0	0	(35 302)
Translation difference	213	(36)	1 570	1 122	(17)	2 852
Cost, end of period	204 581	56 799	51 883	13 654	7 752	334 669
Accumulated amortizations at 1 Jan 2022	0	(11 495)	(10 093)	(13 523)	(643)	(35 755)
Amortization	0	(11 360)	(13 962)	(3 887)	(1 689)	(30 898)
Impairment	0	0	(5 606)	0	0	(5 606)
Reclassifications 1	0	691	(19 283)	7 614	(1 054)	(12 032)
Sale of asset	0	0	0	3 527	0	3 527
Disposals	0	0	28 408	0	0	28 408
Translation difference	0	2	(754)	(416)	6	(1 162)
Accumulated amortization and impairment, end of period	0	(22 162)	(21 290)	(6 684)	(3 381)	(53 517)
Carrying amount at 31 Dec 2022	204 581	34 637	30 593	6 969	4 372	281 152
Useful life	Infinite	5 yrs	5–10 yrs	5 yrs	3–10 yrs

¹ Reclassifications made between categories

Note 06 Financial items

	For the quarter end		Year to date
NOK thousand	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
Finance income
Interest income	99	247	411	256	291
Realized foreign exchange gains	429	471	1 935	999	2 153
Net unrealized foreign exchange gains	(698)	1 001	202	1 868	1 522
Other financial income	65	15	194	1 191	1 225
Total financial income	(104)	1 733	2 742	4 314	5 191
Finance expenses
Interest on debts and borrowings	(305)	(315)	(860)	(503)	(697)
Interest expense on lease liabilities	(321)	(245)	(977)	(947)	(1 236)
Realized foreign exchange losses	(923)	(271)	(3 691)	(625)	(1 998)
Other financial expenses	(167)	(207)	(668)	(1 098)	(1 349)
Total financial expenses	(1 717)	(1 038)	(6 197)	(3 173)	(5 280)
Net financial items	(1 821)	695	(3 454)	1 141	(89)

Note 07 Earnings per share

	For the quarter end		Year to date
NOK thousand	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
Net profit/(loss) to equity holders	(2 917)	(17 312)	(12 691)	(56 496)	(83 393)
Total	(2 917)	(17 312)	(12 691)	(56 496)	(83 393)
Number of shares (in thousands)
Weighted average number of ordinary shares 1	69 057	687 481	69 057	648 757	658 989
Effects of dilution, weighted average	383	5 871	383	5 871	5 664
Weighted average number of shares, adjusted for effects of dilution	69 440	693 352	69 440	654 628	664 652
Basic earnings per share (NOK)	(0.04)	(0.03)	(0.18)	(0.09)	(0.13)
Diluted earnings per share (NOK) 2	(0.04)	(0.03)	(0.18)	(0.09)	(0.13)

¹ Reverse share split 10:1 in Q1 2023

² If Net loss, EPS per Basic and Diliuted share will be equal

Note 08 Issued shares, share capital and shareholder information

Issued shares and share capital
	Number of shares	Share Capital (NOK)
1 January 2020	16 077 403	16 077 403
Capital issue, Jan	7 164 688	7 164 688
Capital issue, Mar	41 666 666	41 666 666
Capital issue, Mar	25 000 000	25 000 000
Capital decrease, Nov		(64 734 305)
New shares, Oct	235 819 574	66 029 481
Share issue, repair offer, Nov	32 855 000	9 199 400
Share issue, employee offer, Nov	10 000 000	2 800 000
Share issue, private placement, Dec	50 000 000	14 000 000
1 January 2021	418 583 331	117 203 333
Capital issue in relation to acq. of Facil, Jan	12 423 200	3 478 496
Capital issue in relation to acq. of Microsky, Feb	3 499 998	979 999
Capital issue in relation to acq. of Innit, Mar	5 606 400	1 569 792
Capital issue in relation to acq. of Qualisoft, May	15 000 000	4 200 000
Capital issue in relation to acq. of Maksit, Aug	5 000 000	1 400 000
Capital issue in relation to merger with Arribatec AS, Sep	124 790 135	34 941 238
31 December 2021	584 903 064	163 772 858
Capital issue, April	100 000 000	28 000 000
Share issue, repair offer, July	3 625 153	1 015 043
Capital issue in relation to acq. of Integra, Nov	2 045 000	572 600
31 December 2022	690 573 217	193 360 501
Capital issue, February	3	1
Reverse share split (10:1), March	(621 515 898)
30 September 2023	69 057 322	193 360 502

20 largest shareholders at 30 Sep 2023

Holding Stake FERNCLIFF LISTED DAI AS 16 655 404 24.1% TITAN VENTURE AS 2 988 661 4.3% ARRIBA INVEST AS 2 660 000 3.9% DALLAS ASSET MANAGEMENT AS 2 467 200 3.6% JOAR AARENES 2 411 185 3.5% NORDNET BANK AB 1 798 805 2.6% SRK CONSULTING AS 1 780 947 2.6% ERIK SKAAR OPDAL 1 695 200 2.5% TRUDE HALVORSEN 1 079 789 1.6% HANEKAMB INVEST AS 1 055 347 1.5% DATUM AS 854 291 1.2% MIDDELBOE AS 701 115 1.0% EXCESSION AS 700 000 1.0% NORSK REGNESENTRAL 677 074 1.0% KRISTIAN FALNES AS 630 000 0.9% DANSKE BANK A/S 606 984 0.9% LARS HUGO BRAADLAND OLSEN 574 850 0.8% LCS AS 551 801 0.8% JAN ARNE CHRISTENSEN 524 675 0.8% NORDLYS TRADING AS 450 000 0.7% Total 20 largest shareholders 40 863 328 59.2% Other shareholders 28 193 994 40.8% Total 69 057 322 100.0%

Shares held by related parties

	Holding	Stake
FERNCLIFF LISTED DAI AS	16 655 404		24.1% Related to Øystein S. Spetalen, Member of the Board in Arribatec Group ASA
HANEKAMB INVEST AS	1 055 347		1.5% Related to Martin Nes, Chairman of the Board in Arribatec Group ASA
FINANCE RESOURCES GJ AS	360 609		0.5% Related to Geir Johansen, CEO of Arribatec Group ASA
TERJE MJØS HOLDING AS	150 000		0.2% Related to Terje Mjøs, Member of the Board in Arribatec Group ASA
KJØLVIK INVEST AS	58 334		0.1% Related to Ole-Jakob Kjølvik, COO of Arribatec Group ASA
SICUBI AS	24 072		0.0% Related to Bente Brocks, CFO (interim) of Arribatec Group ASA
HELLEBUST, KRISTIN	22 728		0.0% Related to Kristin Hellebust, Member of the Board in Arribatec Group ASA

Note 09 Interest bearing debt

NOK thousand

Debt financial institutions	Type	Currency	Facility limit	Interest rate	Year of maturity	30 Sep 2023	31 Dec 2022
Danske Bank	Revolving credit facility	NOK	20 000	NIBOR+2.75%	2023	14 420	6 750
DLL	Leasing & finance company	NOK		4.5%	2024	77	244
Bank Intesa, Italy	Unsecured bank facilities	EUR		EURIBOR+1.95%-2.40%	2027	8 455	8 411
Bank Progetto, Italy	Unsecured bank loan	EUR		EURIBOR+5%	2025	4 262	5 759
Bank Carige, Italy	Unsecured bank loan	EUR		1.3%	2027	6 104	6 863
Bank Passadore, Italy	Unsecured bank loan	EUR		EURIBOR+1.5%	2028	2 831	3 154
Italian banks, ref above	Revolving credit facility	EUR		1.0-4.75%	2023	0	29
Total						36 149	31 211

Credit facilities	Other borrowings	Total
6 779	24 431	31 211
14 649	0	14 649
(7 010)	(4 405)	(11 414)
7 639	(4 405)	3 234
2	1 702	1 704
14 420	21 728	36 149

Note 10 Transactions with related parties

There are no transactions with related parties since January 2022.

APMs, terms and abbreviations ^

		For the quarter end		Year to date
NOK thousand	30 Sep 2023	30 Sep 2022	30 Sep 2023	30 Sep 2022	Full year 2022
EBITDA	8 965	(6 671)	22 648	(24 391)	(34 107)
Restructuring cost	0	441	0	3 779	3 779
Bad debt in relation to discont. product	0	0	0	0	1 048
Sale of intangible asset (IP)	0	0	0	0	4 190
Sanctions 1	0	(545)	0	0	0
Adjusted EBITDA	8 965	(6 775)	22 648	(20 612)	(25 090)

¹ Accrual for ECL Russia, reversed in Sep-22

APM cost is considered as one-time and not part of the ongoing business and are therefore adjusted to show an EBITDA mirroring the underlying business.

Restructuring cost is related to the restructuring of BA Marine, bad debt in relation to discontinued product in BA Business Services and Sale of intangible asset is related to loss on sale of IP in BA Marine.

KPI/APM definition

KPI/APM	Definition
Gross profit	Operating revenue less materials, software and services
EBITDA	Earnings before Interest, Tax, Depreciation and Amortization
Adjusted EBITDA	EBITDA, adjusted for calculated reverse take-over cost, restructuring cost and direct M&A cost
EBITDA margin	EBITDA as a percentage of Total income
Equity ratio	Equity as a percentage of total assets

Terms and abbreviations

APAC	Asia/Pacific
BA	Business Area
BizS	BA Business Services
BoD	Board of Directors
BPM	Business Process Management
CAGR	CAGR Compound Annual Growth Rate, used to measure an investment's annual growth rate over time, with the effect of compounding taken into account.
CGU	Cash Generating Unit
Cloud	BA Cloud
DKK	Danish Krone
EA-BPM	BA Enterprise Architecture & Business Process Management
EBIT	Operating profit, Earning before Interest and Tax

EBITDA	Earnings Before Interest, Tax, Depreciation and Amortization
ECL	Estimated Credit Losses
EPS	Earnings Per Share
EUR	Euro
FTE	Full Time Equivalent
Hspt	BA Hospitality
IFRS	International Financial Reporting Standards
Marine	BA Marine
M&A	Mergers and Acquisitions
NOK	Norwegian Krone
Opex	Operating expenses
RR	Recurring revenue, derived from sale of services and solutions through subscription models this reporting period
RTO	Reverse take over
SEK	Swedish Krone
Saas	Software as a service
Solaas	Solution as a service
USD	US dollar
VIU	Value in Use
WACC	Weighted Average Cost of Capital
WAEP	Weighted Average Exercise Price

Arribatec is a global supplier of digital business solutions that help our customers achieve competitive advantage through innovative use of IT.

+47 4000 3355 info@arribatec.com

Arribatec Group ASA Lørenfaret 1D N-0585 Oslo

Next event

14 February 2024

Contact: ir@arribatec.com