Columbus — Earnings Release 2017

Mar 15, 2018

Successful execution of the Columbus2020 strategy with a revenue of DKK 1.2bn,
a growth of 2%. EBITDA increased by 3% to DKK 149m, and result after tax
increased by 18% to DKK 96m.

Release no. 4/2018

Columbus A/S has today published the Annual Report 2017, cf. release no. 3/2018.

In 2017 Columbus delivered a revenue of DKK 1.2bn, and EBITDA* amounted to DKK
149m, corresponding to an increase of 2% and 3%, respectively, compared to
2016. The result after tax increased by 18% to DKK 96m.

The revenue growth was primarily driven by the emerging cloud business, growth
in the services business and acquisitions made in 2016 and 2017.

The increase in EBITDA* was primarily due to growth in profitability in the
services business, which increased by 19%, but was negatively affected by the
development in Columbus’ business in the US.

Based on the result for the year and cash flow, the Board of Directors proposes
that the General Meeting adopts a dividend payment of 10% of the nominal share
capital.

Management initiatives in 2017

-- Execution of the Columbus2020 strategy
-- Execute cloud transition plan
-- Acquisitions:
-- Tridea Partners
-- Offer to buy iStone AB
-- Recovery initiatives for Columbus US

Succesful execution of Columbus2020

Columbus continued the execution of Columbus2020 as planned. In 2017 Columbus
focused particularly on improving customer success and customer loyalty, and
during the year the number of loyal customers increased considerably.

In 2017, Columbus launched a range of new services within Application
Management and Infrastructure Management, which means that Columbus is now able
to support the customers’ entire applications and IT infrastructure.

Cloud market leaders

During 2017, Columbus converted the Company’s software portfolio into
cloud-based solutions and developed new services to support the customers
running their applications in the cloud. Today, Columbus is among the market
leaders in implementing business application projects in the cloud.

Acquisition of iStone

On 30 November, Columbus announced an offer to acquire the Swedish IT services
company iStone with 600 employees. The acquisition was completed 2 January
2018. The acquisition will grow Columbus’ revenue by approx. 50% and position
Columbus as market leader within digital transformation in the Nordic region as
well as increase global reach significantly.

Challenges in Columbus US

During first half of 2017, Columbus’ business in the US faced market challenges
that led to declining sales. The challenge with the US market has continued
through Q4 and we experienced sales execution below expectations and unexpected
losses on customer engagements of DKK 4m. Overall the challenges in the US
business had a negative impact on revenue of approximately DKK 70 million and a
negative impact on EBITDA of approximately DKK 31m. During 2017, the US
business has adjusted the cost level in order to compensate for the reduced
revenue.

Financial statements for 2017

The revenue increased by 2% to DKK 1.2bn in 2017. In local currency revenue
increased by 3%. EBITDA2 increased by 3% to DKK 149m. Revenue is in the lower
end of the announced expectations.

The revenue from Columbus’ services business increased by 3% to DKK 823m.
Service EBITDA increased by 19% to DKK 109m which is in the lower end of the
announced expectations.

The revenue from Columbus Software decreased by 9% to DKK 83m (2016: 91m). The
decrease is due to the cloud conversion, as license sales decreased by 37%.
However, sale of subscriptions increased by 7% and own cloud revenue increased
by 216% to DKK 6.2m. This development is in line with expectations.

Recurring revenue increased from 25% of total revenue to 28%. The increase is
primarily due to an increase in sale of Columbus Care which grew by 43% and
growth in the sale of cloud based solutions. The development is in line with
the announced expectations.

EBITDA after share-based payment increased by 6% to DKK 146m compared to 2016
(DKK 139m). Profit after tax increased by 18% to DKK 96m (2016 DKK 82m) and is
considered satisfactory.

Expectations for 2018

2018 will be focused on growing the business organically with retained
profitability while ensuring a successful integration of iStone and other
acquisitions. Management will also have high focus on getting the US business
back on track.

Specific targets for 2018:

-- Revenue in the level of DKK 2bn
-- EBITDA* in the level of DKK 200m
-- Columbus Software in the level of DKK 90m
-- 10% dividend on nominal share capital

Expected integration and restructuring costs of DKK 10-15m in relation to the
integration of iStone and HiGH Software are included in the expectations to
EBITDA* for 2018.

Columbus increases expectations to acquisition price and contribution from the
iStone acquisition

At the time of announcement of the iStone acquisition, Columbus expected iStone
to deliver revenue in the level of SEK 800m (DKK 600m) and an EBITDA in the
level of SEK 41m (DKK 31m) i 2017.

Due to a high activity level and a good final sprint, iStone ended the year
better than expected. Thus, the preliminary unaudited financial statements for
2017 for iStone show a revenue of SEK 830m (DKK 623m) and an EBITDA of SEK 56m
(DKK 42m).

At closing on 2 January 2018, the total acquisition price for iStone was
expected to amount to between SEK 430m (DKK 323m) and SEK 570m (DKK 428m), of
which SEK 230m (DKK 173m) was paid at closing. Based on the preliminary result
for 2017 and adjusted expectations for 2018, the total acquisition price is
expected to increase to between SEK 514m (DKK 386) and SEK 682m (DKK 512m). The
increased acquisition price will be paid over the next three years and is
expected to be financed by liquidity from operations.

As a consequence of the final sprint and subsequent momentum, iStone is
expected to deliver revenue in the level of SEK 840m (DKK 630m) and an EBITDA
in the level of SEK 60m (DKK in 45m) in 2018.

Updated long-term guidance

Columbus has updated the long-term guidance for the next three years.

With the acquisition of iStone and HiGH Software Columbus has taken a large
step in reaching the financial goals for 2020.

With the acquisition of iStone the Company’s focus will be to grow the business
organically. The ambition is to grow the business at a compounded average
growth rate of 3-5% each year. If Columbus makes any acquisitions during the
period, expectations will be adjusted accordingly.

In 2017 Columbus realized an EBITDA margin of 12%. With the acquisition of
iStone, the EBITDA margin for 2018 is expected to be in the level of 10%.

Columbus maintains long-term guidance of 11% EBITDA margin towards 2020.

”We are satisfied with the result for 2017 where we grew our business while
developing and selling a range of new cloud-based solutions helping our
customers in the digital transformation. The result has shown that Columbus can
deliver on our vision about growth and innovation in a rapidly changing
market”, says CEO & President in Columbus, Thomas Honoré.

Investor presentation

Columbus’ Executive Board will present the results for 2017 at a conference
call today at 13:00CET.

Please use the following dial-in numbers:

Denmark: +45 35 15 81 21

UK/international: +44 (0) 330 336 9411

US: +1 323 994 2083

Conference ID 1227866

It is also possible to follow the online webcast via this link:
edge.media-server.com/m6/p/u6fejqs3

A recorded version of the presentation will be available on the website after
the webcast has concluded:

www.columbusglobal.com.

Ib Kunøe Thomas Honoré
Chairman CEO & President
Columbus A/S Columbus A/S
For further information, please contact:
CEO & President, Thomas Honoré .: +45 70 20 50 00

Translation: In the event of any inconsistency between this document and the
Danish language version, the Danish language version shall be the governing
version.

Columbus’ Columbus2020 strategy – towards growth

Based on Columbus’ strengthened position, as a result of successful execution
of the Columbus15 strategy, the company launched a growth strategy in March.
The strategy is named Columbus2020 and consists of four interconnected
strategic elements.

Customer Success – Taking care of our customers for life
Columbus’ fundamental goal their ERP investments and satisfaction from the
is to take care of our by leading them in the customer meet Columbus
customers for life. digital transformation of for the first time to
Columbus aims to be their business delivering unique
widely recognized as a This means that Columbus solutions, high quality
strategic business will intensify the focus services and
partner that enhances our on creating a unique streamlined project
customer’s success by customer experience and delivery and support
improving the value increase customer 24/7.
realization of

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Digital Leadership – Accelerate business innovation
Columbus helps our methodologies and business business in order to
customers in the digital processes that optimizes succeed in the digital
transformation of their and improves the economy. Columbus will
business. With Digital implementation of develop solutions and
Leadership Columbus has ERP-solutions. Secondly, services within cloud,
two focus areas. Firstly, Columbus will establish a mobile, social,
Columbus will continue to leadership position analytics and Internet
strengthen our leadership within Digital of Things that help
position within ERP by Transformation. Many companies take
investing in new companies are about to or advantage of the
companies, applications, in the process of digital opportunities.
transforming their

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Process Excellence – Quality in everything we do
In Columbus, we constantly quality to our customers. over sales and design of
strive to optimize and Our goal is to create the the business solution
streamline our business best customer experience to the implementation
operations in order to in the industry. The process and lifetime
achieve strong sales focal point is quality in support. This means an
excellence and deliver everything we do – from intense focus on
projects, services and the initial contact with optimizing and
support of high customers, streamlining our
processes globally.

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Our People – Attract, develop and retain the best people
Columbus’ greatest asset providing challenging meeting the customers’
is our employees and career opportunities, expectations sets the
therefore it is crucial attractive working direction in everything
that we attract and conditions and we do.
retain the best people in professional and personal This means that Columbus
the industry. We want to growth. Columbus want to always strives to
attract highly skilled create a customer deliver projects on
people by culture, where time, within budget and
at the highest quality.