Crayon Group Holding — Earnings Release 2023

Aug 24, 2023

Crayon Q2 2023: Strong growth momentum continues

Crayon Q2 2023: Strong growth momentum continues

Crayon Group Holding ASA (OSE: CRAYN) today reported its second-quarter results with a Gross Profit growth of 23%, driven by a strong demand for software and cloud, particularly in Europe and the Nordics. Performance in the US is materializing as planned with Gross Profit growing 31% in the quarter. Software and Cloud Economics Gross Profit increased 28%, reflecting its importance and high demand from customer to reduce their software and cloud spend.

Financial highlights

Gross Profit NOK 1.553m Up 23% (14% constant currency)

Adjusted EBITDA NOK 351m Up 2%

Net Income NOK 68m Up 183%

Adjusted EBITDA increased 2% to NOK 351. The margin development reflects the continuous investments, in particular in service capabilities, to capitalize on the growth momentum. In addition, rising inflation limits short-term profit improvement as there is a time lag before adjustments to the cost base and price increases to customers materializes.

To reflect the strong market demand and growth momentum for Software and Cloud and associated services, the company is increasing its outlook for Gross Profit growth from ~20% to ~25%.

Crayon’s profitability for the first half of 2023 was solid, despite being impacted by rising inflation and investments as described above. Overall profitability remains largely unchanged but delivered through a higher growth and thereby a lower margin. As a result, Crayon is changing its 2023 outlook for adjusted EBITDA margin from 20-21% to 19-20%.

Net working capital improvement remains a priority and focus but is impacted by outstanding receivable in the Philippines. To reflect the progress year to date, the company changes its outlook from -5% to -15% to -5% to -10% (Average net working capital last four quarters as share of Gross Profit last four quarters)

Revised full year outlook:

• Gross Profit growth ~25% (previously~20%)

• Adjusted EBITDA 19-20% (previously 20-21%)

• Net working capital -5 to -10% (previously -5% to -15%)

• Capex NOK 125m (unchanged)

“We continue to see a strong demand for software and cloud cost optimization,” said CEO Melissa Mulholland. “With our capabilities and services-led go to market, we are in a unique position to capture market opportunity, further drive growth, and create more customer value.”

Net income ended at NOK 68m, an improvement of NOK 44m mainly due to reduced negative currency effects from revaluation of balance sheet items. Positive effect from currency translation of subsidiaries to NOK in net comprehensive income amounted to NOK 122m, whereof cash related currency translation amounted to 48m.

Cashflow from operations ended at NOK 158mm, a reduction of NOK 291m compared to Q2 2022 driven mainly by change in net working capital.

The financial report and presentation for Q2 2023 are enclosed and available at https://www.crayon.com/investor-relations/

CEO Melissa Mulholland and CFO Jon Birger Syvertsen will present the results in a live webcast at 8:30 am CET that can be accessed at www.crayon.com/investor-relations. It will be possible to submit questions online. A recording of the webcast will be available on-demand after the live event has concluded.

Investor contact:

Kjell Arne Hansen

Head of Investor Relations

ir@crayon.com

+47 950 40 372

About Crayon:

Crayon is a customer-centric innovation and IT services company with over 4,000 team members across 46 countries. We optimize businesses’ IT estate to help them innovate with expertise they can trust. Our services create value for companies to thrive today, and scale for tomorrow. For more information, visit www.crayon.com.