Crayon Group Holding — Investor Presentation 2021

Aug 11, 2021

Quarterly Results – Q2 2021

Melissa Mulholland & Jon Birger Syvertsen

Disclaimer

These materials may contain statements about future events and expectations that are forward-looking statements. Any statement in these materials that is not a statement of historical fact including, without limitation, those regarding Crayon Group Holding ASA's (the "Company") financial position, business strategy, plans and objectives of management for future operations is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialise or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors, including, among others competition from Nordic and international companies in the markets in which the Company operates, changes in the demand for IT services and software licensing, changes in international, national and local economic, political, business, industry and tax conditions, the Company's ability to realise backlog as operating revenue, the Company's ability to correctly assess costs, pricing and other terms of its contracts, the Company's ability to manage an increasingly complex business, political and administrative decisions that may affect the Company's public customer group contracts, the Company's ability to retain or replace key personnel and manage employee turnover and other labour costs, unplanned events affecting the Group's operations or equipment, the Company's ability to grow the business organically, changes regarding the Company's brand reputation and brand image, fluctuations in the price of goods, the value of the NOK and exchange and interest rates, the Company's ability to manage its international operations, changes in the legal and regulatory environment and in the Company's compliance with laws and regulations, increases to the Company's effective tax rate or other harm to its business as a result of changes in tax laws, changes in the Company's business strategy, development and investment plans, other factors referenced in this report and the Company's success in identifying other risks to its business and managing the risks of the aforementioned factors. Should one or more of these risks or uncertainties materialise, or should any underlying estimates or assumptions prove to be inappropriate or incorrect, our actual financial condition, cash flows or results of operations could differ materially from what is expressed or implied herein. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.

This presentation does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. The contents of this presentation have not been independently verified. The Company's securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and are offered and sold only outside the United States in accordance with an exemption from registration provided by Regulation S of the US Securities Act. This presentation should not form the basis of any investment decision. Investors and prospective investors in securities of any issuer mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of such company and the nature of the securities.

Q2 2021

Business Update Melissa Mulholland

CRAYON

Crayon at a glance

20 years of expertise in software and cloud advisory

Publicly listed on the Oslo Stock Exchange with a market cap of NOK 12.6 billion

~60,000 customers from SMB to enterprise across all industries segments with high share from public

~2,000 certifications on a wide range of technology solutions

80% global market coverage with over 50 offices across 37 countries

sector

Strong relationships and strategic partnerships

with leading technology vendors and cloud partners

An international growth story with strong momentum

Crayon helps its customers build the commercial and technical foundation for a successful and secure cloud-first, digital transformation journey

CRAYON Crayon's framework

Crayon's three-step framework to optimize customers' IT spend

Crayon successfully manages the dual relationship with customers and software vendors by obtaining higher business value for clients and higher IT spend

Q2 2021 highlights & focus

Strong market outlook 1

Customer-centric strategy 2

Strong performance 3

STRONG MARKET OUTLOOK

Global IT spending is growing and becoming increasingly important

Global IT spending expected to reach over USD 2 trillion in 2022 IT spending is becoming a strategic consideration Global IT spending in USDbn¹ Median IT spend as % of revenue²

Strong growth in IT spending with an expected CAGR of 8.6% from 2020 to 2022¹ Strong underlying demand for IT cost optimization as clients require «more and better» IT advice

1 Overall IT spending excluding devices and communication services. Gartner IT Spending Forecast April 2021 2 Flexera 2021 State of Tech Spend Report 7

STRONG MARKET OUTLOOK

IT projects have an increasing priority – driving IT budgets

Main challenges listed by % of companies surveyed Main factors listed by % of companies surveyed

Top cloud challenges Most important factors for increased IT budgets

Approximately 80% of companies expect their IT budgets to increase or remain stable % of companies surveyed

STRONG MARKET OUTLOOK

Long term sustained growth expected in the APAC region

The APAC market for managed cloud services is the fastest growing region globally

Managed services and cloud infrastructure services APAC IT spending, CAGR per region, 2020 – 2025E

Global trends

• Public cloud markets are forecasted to grow 3.5 times faster than IT spending generally
• By 2025, 75% of large organizations would have used external consultants to develop their cloud strategy
• By 2025, 85% of large organizations would have engaged external service providers to migrate applications to cloud
• Significant opportunity beyond enterprises, small and medium businesses have immediate for moving to the cloud (further accelerated by the pandemic)

APAC

• Higher growth than other geographies due to relative immaturity
• Infrastructure as a service is the fastest growing subsegment of cloud managed services in the region – growing close to 50% in 2021 and expected to grow +30% in the period 2020 – 2025E

The Crayon differentiation & strategy

Crayon named a Leader by Gartner for the 2nd consecutive year

Crayon demonstrated benefit delivery beyond its peers

• The market leader position is a confirmation of Crayon's success in helping customers optimize, manage, and innovate their IT estates
• The report highlights that managed software asset management is a discipline Crayon has been perfecting for about 20 years
• Crayon's SAM manged service client volume, contract maturity and proportion of continuous SAM service delivery are all among the highest in the industry
• Crayon scored especially high within innovation and IP, and is praised by reference clients for service methodology and execution
• Strong delivery platform supporting growth: Crayon's Service-iQ, a global delivery and collaboration platform, provides a single-source view of mitigation, risk avoidance, and savings recommendations and realizations.
• The Crayon subsidiary Anglepoint is the only provider with no bottom-three scores across the 15 assessed criteria in the report

Gartner, Magic Quadrant for Software Asset Management Managed Services, Stephen White, Yoann Bianic, Rob Schafer, 6 July 2021 *This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Crayon. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

Microsoft Partner of the Year Awards

• Crayon Saudi Arabia
• Crayon Philippines
• Crayon Corporate Accounts Portugal

Continued strong performance accelerated

1 Adjusted EBITDA – EBITDA adjusted for share based compensation and other one-off income and expenses

Strong performance across business areas

	Software & Cloud Direct	Software & Cloud Channel	Software & Cloud Economics Services	Consulting Services
Gross profit growth1	+17%	+4%	+12%	+46%
Customer Retention2	94%	98%	78%	89%
Significant customer wins
Q2 drivers and outlook	Market share gains (MS • revenue growth 2x the market) • Product mix improvements (e.g. non-MS, Premium Cloud) • Compelling USP (bundling cost saving services) • Highest growth in USA, APAC and Eastern Europe	Solid results on well profiled • partner recruitment aligned to Q2 campaign with security & backup focus • High demand on ISV services and Dynamics support resulting in positive service mix to partners • Continued strong YoY EBITDA growth with existing partner channel • Focus on enablement and upskill to channel cloud transformation	Strong market demand for • cost optimization • Increasing demand for multi Cloud governance practice • Strong performance in Nordics, Germany & Switzerland and APAC • Continued strong onboarding of managed service customers to the service delivery portal Service-iQ	US market landing significant • services wins data and app modernization with multicloud capability • Strong growth in renewal contracts (3 – 5 year engagements) • Continued strong demand for remote delivery of Data & AI services • Launched Backup Managed Service through Sensa & Acronis

Q2 customer stories

Significant Public Sector Wins in APAC

• 120k new Microsoft cloud seats just with Queensland Government in Australia
• Represents 70%+ of all government spent

Q2 customer stories Strategic value creation levers

• Advisory Projects helps to build trust and confidence in Crayon skills
• Pathway to managed services
• Strategic Advisor in customer's digital transformation journey

Q2 customer stories

After ~2 years of preparation Lithuanian railways in 2020 announced a multicloud public tender with the objective to adopt public cloud services and over the 5-year period migrate up to 90% of the existing environment to the public cloud.

Key focus areas are:

• SAP deployment of ERP on cloud platform
• Data platform modernization
• Cargo application migration to cloud

Q2 customer stories Strategic value creation levers

Multicloud Innovation: Crayon Cloud Services:

• Cloud platform assessment and selection, business and technical workshops with Microsoft and AWS involvement
• AWS MAP program setup for SAP workloads deployment and migration to the cloud
• Azure platform utilization for Business-critical apps e.g. cargo management

Q2 customer stories

Data & AI

Remote global delivery across industries

• Developed an anomaly detection system for predicting oil rig machinery issues for leading global oil and gas company
• Support CW&D to index thousands of PDF and images of technical documents to easily retrieve the relevant data in the future by searching for keywords
• Lithuania Railways: Largest railway company in Lithuania who wants to build a Cloud Data Platform

Q2 customer stories Strategic value-creation levers

• Investment: Managed service product development roadmap
• Managed service offer predictive maintenance platform market ready
• Launch APAC CoE
• 15 new delivery resources onboarded since Jan 2021
• Further enhancement of our cloud data platform blueprints due to existing customer engagement

Financial Review

Q2 2021 CFO Jon Birger Syvertsen

1

2

3

Q2 2021 - Summary

Scalability of business model demonstrated across regions

Continued strong working capital performance

Updated 2021 guidance

Strong growth across markets in Q2

Compared to corresponding period last year

Growth across all business areas

Compared to corresponding period last year

Q2 2021

International expansion momentum continues

• Continued strong gross profit growth in international markets
• EBITDA contribution from International markets demonstrates scalability of business model

1 Adjusted EBITDA is reported EBITDA less other income & expenses items netted under HQ, hence not reflected on Market Cluster / Business Area level

Q2 2021 APPENDIX

International EBITDA margins continue to improve

LTM adjusted EBITDA margin¹

• Nordics with continued strong EBITDA margins
• APAC&MEA and Europe EBITDA margins improving as business scale
• Continued positive EBITDA margin in the US

Working capital driven by seasonality

Strong liquidity position end Q2

• Cash flow from operations is seasonal and driven by changes to net working capital
• Strong liquidity position of NOK 1.4 bn as a consequence of strong business and working capital

1 EBITDA (non-adjusted)

2 As seen from the cash flow statement; Acquisitions include business combinations.

3 Also includes cash flow effects from IFRS 16, cash flow from financing activities, etc..

4 Liquidity reserve is reported in the 'Alternative Performance Measures' section in the quarterly report, and is defined as the sum of freely available cash and available credit facilities

P&L - summary

NOKm	Q2 2021	Q2 2020	YTD Q2 2021	YTD Q2 2020
Operating revenue	8 071 3 ,	6 095 0 ,	13 593 8 ,	10 299 0 ,
Cost of sales	259 -7 7 ,	429 2 -5 ,	-12 147 2 ,	-9 118 0 ,
Gross profit	811 6 ,	665 8 ,	1 446 6 ,	1 181 0 ,
Payroll and related costs	-481 5 ,	-449 9 ,	-970 9 ,	-845 4 ,
Other operating expenses	-70 4 ,	-51 5 ,	-134 8 ,	-132 8 ,
Total operating expenses	-551 9 ,	-501 4 ,	-1 105 6 ,	-978 1 ,
EBITDA	259 7 ,	164 4 ,	340 9 ,	202 9 ,
Depreciation	-17 2 ,	-13 1 ,	-31 7 ,	-25 6 ,
Amortisation	-22 6 ,	-21 5 ,	-44 1 ,	-41 6 ,
EBIT	220 0 ,	129 8 ,	265 1 ,	135 7 ,
Interest expense	9 5 ,	7 8 ,	19 8 ,	23 2 ,
Other financial expense, net	26 3 ,	-9 8 ,	32 2 ,	22 1 ,
Ordinary before result tax	184 1 ,	131 8 ,	213 1 ,	90 3 ,
Income expense on ordinary result tax	-19 3 ,	-29 3 ,	-33 1 ,	-39 4 ,
Net (loss) income	164 8 ,	102 6 ,	180 0 ,	51 0 ,
Adjusted EBITDA reconciliation
Reported EBITDA	259 7 ,	164 4 ,	340 9 ,	202 9 ,
Other income and expenses	-3 9 ,	6 8 ,	7 9 ,	8 9 ,
Adjusted EBITDA	255 8 ,	171 2 ,	348 9 ,	211 8 ,

• Depreciation and amortization in line with plan
• Interest expenses increased YoY due to higher RCF costs and a positive impact in Q2 2020 from a currency swap
• EBITDA adjustments in Q2 2021 decrease EBITDA with NOK -3.9m, driven by NOK 10.2m related to share-based compensation and NOK -14.1m due to a forgivable loan in the US
• Net profit in Q2 2021 increases with NOK 164.8m and YTD of NOK 180.0

Balance sheet and net interest-bearing debt

NOKm		30.06.2021 30.06.2020
ASSETS
Development Costs	94,5	87,6
Technology and software	14,7	24,3
Contracts	175,8	68,1
Software licenses (IP)	2,1	2,4
Goodwill	926,7	869,5
Deferred tax asset	39,3	29,6
Total intangible assets	1 253,0	1 081,5
Equipment	43,1	39,1
Right of use assets	128,6	120,4
Total tangible assets	171,7	159,4
Other non-current receivables	61,2	21,7
Inventory	9,6	19,0
Accounts receivable	5 218,2	4 030,7
Other current receivables	639,2	160,9
Cash & cash equivalents	1 414,6	1 689,4
Total current assets	7 281,6	5 899,9
Total assets	8 767,4	7 162,5

LIABILITIES AND SHAREHOLDERS' EQUITY

Total equity and liabilities	8 767,4	7 162,5
Total liabilities	7 404,8	6 154,8
Total current liabilities	6 915,6	5 660,4
Other current liabilities	820,0	545,2
Other current interest bearing debt	100,2	57,1
Current lease liabilities	31,6	29,6
Public duties	561,9	286,4
Income taxes payable	60,6	39,5
Accounts payable	5 341,2	4 702,6
Total long-term liabilities	489,3	494,3
Other non-current liabilities	71,2	76,2
Lease liabilities	104,8	95,8
Deferred tax liabilities	16,8	28,4
Bond loan	296,4	294,0
Total shareholders' equity	1 362,6	1 007,8
Non-controlling interests	18,5	-7,0
Total equity attributable to parent company shareholders1 344,1		1 014,7
Retained Earnings	206,6	19,3
Sum paid-in equity	1 137,5	995,4
Share premium	1 053,5	914,2
Own shares	0,0	0,0
Share capital	84,0	81,2

	30.06.2021	30.06.2020
Long-term interest bearing debt	300,0	303,8
Other current interest bearing debt	100,2	57,1
Cash and cash equivalents	-1 414,6	-1 689,4
Restricted cash	61,0	23,4
(NIBD) Net interest bearing debt	-953,4	-1 305,1

• The Company reports its cash balance net of drawdown on its revolving credit facility ("RCF")
• Approx. NOK 556m of goodwill relates to the Oslo Stock Exchange delisting of Inmeta-Crayon in 2012
• Note that bond transactional costs of around NOK 7m are capitalized , and accretion expensed over the lifetime of the bond, cf. IAS 39
• Development costs increase y-o-y due to investment in ERP and Cloud IQ platforms.
• Increase in contracts and goodwill mainly driven by the acquisition of Sensa.
• Increase in other current receivables and public duties driven by reclassification of VAT payable
• New bond and RCF for financing Rhipe not included in Q2 balance sheet
• The strong balance sheet supports the Rhipe acquisition and the M&A strategy

Cash flow development

NOKm	Q2 2021	Q2 2020	Q2 YTD 2021	Q2 YTD 2020
Net income before tax	184 1 ,	131 8 ,	213 1 ,	90 3 ,
Taxes paid	-9 8 ,	-5 1 ,	-25 2 ,	-15 4 ,
Depreciation and amortisation incl impairment ,	39 8 ,	34 6 ,	75 9 ,	67 2 ,
Net interest expense	8 1 ,	4 7 ,	15 8 ,	17 0 ,
Changes in inventory AR/AP¹ ,	141 3 ,	760 5 ,	-44 3 ,	859 2 ,
Changes in other assets/liabilities current	266 5 ,	163 6 ,	-6 3 ,	188 3 ,
Net cash flow from operating activities	629 9 ,	1 090 0 ,	228 9 ,	1 206 8 ,
Interest paid credit institutions and interest bond loan to to	-7 5 ,	-21 1 ,	-12 7 ,	-31 5 ,
New Equity / Other	0 0 ,	296 6 ,	-3 8 ,	304 4 ,
Net debt new	-14 0 ,	24 4 ,	-25 4 ,	14 3 ,
Net cash flow from financing activities	-21 6 ,	300 0 ,	-41 9 ,	287 1 ,
Acquisition of subsidiaries assets - net of cash acquired/	-21 5 ,	-17 2 ,	-35 0 ,	-34 9 ,
Business combinations	-122 6 ,	-11 6 ,	-122 6 ,	-12 6 ,
Net cash flow from investing activities	-144 1 ,	-28 8 ,	-157 6 ,	-47 5 ,

• Cash flow from operations in Q2 driven by change in net working capital performance and strong underlying business performance.
• Acquisition of assets in Q2 2021 of NOK 21.5m mainly relates to investments in new ERP system and Cloud IQ platform.
• 'Business combinations' relates to the cash outflow from the acquisition of Sensa.

Outlook

Q2 2021 OUTLOOK

2021 margin outlook updated

	2020 actuals	LTM actuals	2021 outlook	Medium term	Comment
Gross profit growth	+29.6 %	+24.3%	+20-25%	+15-20 %	Continued strong growth momentum
Adjusted EBITDA as share of gross profit	17.6%	21.1%	17-18% ~20%	Gradually increase to 19%	Continuing to invest, but seeing clear benefits from scaling up across markets
NWC1	-30.2 %	-23.8%	-20% to -25%	-15% to - 20%	Expect to sustain ~half of the 2020 NWC improvement medium term
Capex	NOK 81.4m	NOK 81.5m	NOK 80-85 m	NOK~85m	Continued investments in platforms and IP

Q&A

Appendix

LTM gross profit by market cluster

Strong Q2 performance leads to 24% LTM growth

EBITDA margin²

EBITDA

2 Adjusted EBITDA as share of Gross Profit 3 LTM vs previous LTM period

Strong growth across markets in Q2

YoY gross profit growth by market cluster NOK million

YoY Adj EBITDA growth by market cluster NOK million

Strong performance across SW&Cloud and Services

LTM gross profit by business area NOK million

LTM adjusted EBITDA by business area NOK million

margin 1 LTM vs previous LTM period ³ 2 Adjusted EBITDA as share of Gross Profit 3 LTM vs previous LTM period

Strong GP growth across markets and segments

YoY gross profit growth by business area NOK million

YoY Adj EBITDA growth by business area NOK million

Q2 2021 APPENDIX

Services

YoY, %

1 Adj. EBITDA divided by reported gross profit

Q2 2021 APPENDIX

Software

SW & Cloud Direct SW & Cloud Channel

• 1 EBITDA divided by reported gross profit