ECIT AS — Investor Presentation 2022

Nov 17, 2022

Peter Lauring CEO

Mads Skovgaard CFO

ECIT in short

Founded in 2013
+130 acquisitions
~250 partners
People business (+ 2300)
10 countries
Strategic partner

Performance – Q3 and YTD 2022

Financial summary

Highlights – YTD 2022

(NOKm)	Q3 2022	%	Q3 2021	%	YTD 2022	%	YTD 2021	%
Revenue COGS	672 -153	100.0% 22.8%	557 -114	100.0% 20.4%	2,115 -466	100.0% 22.0%	1,735 -374	100.0% 21.6%	Revenue	21.9% Revenue
Gross Profit PEX OPEX	519 -376 -45	77.2% 55.9% 6.7%	443 -319 -43	79.6% 57.3% 7.8%	1,649 -1,218 -148	78.0% 57.6% 7.0%	1,361 -1,015 -120	78.4% 58.5% 6.9%	2,115m (1,735)	growth (33.6%)
EBITDA	99	14.7%	80	14.4%	283	13.4%	226	13.0%
KPIs									9.3%	13.4%
Total revenue growth	20.8%		35.6%		21.9%		33.6%		Organic	EBITDA
M&A revenue growth	10.9%		28.5%		14.1%		28.7%		growth (6.8%)	margin (13.0%)
Organic revenue growth	11.5%		7.9%		9.3%		6.8%
EBITDA-margin	14.7%		14.4%		13.4%		13.0%

Financial performance – Three year overview

EBITDA (NOKm) and margins

Free cash flow (NOKm)

Earning per share (NOK)

Notes: EBITDA = EBITDA before special items. Free cash flow = cash flow from operating activities less IFRS leasing and before special items, R&D and acquisitions Earnings per share = earnings per share adjusted for one-off items

Divisions

F&A division

Financial overview – Q3 2022
(NOKm)	Q3 2022	Q3 2021
Revenue	340	313
EBITDA	53	52
Total revenue growth	9.5%	42.5%
EBITDA-margin	15.5%	16.7%

• Improved organic growth.

• Margin affected by consolidation.
• Internal education program.

Financial overview – YTD 2022

(NOKm)	YTD 2022	YTD 2021
Revenue	1,133	982
EBITDA	185	162
Total revenue growth	15.4%	35.7%
EBITDA-margin	16.3%	16.7%

EBITDA and margin development

IT division

Financial overview – Q3 2022
(NOKm)	Q3 2022	Q3 2021
Revenue	323	247
EBITDA	48	35
Total revenue growth	30.5%	19.5%
EBITDA-margin	14.8%	14.0%

• Good organic growth.

• Large orders.
• Margin affected by consolidation.

Financial overview – YTD 2022

(NOKm)	YTD 2022	YTD 2021
Revenue	953	780
EBITDA	112	84
Total revenue growth	22.2%	27.7%
EBITDA-margin	11.7%	10.8%

EBITDA and margin development

Tech division

Financial summery – Q3 2022
(NOKm)	Q3 2022	Q3 2021
Revenue	39	23
EBITDA	2	0
Total revenue growth	67.3%	45.8%
EBITDA-margin	4.9%	1.7%

• Good organic growth consulting revenue.
• ECIT systems Implementation takes time (ARR).

• Two systems to be mentioned – Intect (DK payroll system) – ECIT Digital (invoice handling).

Financial summery – YTD 2022 Revenue development

(NOKm)	YTD 2022	YTD 2021
Revenue	116	68
EBITDA	0	-6
Total revenue growth	69.8%	47.1%
EBITDA-margin	-0.4%	-8.6%

Acquisitions YTD

M&A – Acquisitions in 2022

M&A acquired revenue (NOKm)

Acquisitions:

• General strengthen competence base, industry position and geographical presence.
• F&A:Competence base and customer portfolio.
• IT: Business process automation, Cloud services portfolio and Digitalization.
• SW/Tech: Cloud-based ERP system and HR-system.
• Debt collection.

Notes:

New management structure

Comments

• New mgmt. structure.
• Three divisions F&A, IT and Tech.
• New Division MD's.
• ECIT origin.

Financial review

Financial review

Profit & loss summarized Comments

(NOKm)	Q3 2022	Q3 2021	Growth	YTD 2022	YTD 2021	Growth
Revenue	672	557	20.8%	2,115	1,735	21.9%
EBITDA	99	80	22.6%	283	226	24.9%
Profit for the period	45	25	82.3%	110	64	72.4%
Adj. profit for the period	33	25	32.7%	97	76	26.6%
P&L items
Special items, net	-2	0	n/a	-11	-8	34%
Financial income	19	6	208%	37	12	204%
Financial expenses	-13	-8	63%	-30	-24	25%
KPIs
Total revenue growth	20.8%	35.6%	-14.8 p.p.	21.9%	33.6%	-11.7 p.p.
M&A revenue growth	10.9%	28.5%	-17.6 p.p.	14.1%	28.7%	-14.6 p.p.
Organic revenue growth	11.5%	7.9%	3.6 p.p.	9.3%	6.8%	2.5 p.p.
Currency impact	-1.6%	-0.8%	-0.8 p.p.	-1.5%	-1.9%	0.4 p.p.
EBITDA-margin	14.7%	14.4%	0.3 p.p.	13.4%	13.0%	0.4 p.p.
EPS	0.04	0.03	23.5%	0.13	0.10	28.2%

• Revenue development according to plan.
• Currency impact (YTD) on par with last year.
• Increased interest rate.
• Divestment of associated company Cloud Connection AS and sale F&A subsidiary ECIT Invent AS.
• EPS improvement.

Cash Flow & Net Working Capital

(NOKm)	YTD 2022	YTD 2021
EBITDA	283	226
Special items	-11	-8
Corporation tax, paid	-44	-30
Change in NWC	14	-2
Cash flow from operations	241	186
Cash flow from investing	-223	-293
Cash flow from financing	-79	116
Cash flow for the period	-61	8
Free cash flow	173	118
Covid-19 impact
NWC Covid-19 impact	1	33
Free cash flow, incl. Covid-19	174	151

Cash Flow Statement Comments Free cash flow incl. Covid-19 (NOK million)

Change in Net Working Capital (NWC)

YTD 2022	YTD 2021
-4	12
7	-19
-1	-33
12	38
14	-2

• NWC back to normal (offset the high NWC last quarter).
• Cash flow from operations match cash outflow from investments.
• Financing activities 2022 leasing & dividends – 2021 listing.

Net debt and leverage ratio

Net interest bearing debt (NOKm)			Leverage ratio		Comments
(NOKm)	YTD 2022	YTD 2021		0.57x	16).
Borrowings	307	190	0.37x
Lease liabilities	192	239
Total interest bearing liabilities	499	428			IFRS16.
Interest bearing receivables	62	56	YTD 2021	YTD 2022
Cash and cash equivalents	207	248
Total interest bearing assets	269	304	Revolving facility (NOKm)
Net debt / Net cash (-)	231	125
EBITDA, LTM	407	333		750
Leverage ratio	0.57x	0.37x	475	463

463 750 475 Revolving facility (NOKm)

123

YTD 2021

352

• NIBD at NOK 38 million (excl. IFRS 16).
• NIBD at NOK 231 million (125) incl. IFRS16.
• Leverage ratio 0.57x (0.37x).
• NOK +450 million in financial headroom.
• Partly hedge of interest rate

287

YTD 2022

Share buyback & Dividend

Management comments

• The 1st share buyback program was announced 23 August 2022 of NOK 8 million.
• 1,205 thousand shares were bought back at an average price of NOK 6.64 during the program.
• A second share buyback program has been announced starting the 17th November 2022 of NOK 4 million. The program is to end the 22 December 2022.
• As of 30th September 2022, ECIT AS holds 1,850 thousand treasury shares.

Announced allocations to shareholders 2022 (NOKm)	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Total 2022 announced
Dividend (NOK 0.04 per share)	0.0	17.9	0.0	0.0	17.9
Share buyback 1 - NOK 8 million	0.0	0.0	5.4	2.6	8.0
Share buyback 2 - NOK 4 million	0.0	0.0	0.0	4.0	4.0
Total announced allocations	0.0	17.9	5.4	6.6	29.9

Overall evaluation

Key financial targets (mid-to-long term ambitions)

Key Financial targets	2022 YTD	Mid-to-long term targets	Management comments
Growth			Organic growth affected by Covid-19 • recovery (F&A).
Total revenue growth	21.9%	> 15.0%	Acquired revenue target expected to •
Organic revenue growth	9.3%	> 5.5%	be within 2022 range.
Recurring & repeatable revenue	77.0%	> 75.0%	EBITDA margin affected by mergers – • consolidation processes
Earnings
EBITDA-margin	13.4%	> 17.0%
Leverage
Leverage ratio (NIBD / EBITDA)	0.6x	< 2.5x
Mergers & acquisitions
M&A acq. revenue, NOKm	260	350