ECIT AS — Investor Presentation 2022

Mar 25, 2022

ECIT | Annual Report | 2021 ECIT | Annual Report | 2021

Investor presentation 16th November 2021 Investor presentation 25 March 2022

Agenda

3

4

Revised financial targets

Peter Lauring CEO

Mads Skovgaard CFO

ECIT in short

Founded in 2013

In May 2013 ECIT was established by CEO Peter Lauring.

Since incorporation ECIT have made +125 acquisitions (+45 mergers)

with minority ownership in local subsidiaries. The ownership reflects the consideration, care, and pride in all we do.

Present in 10 countries

+100 locations across 10 countries makes ECIT a local partner to customers able to add with the strength from a larger international group.

People business

+2,200 employees to contribute with the knowledge and expertise of their field based on a quality driven culture.

Through providing IT, Finance & Accounting including production software applications the important admin business areas of any firm are supported by ECIT.

Business offerings tailored to market and customer needs

Highlights

Financial summary

2021 highlights

(NOKm)	2021	2020			Acquired
Revenue	2,383	1,829	Total revenue	EBITDA margin	annual revenue
EBITDA*	339	256	growth of 30.3%	of 14.2%	of NOK ~500 million
Profit for the year	115	121			(proforma 2020)
Adj. profit for the year	130	81
KPIs
Total revenue growth	30.3%	35.9%	Listing on	ECIT ownership in subsidiaries increase from ~55% to ~68%	Further
M&A revenue growth	27.2%	28.9%	Euronext growth		consolidation of the F&A and IT division
Organic revenue growth	6.4%	5.0%	Oslo Stock Exchange
EBITDA-margin*	14.2%	14.0%

Value creation

Financial performance (NOK million)

The majority of ECIT's revenue is coming from recurring and repeat revenue

Adjusted free cash flow** (NOK million)

Adjusted diluted earnings per share*** (NOK)

Notes

*) Including the impact of IFRS16 leasing accounting. The 2014-2018 EBITDA results would have been higher, and therefore not comparable to 2019 - 2021 **) Free cash flow less IFRS leasing and before special items, R&D and acquisitions

(32%)

(30%)

***) Adjusted for one-off items

Comments to valuation of ECIT

Components in valuation of ECIT

Calculation incl. option obligation	NOK
Share price, 24 March 2022	6.42
Number of shares, million	446
Equity Value, NOKm	2,860
+/- Net interest bearing debt, NOKm	-137
- Option obligation, NOKm	-458
Enterprise value, NOKm	3,455
EBITDA*, NOKm	339
Factor	10.2

• 31 December 2021 figures.
• Market cap per 24 March 2022 of NOK 2,860 million.

EPS 0,13 Existing ownership**) 100% ownership*** ~0,25

Assumptions Management comments

• Dual-ownership fundamental to build ECIT.
• Option of NOK ~458 million to reach 100% ownership:
  • Factor: EV/EBITDA, ~4x
  • Adjusted for NIBD
• Ownership in subsidiaries will increase over time.
• Options can be executed at will.

Notes *) EBITDA before special items **) Adjusted diluted EPS excluding 'one-off' and special items

***) Estimated financial expenses are included to finance the option obligation (exercising)

IT division

Financial overview – Full year

(NOKm)	2021	2020
Revenue EBITDA*	1,105 140	897 113
Total revenue growth EBITDA-margin*	23.2% 12.7%	62.1% 12.6%
(NOKm)	2021	2020

Revenue development and total growth Management comments

(NOKm)
Revenue	325	286
EBITDA*	56	47
Total revenue growth	13.7%	62.8%
EBITDA-margin*	17.2%	16.4%

Financial summery – Q4 EBITDA* and margin development

• High demand throughout the year for IT services and solutions - both from existing as well as new customers.
• Revenue growth in Q4 lower than last year as a consequence of current IT supply challenges.
• Growth 2021 versus growth 2020 lower M&A activity.
• Stable EBITDA margin.
• Three mergers combined revenue of NOK 700 million (11 companies)

F&A division

Financial summery – Full year

(NOKm)	2021	2020
Revenue	1,298	979
EBITDA*	225	174
Total revenue growth	32.2%	16.1%
EBITDA-margin*	17.4%	17.7%
(NOKm)	2021	2020

Revenue development and total growth Management comments

• Activity level affected by Covid-19.
• M&A explaining growth rate of 32.2%.
• EBITDA margin affected by M&A.
• Substantial merger in F&A Norway combined revenue of NOK 300 million (7 companies).

Notes

(NOKm)
Revenue	316	259
EBITDA*	63	55
Total revenue growth	22.0%	20.9%
EBITDA-margin*	14.5%	21.2%

*) EBITDA before special items

Financial summery – Q4 EBITDA* and margin development

Tech division

Financial summery – Full year

(NOKm)	2021	2020
Revenue	104	72
EBITDA*	-2	0
Total revenue growth	44.8%	146.8%
EBITDA-margin*	-1.9%	-0.3%

Number of customers Number of products

Annual recurring revenue Management comments

• 100m in 2021 revenue offering > 20 different products within Payroll, Accounting and Office Support.
• Low M&A growth focus product development.
• 37,9% growth in ARR NOK 80 million versus NOK 58 million (2020).

• customers increased by 37%

• Product development affect earnings in the division.

Financial review

Financial review

Profit & loss summarized Management comments

	Q4		Full year
(NOKm)	2021	2020	2021	2020
Revenue	648	530	2,383	1,829
EBITDA*	113	88	339	256
Special items	-1	-1	-9	-1
Profit for the year	51	33	115	121
Adj. profit for the year	62	34	130	81
KPIs
Total revenue growth	22.3%	42.4%	30.3%	35.9%
M&A revenue growth	21.5%	33.2%	27.2%	28.9%
Organic revenue growth	2.9%	7.4%	6.4%	5.0%
Currency impact	-2.1%	1.8%	-3.2%	1.9%
EBITDA-margin*	17.4%	16.6%	14.2%	14.0%
FTEs			2,221	1,515
Diluted adj. EPS			0.13	0.07

• Lower revenue growth in Q4 2021 mainly explained by IT supply challenges.
• Despite Covid-19 challenges, full year organic revenue growth ended at 6.4%.
• High acquisition volume (Norian) in total the total growth of the year ended at 30.2% (35.2%).
• Currency headwind on revenue in 2021 (negative impact of minus 3.2%).
• EBITDA margin impacted by high acquisition volume.
• Full year adjusted profit excluding 'one off' for the year ended at NOK 130m.
• Increase in number of FTEs was mainly related to M&A.

Cash Flow & Net Working Capital development

Cash Flow Statement Management comments 33 NWC -42 (NOKm) EBITDA 339 256 Change in NWC -42 37 Cash flow from operations 249 259 Cash flow from investing -319 -109 Cash flow from financing 95 -64 Cash flow for the period 25 86 Adjusted free cash flow: Cash flow from operations 249 259 Special items 9 1 Investments in tangible assets -20 -21 Repayment of lease liabilities -84 -66 Adjusted free cash flow 154 173 Covid-19 impact NWC Covid-19 impact 33 -34 Covid-19 adj. free cash flow 187 139 2021 2020 58

-9 Adj. NWC Covid-19 37 3 NWC Covid-19 -34 Adj. NWC 2021 2020

• Cash flow from operating activities impacted Covid-19 impact to net working capital development between 2020 and 2021.
• Adjusted for Covid-19 impact, the adjusted free cash flow is at NOK 187 million (139m)
• High M&A activity explain the cash flow from investments of minus NOK 319 million.
• Cash flow from financing activities positive (NOK 95 million) – explained by the capital increase from the IPO.
• Cash outflow in financial activities comes from the options being exercised (NOK 75 million).

Net debt and leverage development

(NOKm)	2021	2020
Borrowings	217	160
Lease liabilities	236	201
Total interest bearing liabilities	453	362
Interest bearing receivables	50	70
Cash and cash equivalents	265	246
Total interest bearing assets	316	316
Net debt / Net cash (-)	137	45
EBITDA*, LTM	359	255
Debt leverage	0.4x	0.2x

Revolving facility (NOKm)

Net interest bearing debt (NOKm) Leverage ratio Management comments

• Net debt increase mainly due to increased debt and lease liabilities.
• Leverage ratio gearing remains low at 0.4x (0.2x last year).
• New credit facility agreed with Nordea in 2021:
  • Revolving facility of NOK 750m
  • Leasing facility of NOK 50m

Unused revolving facility:

Revised key financial targets

Revised key financial targets (mid-to-long term ambitions)

			Mid-to-long term
(NOKm)	2021 Actual	Previous targets	Revised targets
Growth
Total revenue growth	30.3%	> 15.0%	> 15.0%
Organic revenue growth	6.7%	> 5.5%	> 5.5%
Recurring & repeatable revenue	71.0%	n/a	75.0%
Earnings
EBITDA-margin	14.2%	> 17.0%	> 17.0%
Leverage
Leverage-ratio (NIBD / EBITDA)	0.4x	< 1.5x	< 2.5x
Mergers & acquisitions
M&A acq. Revenue, NOKm	498	350	350

Management comments / assumptions

• Financial targets unchanged except gearing ratio and recurring revenue.
• Gearing ratio target: NIBD below 2.5x EBITDA.
• Recurring- and repeat revenue as a combined target: 75% of total revenue.
• EBITDA-margin target of 17% a potential impact from low earning acquisitions.