Eezy Oyj

Annual Report (ESEF) • Mar 13, 2023

Untitled 1 Eezy Plc Report of the Board of Directors and Financial Statements 1 January – 31 December 2022 2 Contents Page Report of the Board of Directors 3 - 7 Statement of non-financial information 8 – 10 Key figures 11 - 13 Consolidated financial statements (IFRS) 14 - 54 Parent company financial statements (FAS) 55 - 63 Signatures to the Financial Statements and Report of the Board of Directors 64 Auditor’s Report 65 Non-official version and translation. These financial statements must be stored for at least ten years from the end of the financial year, or until 31 December 2032. The vouchers for the financial year must be stored for at least six years after the end of the year during which the financial year ended, or until 31 December 2028. 3 Report of the Board of Directors Market review The HR services market relevant to Eezy’s business includes staffing services, light entrepreneurship services and selected professional services. Due to the working life megatrends and the increased need for flexible workforce we expect the markets to continue on growth track. According to an estimate by management, the size of the entire HR services market in Finland was EUR 3.4 billion in 2022, of which the staffing services were EUR 2.7 billion. The market size of the relevant recruitment services was somewhat over EUR 100 million. The market size of light entrepreneurship services has been estimated to be over EUR 300 million. According to The Private Employment Agencies Association (HPL), the revenue of the largest companies in the staffing service market increased approx. 7% in December 2022 and approx. 14% in January–December compared to last year. According to HPL, the economic outlook in staffing services has weakened. In Finland, the share of flexible forms of working relative to all work remains significantly lower than in comparable European countries. Management believes that the market will continue its structural growth as flexible forms of working become more common. Business developments Corona virus has strongly affected our business for the last three years. The restrictions related to Corona have ended during the year, but they impacted the early part of the year negatively. General economic conditions have weakened clearly during the second year-half, which affected some of our businesses. Growth has slowed in most of our business areas, and the revenue has even decreased in some businesses. Workforce availability is still an important factor for our customers, but the role of staffing services as a provider of flexible workforce has grown again. Horeca sector developed mainly positively, and the delivery volumes in the sector grew clearly in the early part of the year. We expected even higher growth but missed our growth targets due to workforce shortages. The negative effects of the general economy have been most visible in our industry and construction sector, where volumes grew in spring, but turned into decline toward the end of the year. The revenue of our franchise chain decreased clearly during the quarter. However, the volume development varies a lot by customer. The sick-leaves have continued on a higher level than in the earlier years, but the difference to the previous year has during the second year-half not been quite as large as in the first year-half. We estimate that in the near future sick leave costs will remain on a higher level than in the earlier years, and we aim to accommodate into that in our pricing. Revenue Eezy’s revenue amounted to EUR 247.6 million (203.3), increasing by 22% compared to the corresponding period in the previous year. Revenue increased by 19% in the staffing service area. In the professional services area revenue increased by 66% due both organic growth and the Valmennuskeskus acquisition in 2021 and Leidenschaft/Siqni acquisition in April 2022. In the light entrepreneurship service area revenue increased by 2%. Eezy’s chain-wide revenue amounted to EUR 351.6 million (305.5) increasing by 15%. Franchise fees totaled EUR 6.3 million (7.1). The invoicing volume of light entrepreneurship services was EUR 42.3 million (41.4). 4 Revenue by service area EUR million 1–12/2022 1–12/2021 Change % Staffing services 212.7 178.1 19% Franchise fees 6.3 7.1 -11% Professional services 26.1 15.7 66% Light entrepreneurship services 2.5 2.5 2% Total 247.6 203.3 22% Result EBITDA was EUR 18.2 million (19.5). Operating profit was EUR 10.0 million (11.8). The sick leaves' profit impact has been EUR -6.0 million (-3.3). Non-recurring costs related to acquisitions, change negotiations and the CEO change were approx. EUR 1.0 million. A non-recurring income of EUR 1.7 million and a corona subsidy from State treasury totaling EUR 1.0 million were included in the result in comparative period last year. Total depreciation, amortization and impairment was EUR 8.2 million (7.7), of which EUR 4.1 million (4.0) was acquisition related amortization. The result before taxes was EUR 9.1 million (10.3) and the result for the period was EUR 7.5 million (8.1). Earnings per share was EUR 0.29 (0.31). Financial position and cash flow Eezy's consolidated balance sheet on 31 December 2022 amounted to EUR 216.7 million (206.8), of which equity made up EUR 113.1 million (109.1). In March, a new bank loan of EUR 8.0 million was drawn to finance the acquisitions in April 2022. As of 31 December 2022, the Group has liabilities to credit institutions amounting to EUR 52.1 million (48.3). of which EUR 47.6 (43.9) was non-current. Cash balance on 31 December 2022 was EUR 5.8 million (6.1). The Group has overdraft facilities in total of EUR 10.0 million, all of which were unused on 31 December 2022. Equity ratio stood at 52.2% (52.8%). The Group’s net debt including IFRS16 leasing items on 31 December 2022 amounted to EUR 52.5 million (48.7). Net debt excluding IFRS16 leasing items was EUR 47.3 million (44.2). The net debt/EBITDA ratio was 2.9 x (2.4 x). Operative free cash flow amounted to EUR 13.9 million (6.2). Investments and acquisitions Eezy’s investments in subsidiary shares presented in the cash flow statement amounted to EUR 6.1 million (4.6). Investments include acquisitions of Farenta Oy, The Siqnificant Company Oy and Leidenschaft Oy as well as increasing the ownership in Eezy Valmennuskeskus Ltd. In line with its strategy, Eezy strengthened its professional staffing services by purchasing the share capital of Farenta Ltd from Oriola Plc on 1 April 2022. Farenta supports around 350 pharmacies yearly with over 300 employees and it is the largest pharmacy staffing service operator in Finland. In line with its strategy, Eezy strengthened its research and coaching services by acquiring research and business culture companies The Siqnificant Company Ltd and Leidenschaft Ltd on 1 April 2022. The companies will become part of Eezy Flow Ltd, which offers management, strategy, research and change management services. Leidenschaft is Finland’s first business culture agency, whose mission is to develop business culture into real competitive advantage. The Siqnificant Company’s product, Siqni, is the world’s first tool for gaining employee understanding and measuring employee experience. Additionally, Eezy made an investment of EUR 0.2 million in minority shareholding of VeggArt’s Oy that offers services for immigrants. Investments in tangible and intangible assets totaled EUR 3.0 million (1.7). Investments in tangible and intangible assets were mainly related to IT investments. 5 Employees Eezy employs people in Group functions and as staffed employees assigned to customer companies. Eezy employed on average of 527 (374) people in Group functions and on average 3 837 (3 320) staffed employees on FTE basis. Due to the nature of the staffing service business, Eezy’s total number of personnel employed is higher than the number of personnel employed on average. In the calculation of the average number of staffed employees, the work input of the employees has been converted into person-years. The users of light entrepreneurship services are not included in the Group’s personnel numbers. Changes in management Eezy announced in February 2022 that Content Director Isa Merikallio will leave the management team. In August, Eezy announced that HR Director Hanna Lehto will start maternity leave. Director Mikko Innanen will act as her substitute and as a member of the management team. Innanen will also continue in his role as the development director. Marleena Bask started in October as the Chief Marketing and Communications officer as well as a member of the Group management. Eezy announced on 19 December 2022 that CEO will change and Sami Asikainen will leave the company. The recruitment process of a new CEO has been started and the deputy CEO Pasi Papunen will act as the interim CEO. On 31 December 2022 the management team members are: • Pasi Papunen, interim CEO • Hannu Nyman, CFO • Thomas Hynninen, Staffing services • Päivi Salo, CDO • Marleena Back, CMO • Mikko Innanen, Development, HR • (Hanna Lehto, HR, maternity leave) Shares and shareholders On 31 December 2022, Eezy Plc had 25 046 815 (25 046 815) registered shares. The company holds no treasury shares. The company had 2 787 (2 627) shareholders, including nominee registered shareholders. In January–December 2022, a total of 2 656 037 (4 046 053) shares were traded and the total trading volume was EUR 12.5 million (23.7). During the period, the highest quotation was EUR 6.38 (7.20) and the lowest EUR 3.01 (4.90). The volume- weighted average price of the share was EUR 4.71 (5.85). The closing price of the share at the end of December was EUR 3.12 (5.98) and the market value stood at EUR 78.1 million (149.8). On 31 December 2022, the members of the Board of Directors and the members of the management team owned a total of 394 470 (1 237 129) Eezy shares, corresponding to approximately 1.6% (4.9%) of shares and of the votes to which they entitle. The share numbers include the direct holdings of the persons in question and their controlled companies. In addition, Board members are employed in managerial duties by significant shareholders. 6 Ten largest shareholders as of 31 December 2022: Shareholder Shares % 1. Sentica Buyout V Ky 6 105 458 24.38 2. NoHo Partners Oyj 5 139 745 20.52 3. Meissa-Capital Oy 3 223 071 12.87 4. Evli Finnish Small Cap Fund 1 341 126 5.35 5. OP Finland Micro Cap Fund 844 668 3.37 6. Asikainen Sami 414 350 1.65 7. Säästöpankki Small Cap Fund 322 200 1.29 8. WestStar Oy 293 398 1.17 9. Church Pension Fund 282 155 1.13 10. Ilmarinen Mutual Pension 274 261 1.09 10 largest in total 18 240 432 72.83 Nominee-registered 1 954 767 7.80 Others 4 851 616 19.37 Total 25 046 815 100.00 The company has received flagging notices during the period: The ownership of Evli Bank Plc has exceeded 5% and the ownership of Handelsbanken Fonder has decreased below 5%. Governance The Corporate Governance Statement and the Remuneration Report are issued separately from the Report of the Board of the Directors, and the documents are available at the company’s website. Annual General Meeting The Annual General Meeting (AGM) was held on 12 April 2022. The AGM adopted the Financial Statements for the year 2021. The AGM decided that for year 2021 a dividend of EUR 0.15 per share is distributed in two tranches. The first tranche of the dividend, EUR 0.10 per share and EUR 2.5 million in total, was paid in April 2022. The second tranche of the dividend, EUR 0.05 per share and EUR 1.3 million in total, was paid in October 2022. The AGM elected eight members to the board of directors. Tapio Pajuharju, Kati Hagros, Liisa Harjula, Timo Mänty, Paul-Petteri Savolainen, Jarno Suominen and Mika Uotila were re-elected as members of the board of directors. Mikko Wirén was elected as a new member of the board of directors. The members of the board of directors will be paid monthly remuneration EUR 4 000 per month for the chairperson of the board and EUR 2 000 per month for all other members of the board each. In addition, for members of the board of directors’ committees will be paid a meeting fee of EUR 300 for each committee meeting. Authorized Public Accountant KPMG Oy Ab was re-elected as the company’s auditor. KPMG Oy Ab has informed that Authorized Public Accountant Mr. Esa Kailiala will act as the principal auditor. In the organization meeting held on the same day, the Board of Directors elected Tapio Pajuharju as its Chairman. Liisa Harjula was elected as Chairman of the Audit Committee and Jarno Suominen and Kati Hagros as members of the Audit Committee. The Board decided to establish a Human Resources Committee which assists the Board by preparing matters pertaining to the remuneration and nomination of the Company’s CEO and other management, as well as the Company’s remuneration principles. Tapio Pajuharju was elected as Chairman of the Human Resources Committee and Mika Uotila and Mikko Wirén as members of the Human Resources Committee. Valid authorizations The authorizations given by the AGM on 12 April 2022 are described in detail in the stock exchange release about the AGM's decisions. 7 The AGM authorised the board of directors to decide on the repurchase of the company’s own shares using the company’s unrestricted equity. The total maximum number of shares to be repurchased under the authorisation shall be 2 500 000 shares. The authorisation is valid until the end of the annual general meeting of 2023, however, for a maximum of 18 months. The authorization is unused. The AGM authorised the board of directors to decide, in one or more tranches, on the issuance of shares as well as on the issuance of option rights and other special rights entitling to shares as referred to in chapter 10(1) of the Finnish Limited Liability Companies Act. The total maximum number of shares to be issued under the authorisation shall be 2 500 000 shares. The authorisation is valid until the end of the annual general meeting of 2023, however, for a maximum of 18 months. The authorization is unused. Long-term incentive plan In March, Eezy Plc’s board of directors resolved to extend the third earning period of the long-term incentive plan for the company’s key employees, which has been announced in November 2021. The third earning period shall be 16 months, starting on 1 December 2021 and ending on 31 March 2023. According to the previous decision a maximum of 246 000 reward shares could be awarded for the third earning period. The reward criteria for the third earning period are based on Eezy Plc’s revenue and operating profit margin. It is currently estimated that no shares will be earned for the period. Risks and uncertainties Eezy’s risk management principles are based on the Finnish Corporate Governance Code for Listed Companies. The objective of risk management is to ensure that the Group’s targets are reached and to safeguard the continuity of operations. Poor economic development and high inflation in Finland may have an adverse impact on Eezy’s business and result. In economic downturn it is possible that companies use less staffing services and other HR services offered by Eezy. Sick leaves may negatively affect Eezy through the sick leaves of either staffed employees or employees in group functions, as well as by disturbing or stopping customers’ businesses. Material short-term risks also include tighter competition in the HR and recruitment market, changes in legislation or collective agreements, and the cyclical nature of the business. There are also significant risks related to acquisitions. If the performance of the acquired company does not match expectations, the integration fails, or other targets set for the acquisition are not reached, there may be material effects for Eezy’s profitability and financial position. More information about risk management is available on the company website. Guidance for 2023 Eezy expects revenue to be approx. EUR 250 million and EBIT-% to grow in 2023. Dividend proposal The parent company’s distributable funds in the financial statement on 31 December 2022 was EUR 125.7 million, of which profit for the financial period was EUR 4.3 million. Board of Directors proposes a dividend of EUR 0.15 per share, of which EUR 0.10 will be paid in April and 0.05 in October. Helsinki, 15 February 2023 Eezy Plc Board of Directors 8 Statement of non-financial information Eezy’s business Eezy Group consist of the parent company Eezy Plc and its subsidiaries. Eezy’s business operations are divided into two business areas: The Staffing Services business unit and the Professional Services business unit. The Staffing Services business unit provides staffing services to customers and employees. In staff leasing, Eezy serves corporate customers, with the employee being in an employment relationship with Eezy and working for the customer company for a specified period of time. Eezy offers staffing services through its own units as well as through franchisees. The Professional Services business unit provides HR research, training and development services, management consulting and coaching as well as recruitment services (executive search, suitability assessments and relocation). The unit also includes tutoring services for upper secondary school students and university students as well as employment services ranging from coaching, integration, guidance and rehabilitation services. Eezy’s light entrepreneurship services enable private individuals to operate as independent entrepreneurs without having to start their own company, by invoicing their customers through Eezy’s service. With its extensive range of services, Eezy responds to the changing needs of working life in Finland. Eezy’s diverse and nationwide service network enables the company to serve as a comprehensive partner to customers and individuals. Eezy is a significant employer – we paid wages to approximately 32,000 people in 2022. Responsible employer Eezy’s mission is to help employers and employees succeed in the ever-changing work life. Eezy’s business, growth and success are based on highly competent personnel, taking both the Group’s direct personnel and staffed employees into consideration. In all of its operations, Eezy observes collective agreements and applicable legislation. Eezy cooperates with trade unions, the public sector and educational institutions. We pay our taxes in Finland. The central themes of Eezy’s HR policy are well-being at work, occupational safety, equality and non-discrimination. Eezy coaches its employees to enable professional development. In 2022, we trained 28 people through JYEAT training programme and 15 people through the LIAT training programme. In addition, we trained our personnel in topical issues with the help of e.g. legal department and HR. The well-being at work of Eezy employees is measured by regular job satisfaction surveys and by monitoring sickness absence rates. In February 2022, we studied the strengths, development areas and work culture of our organisation with the PeoplePower® personnel survey. The response rate was excellent, 92.7%. The level of dedication of Eezy’s personnel is clearly higher than that of the average Finnish employee-intensive organisation. All individual survey indices exceeded both the external standard and the 2020 result level. The commitment index was the strongest compared to the external standard. Faith in recent development and a bright future, as well as the strong communication strongly associated with these, were the Group’s clearest strengths. In addition, the concrete prerequisites for smooth work (tools, premises, investments in well-being) were among the strengths. On the other hand, stress, high turnover and clarity of goals and operations were our development areas in terms of overall results. Sickness absence rates increased compared to 2021. Part of the increase in sickness absence rates was attributable to COVID- 19, but the majority are related to the general increased caution when it comes to sickness – people no longer go to work with a runny nose. Monitoring sickness absence rates and preventive occupational health are critical to our business, so we will invest increasingly in this in 2023. We take care of the occupational safety of both our in-house employees and staffed employees in cooperation with our customers. Eezy has an active occupational health and safety committee that is responsible for the occupational safety of Eezy’s in-house employees and works together with customer companies to develop the occupational safety of staffed employees. Occupational accident monitoring is carried out together with the occupational health care provider on the basis of accident statistics. The majority of accidents at work in 2022 were minor accidents. The development of occupational safety is one of our key projects in 2023. For example, we will develop our operating model together with the occupational health care provider and the employment pension insurance company and strengthen the employee orientation model together with our customers. 9 In its operations, Eezy follows its equality and non-discrimination plan, in which the main focus is on ensuring equality in recruitment, career development and remuneration, reconciling work and family life and preventing direct and indirect discrimination. Eezy is committed to preventing all forms of corruption, including extortion and bribery. No favours, gifts or benefits are offered or received that could reasonably be expected to influence decision-making within the company. For Eezy, data protection is an extremely important part of good governance and our responsibility work. Eezy has established a data protection and data security organisation based on the EU’s General Data Protection Regulation (GDPR) and the company has operating processes in place to ensure appropriate data protection and data security. Data protection training is part of our orientation programme and we regularly train our employees on data protection practices. There were 6 security breaches in 2022. None of these posed a high risk to the rights of the data subject and all cases were promptly rectified in accordance with our process. Eezy uses a Whistleblowing channel to facilitate the external and internal reporting of suspected misconduct in accordance with the EU’s Whistleblower Directive. Reformer of working life Eezy has an extensive service offering related to reforming the Finnish working life. The relationship with work and work patterns is changing, labour shortages are affecting many sectors and digitalisation is changing the needs and roles of working life. It is critical for our society that we are able to respond to these changes and challenges. Eezy plays an important role in extending working careers and preventing social exclusion. Eezy works closely together with Employment and Economic Development Offices and various employment promotion projects. Eezy provides advice and training to the hard-to-employee on questions concerning working life, offers integration services for immigrants and is a significant employer of young people. In 2002, we trained 8,000 jobseekers through Eezy Employment Services, of which about 3,000 were employed. Eezy Pikaduuni promotes the employment of young people by offering 15–19-year-olds the opportunity for summer work. This helps prevent the social exclusion of young people, provide all young people with an equal opportunity to find a summer job and provide young people with a low threshold for the first step into working life. In summer 2022, Eezy employed nearly 800 young people in twelve municipalities through Pikaduuni. The proceeds of the campaign, EUR 10,000, were donated to SOS Children’s Villages’ “Unelmista totta” (“Dreams come true”) project. It enables recreation for those children whose families are in very difficult financial situations. Employing people with an immigrant background is very important to Eezy, but also to our society as a whole. The labour shortage is huge in many sectors, and employment helps reduce prejudice and improve cohesion between immigrants and the native population. In 2022, we employed a total of about 3,000 immigrants already residing in Finland. Eezy Shine, Finland’s first staff leasing company specialising in employing immigrants, opened a service point in October 2022 at Itäkeskus in Helsinki. Eezy Shine serves job seekers in up to 32 languages. Eezy franchise entrepreneur Sirpa Kilpeläinen and her team have employed more than 200 Ukrainians in the Päijät-Häme region through their relentless work. In November, she received an honorary mention at the Recruitment Gala event for her work to employ Ukrainians. In 2022, we recruited approximately 600 people from abroad to Finland for the needs of our customers. The process of recruiting foreign personnel has been audited by a third party. It excludes the possibility of human trafficking and verifies compliance with labour law. Eezy’s ERP system is tied to the validity of work permits and certificates required to perform the work, and the payment of wages requires a personal account number to prevent misuse. With regard to imported labour, we commit our customers to a 12-month work period in order to ensure that the employee is well settled in Finland. Eezy provides support throughout the employment relationship for both the customer and the employee. Eezy Flow and Leidenschaft and Siqni, which joined Eezy in 2022, study, design and coach companies for better leadership, corporate culture, strategies and change capabilities. Individuals and companies that feel good create successes in working life, and a humanly sustainable working life is a huge resource for the well-being of our society as a whole. In 2022, we studied the job satisfaction of more than 100,000 Finnish employees with the PeoplePower® personnel survey. The survey was conducted in 26 different languages. We mentored about 20,000 people in areas such as change management and better managerial work. 10 Our climate and environmental footprint Eezy has an environmental policy established in 2021, which aims to develop and enhance environmentally friendly operations in the company. As part of the environmental programme, the office premises have extensive recycling facilities, staff are encouraged to use public transport and, if possible, to have remote meetings. In addition to Eezy’s own employees, environmental and climate impacts arise from leased employees’ commuting. The priorities for 2023 include updating the environmental policy. The company has estimated that climate change will not have significant direct impacts, as the company’s business operations do not involve significant raw material or energy purchases. Climate change mainly has indirect effects through the climate sensitivities of different customer industries. The company’s broad customer base reduces dependence on individual customers. Information in accordance with the EU Taxonomy Regulation The European Union’s Taxonomy Regulation establishes the basis for the EU Taxonomy and is part of the EU’s sustainable finance package. Companies are required to disclose information on the share of their turnover, capital expenditure and operational expenditure associated with Taxonomy-eligible operations. Eezy’s interpretation is that none of its business operations belong to the sectors covered by the Taxonomy. In other words, 0% of Eezy’s revenue, capital expenditure and operational expenditure have been Taxonomy-eligible, both in 2022 and 2021. Therefore, the company has had no Taxonomy- aligned operations in 2022 and 2021. Helsinki, 15 February 2023 Eezy Plc Board of Directors 11 Key figures, their calculation and reconciliations Eezy presents selected key figures which relate to the performance and financial position of the company. All these key figures are not measures defined in the IFRS and they are thus considered as alternative performance measures. The companies do not calculate alternative performance measures in a uniform way, and thus the alternative performance measures presented by Eezy may not be comparable with the similarly named key figures presented by other companies. Key figures EUR thousand, unless otherwise specified 2022 2021 2020 2019 2018 Key figures for income statement Revenue 247 596 203 328 190 637 169 784 81 698 EBITDA 18 231 19 492 13 495 12 586 10 070 EBITDA margin, % 7.4% 9.6% 7.1% 7.4% 12.3% EBIT 10 004 11 812 5 565 8 022 8 154 EBIT margin, % 4.0% 5.8% 2.9% 4.7% 10.0% Earnings per share, basic, EUR 0.29 0.31 0.11 0.25 0.38 Earnings per share, diluted, EUR 0.28 0.30 0.11 0.25 - Weighted average number of outstanding shares, pcs 25 046 815 24 883 655 24 849 375 18 296 109 10 559 819 Weighted average number of outstanding shares, diluted, pcs 25 287 264 25 081 134 24 997 332 18 301 372 - Number of outstanding shares at the end of reporting period, pcs 25 046 815 25 046 815 24 849 375 24 849 375 14 799 198 Key figures for balance sheet Net debt 52 466 48 702 42 424 56 513 14 023 Net debt excluding IFRS16 47 307 44 200 36 440 51 887 11 373 Net debt/EBITDA 2.9 x 1 2.4 x 1 2.9 x 1 2.7 x 1 1.3 x Gearing, % 46.4% 44.6% 40.9% 55.5% 27.6% Equity ratio, % 52.2% 52.8% 50.6% 48.6% 52.8% Equity per share, EUR 4.51 4.36 4.17 4.10 3.43 Key figures for cash flow Operative free cash flow 13 908 6 244 19 269 11 545 8 970 Purchase of tangible and intangible assets -2 998 -1 688 -2 096 -1 691 -667 Acquisition of subsidiaries, net of cash acquired -6 125 -4 609 -2 082 -11 417 -7 937 Operative key figures Chain-wide revenue, EUR million 351.6 305.5 282.6 285.6 207.4 Franchise-fees, EUR million 6.3 7.1 6.1 7.8 8.9 Light entrepreneurship invoicing volume, EUR million 42.3 41.4 41.9 49.9 46.1 1 EBITDA is based on estimated pro forma EBITDA of last 12 months. 12 Reconciliation of Certain Alternative Performance Measures EUR thousand 2022 2021 2020 2019 2018 EBITDA EBIT 10 004 11 812 5 565 8 022 8 154 Acquisiton related amortization 1) 4 061 4 045 3 914 1 645 16 Other depreciation, amortization and impairment losses 4 165 3 636 4 016 2 919 1 900 Total depreciation, amortization and impairment losses 8 226 7 680 7 929 4 564 1 916 EBITDA 18 231 19 492 13 495 12 586 10 070 Operative free cash flow Cash flows from operating activities before financial items and taxes 19 494 9 982 23 363 14 752 10 510 Purchase of tangible and intangible assets -2 998 -1 688 -2 096 -1 691 -667 Payment of lease liabilities -2 588 -2 050 -1 998 -1 516 -873 Operative free cash flow 13 908 6 244 19 269 11 545 8 970 1 The acquisition related amortization comprises the amortization made on the recognized fair value adjustments arisen from business combinations. 13 Calculation of key figures Key figures for income statement EBITDA = Operating profit + Depreciation amortization and impairment losses EBITDA margin, % = EBITDA / Revenue x100 Operating profit (EBIT) = Operating profit Operating profit margin, % = Operating profit / Revenue x100 Earnings per share, basic = Profit for the period attributable to the owners of the parent company / Weighted average number of outstanding shares Earnings per share, diluted = Profit for the period attributable to the owners of the parent company / Weighted average number of outstanding shares taking into account obligations arising from potential dilutive share issues of the Parent Company in the future Key figures for balance sheet Net debt = Interest bearing liabilities - interest-bearing receivables - cash at bank and in hand Net debt excluding IFRS16 = Net debt - IFRS 16 items Net debt / EBITDA = Net debt / EBITDA Gearing = Net debt / Equity x100 Equity ratio = Equity / (Total equity and liabilities – advances received) x100 Equity per share = Equity / Number of outstanding shares at the end of reporting period Key figures for cash flow Operative free cash flow = Cash flow from operating activities presented in the cash flow statement before financing items and taxes – purchase of tangible and intangible assets – payment of lease liabilities Purchase of tangible and intangible assets = Investments in tangible and intangible assets presented in the cash flow statement Acquisition of subsidiaries, net of cash acquired = Acquired shares of subsidiaries presented in the cash flow statement Operative key figures Chain-wide revenue = Consolidated revenue + revenue of chain franchisees – franchise fees (and other significant internal chain revenue) light entrepreneurship invoicing volume to the extent it is excluded from consolidated revenue Franchise fees = Fees paid by franchisees based on revenue and/or gross profit + initial fees Light entrepreneurship invoicing volume = Invoicing volume of the light entrepreneurship services 14 Consolidated financial statements 1 January – 31 December 2022 15 Consolidated statement of comprehensive income (IFRS) EUR thousand Note 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Revenue 3 247 596 203 328 Other operating income 4 347 3 070 Share of result of equity accounted investments 7 - Materials and services 5 -9 379 -6 059 Personnel expenses 6, 7 -202 825 -165 576 Other operating expenses 9, 10 -17 515 -15 270 Depreciation, amortization and impairment losses 8 -8 226 -7 680 Operating profit 10 004 11 812 Financial income 11 763 149 Financial expense 11 -1 642 -1 614 Financial income and expenses 11 -879 -1 465 Profit before taxes 9 125 10 348 Income taxes 12 -1 654 -2 266 Profit for the financial year 7 472 8 081 Profit attributable to Owners of the parent company 7 156 7 601 Non-controlling interests 316 480 Profit for the financial year 7 472 8 081 Earnings per share, basic (EUR) 23 0.29 0.31 Earnings per share, diluted (EUR) 23 0.28 0.30 Other comprehensive income Items that will not be reclassified to profit or loss Changes in the fair value of share investments 18 - 3 Items that may be reclassified to profit or loss Exchange differences on translating foreign operations - 50 Other comprehensive income for the financial year, net of tax - 52 Total comprehensive income for the financial year 7 472 8 134 Total comprehensive income attributable to Owners of the parent company 7 156 7 653 Non-controlling interests 316 480 Total comprehensive income for the financial year 7 472 8 134 The notes are an integral part of the consolidated financial statements. 16 Consolidated balance sheet (IFRS) EUR thousand Note 31 Dec 2022 31 Dec 2021 ASSETS Non-current assets Goodwill 15 141 654 134 054 Intangible assets 15 28 284 28 314 Property, plant and equipment 16 5 680 5 095 Equity accounted investments 29 252 - Investments in shares 18 240 240 Receivables 20, 26 772 1 152 Deferred tax asset 19 363 201 Total non-current assets 177 245 169 056 Current assets Trade receivables and other receivables 20, 26 33 463 31 649 Current income tax receivables 213 14 Cash and cash equivalents 21 5 768 6 106 Total current assets 39 444 37 769 TOTAL ASSETS 216 690 206 825 EQUITY AND LIABILITIES Equity attributable to the owners of the parent company Share capital 22 80 80 Reserve for invested unrestricted equity 22 107 876 107 876 Retained earnings 22 1 488 -1 857 Total equity attributable to the owners of the parent company 109 444 106 099 Non-controlling interests 3 630 3 037 Total equity 113 074 109 136 Non-current liabilities Loans from financial institutions 24, 26 47 614 43 924 Lease liabilities 24, 26 2 948 2 527 Other liabilities 25, 26 974 1 944 Deferred tax liability 19 4 875 5 190 Total non-current liabilities 56 411 53 586 Current liabilities Loans from financial institutions 24, 26 4 448 4 400 Lease liabilities 24, 26 2 211 1 975 Trade payables and other liabilities 25, 26 38 954 35 499 Current income tax liabilities 1 591 2 228 Total current liabilities 47 204 44 102 Total liabilities 103 615 97 688 TOTAL EQUITY AND LIABILITIES 216 690 206 825 The notes are an integral part of the consolidated financial statements. 17 Consolidated cash flow statement (IFRS) EUR thousand Note 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Cash flows from operating activities Customer payments received 248 736 196 950 Cash paid to suppliers and employees -229 242 -186 967 Cash flows from operating activities before financial items and taxes 19 494 9 982 Interest paid -1 518 -1 497 Interest received 80 64 Other financial items 79 67 Income taxes paid -3 507 -2 497 Proceeds from repayments of loans 31 43 Net cash flows from operating activities 14 657 6 163 Cash flows from investing activities Purchase of tangible and intangible assets 15, 16 -2 998 -1 688 Proceeds from sale of tangible assets 16 104 231 Acquisition of subsidiaries, net of cash acquired 14 -6 125 -4 609 Disposal of subsidiaries 14 - 500 Purchase of equity accounted investments 29 -245 - Proceeds from sale of investments - 311 Proceeds from repayments of loans 6 190 Net cash flows from investing activities -9 257 -5 065 Cash flows from financing activities Change in non-controlling interests -80 -41 Proceeds from non-current borrowings 24 8 000 - Repayment of non-current borrowings 24 -92 - Repayment of current borrowings 24 -6 941 -4 328 Payment of lease liabilities 24 -2 588 -2 050 Dividends paid 22 -4 036 -4 021 Net cash flows from financing activities -5 737 -10 439 Net change in cash and cash equivalents -338 -9 341 Cash and cash equivalents at the beginning of the financial year 6 106 15 447 Cash and cash equivalents at the end of the financial year 5 768 6 106 The notes are an integral part of the consolidated financial statements. 18 Changes in equity (IFRS) Attributable to owners of the parent EUR thousand Note Share capital Reserve for invested unrestricted equity Fair value reserve Translation differences Retained earnings Total Non- controlling interests Total equity Equity 1 Jan 2022 80 107 876 - - -1 857 106 099 3 037 109 136 Profit for the financial year - - - - 7 156 7 156 316 7 472 Other comprehensive income: Change in fair value - - - - - - - - Translation differences - - - - - - - - Other comprehensive income for the financial year, net of tax - - - - - - - - Total comprehensive income - - - - 7 156 7 156 316 7 472 Transactions with owners Dividend distribution 22 - - - - -3 757 -3 757 -279 -4 036 Changes in non- controlling interests 28 - - - - -38 -38 557 518 Share based payments 7 - - - - -16 -16 - -16 Total equity 31 Dec 2022 80 107 876 - - 1 488 109 444 3 630 113 074 Attributable to owners of the parent EUR thousand Note Share capital Reserve for invested unrestricted equity Fair value reserve Translation differences Retained earnings Total Non- controlling interests Total equity Equity 1 Jan 2021 80 106 572 -3 -50 -5 714 100 885 2 859 103 744 Profit for the financial year - - - - 7 601 7 601 480 8 081 Other comprehensive income: Change in fair value - - 3 - - 3 - 3 Translation differences - - - 50 - 50 - 50 Other comprehensive income for the financial year, net of tax - - 3 50 - 52 - 52 Total comprehensive income - - 3 50 7 601 7 653 480 8 134 Transactions with owners Dividend distribution 22 - - - - -3 737 -3 737 -284 -4 021 Share issue 22 - 1 305 - - - 1 305 - 1 305 Changes in non- controlling interests 28 - - - - -23 -23 -18 -41 Share based payments 7 - - - - 16 16 - 16 Total equity 31 Dec 2021 80 107 876 - - -1 857 106 099 3 037 109 136 The notes are an integral part of the consolidated financial statements. 19 Notes to the Consolidated Financial Statements 1. General information and basis of presentation Basic information about the Group Eezy’s services include staffing services, professional services as well as light entrepreneurship services. Staffing services are provided through franchisees in addition to Group companies. Services are provided to a broad range of sectors including the hotel and restaurant, retail, manufacturing, construction and health care services sectors. Eezy Plc (“parent company”, “Eezy Plc”), the parent company of Eezy Group (“Eezy”, “Group”) is a Finnish public limited company with a business ID of 2854570-7. The domicile of Eezy Plc is in Helsinki, Finland and the registered postal address is PL 901, 20101 Turku, Finland. Eezy Group consist of the parent company Eezy Plc and its subsidiaries. A copy of the consolidated financial statements is available at the website www.eezy.fi. The board of directors of Eezy Plc has approved the publication of these financial statements in its meeting on 15 February 2023. According to the Finnish Limited Liability Companies Act, shareholders are authorized to approve or reject the financial statements in the Annual General Meeting held after the publication. The Annual General Meeting can also decide on the amendments of the financial statements. Basis of preparation These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the SIC and IFRIC interpretations in force as at 31 December 2022. International Financial Reporting Standards refer to the standards and their interpretations approved for application in the EU in accordance with the procedure stipulated in the EU Regulation (EC) No. 1606/2002 and embodied in the Finnish Accounting Act and provisions under it. The notes to the consolidated financial statements have also been prepared in accordance with the requirements in Finnish accounting legislation and Community law that complement IFRS regulations. The consolidated financial statements are prepared for a calendar year, which is the financial period of the parent company and the Group companies. The consolidated financial statements are presented in thousands of euros, unless otherwise stated. Additionally, the sum of individual numbers may deviate from the presented sum figure due to rounding differences. The comparative prior year information is presented in brackets after the information for the current financial year. The consolidated financial statements are presented in euros, which is the parent company’s functional and presentation currency. The information in the consolidated financial statements is based on original acquisition costs, except where otherwise stated in the accounting policy. Segments Staffing is the core business of the Group and the Group operates in the domestic market. The Board of Directors of the parent company is the chief operating decision maker (CODM) that makes decision on the allocation of resources and reviews the profit or loss. The operations of the Group are managed and reviewed as a whole and therefore the Group has only one segment. The figures that the CODM reviews do not differ materially from the figures presented in the consolidated income statement and balance sheet. No geographical information is presented as the Group operates only in Finland. Foreign currency items The consolidated financial statements are presented in euros, which is the parent company’s functional and presentation currency. Group’s transactions are mainly denominated in euros. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. 20 2. Significant management judgement and estimates The preparation of consolidated financial statements requires management to use judgement and estimates, which have an impact on the application of the accounting policy and the amounts of significant assets, liabilities, income and expenses. The actual results may differ from these estimates. The changes in accounting estimates are recognized in the financial year in which the change in estimate occurs as well as in future financial years on which they have an impact. Information on significant areas, which include significant estimates, uncertainties and judgement in the application of the accounting policies related to the items in the consolidated financial statements are presented in the following notes: • Revenue (note 3) • Income taxes (note 12) • Business combinations (note 14) • Intangible assets (note 15) • Leases (note 17) • Deferred tax assets and liabilities (note 19) • Financial risk management (note 26) Estimates and judgement are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are assumed to be reasonable under the circumstances. The impact of climate change on estimates and the Group's business operations Group has assessed that climate change has no significant direct effects, as the Group's business does not involve significant raw material or energy purchases. Climate change causes mainly indirect effects through the climate sensitivities of different customer industries. The Group's wide customer base reduces dependence on individual customers. The key assumptions of impairment testing Group assesses on every reporting date if there are indicators of impairment of goodwill. If any signs are detected, the carrying value of goodwill is compared to recoverable amount. The business growth and EBITDA used in goodwill impairment testing are based on management’s assessment of the future development considering the general poor economic development and high inflation in Finland due to e.g indirect effects of Russia offensive war in Ukraine. In economic development has been taken into account the effect of possible sick leaves and the availability of labor in competition in the personnel service and recruitment market. More information on intangible assets is provided in note 15. Financial risk management The most significant financial risks for Eezy are liquidity risk and credit risk. Liquidity risk relates to ensuring and maintaining sufficient financing for Eezy. Eezy strives to continuously assess and monitor the amount of financing needed for the business operations, by, among others, performing a monthly analysis on the sales development and investment needs in order to ensure the Group has sufficient liquid assets to finance the operations and to repay the borrowings when they fall due. Credit risk arises specially from trade receivables. The Group monitors continuously the level of write downs on receivables and changes the models by taking into account existing conditions and forward-looking information. More information on financial risk management is provided in note 26. 3. Revenue Eezy’s revenue comprises income from staffing services, professional services and light entrepreneurship services. In staffing services Eezy provides the customer the resources agreed. Eezy seeks employees through open applications as well as through its own employee pool in order to find an employee fulfilling the customer requirements within a short notice. The employee signs the employment contract with Eezy and Eezy is responsible for all the employer obligations, but work is performed under the customer company’s management. Staffing services’ revenue consists of income from services performed and invoiced by Eezy Group companies. In franchising services, Eezy signs a contract with local franchisees, which gives the local company a right to sell services using Eezy business concept and brand. Eezy also offers business support services to their customers. Franchising revenue comprises charges based on cooperation agreements. In the professional services area, Eezy provides consulting services for organizational development, cultural design, and personnel surveys. Eezy also provides recruitment, aptitude testing, training, and executive search services. Additionally, Eezy provides workforce training, coaching, guiding and rehabilitation services for the public sector as well as entrance examination courses and courses for upper secondary school students for private customers. 21 Light entrepreneurship services comprise the invoicing and business support services provided to the employee customers and the revenue from light entrepreneurship services comprise the fees collected from the employee customers. With the light entrepreneurship services provided to private persons they can operate as independent entrepreneurs without establishing a company of their own. Revenue by service area: EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Staffing services 212 699 178 054 Franchise fees 6 292 7 058 Professional services 26 069 15 723 Light entrepreneurship services 2 536 2 493 Total revenue 247 596 203 328 Bad debt provisions related to trade receivables and contractual assets are presented in note 26. Eezy does not have incremental costs for obtaining a contract or costs to fulfil a contract. Accounting policy Revenue recognition Revenue is recognized when service or goods have been delivered and control is perceived to been transferred to the customer to amount in which Eezy expects to be entitled to based on the customer contract in exchange for the services performed. Staffing services In staffing services Eezy signs a contract with the customer, in which the personnel resourced required by the customer are determined, and for which Eezy invoices according to principles defined in the contract. The range of services, contract terms and the length of the contract varies by customers. Assignments are mainly fixed-term contracts. Staffing services are considered as a series of (distinct) services, as each working hour is a distinct item, services are substantially the same, and have the same pattern of transfer to the customer over time. These series of services are recognized as one performance obligation. The price for the services is agreed on the customer contract, in which set prices are given for each service. Customer contracts do not include any significant variable consideration. The staffing services are mainly invoiced every two weeks. Typical payment term is 7-14 days net. Revenue are recognized over time as the customer benefits from the staffing services simultaneously as services are rendered. In addition, Eezy utilizes the practical expedient provided in IFRS 15 and recognizes the revenue for services provided by the reporting date in the amount to which it has a right to invoice. In staffing service contracts including growth funding arrangements, which Eezy has because of acquisition of Smile in 2019, the customer is obliged to purchase the amount of staffing services defined in the contract during a certain period. Contracts including growth funding arrangements are fixed-period contracts, typically 1-5 years. Eezy makes a growth funding payment to the customer based on a purchase commitment defined in the contract. Purchase commitment has been determined based on annual purchase estimate informed by the customer. By its nature, a growth funding payment is an advanced payment paid to the customer based on a purchase commitment and therefore recognized in receivables. The customer earns the growth funding paid in advance during the contract period based on the purchases made by them. The growth funding is a discount paid to the customer in advance which is recorded as a deduction of revenue when services are rendered to the customer. Growth funding is recognized in other current and non-current receivables. The total amount of growth funding receivables was EUR 613 thousand as at 31 December 2022 (EUR 1 041 thousand as at 31 December 2021). Based on management estimate, growth funding receivables will be deducted from the recognized revenue during the next 1 to 5 years. More information on growth funding is presented in note 26. Franchising Eezy Group signs cooperation agreements with chain entrepreneurs, which, based on management judgement, comprises the following performance obligations. According to the cooperation agreement, Eezy provides to the local franchisee firstly the franchising right, i.e. the right to sell services using Eezy’s business concept and brand and secondly business support services. According to the cooperation agreement, a local entrepreneur pays a cooperation fee to Eezy which includes the franchising right and business support services. The franchising right is a license as the local entrepreneur is given a right to use Eezy’s intellectual property. Revenue is recognized over time. The cooperation charges are payments based on the local entrepreneurs’ revenue and/or gross profit and revenue is recognized as the local entrepreneurs’ sales occurs. Revenue from the business support services is also recognized over time as the customer simultaneously benefits from the service as Eezy provides it. 22 Professional services In the professional services area, Eezy provides consulting services for organizational development, cultural design and personnel surveys. Eezy also provides recruitment, aptitude testing, training, and executive search services. Additionally, Eezy provides workforce training, coaching, guiding and rehabilitation services for the public sector as well as entrance examination courses and courses for upper secondary school students for private customers. Professional services are considered as a series of distinct services, as each working hour is a distinct item, services are substantially the same, and have the same pattern of transfer to the customer over time. Revenue from these services is recognized as services are rendered. The customer contracts do not include return or refund obligations or specific terms on warranties. Typical payment term agreed in the contract is 14-30 days net. Light entrepreneurship services Light entrepreneurship services comprise invoicing and administration services provided to the customers. A private individual selling one’s own expertise, invoices the services provided through Eezy’s service and receives the payment agreed with their customer with Eezy’s fee deducted from the balance. According to the management only one performance obligation is included in the customer contract: an invoicing service, which includes separate tasks. Although the service includes separate tasks, all are substantially the same, and have the same pattern of transfer to the customer (series of distinct services). Revenue from invoicing service is recognized as services are rendered, i.e. when the client’s customer is invoiced. Contractual assets and liabilities Contract assets are presented in other current and non-current receivables and related liabilities in current and non-current other liabilities. Receivables that Eezy has an unconditional right to receive, i.e. only the passage of time is required before payment of the consideration is due, are presented as trade receivables. Significant management judgement and estimates Revenue is recognized to the extent that it is highly probable that a significant reversal in the amount of revenue will not occur. Eezy’s management uses judgement when growth funding is recognized as deduction of revenue when services are rendered. Customer earns the growth funding paid in advance during the contract term based on purchases. Purchase commitment is defined based on the yearly purchase estimate made by the customer. By its nature growth funding is an advance payment paid to customer which is recognized as reduction of revenue when services are rendered to the customer. The purchase estimate informed by the customer may differ from the actual purchases and therefore the amounts recognized in revenue may differ from the estimate. 23 4. Other operating income EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Grants received 152 1 079 Gain on disposal of tangible assets 21 22 Change in VAT handling - 1 688 Gain on disposal of investments in group companies - 109 Other operating income 173 171 Total 347 3 070 Other operating income include a change in light entrepreneurship service fee’s VAT handling of EUR 1 688 thousand in 2021. In 2022, grants received include a corona subsidy from State treasury totaling EUR 0 thousand (EUR 1000 thousand in 2021). 5. Materials and services EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Recruitment costs, purchases and subcontracting -1 987 -1 649 Rent on premises -821 -125 Other external services -6 571 -4 285 Total -9 379 -6 059 Other external services consist primarily of subcontracting and other services. 6. Personnel expenses Eezy’s personnel expenses consists of wages and salaries, pension and social security expenses and expenses related to the share-based payments. The Group’s pension plans are classified as defined contribution plans. EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Wages and salaries -166 961 -137 558 Pension expenses -29 578 -23 515 Share-based payments (note 7) 32 -17 Other social security expenses -6 318 -4 487 Total -202 825 -165 576 Key management remuneration is presented in note 13. Accounting policy Pension obligations are classified as defined benefit plans or defined contribution plans. The Group’s statutory pension plans in Finland are classified as defined contribution plans. For defined contribution plans, the Group pays contributions to a separate fund, i. e. pension insurance companies. The Group does not have legal or constructive obligations to further payments if the fund does not have sufficient assets to pay the employee benefits related to the employee service from current and prior periods. Contributions to the defined contribution plans are recognized in the income statement in the period to which the contributions relate. Eezy does not have any defined benefit plans. The average number of employees during the financial year in presented in the table below: EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Salaried employees 527 374 Workers 3 837 3 320 Total 4 364 3 694 24 7. Share-based payments The Board of Directors of Eezy Plc decided on 17 December 2019 on a long-term share-based compensation plan (LTIP 2019- 2026) targeted to key employees and on 30 November 2021 to amend the terms due to the changes in the company’s business environment caused by the coronavirus pandemic. The terms of the long-term incentive were amended by extending the duration of the long-term incentive plan by one year until 2026 and adding a new earning period. On 28 March the board of director decided to extend the third earning period of the incentive plan. The aim of the incentive plan is to align the objectives of the shareholders and the key personnel in order to increase the value of the company as well as to ensure the execution of business strategy on a long-term basis. In addition, the aim is to engage the key personnel of the company and to offer them a competitive incentive plan based on share ownership and the development of the company’s value. The share-based incentive plan contains five earning periods. The first 13 months earning period started on 1 December 2019 and ended on 31 December 2020. The second 13 months earning period started on 1 December 2020 and ended on 31 December 2021. The third 16 months earning period started on 1 December 2021 and ends on 31 March 2023. The fourth 24 months earning period starts on 1 January 2023 and ends on 31 December 2024. The fifth 24 months earning period starts on 1 January 2025 and ends on 31 December 2026. The Company’s Board of Directors determines the reward criteria and their target levels as well as the employees covered by the incentive plan before the beginning of each earning period. No shares were issued for the first and second earning periods. From the third period a maximum of 246 000 shares can be paid as compensation. The payment of the compensation is subject to the condition that the key employee’s employment or service relationship has not been terminated prior to the payment. Additionally, the payment is subject to achieving the set revenue and operating profit margin targets. The amount of compensation paid is subject to the achievement levels of the performance targets. The Board of Directors has the right to pay the compensation in shares, cash or as a combination of these. It is currently estimated that no shares will be earned for the period. The fair value of the shares granted is determined based on the company’s quoted share value reduced by the estimated number of dividends paid during the accounting period. Long-term (2019-2026) share-based compensation plan Earning period 1 Dec 2019 – 31 Dec 2020 Number of shares granted (maximum) 137 210 Number of shares forfeited 31 008 Number of shares not exercised 106 202 Number of shares granted as at 31 Dec 2022 0 Share price at the beginning of service 6.25 Performance conditions Service condition Revenue growth and operating profit % Estimated time of payment No payment Payment method Combination of shares and cash Number of participants 7 Long-term (2019-2026) share-based compensation plan Earning period 1 Dec 2020 – 31 Dec 2021 Number of shares granted (maximum) 179 091 Number of shares forfeited 0 Number of shares not exercised 179 091 Number of shares granted as at 31 Dec 2022 0 Share price at the beginning of service 4.87 Performance conditions Service condition Revenue and operating profit Estimated time of payment No payment Payment method Combination of shares and cash Number of participants 8 25 Long-term (2019-2026) share-based compensation plan Earning period 1 Dec 2021 – 31 March 2023 Number of shares granted (maximum) 246 000 Number of shares forfeited 60 000 Number of shares granted as at 31 Dec 2022 186 000 Share price at the beginning of service 5.92 Performance conditions Service condition Revenue and operating profit % Estimated time of payment No payment Payment method Combination of shares and cash Number of participants in the beginning of the earning period 18 The amount of profits recognized in the accounting period is EUR 32 (expenses 17) thousand, of which EUR -16 (16) thousand is from the share portion and recognized within the equity. The amount of the liability recognized in the balance sheet is EUR 0 (16) thousand as at 31 December 2022. Accounting policy Eezy has a share-based compensation plan where the settlement is a combination of equity and cash. The cost is recognized over the period during which the employee has to remain in the company’s payroll in order the award to vest. Cost is recognized from the grant date or the service beginning date, whichever is earlier, until the settlement date. The component paid as equity (shares) is recognized as an expense measured at the grant date fair value and is not remeasured after the grant date. The performance conditions of the arrangement are non-market conditions and are not taken into account in the grant date fair value but instead are taken into account by adjusting the number of shares that are expected to vest. The expense recognized is based on management’s judgement on the likelihood of achieving the performance conditions, and as such the number of shares that are expected to vest. In addition, the expense recognized is impacted by the company’s management’s estimate on the number of participants in the arrangement that will remain in the company’s payroll until the award is settled. The achievement of vesting conditions is estimated at the end of each reporting period and ultimately the amount recognized is based on the number of shares that eventually vest. The cash-settled component is measured at the end of each reporting period and at the liability settlement date. Also, for the cash-settled award, the amount recognized is impacted by the management’s estimate on the achievement of performance targets and the number of the participants in the arrangement that will remain in the company’s payroll until the award is settled. The expense on the component settled in shares is recognized as personnel expenses and the corresponding amount is credited in retained earnings. The cash-settled amount is recognized as personnel expenses and as non-current other liabilities in the balance sheet. 26 8. Depreciation, amortization and impairment Depreciation, amortization and impairment by asset class is presented in the table below: EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Acquisition related amortization Trademarks -338 -249 Customer relationships -2 926 -2 727 Non-competition agreements -797 -1 068 Total -4 061 -4 045 Other intangible assets Trademarks -15 -24 IT software -1 307 -1 167 Development costs -109 -14 Total -1 432 -1 204 Total amortization, intangible assets -5 493 -5 249 Property, plant and equipment Buildings -161 -147 Buildings, right-of-use -2 169 -1 974 Machinery and equipment -102 -138 Machinery and equipment, right-of-use -301 -173 Total -2 733 -2 431 Total other depreciation, amortization and impairment losses 1 -4 165 -3 636 Total depreciation, amortization and impairment losses -8 226 -7 680 The acquisition related amortization comprises the amortization made on the recognized fair value adjustments arisen from business combinations. 1 Total other depreciation, amortization and impairment losses is total depreciation and amortization less the acquisition related amortization. 9. Other operating expenses EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 IT machinery and software expenses -3 546 -2 734 Administrative expenses -3 256 -3 492 Marketing expenses -3 164 -2 990 Personnel related expenses -2 968 -2 323 Travelling expenses -2 108 -1 704 Facility maintenance expenses -614 -438 Transaction expenses related to acquisitions -273 -415 Credit losses 217 80 Other expenses 1 -1 803 -1 254 Total -17 515 -15 270 1 Other expenses consist of multiple items that are not material separately. 27 10. Auditor fees EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Statutory audit 191 235 Other advisory services 6 7 Tax advisory services 9 14 Other services 138 58 Total 344 313 Auditor fees include the fees paid to the auditors of each Group company. Other services include mainly the expenses related to the acquisitions. 11. Financial income and expenses EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Financial income Revaluation of debt 584 - Interest income from receivables 80 68 Other financial income 99 81 Total 763 149 Financial expenses Interest expenses from borrowings -1 463 -1 265 Interest expenses from lease liabilities -136 -131 Other interest expenses -11 -94 Other financial expenses -31 -123 Total -1 642 -1 614 Total financial income and expenses -879 -1 465 12. Income taxes EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Current income tax expense -2 607 -2 803 Adjustments to taxes for prior periods 62 1 Total current income tax expenses -2 545 -2 802 Change in deferred tax assets 162 -172 Change in deferred tax liabilities 730 708 Deferred tax expense/benefit 892 536 Total income taxes -1 654 -2 266 28 The reconciliation between income tax expense and tax payable is presented in the table below: EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Result for the period before taxes 9 125 10 348 Tax calculated at the Finnish tax rate of 20% -1 825 -2 070 Tax effect of tax free and non-deductible items: Effect of the expenses not deductible for tax purposes 1) -56 -224 Effect of the tax-free income 11 26 Recognition of deferred tax assets for previously unrecognized losses 155 - Adjustments in respect to prior years 62 1 Total income taxes -1 654 -2 266 1) Non-deductible items consist mainly of costs related to acquisitions. Deferred tax assets and liabilities have been measured using the tax rate of 20%. The effective tax rate of the Group was 18(22)%. Accounting policy The tax expense in profit or loss consist the tax based on the taxable income for the financial year and deferred taxes. Taxes are recognized in the profit or loss, except when they are directly related to the items recognized in equity or other comprehensive income, when the tax impact is also recognized as a corresponding item within equity. Taxes based on the taxable income for the financial year is calculated using the applicable income tax rate in each country. The tax expense for the financial year is adjusted by any taxes related to the previous financial years. Significant management judgement and estimates The tax expense recognized in profit or loss consists of the tax based on the taxable profit for the financial year, taxes related to the previous financial years and changes in deferred taxes. The management estimates the utilization of deferred tax assets against any future taxable profit. Management judgement on income taxes is presented in notes 14 and 19. 13. Related party transactions Transactions and balances with related parties: EUR thousand 2022 2021 Communities that hold significant control in community Sales 16 627 10 566 Purchases -103 -257 Trade receivables 2 053 2 016 Trade payables and other liabilities - 10 Related party transactions are made on the same terms and conditions as transactions with independent parties. Related party loans and receivables are presented in notes 20, 25 and 26. 29 Key management remuneration (accrual basis) is presented below: Board of Directors remuneration EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Tapio Pajuharju 50 48 Kati Hagros 25 25 Liisa Harjula 25 25 Timo Laine, until 12 April 2022 6 24 Timo Mänty 24 24 Paul-Petteri Savolainen 24 24 Jarno Suominen 25 25 Mika Uotila 25 24 Mikko Wiren, from 12 April 2022 20 - Total 224 220 Key management wages and salaries (not including CEO) EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Wages, salaries and benefits 755 782 CEO remuneration EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Wages, salaries and benefits CEO, until 19 December 2022 545 296 CEO, from 19 December 2022 9 - Total 554 296 In 2022 CEO’s remuneration includes termination benefits. Management compensation (Board of Directors, CEO, key managament) EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Short-term employee benefits 1 373 1 324 Post-employment benefits 193 190 Termination benefits 221 - Share-based payments -18 9 Total 1 769 1 523 CEO pension obligations and severance compensation The CEO participates in the statutory Finnish pension scheme (TyEL) under the Employees Pension Act under which the pension is based on the service period and earnings. No specific retirement age has been agreed. The pension expenses recognized was EUR 60 (52) thousand. The CEO’s term of notice is three months in case the CEO decides to resign and nine months if the contract is terminated by the company. The CEO will receive normal compensation during the termination period and is not entitled to a separate compensation. Accounting policy Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decision. Eezy’s related parties include associated companies and key management personnel. Key management personnel include members of the board of directors and the group management team, CEO and substitute CEO, and their close family members. In addition, Eezy’s related parties include owners that use control or exercise significant influence in Eezy Plc and companies in which they have control or companies in which the person that uses control in Eezy Plc exercises significant influence or belongs to the company’s or its parent’s management. The Group structure is presented in note 27. 30 14. Business combinations Acquisitions 2022 Acquisition of Eezy Farenta, Eezy Siqni and Eezy Leidenschaft In line with its strategy, Eezy strengthened its professional staffing services by purchasing the share capital of Farenta Ltd (current Eezy Farenta Ltd) from Oriola Plc on 1 April 2022. Farenta supports around 350 pharmacies yearly with over 300 employees and it is the largest pharmacy staffing service operator in Finland. In line with its strategy, Eezy strengthened its research and coaching services by acquiring research and business culture companies The Siqnificant Company Ltd (current Eezy Siqni Ltd) and Leidenschaft Ltd (current Eezy Leidenschaft Ltd) on 1 April 2022. The companies will become part of Eezy Flow Ltd, which belongs to the Eezy Group and offers management, strategy, research and change management services. Leidenschaft is Finland’s first business culture agency, whose mission is to develop business culture into a real competitive advantage. The Siqnificant Company’s product, Siqni, is the world’s first tool for gaining employee understanding and measuring employee experience. EUR thousand Eezy Farenta Eezy Siqni and Eezy Leidenschaft Purchase considerations Cash consideration 881 5 009 Shares issued - 599 Total purchase consideration 881 5 608 Shares of Eezy Flow issued in exchange for Eezy Siqni and Eezy Leidenschaft The fair value of Eezy Flow shares issued in exchange for Eezy Siqni and Eezy Leidenschaft is EUR 599 thousand. Fair values of the acquired assets and liabilities assumed in the business combinations at the acquisition date: EUR thousand Eezy Farenta Eezy Siqni and Eezy Leidenschaft ASSETS Non-current assets Intangible assets 1 048 1 597 Property, plant and equipment 85 34 Receivables - 67 Total non-current assets 1 133 1 698 Current assets Trade receivables and other receivables 823 793 Cash and cash equivalents 71 44 Total current assets 894 837 TOTAL ASSETS 2 028 2 535 LIABILITIES Non-current liabilities Loans from financial institutions - 229 Lease liabilities 23 - Deferred tax liability 165 250 Total non-current liabilities 188 479 Current liabilities Loans from financial institutions - 147 Lease liabilities 39 46 Trade payables and other liabilities 3 896 753 Current income tax liabilities - 126 Total current liabilities 3 935 1 072 TOTAL LIABILITIES 4 122 1 551 31 EUR thousand Eezy Farenta Eezy Siqni and Eezy Leidenschaft Total net assets acquired -2 095 984 Goodwill 2 976 4 625 Purchase consideration 881 5 608 Fair values of the acquired identified intangible assets at the acquisition date EUR thousand Eezy Farenta Eezy Siqni and Eezy Leidenschaft Customer relationships 486 328 Trademarks 336 168 Non-competition agreements - 754 Total 823 1 250 Eezy Farenta The gross amount of trade receivables at the date of the acquisition was EUR 815 thousand and it was estimated to be fully collectable. Goodwill arising from the acquisition of Eezy Farenta amounted to EUR 2 976 thousand which comprises mainly workforce, synergies and market position. The goodwill recognized in connection with the acquisition is not tax deductible. The transaction costs of the acquisition amounted to EUR 61 thousand and are recorded in other operating expenses for the period 2022. Eezy Siqni and Eezy Leidenschaft The gross amount of trade receivables at the date of the acquisition was EUR 507 thousand and it was estimated to be fully collectable. Goodwill arising from the acquisition of Eezy Siqni and Eezy Leidenschaft amounted to EUR 4 625 thousand which comprises mainly workforce, synergies and market position. The goodwill recognized in connection with the acquisition is not tax deductible. The transaction costs of the acquisition amounted to EUR 203 thousand and are recorded in other operating expenses for the period 2022. Impact on earnings Revenue and profit (loss) for the period of the acquired companies from the date of acquisition included in the consolidated financial statements for the financial year 2022: EUR thousand Eezy Farenta 1 Apr – 31 Dec 2022 Eezy Siqni and Eezy Leidenschaft 1 Apr – 31 Dec 2022 Impact on the Group Revenue and Result Revenue 5 308 2 586 Result for the period -194 407 If the acquisitions had taken place on 1 January 2022, the pro forma consolidated revenue for the financial year from 1 January 2022 to 31 December 2022 would have been EUR 250 166 thousand and pro forma consolidated operating profit would have been EUR 9 914 thousand. The pro forma figures are based on the consolidated revenue and operating profit for the financial year 2022 as well as on the revenue and operating profit of the acquired companies from the beginning of 2022 until the date of the acquisitions. Figures have been adjusted related to the amortizations of intangible assets related to acquisitions, as if acquisitions had been done on 1 January 2022 and additional amortizations recorded since then. Cash flows from purchase considerations EUR thousand Eezy Farenta Eezy Siqni and Eezy Leidenschaft Cash consideration 881 5 009 Deducted: Cash and cash equivalents acquired -71 -44 Net cash flow 810 4 965 32 Other acquisitions In June, Eezy increased its ownership in Eezy Valmennuskeskus Ltd by 10 per cent and recorded the paid purchase price EUR 0.3 million against the contingent consideration recorded in 2021. As of a result of this and the revaluation of the remaining contingent debt, the company has recorded EUR 0.6 million to financial income. Eezy Plc owns 90 per cent of the company. Eezy Valmennuskeskus Ltd has been consolidated by 100 per cent to Eezy Group (IFRS) since initial acquisition date. Eezy made an investment of approx. EUR 0.2 million in minority shareholding of VeggArt’s Oy which specializes in employment services for immigrants. Acquisitions 2021 Acquisition of Eezy Valmennuskeskus, Eezy Triton and ValueScout Eezy strengthened its offering to the public sector by acquiring KK Valmennuskeskus Oy (current Eezy Valmennuskeskus Oy) on 1 November 2021. On 1 October 2021 Eezy strengthened its recruitment of labour from outside Finland through its purchase of Triton Henkilöstöpalvelut Oy (current Eezy Triton Oy), which is a company that recruits labour from several eastern European countries. Eezy strengthened its research business by acquiring ValueScout research method business on 1 June 2021. ValueScout is a research method which examines emotional experience and finds hidden growth potential in customer, brand and personnel experience. EUR thousand Eezy Valmennuskeskus Eezy Triton ValueScout Purchase considerations Cash consideration 3 781 894 100 Shares issued 999 306 - Contingent consideration 1 868 - - Total purchase consideration 6 647 1 200 100 Shares issued in exchange for Eezy Valmennuskeskus and Eezy Triton The fair value of Eezy shares issued in exchange for Eezy Valmennuskeskus is EUR 999 thousand based on the number of 152 thousand shares and subscription price of EUR 6.5867(volume weighted average price in 22–28 October 2021). The fair value of Eezy shares issued in exchange for Eezy Triton is EUR 306 thousand based on the number of 46 thousand shares and subscription price of EUR 6.6750 (volume weighted average price in 27–29 September 2021). Contingent considerations of acquiring Eezy Valmennuskeskus and Value Scout Eezy acquired a 80% majority of the shares of Eezy Valmennuskeskus on 1 November 2021. According to the terms of the acquisition, both Eezy and the non-controlling interests of Eezy Valmennuskeskus have the right to execute trade over remaining 20% of the shares of Eezy Valmennuskeskus in 2024. The purchase price of the shares that Eezy may acquire later is based on the profitability of Eezy Valmennuskeskus in 2022–2023. Because of the sell and purchase options in the agreement, Eezy Valmennuskeskus has been consolidated by 100-percent to Eezy Group since 1 November 2021, and contingent consideration measured at fair value of EUR 1 868 thousand has been recorded for the purchase price of the non- controlling interest. There is an additional contingent consideration included in the acquisition agreement of ValueScout, which is determined based on the sales margin for the period of 1 June 2021 – 30 May 2026. According to the company’s management estimate, EUR 79 thousand represents the fair value of the additional purchase consideration at the time of acquisition. Based on the terms of the agreement, the seller does not have the right to access the contingent consideration if the key management person is not employed at the period of the contingent consideration. Therefore, the purchase consideration of EUR 79 thousand will be accounted for as personnel expense for the work performed after the acquisition during 2021–2026. 33 Fair values of the acquired assets and liabilities assumed in the business combination at the acquisition date: EUR thousand Eezy Valmennuskeskus Eezy Triton ValueScout ASSETS Non-current assets Intangible assets 2 127 165 34 Property, plant and equipment 24 - - Receivables 256 - - Total non-current assets 2 407 165 34 Current assets Trade receivables and other receivables 1 709 441 - Current income tax receivables 14 - - Cash and cash equivalents 3 122 - Total current assets 1 726 563 - TOTAL ASSETS 4 133 728 34 LIABILITIES Non-current liabilities Loans from financial institutions 557 - - Deferred tax liability 354 33 7 Total non-current liabilities 911 33 7 Current liabilities Loans from financial institutions 239 - - Trade payables and other liabilities 1 098 505 - Current income tax liabilities 265 6 - Total current liabilities 1 602 510 - TOTAL LIABILITIES 2 531 543 7 Total net assets acquired 1 620 185 27 Goodwill 5 027 1 016 73 Purchase consideration 6 647 1 200 100 Fair values of the acquired identified intangible assets at the acquisition date EUR thousand Eezy Valmennuskeskus Eezy Triton ValueScout Customer relationships 934 - - Trademarks 506 - 21 Non-competition agreements 329 165 13 Total 1 769 165 34 Eezy Valmennuskeskus The gross amount of trade receivables at the date of the acquisition was EUR 929 thousand and it was estimated to be fully collectable. Goodwill arising from the acquisition of Eezy Valmennuskeskus amounted to EUR 5 027 thousand which comprises mainly workforce, synergies and market position. The goodwill recognized in connection with the acquisition is not tax deductible. The transaction costs of the acquisition amounted to EUR 163 thousand and are recorded in other operating expenses for the period 2021. Eezy Triton The gross amount of trade receivables at the date of the acquisition was EUR 341 thousand and it was estimated to be fully collectable. Goodwill arising from the acquisition of Eezy Triton amounted to EUR 1 016 thousand which comprises mainly workforce, synergies and network of subcontractors. The goodwill recognized in connection with the acquisition is not tax deductible.The transaction costs of the acquisition amounted to EUR 113 thousand and are recorded in other operating expenses for the period 2021. 34 ValueScout Goodwill arising from the acquisition of ValueScout amounted to EUR 73 thousand which comprises mainly research method and know-how related to it. There were no transaction costs related to the acquisition. Impact on earnings Revenue and profit (loss) for the period of the acquired companies from the date of acquisition included in the consolidated financial statements for the financial year 2021: EUR thousand Eezy Valmennuskeskus 1 Nov – 31 Dec 2021 Eezy Triton 1 Oct – 31 Dec 2021 Impact on the Group Revenue and Result Revenue 1 581 705 Result for the period 142 46 If the acquisitions had taken place on 1 January 2021, the pro forma consolidated revenue for the financial year from 1 January 2022 to 31 December 2021 would have been EUR 214 272 thousand and pro forma consolidated operating profit would have been EUR 12 480 thousand. The pro forma figures are based on the consolidated revenue and operating profit for the financial year 2021 as well as on the revenue and operating profit of the acquired companies from the beginning of 2021 until the date of the acquisitions. Figures have been adjusted related to the amortizations of intangible assets related to acquisitions, as if acquisitions had been done on 1 January 2021 and additional amortizations recorded since then. Cash flows from purchase considerations EUR thousand Eezy Valmennuskeskus Eezy Triton ValueScout Cash consideration 3 781 894 100 Deducted: Cash and cash equivalents acquired -3 -122 - Net cash flow 3 778 772 100 Divestments in financial year 2022 During financial year 2022 there were no disposal of subsidiaries. Divestments in financial year 2021 Eezy sold its Swedish subsidiary VMP-Group Sweden AB to Palm & Partners Bemanning AB on 4 January 2021. The transaction did not significantly impact Eezy's result in 2021. Accounting policy The acquisitions are accounted for using the acquisition method. The cost of the acquisition is measured at the fair value of consideration transferred comprising of the fair values of the assets transferred, liabilities incurred to the former owners of the acquired business, equity interests issued as purchase consideration, and the fair value of any contingent consideration arrangement. The excess of the aggregate of the consideration transferred over the fair value of the net identifiable assets acquired is goodwill. On the acquisition of a subsidiary, fair values are attributed to the identifiable net assets including identifiable intangible assets and contingent liabilities acquired. Significant management judgement and estimates The net assets acquired is measured at fair value. The fair value of the net assets acquired is based on market value or estimated expected cash flows (customer relationships, trademarks and non-competition agreements) or the estimated market value of similar assets. Eezy’s management has used judgement and made assumptions in the customer relationship and trademark fair value determination, which is based on the management assumptions and estimates of the expected long-term revenue and profitability development, length of the customer relationships and discount rate. In addition to the assumptions mentioned, management has made assumptions on the possible impact of competition to Eezy’s business when valuing non- competition agreements. If the estimates and assumptions of the development of the business turns out to be too optimistic, an impairment may be required to be recognized on the assets. The management believes that the estimates and assumptions used are appropriate when determining fair values. The trademarks, customer relationships and non-competition agreements recognized as a result of acquisitions are presented in note 15. The fair value of the contingent consideration included in the acquisition purchase consideration is determined based on the present value of the expected cash flows. The final purchase consideration may differ from the amount estimated by management and these changes in fair value are recognized in the statement of comprehensive income. The carrying values of the contingent considerations recognized at the balance sheet date are presented in note 25. 35 15. Intangible assets EUR thousand Goodwill Trademarks IT Software Customer relation- ships Non- competition agreements Develop- ment costs Intangible assets total Cost at 1 Jan 2022 134 054 3 184 9 458 27 804 3 674 515 44 636 Acquisitions 7 600 505 573 814 754 - 2 646 Additions - 4 2 433 - - 406 2 843 Disposals - - -430 - -2 806 - -3 236 Transfers between classes - - 37 - - -37 0 Cost at 31 Dec 2022 141 654 3 692 12 072 28 618 1 622 885 46 889 Accumulated amortization and impairment at 1 Jan 2022 - -693 -6 691 -6 507 -2 415 -14 -16 320 Disposals - - 403 - 2 806 - 3 210 Amortization - -354 -1 307 -2 926 -797 -109 -5 493 Accumulated amortization and impairment at 31 Dec 2022 - -1 047 -7 594 -9 433 -406 -123 -18 603 Net carrying value at 1 Jan 2022 134 054 2 491 2 767 21 297 1 259 501 28 314 Net carrying value at 31 Dec 2022 141 654 2 646 4 477 19 185 1 216 761 28 284 EUR thousand Goodwill Trademarks IT Software Customer relation- ships Non- competition agreements Develop- ment costs Intangible assets total Cost at 1 Jan 2021 127 938 2 623 8 144 26 870 3 315 - 40 953 Acquisitions 6 116 527 16 934 508 342 2 327 Additions - 34 1 298 - - 174 1 506 Disposals - - - - -150 - -150 Cost at 31 Dec 2021 134 054 3 184 9 458 27 804 3 674 515 44 636 Accumulated amortization and impairment at 1 Jan 2021 - -420 -5 526 -3 780 -1 496 - -11 222 Disposals - - - - 150 - 150 Amortization -273 -1 008 -2 727 -1 068 -14 -5 090 Impairments - - -157 - - - -157 Accumulated amortization and impairment at 31 Dec 2021 - -693 -6 691 -6 507 -2 415 -14 -16 320 Net carrying value at 1 Jan 2021 127 938 2 203 2 619 23 090 1 819 - 29 731 Net carrying value at 31 Dec 2021 134 054 2 491 2 767 21 297 1 259 501 28 314 Goodwill impairment testing Goodwill is tested for impairment annually to identify any impairment. In addition, the Group monitors any internal and external indicators to identify any signs for impairment. If signs are detected, the carrying value of goodwill is compared to recoverable amount. In the goodwill impairment testing, the carrying value of the group of cash generating units (CGU) is compared to the recoverable amount of the CGU. Eezy has one CGU which is the segment defined by the company and is the level used to monitor the goodwill. 36 If the recoverable amount of the CGU is lower than the carrying value, the difference is recognized as an impairment loss in the statement of comprehensive income. Impairment tests have indicated that the recoverable amount of the CGU exceeds the carrying value and goodwill has not been impaired. Impairment testing and the key assumptions The recoverable amount of the CGU is determined using a value-in-use method. Value-in-use is calculated by discounting the future cash flows. The calculation of the recoverable amount is impacted primarily by changes in the forecasted EBITDA, discount rate used and the estimated revenue growth. The business growth and EBITDA are based on management’s assessment of the future market demand and environment. The key assumptions used in the value-in-use calculations: 31 Dec 2022 31 Dec 2021 The average cumulative increase in revenue, forecast period 6.1% 10.4% Terminal growth assumption 2.0% 1.0% Average EBITDA, forecast period 10.3% 10.3% Forecasted EBITDA, terminal value 9.5% 9.5% Pre-tax discount rate 11.3% 10.9% Impairment testing calculations are based on the cash flow forecasts and the budget prepared by the Group’s management team and approved by the Board of Directors, including the forecast and terminal periods. A five-year forecast period is used in the impairment testing calculations. The (after-tax) discount rate used is based on the weighted average cost of capital (WACC). The management has determined the following assumptions used in the calculations: Assumption Description Revenue growth Revenue growth is based on the review period forecast. The impact of the acquisitions completed in the financial year on the Group’s revenue has been considered in the growth forecast. EBITDA EBITDA is based on the budgeted, forecasted profitability development in the review period as well as expected long-term profitability. Terminal growth assumption The growth assumption for the terminal period has been determined as 2% which represents the long-term inflation projections Discount rate The discount rate is determined based on peer company analysis. The forecasted cash flows are based on the existing business of the cash generating unit at the time of testing. Expansion investments have not been taken into account in the cash flow forecast estimates. The Group’s cash generating unit provides mainly staffing services. The management judgement and estimates regarding future have a central role in preparing the impairment testing calculations. The discounted cash flow method used in preparing the calculations requires forecasts and assumptions of which the most significant relate to revenue growth, the development of costs, the level of maintenance investments and changes in the discount rate. The main uncertainty factors in calculations are the general poor economic development and high inflation in Finland due to e.g indirect effects of Russia offensive war in Ukraine, the effect of possible sick leaves and the availability of labor in competition in the personnel service and recruitment market. The growth assumption for the terminal period has been determined as 2% which represents the long-term inflation projections. It is possible that the predictions related to the cash flow forecasts are not achieved. As a result, the impairment of goodwill or other assets may have a significantly negative effect on the result and the financial position in the future periods. The result of impairment testing is assessed by comparing recoverable amount of CGU to carrying value of CGU as follows: Recoverable amount / Carrying value Test result less than 1.0 Impairment 1.0-1.2 Exceeds slightly 1.2-1.5 Exceeds clearly more than 1.5 Exceeds remarkably 37 In 2022 and 2021, impairment testing has been performed quarterly. Test result of impairment testing exceeds remarkably; therefore no impairment losses have been recognized in any financial periods presented. The management has prepared a sensitivity analysis for the key factors and based on the management estimate none of the reasonably possible changes in the staffing service key assumptions would lead to a situation in which the recoverable amount would be less than the carrying value of the cash generating unit. Accounting policy Group’s intangible assets comprise mainly goodwill arising from business combinations and other intangible assets identified in connection with the business combinations, such as trademarks, non-competition agreements and customer relationships. Goodwill Goodwill arising from business combinations is the excess of the consideration paid, amount of non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interests in the acquired entity over the fair value of the net identifiable assets acquired. Goodwill represents the consideration paid for the future economic benefits that cannot be separately identified and recognized. Goodwill is not amortized but is tested for impairment annually and whenever there is an indication that it might be impaired. Impairment loss is immediately recognized in the income statement if the carrying amount exceeds the recoverable amount. Impairment losses on goodwill are not reversed. Goodwill is measured at cost less any accumulated impairment losses incurred. Trademarks Eezy has obtained trademarks for the acquired companies in the business combinations. As part of the purchase price allocation a value has been determined for significant trademarks and they are recognized in intangible assets. Development costs Research expenses are booked as an expense as they are incurred. Development costs are recognized as an intangible asset when the Group can demonstrate that: • the technical feasibility of completing the intangible asset so that the asset will be available for use or sale, • the intention is to complete and its ability and intention to use or sell the asset, • the asset will generate future economic benefits, • the availability of resources is to complete the asset, • is the ability to measure reliably the expenditure during development. The development costs recognized as assets are amortized over their estimated useful lives. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Other intangible assets An intangible asset is recognized only if it is probable that future economic benefits will flow to the company and the cost can be measured reliably. The other intangible assets with finite useful life identified in the business combinations are recognized separately from goodwill if they meet the recognition criteria of an intangible asset, i.e. are separable or arise from contractual or other legal rights and if the cost can be measured reliably. Non-competition agreements In the business combinations the seller generally agrees to a non-competition agreement related to staffing services for a limited duration. As part of the purchase price allocation a value has been determined for non-competition arrangements and they are recognized in intangible assets. Customer relationships In the business combinations, a value has been determined for the existing customer contracts and customer relationships as a part of the purchase price allocation. The value determined in connection with the purchase price allocation has been recognized in intangible assets. Intangible assets are amortized over the following estimated useful life: Trademarks 10 years IT software 3-5 years Non-competition agreements 2-3 years Customer relationships 7-10 years Development costs 3-5 years The residual value, useful life and amortization method are reviewed at least at each financial year-end and adjusted to reflect the changes in economic benefit expectations. 38 Amortization is terminated when an intangible asset is classified (or included in the group that is classified) as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Impairment of tangible and intangible assets The Group estimates at the end of each balance sheet date if any indications of impairment exist. If such exists, the recoverable amount of the assets is estimated. In addition, the recoverable amount is estimated annually regardless of indications of impairment for the following assets: goodwill, intangible assets with indefinite useful life, and intangible assets under construction. The need for impairment is monitored at the level of cash generating units (CGU) which is the lowest level that is largely independent of the cash inflows from other groups of assets. The recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. The value in use is the estimate of the future cash flows of an asset or cash generating unit which are discounted to present value. The pre-tax rate which represents the market view of time value of money and risks associated to asset or cash generating unit is used as a discount rate. Impairment loss is recognized if the carrying value of an asset is higher than the recoverable amount. Impairment loss is recognized in profit and loss. The useful life of the asset is reassessed when an impairment loss is recognized. Impairment is reversed if there is a change in estimates used in determining the recoverable amount of an asset. Impairment is not reversed over the carrying value of the asset without recognition of impairment. An impairment loss recognized for goodwill is not reversed in any circumstances. Significant management judgement and estimates Business combinations In business combinations, management makes estimates related to e.g. future cash flows of an acquired business, fair value adjustments, value and useful life of trademarks and synergies obtained from the acquisition. Goodwill impairment testing In the goodwill impairment testing, the carrying value of the group of cash generating units (CGU) is compared to the recoverable amount of the CGU at least annually and when there are indications that it might be impaired. The recoverable amount of the cash generating units is based on value in use calculations. Industry specific factors have been taken into account in the discount rate used. The recoverable amount used in impairment testing is assessed by using budgets, forecasts and terminal periods and the sensitivity is analyzed for discount rate, profitability, and changes in residual value growth factors. Changes in these estimates or in the structure or number of cash generating units or group of units may cause impairment in the fair value of assets or goodwill. The estimates concern the expected sale prices of services, expected price development of service costs, and discount rate. The value in use estimates require forecasts and assumptions, of which the most significant concern the revenue growth and development of costs, the level of maintenance investments and changes in the discount rate. It is possible that the predictions related to cash flow forecasts are not achieved. As a result, the impairment of goodwill or other assets may have a significant negative effect on the result and financial position in the future periods. 39 16. Property, plant and equipment EUR thousand Buildings Buildings, right-of-use Machinery and equipment Machinery and equipment, right-of-use Other Total Cost at 1 Jan 2022 827 7 296 1 481 849 102 10 556 Acquisitions - 46 58 62 - 166 Additions 57 2 694 41 259 - 3 051 Disposals - -1 569 -83 -145 - -1 798 Revaluation - 282 - -97 - 185 Cost at 31 Dec 2022 884 8 749 1 498 928 102 12 161 Accumulated depreciation and impairment at 1 Jan 2022 -415 -3 647 -1 098 -229 -73 -5 462 Disposals - 1 569 -1 145 - 1 714 Depreciation -161 -2 169 -102 -301 - -2 733 Accumulated depreciation and impairment at 31 Dec 2022 -576 -4 246 -1 201 -385 -73 -6 481 Net carrying value at 1 Jan 2022 413 3 650 383 620 29 5 095 Net carrying value at 31 Dec 2022 307 4 503 297 542 29 5 680 EUR thousand Buildings Buildings, right-of-use Machinery and equipment Machinery and equipment, right-of-use Other Total Cost at 1 Jan 2021 1 080 9 616 1 646 341 102 12 786 Acquisitions - - 24 - - 24 Additions 137 624 25 690 - 1 476 Disposals -390 -2 198 -214 -185 - -2 987 Revaluation - -746 - 3 - -743 Cost at 31 Dec 2021 827 7 296 1 481 849 102 10 556 Accumulated depreciation and impairment at 1 Jan 2021 -658 -3 871 -959 -241 -73 -5 802 Disposals 390 2 198 - 185 - 2 773 Depreciation -147 -1 858 -129 -173 - -2 307 Impairment - -116 -10 - - -126 Accumulated depreciation and impairment at 31 Dec 2021 -415 -3 647 -1 098 -229 -73 -5 462 Net carrying value at 1 Jan 2021 422 5 745 687 100 29 6 984 Net carrying value at 31 Dec 2021 413 3 650 383 620 29 5 095 Accounting policy Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses and is recognized in the balance sheet when it is probable that future economic benefits will flow to the Group and costs can be measured reliably. The cost of property, plant and equipment comprises the expenses directly attributable to the acquisition. The subsequent expenses incurred are recognized in the carrying value of an item of property, plant and equipment or as a separate item if it is probable that future economic benefits will flow to the Group and costs can be measured reliably. Repair and maintenance expenses are recognized in profit or loss as incurred. If an item of property, plant and equipment consists of several separate parts that have different useful life each part is recognized as a separate item. 40 The Groups property, plant and equipment are depreciated over the estimated useful life. The depreciation periods are 5-8 years. The residual value and useful life of property, plant and equipment are reviewed at least annually at the balance sheet date and impairment adjustments are made if necessary. The Group estimates if there are any indications for impairment at each balance sheet date. If the carrying value of the asset is greater than the recoverable amount, the carrying value of the asset is reduced to its recoverable amount immediately. An item of property, plant and equipment classified as held for sale in accordance with IFRS 5 is not depreciated. The gains and losses from the sale of property, plant and equipment are presented in the other operating income or expenses. The gain or loss is determined as a difference between the sales price and carrying value. 17. Leases Eezy’s leases relate primally to premises and cars. The most significant leases are for the premises in the largest cities in which the operations have been centralized. These leases are mainly 3 to 5-year fixed term leases. Leases may include extension options and it is determined on a lease-by-lease basis if the extension option is exercised or not. Smaller premises have been leased for a perpetual term. Right-of-use assets are presented in note 16. The following lease liabilities are included in the borrowings in the balance sheet: Lease liabilities EUR thousand 31 Dec 2022 31 Dec 2021 Current 2 211 1 975 Non-current 2 948 2 527 Total 5 159 4 502 The maturity of the lease liabilities is presented in note 26. Eezy has leases that have not yet commenced but Eezy is contractually committed to. The leases commence during 2023 and the total lease liability of the contracts is approximately EUR 5 million. The following amounts related to leases are recognized in profit or loss: EUR thousand 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Depreciation and impairment losses -2 470 -2 146 Interest expenses from lease liabilities -136 -131 Lease expenses from short term leases -183 -49 Lease expenses from leases of low value assets -712 -583 The total cash outflow for leases in 2022 was EUR 3 619 (2 814) thousand. Accounting policy Right-of-use assets are measured at cost comprising the amount of the lease liability and any prepayments. Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term. Lease liability is initially measured at the commencement of the lease at the present value of the future payments. Lease payments include fixed payments and variable lease payments based on an index, any penalties for terminating the lease if the lease term reflects the termination. Payments for the periods covered by the extension options are included in the lease liability if the lease is reasonably certain to be extended. Lease payments are discounted using the interest rate implicit in the lease or the lessee’s incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined. Eezy’s incremental borrowing rate is determined based on financing offers, lease term and economic environment. Eezy’s leases include variable lease payments based on an index which are not included in the measurement of the lease liability until they realize. The lease liability is remeasured when the lease payment based on an index change. A corresponding adjustment is done to the right-of-use asset amount. Lease payments are allocated between principal and finance cost. The finance cost is expensed over the lease term to produce a constant periodic rate of interest on the remaining balance of the liability for each period. 41 Eezy’s leases include lease components and non-lease components. The consideration in the contract is allocated to the lease and non-lease components based on their relative stand-alone prices. Payments for short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in the result for the period. Short-term leases are leases with a lease term of 12 months of less. Exemption is applied to all classes of underlying assets. Low-value assets comprise IT equipment and machinery and office equipment. Significant management judgement and estimates In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Otherwise the Group assesses the historical leases and need for replacement leases when determining lease terms. The lease term is reassessed if a significant event or significant change in circumstances occurs or the Group becomes obliged to exercise or not to exercise an option. 18. Investments in shares and funds Fair values of investments and the fair value hierarchy levels are presented in the table below: EUR thousand 31 Dec 2022 Fair value Level 31 Dec 2021 Fair value Level Investments in shares, unquoted 240 3 240 3 Total 240 240 The changes in level 3 items are as follows: Share investments 1 Jan 2021 235 Addition 5 31 Dec 2021 240 31 Dec 2022 240 In addition, the Group has contingent consideration liabilities which were classified as level 3 in the fair value hierarchy. More information is presented in notes 14 and 25. Accounting policy Share investments are measured at fair value. Eezy has chosen to recognize the changes in the fair value of the share investments in other comprehensive income instead of the profit or loss for the period. Eezy sees this as an appropriate decision as shares are non-current investments not held for trading. The changes in the fair value are not subsequently reclassified to profit or loss. Dividend income is recognized in the profit or loss for the period. Eezy’s share investments consist of listed and unlisted shares. The fair value of the unlisted shares is determined using valuation models. They are measured at cost when it is determined that the acquisition cost is a reasonable estimate of the fair value. Listed shares are measured at the balance sheet date fair value. The Group has no listed shares measured at fair value. The financial instruments measured at fair value in the balance sheet are classified based on the following fair value hierarchy levels: Level 1: The fair value of publicly traded instruments (like listed shares) is based on the quoted year-end market prices of similar assets or liabilities in active markets. The bid price is used as the quoted market price. Level 2: The fair value of financial instruments that are not traded on the active market is determined with a valuation technique. These techniques maximize the use of observable market data and apply company specific estimates only to a minimal degree. When all significant inputs needed to determine the fair value of the instrument are observable, the instrument is categorized on level 2. Level 3: If one or several significant inputs are not based on observable market data, the instrument is categorized on level 3. Such instruments include the Company’s investments in unlisted shares. 42 19. Deferred tax assets and liabilities Deferred taxes are recognized for all temporary differences. The changes in deferred taxes are as follows: EUR thousand 1 Jan 2022 Recognized in profit or loss 31 Dec 2022 Deferred tax assets Tax losses carried forward 35 -15 20 Tax losses from the period - 155 155 Leases 23 - 23 Credit loss provision 143 23 166 Total 201 162 363 EUR thousand 1 Jan 2021 Recognized in profit or loss 31 Dec 2021 Deferred tax assets Tax losses carried forward 20 15 35 Tax losses from the period 98 -98 - Interest cost suspended in taxation 47 -47 - Leases 19 4 23 Credit loss provision 189 -46 143 Total 374 -172 201 EUR thousand 1 Jan 2022 Recognized in profit or loss Acquisitions 31 Dec 2022 Deferred tax liabilities Business combinations 5 179 -727 415 4 865 Loans 12 -2 - 10 Total 5 190 -730 415 4 875 EUR thousand 1 Jan 2021 Recognized in profit or loss Acquisitions 31 Dec 2021 Deferred tax liabilities Business combinations 5 491 -706 394 5 179 Loans 14 -2 - 12 Total 5 504 -708 394 5 190 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and the deferred taxes related to the income tax of the same taxable entity. Accounting policy Deferred taxes are recognized for all temporary differences between the carrying values and the tax bases. The largest temporary differences arise from the fair value adjustments of assets and liabilities in business combinations, provisions and unused tax losses. Deferred taxes are calculated using the tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be generated against which the deductible temporary difference can be utilized. The recognition criteria of the deferred tax asset is assessed at each balance sheet date. However, a deferred tax liability is not recognized, when it arises from the initial recognition of an asset or liability in a transaction other than a business combination and the recognition of the asset or liability at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset the current tax assets against current tax liabilities, and when the deferred tax assets and liabilities are related to the income tax levied by the same taxation authority either from the same taxable entity or different taxable entities when there is an intention to settle the asset and the liability on a net basis. 43 Significant management judgement and estimates Eezy’s management uses judgement when recognizing deferred tax assets and liabilities in the balance sheet. Deferred tax assets are recognized on the balance sheet only if the utilization of the assets is seen as more probable than not utilizing the deferred tax assets. Utilization is subject to the future generation of taxable income. Assumptions related to the generation of future taxable profit are based on the management estimates on future cash flows. The Group’s ability to generate taxable income is also subject to the general economic situation, financing, competitiveness and regulation environment which are not in the Group’s control. These estimates and assumptions involve risks and uncertainty, and thus it is possible that the changes in circumstances will change the expectations which may affect the amount of the deferred tax liabilities and assets recognized as well as other unrecognized tax losses and temporary differences. 20. Trade receivables and other receivables EUR thousand 31 Dec 2022 31 Dec 2021 Non-current receivables Growth funding receivables 423 683 Lease guarantees 313 441 Other receivables 36 27 Total non-current receivables 772 1 152 Current receivables Trade receivables 30 718 30 105 Growth funding receivables 190 358 Other loan receivables 9 46 Other receivables 537 454 Accrued income 2 009 687 Total current receivables 33 463 31 649 Total trade receivables and other receivables 34 235 32 800 Accrued income consists of sales accruals, employer insurance and advance payments. Trade receivables are measured at the transaction price. The carrying value of the trade receivables and other receivables equals their fair value. Information on the impairment of the trade receivables and other receivables and their credit risk is described in note 26. 21. Cash and cash equivalents Cash and cash equivalents presented in the balance sheet and cash flow statement consists of cash at bank and in hand. Utilized credit limits are presented as current liabilities. Credit limits are an essential part of the liquidity management. Liquidity risk and its management is described in note 26. 44 22. Equity EUR thousand, unless otherwise specified Shares 1 000 pcs Share capital Reserve for invested unrestricted equity Retained earnings Total attributable to the owners of the parent company Non- controlling interests Total equity 31 Dec 2022 25 047 80 107 876 1 488 109 444 3 630 113 074 31 Dec 2021 25 047 80 107 876 -1 857 106 099 3 037 109 136 Share capital Eezy Plc has one series of shares and all shares are equally entitled to dividends. One share carries one vote at the general meeting. Eezy’s shares are listed on the official list of Nasdaq Helsinki. Pcs 2022 2021 1 Jan 25 046 815 24 849 375 Directed share issue - 197 440 31 Dec 25 046 815 25 046 815 The directed share issue in the 2021 financial year is related to the Eezy Triton acquisition, in which 45 843 shares were issued, and to the Eezy Valmennuskeskus acquisition, in which 151 597 shares were issued. Own shares The Company does not hold its own shares. Dividends The Annual General Meeting (AGM) decided on 12 April 2022 that for year 2021 a dividend of EUR 0.15 per share is distributed in two tranches. The first tranche of the dividend, EUR 0.10 per share, was paid on 26 April 2022. The second tranche of the dividend, EUR 0.05 per share, was paid on 27 October 2022. Board of Directors proposes a dividend of EUR 0.15 per share, of which EUR 0.10 will be paid in April and EUR 0.05 in October 2023. Reserve for invested unrestricted equity The reserve for invested unrestricted equity includes other investments that by nature are considered as equity and the share subscription price unless it is explicitly decided to be included in the share capital. The changes in the reserve for invested unrestricted equity are presented in the statement of changes in equity. Accounting policy Share capital includes only ordinary shares. The incremental costs directly attributable to the issue of new shares or other equity instruments, net of tax, are recognized in equity as a deduction from the proceeds. If company buys back its own equity instruments, the consideration paid is deducted from equity. The dividend payable to the Group’s shareholders is recognized in the financial year during which the general meeting has approved the dividend. 23. Earnings per share 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Profit for the financial year attributable to the owners of the company 7 156 154 7 600 963 Weighted average number of shares, undiluted 25 046 815 24 883 655 Earnings per share, basic (EUR) 0.29 0.31 Impact of shares related to the share-based payments plan 240 449 197 479 Weighted average number of shares, diluted 25 287 264 25 081 134 Earnings per share, diluted (EUR) 0.28 0.30 The number of dilutive shares in 2022 was 240 449 (197 479). 45 Accounting policy The basic earnings per share is calculated by dividing the profit (loss) attributable to the owners of the parent company by the weighted average number of shares. In calculating the diluted earnings per share, the dilution impact of the options and shares granted to employees is taken into consideration. More information on the share-based payments is in note 7. 24. Borrowings Changes in borrowings divided to changes from financing cash flows and other changes are presented in the table below: EUR thousand Loans from financial institutions Lease liabilities Other loans Total 1 Jan 2021 51 877 5 984 9 57 870 Repayments of borrowings -4 328 -2 050 -9 -6 387 Acquisitions 796 - - 796 New leases - 1 314 - 1 314 Revaluations - -745 - -745 Other changes -21 - - -21 31 Dec 2021 48 325 4 502 - 52 826 Proceeds from borrowings 8 000 - - 8 000 Repayments of borrowings -4 633 -2 588 - -7 221 Acquisitions 376 108 - 484 New leases - 2 953 - 2 953 Revaluations - 185 - 185 Other changes -5 -1 - -6 31 Dec 2022 52 062 5 159 - 57 221 The financing arrangements of the Group relate primarily to the financing of the business acquisitions. The maturities of these financing arrangements range from 1 to 5 years. The Group’s loans include covenants defined in the financing agreements. The most important loan covenants are reported to the creditors half yearly. If the Group does not meet the covenants, the creditor may require an accelerated loan prepayment. During the financial years presented, the Group has met loan related covenants, which relate to net debt ratio and ratio of interest bearing net debt compared to EBITDA. The Group’s loans are denominated in euros, primarily have floating interest rates and a significant part of its loans are linked to the Euribor. The repricing of the loans occurs every 12 months. The impact on the cash flows arising from changes in the loan interest rates at the current market interest rate levels is insignificant. The loan margins vary between 1.7% and 2.45%. The covenants also include terms related to interest rate levels. Half yearly the margin can vary between 1.45% and 2.70% depending on the level of the covenant related to net debt and EBITDA. The carrying value of the borrowings equals their fair value in the periods presented, as the coupon rates have been on the same level with market rates, and the impact of discounting the future cash flows using the market interest rate at the valuation date is not significant. The maturities of the borrowings and more information on the interest rate risk and the liquidity risk management is presented in note 26. Accounting policy Borrowings are initially recognized at fair value, net of transaction costs incurred. After the initial recognition borrowings are measured at amortized cost using the effective interest method. Borrowings are classified as current liabilities if the Group intends to settle the borrowings during the next 12 months after the reporting date or if the Group does not have an unconditional right to defer the settlement for at least 12 months after the reporting date. The transaction costs incurred in connection with the borrowings are recognized as interest expenses using the effective interest method. 46 25. Trade payables and other liabilities EUR thousand 31 Dec 2022 31 Dec 2021 Non-current liabilities Contingent considerations 974 1 928 Share-based payments - 16 Total non-current liabilities 974 1 944 Current liabilities Trade payables 9 545 6 241 Contingent considerations 39 54 VAT liability 8 672 8 994 Personnel related liabilities 4 090 4 487 Other liabilities 241 515 Personnel related accrued expenses 15 665 14 689 Other accrued expense 702 520 Total current liabilities 38 954 35 499 Total trade payables and other liabilities 39 928 37 443 Accounting policy Fair values of trade payables and other liabilities equal their carrying values. They are measured at cost or amortized cost apart from contingent considerations which are measured at fair value. Fair value is based on management’s estimate and it is classified as level 3 in the fair value hierarchy. 26. Financial risk management The Group’s principles of financial risk management have not significantly changed during reporting period. Eezy and its operating activities are exposed to certain financial risks. Financial risk management is a part of the Group’s risk management processes and an integral part of Eezy’s strategy process, planning process and day-to-day management. Eezy’s CEO is responsible for drafting the principles of risk management and for ensuring that the principles are implemented systematically and appropriately. Eezy’s Group Management Team is responsible for identifying group level risks. Risk management is reported to Eezy’s Board of Directors and the Board confirms the company’s principles of risk management. The most significant financial risks for Eezy are credit risk and liquidity risk. Group treasury monitors the day-to-day liquidity and the CFO is responsible for the long-term liquidity and for monitoring the covenants. Liquidity risk Liquidity risk relates to ensuring and maintaining sufficient financing for Eezy. Eezy strives to continuously assess and monitor the amount of financing needed for the business operations, by, among others, performing a monthly analysis on the sales development and investment needs in order to ensure the Group has sufficient liquid assets to finance the operations and to repay the borrowings when they fall due. The CFO analyses the possible need for additional financing. The Group aims to ensure the availability and flexibility of the Group’s financing with sufficient available credit facilities, a balanced debt maturity profile and sufficiently long loan periods as well as by using several financial institutions as counterparties and different forms of financing, when necessary. The Group’s financing activities determine the optimal level of cash. Cash and cash equivalents amounted to EUR 5 768 (6 106) thousand at the end of the financial year, in addition to which the Group had undrawn committed credit limits available totaling to EUR 10 000 (10 000) thousand. The Group has a long-term senior loan from financial institutions and the financial agreements include the terms of covenants. The breach of covenants may lead to the situation where the creditor may require an accelerated loan prepayment or immediate prepayment. As of 31 December 2022, the Group has non-current loans from financial institutions EUR 47 614 (43 924) thousand and current loans from financial institutions EUR 4 448 (4 400) thousand. The terms and conditions of the loans and related covenants are described in note 24. 47 The following tables present the contractual maturity analysis of the Group’s financial liabilities. The figures are undiscounted and include interest payments and repayments. EUR thousand 0-6 months 7-12 months 1-3 years 4-5 years Total contractual cash flows Carrying value 31 Dec 2022 Loans from financial institutions 1 749 4 757 49 522 14 56 043 52 062 Lease liabilities 1 367 991 2 710 361 5 428 5 159 Trade payables 9 545 - - - 9 545 9 545 Contingent considerations 39 - 954 20 1 013 1 013 Total 12 700 5 748 53 186 395 72 029 67 779 EUR thousand 0-6 months 7-12 months 1-3 years 4-5 years Total contractual cash flows Carrying value 31 Dec 2021 Loans from financial institutions 1 496 3 991 45 731 188 51 406 48 325 Lease liabilities 1 053 1 003 2 058 535 4 648 4 502 Trade payables 6 241 - - - 6 241 6 241 Contingent considerations 54 - 1 908 20 1 981 1 981 Total 8 844 4 994 50 175 265 64 276 61 049 Credit risk Credit risk arises from trade receivables and the growth funding receivables. Credit risk also arises from loan receivables, other receivables and cash and cash equivalents but based on Group’s analysis their credit risk is considered immaterial. The Group’s policy defines the creditworthiness requirements for the counterparties. Credit risk management and credit control are centralized in the Group’s financial management. The Group aims to minimize the risks related to the receivables through the terms of payment of the receivables, customer- specific monitoring of trade receivables, effective collection, and checking of the customers’ creditworthiness, as well as partly through various collateral arrangements. For the growth funding paid to their customers, the Group has received a counterparty guarantee from these customers that covers the growth funding paid to these customers. The trade receivables and growth funding of certain big customers together form credit risk concentrations for the Group. The Group has aimed to secure the most significant customer-specific receivable positions through various collateral arrangements. Typical collaterals are, among others, guarantees and various pledges to the benefit of the Group. During the financial year, the Group has recognized EUR 551 (227) thousand on trade receivables and growth funding receivables as credit losses and EUR 882 (307) thousand as reversal of unused amount in profit or loss. Trade receivables The staffing service business is based on sales invoiced. It involves a risk of credit losses typical for the nature of the business and the industry. Historically, the level of incurred credit losses on trade receivables has typically been low. The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The Group monitors continuously the level of write downs on receivables and changes the models by taken into account existing conditions and forward-looking information. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 31 December 2022 or 31 December 2021, respectively, and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information and macroeconomic factors affecting the ability of the customers to settle the receivables. 48 The table below presents the changes in the credit loss allowance for the periods presented, the age analysis of trade receivables, and for each age analysis group the recognized impairments and the percentages used: EUR thousand Not due Due 1-30 days Due 31-60 days Due 61-90 days Due 91-180 days Due over 180 days Total 31 Dec 2022 Expected credit loss rate, % 0.2% 0.8% 1.5% 2.0% 10.0% 26.0% Carrying value of trade receivables 26 347 1 494 234 382 1 030 1 906 31 392 Credit loss provision 53 12 4 8 103 496 674 EUR thousand Not due Due 1-30 days Due 31-60 days Due 61-90 days Due 91-180 days Due over 180 days Total 31 Dec 2021 Expected credit loss rate, % 0.2% 0.8% 1.5% 2.0% 10.0% 26.0% Carrying value of trade receivables 26 383 1 906 307 148 613 1 197 30 553 Credit loss provision 53 15 5 3 61 311 448 EUR thousand 2022 2021 1 Jan 448 345 Change in provision -105 20 Recognized as credit losses -551 -224 Unused amount reversed 882 307 31 Dec 674 448 The Group monitors continuously the level of write downs on receivables and changes the models by taken into account existing conditions and forward-looking information. Trade receivables are written off when there is not a reasonable expectation of recovery. Indicators that there is not a reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group and a failure to make contractual payments for a period of greater than 360 days past due. Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item. Growth funding receivables Growth funding has been paid to certain large customers in the staffing service business. The earning of the growth funding is based on the customers’ future purchases and the payments of the trade receivables generated from them. Growth funding receivables were acquired in connection with the acquisition of Smile in 2019 and they were measured at fair value considering the estimated future credit losses. Growth funding receivables are secured by using, among others, guarantees and various pledges. Unexpected customers insolvency situations may lead to disruptions of providing services and may lead to termination of growth funding agreements that are earlier considered favorable. The Group monitors continuously the level of write downs on receivables and changes the models by taken into account existing conditions and forward-looking information. After initial recognition, the Group recognizes impairment from growth funding receivables based on expected credit losses. The Company considers the growth funding receivables to be low credit risk where they have a low risk of default and the counterparty has a strong capacity to meet its contractual cash flow obligations in the near term. From these receivables, 12- month expected credit losses are recognized. If the credit risk is not considered to be low or the credit risk has increased significantly since initial recognition, lifetime expected credit losses are recognized from the growth funding receivables. The mitigating effect of collateral is taken into consideration in the recognized credit losses. 49 Significant management judgement and estimates Eezy’s management uses judgement when determining whether there has been a significant increase in the credit risk of growth funding receivables so that the recognition of lifetime expected credit losses is commenced, and on the timing when the receivables are written off as impaired. Management presumes the credit risk to have increased significantly when the payments are at least 180 days past due. Additionally, the past-due receivables are analyzed on a case by case basis. The growth funding receivables are written off when there is not a reasonable expectation of recovery, for example when the customer is in liquidation or has entered bankruptcy. Capital management Eezyn johto seuraa osana pääoman hallintaa konsernitaseen mukaisia lainoja sekä omaa pääomaa. Konsernin pääoman As a part of their capital management, Eezy’s management monitors the borrowings and equity as presented in the consolidated balance sheet. The aim of the Group’s capital management (equity vs. debt) is, with the optimal capital structure, to support the business operations by ensuring normal operational prerequisites, and to increase the shareholder value in the long term. Capital management is also driven by the owners’ aim to maintain a simple financial structure. Capital needs are primarily fulfilled with long-term debt financing. The capital structure is adjusted mainly by dividend distributions and share issues. The Group can also decide to sell assets in order to reduce debt. The development of the Group’s capital structure is monitored with comparing net debt to adjusted EBITDA, which is reported to the Group management regularly. Net debt is calculated by deducting cash and cash equivalents from non-current and current loans from financial institutions, non-current other liabilities, lease liabilities, current contingent consideration liabilities and current financial liabilities. Adjusted EBITDA is calculated by adding to operating profit the following: depreciation, amortization and impairment losses, and items affecting comparability, such as items relating to acquisitions, closing of business operations, structural reorganization and significant redundancy costs. Interest rate risk Interest rate risk means the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s loans primarily have floating interest rates and a significant part of its loans are linked to the Euribor, EUR 17.5 million loan has a fixed interest rate. The Group’s floating interest rates loans may expose to the cash flow interest rate risk. The interest rates of borrowings are described in note 24. 50 27. Group structure Subsidiaries belonging to the Group as at 31 December 2022 are presented in the table below: Subsidiary Domicile Group ownership portion, % Eezy VMP Oy Helsinki 100% Bework Oy Helsinki 100% Castanea Oy Helsinki 100% Conrator Oy Helsinki 100% Eezy Sonire Oy Helsinki 100% Staffservice Finland Oy Helsinki 100% Workcontrol Oy Helsinki 100% Eezy Kevytyrittäjät Osk Helsinki 100% Eezy Personnel Oy Tampere 100% Extremely Nice Job Oy Helsinki 100% Enjoy Etelä Oy Helsinki 100% Enjoy Pohjoinen Oy Helsinki 100% Enjoy Itä Oy Helsinki 100% Enjoy Länsi Oy Helsinki 100% Henkilöstöratkaisu Extraajat Oy Helsinki 100% Eezy Kauppa Etelä-Suomi Oy Helsinki 100% Eezy Kauppa Helsinki Oy Helsinki 100% Eezy Kauppa Suomi Oy Helsinki 100% Eezy Kauppa Pirkanmaa Oy Helsinki 100% Eezy Kauppa Uusimaa Oy Helsinki 100% Eezy Kauppa Länsi Oy Helsinki 100% Eezy Flow Oy Turku 70.10% Eezy Siqni Oy Helsinki 100% Eezy Leidenschaft Oy Helsinki 100% Eezy Henkilöstöpalvelut Oy Tampere 100% Happy Henkilöstöpalvelut Oy Tampere 100% Smile Job Services Oy Tampere 100% Resta Henkilöstöpalvelut Oy Tampere 100% Doctors by Eezy Oy Tampere 80.75% Smile Office Oy Tampere 100% Eezy Events Oy Tampere 100% Smile Huippu Oy Kuopio 100% Smile MMS Oy Kuortane 100% Smile Industries Oy Kuortane 100% Smile Industries Tampere Oy Tampere 100% Smile Pohjanmaa Oy Kuortane 100% Smile Palvelut Helsinki Oy Tampere 100% Smile Palvelut Pohjoinen Oy Tampere 100% Smile Services Oy Tampere 100% Smile Super Oy Tampere 100% Smile Tampere Oy Tampere 100% Smile Banssi Oy Tampere 100% Smile Banssi Etelä Oy Espoo 100% Smile Banssi Keski Oy Jyväskylä 100% Smile Palvelut Royal Oy Tampere 100% Eezy Teollinen Etelä Oy Helsinki 100% Smile Seinäjoki Oy Tampere 100% 51 Smile Jobio Pohjanmaa Oy Tampere 100% Smile Jobio Pirkanmaa Oy Tampere 100% Smile Jobio Varsinais-Suomi Tampere 100% Eezy Import Oy Tampere 80.00% Eezy Teollinen Pohjoinen Oy Tampere 100% Smile Kymppi-Service Länsi-Suomi Oy Tampere 100% Eezy United Oy Helsinki 70.00% Eezy United Tampere Oy Helsinki 63.00% Eezy United Jyväskylä Oy Jyväskylä 63.00% Eezy Shine Oy Helsinki 67.00% Eezy Valmennuskeskus Oy Helsinki 90.00% Eezy Farenta Oy Helsinki 100% These consolidated financial statements consist of Eezy Plc, the parent company of the Group, and all subsidiaries over which the parent company has control. Acquisitions that have impacted the Group structure are presented in note 14. Accounting policy Subsidiaries are entities over which the Group has control. The group controls an entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to eliminate share ownership between the Group companies. The acquisition cost exceeding the fair value of the net identifiable assets acquired is recorded as goodwill. If the acquisition cost is less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly as income in the result of the period. The acquisition related costs, other than those associated with the issue of debt or equity securities, are expensed as incurred. Any contingent consideration payable is recognized at fair value at the acquisition date, and classified as a financial liability or equity. The contingent consideration classified as a financial liability is remeasured to fair value at each balance sheet date and changes in fair value are recognized in the result for the period. The contingent consideration classified as equity is not remeasured. Any non-controlling interests in the acquired entity is measured at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. The valuation policy is determined on an acquisition-by- acquisition basis. Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies applied by the Group. The profit (loss) for the period and total comprehensive income for the period attributable to the owners of the parent company and non-controlling interests are presented in the consolidated statement of comprehensive income. Total comprehensive income for the period is allocated to non-controlling interests although this would result in a negative non-controlling interest. Non-controlling interests in the equity is presented as a separate line item in the balance sheet as part of equity. Changes in the ownership of the subsidiaries that do not result in a loss of control are treated as transactions with equity owners of the Group. In a business combination achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date and any gains or losses arising is recognized in the result for the period. When the Group loses the control in a subsidiary, any retained interest in the entity is remeasured to its fair value at the date when the control ceases and the difference arising from the measurement is recognized in profit or loss. 52 28. Changes in the non-controlling interests Company in which interests are acquired Acquisition date Acquired share New ownership interest Purchase consideration (EUR thousand) Change in non- controlling interests (EUR thousand) Change in retained earnings (EUR thousand) 2022 Eezy Henkilöstöpalvelut Oy Doctors by Eezy Oy 27 Jan 2022 4.75% 80.75% 79 -44 -37 2021 Eezy Henkilöstöpalvelut Oy Smile Industries Kuopio Oy 5 Feb 2021 10.00% 100.00% 40 -23 -18 29. Investments in associates EUR thousand 2022 2021 Cost at 1 Jan - - Acquisitions 245 - Share of the result of associates 7 - Cost at 31 Dec 252 - On 14 June 2022, Eezy made an investment of EUR 245 thousand in minority shareholding of VeggArt’s Oy which specializes in employment services for immigrants. 30. Commitments and contingencies Eezy has a group cash pooling arrangement managed by Eezy Plc and the arrangement includes all subsidiaries. All current and future cash pool receivables are a used as a comprehensive guarantee for liabilities on the bank accounts included in the cash pool agreement. EUR thousand 31 Dec 2022 31 Dec 2021 Liabilities in balance sheet for which collaterals given Loans from financial institutions, non-current 47 614 43 924 Loans from financial institutions, current 4 448 4 400 Total 52 062 48 325 EUR thousand 31.12.2022 31.12.2021 Mortgages on own behalf Company mortgages 100 000 100 000 Property, plant and equipment - 16 Total 100 000 100 016 The shares of Eezy VMP Oy, Eezy Henkilöstöpalvelut Oy and Eezy Farenta Oy are pledged to existing and future financial institution loans on the balance sheet dates. More information on business combinations is presented in note 14. Accounting policy A contingent liability is a possible obligation that has arisen from past events and whose existence is confirmed only by the occurrence of uncertain future events not wholly in the control of the Group. A contingent liability is also a present obligation whose settlement probably does not require an outflow of resources, and the amount cannot be measured reliably. A contingent liability is presented in the notes of the consolidated financial statements. 53 31. New standards New and amended standards and accounting policies applied in the financial year ended 31 December 2022 Group has applied following new and amended standards and accounting policies from 1 January 2022 onwards. These have not had an impact on consolidated financial statements 2022. Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets (effective for financial years beginning on or after 1 January 2022) When an onerous contract is accounted for based on the costs of fulfilling the contract, the amendments clarify that these costs comprise both the incremental costs and an allocation of other direct costs. Annual Improvements to IFRS Standards 2018–2020 (effective for financial years beginning on or after 1 January 2022) The annual improvements process provides a mechanism for minor and non-urgent amendments to IFRSs to be grouped together and issued in one package annually. The amendments clarify the following standards IFRS 9 Financial Instruments - Fees in the 10 per cent test for derecognition of financial liabilities. This amendment clarifies that – for the purpose of performing the 10 per cent test for derecognition of financial liabilities – in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. Property, Plant and Equipment - Proceeds before Intended Use – Amendments to IAS 16 Property, Plant and Equipment (effective for financial years beginning on or after 1 January 2022) Under the amendments, proceeds from selling items before the related item of PPE is available for use should be recognised in profit or loss, together with the costs of producing those items. Reference to the Conceptual Framework - Amendments to IFRS 3 Business Combinations (effective for financial years beginning on or after 1 January 2022) The amendments update a reference in IFRS 3 and makes further reference related amendments. Adoption of new and amended standards in future financial years Group estimates that adoption of new and amended standards listed below in future financial years will not have a significant impact on consolidated financial statements. Disclosure of Accounting Policies – Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements (effective for financial years beginning on or after 1 January 2023, early application is permitted) The amendments clarify the application of materiality to disclosure of accounting policies. Definition of Accounting Estimates – Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (effective for financial years beginning on or after 1 January 2023, early application is permitted) The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates, with a primary focus on the definition of and clarifications on accounting estimates. Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 Income Taxes (effective for financial years beginning on or after 1 January 2023, early application is permitted) The amendments narrow the initial recognition exemption (IRE) and clarify that the exemption does not apply to transactions such as leases and decommissioning obligations which give rise to equal and offsetting temporary differences. Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 Leases (effective for financial years beginning on or after 1 January 2024, early application is permitted) The amendments introduce a new accounting model for variable payments and will require seller-lessees to reassess and potentially restate sale-and-leaseback transactions entered into since 2019. Classification of Liabilities as Current or Non-current - Amendments to IAS 1 Presentation of Financial Statements : Classification of Liabilities as Current or Non-current; Classification of Liabilities as Current or Non-current - Deferral of Effective Date; and Non-current Liabilities with Covenants (effective for financial years beginning on or after 1 January 2024, early application is permitted) The amendments are to promote consistency in application and clarify the requirements for determining if a liability is current or non-current. The amendments specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. The amendments require to disclose information about these covenants in the notes to the financial statements. 54 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures * (available for optional adoption, effective date deferred indefinitely) The amendments address the conflict between the existing guidance on consolidation and equity accounting and require the full gain to be recognised when the assets transferred meet the definition of a ‘business’ under IFRS 3 Business Combinations. * = not yet endorsed for use by the European Union as of 31 December 2022 32. Events after the balance sheet date No significant events after the balance sheet date. 55 Parent company financial statements 1 January – 31 December 2022 56 Parent company income statement (FAS) EUR 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Revenue 13 905 949.54 12 064 136.50 Other operating income 49 262.19 7 101.53 Personnel expenses Wages and salaries -3 559 074.72 -3 119 606.46 Social security expenses Pension expenses -568 546.45 -509 527.35 Other social security expenses -134 385.15 -109 490.18 Social security expenses -702 931.60 -619 017.53 Personnel expenses -4 262 006.32 -3 738 623.99 Depreciation, amortization and impairment losses Depreciation and amortization according to plan -82 788.68 -40 681.97 Depreciation, amortization and impairment losses -82 788.68 -40 681.97 Other operating expenses -8 555 631.87 -7 228 821.03 Operating profit (loss) 1 054 784.86 1 063 111.04 Financial income and expenses Income from investmens in group companies 80 000.00 0,00 Other interest income and other financial income From other companies 24.34 73.45 From group companies 1 777 361.53 1 679 042.61 Interest expenses and other financial expenses To other companies -1 462 712.65 -1 262 775.61 To group companies 0.00 -5.31 Financial income and expenses 394 673.22 416 335.14 Profit (loss) before appropriations and taxes 1 449 458.08 1 479 446.18 Appropriations Group contribution 4 015 000.00 2 500 000.00 Appropriations 4 015 000.00 2 500 000.00 Income taxes Taxes for the financial year and previous financial years -1 114 925.76 -816 254.64 Income taxes -1 114 925.76 -816 254.64 Profit (loss) for the financial year 4 349 532.32 3 163 191.54 57 Parent company balance sheet (FAS) EUR 31 Dec 2022 31 Dec 2021 ASSETS Non-current assets Intangible assets Intangible rights 24 440.75 30 342.93 Goodwill 0.00 94 166.69 Other non-current expenditures 199 513.52 165 850.62 Total intangible assets 223 954.27 290 360.24 Tangible assets Machinery and equipment 65 119.15 45 366.54 Total tangible assets 65 119.15 45 366.54 Investments Holdings in group companies 165 406 373.58 115 909 034.40 Total investments 165 406 373.58 115 909 034.40 Total non-current assets 165 695 447.00 116 244 761.18 Current assets Non-current receivables Receivables from group companies 4 500 000.00 47 500 000.00 Other non-current receivables 19 171.64 19 171.64 Total non-current receivables 4 519 171.64 47 519 171.64 Current receivables Trade receivables 4 602.20 2 335.76 Receivables from group companies 32 726 213.15 35 754 774.17 Other receivables 1.18 22 875.17 Prepayments and accrued income 273 385.27 198 785.63 Total current receivables 33 004 201.80 35 978 770.73 Cash at bank and in hand 5 634 685.21 5 605 663.51 Total current assets 43 158 058.65 89 103 605.88 TOTAL ASSETS 208 853 505.65 205 348 367.06 EQUITY AND LIABILITIES Equity Share capital 80 000.00 80 000.00 Reserve for invested unrestricted equity 110 507 409.02 110 507 409.02 Retained earnings 10 810 238.82 11 404 069.53 Profit (loss) for the financial year 4 349 532.32 3 163 191.54 Total equity 125 747 180.16 125 154 670.09 Liabilities Non-current liabilities Liabilities to credit institutions 47 222 216.00 43 444 440.00 Other non-current liabilities 0.00 60 000.00 Total non-current liabilities 47 222 216.00 43 504 440.00 Current liabilities Liabilities to credit institutions 4 222 224.00 4 222 224.00 Trade payables 501 830.82 744 729.80 Liabilities to group companies 29 445 579.83 30 100 671.38 Other liabilities 361 522.39 279 144.28 Accruals and deferred income 1 352 952.45 1 342 487.51 Total current liabilities 35 884 109.49 36 689 256.97 Total liabilities 83 106 325.49 80 193 696.97 TOTAL EQUITY AND LIABILITIES 208 853 505.65 205 348 367.06 58 Parent company cash flow statement (FAS) EUR 1 Jan – 31 Dec 2022 1 Jan – 31 Dec 2021 Cash flow from operating activities Cash receipts from customers 13 689 393.39 11 831 516.36 Cash paid to suppliers and employees -13 434 387.83 -10 424 746.33 Cash flow from operating activities before financial items and taxes 255 005.56 1 406 770.03 Interest and expenses paid from other operating financial expenses -1 357 305.22 -1 270 055.60 Dividends received 80 000.00 0.00 Interest received from operating activities 1 881 005.56 1 723 226.53 Other financial expenses paid -13 098.16 -364.23 Direct taxes paid -1 138 755.04 -606 535.03 Net cash from operating activities -293 147.30 1 253 041.70 Cash flow from investing activities Investments in tangible and intangible assets -176 689.00 -99 370.25 Proceeds from sale of tangible assets 62 766.00 0.00 Investments in subsidiaries -1 297 339.18 -4 950 846.17 Net cash from investing activities -1 411 262.18 -5 050 216.42 Cash flow from financing activities Repayment of current loans and borrowings -4 222 224.00 -4 222 224.00 Group cash pool 4 512 677.43 583 696.41 Proceeds from non-current loans 8 000 000.00 0.00 Dividends paid -3 757 022.25 -3 737 278.25 Granted loans -5 450 000.00 -150 000.00 Group contribution received and paid 2 500 000.00 2 380 000.00 Proceeds from repayment of loans 150 000.00 0.00 Net cash from financing activities 1 733 431.18 -5 145 805.84 Net increase/decrease in cash and cash equivalents 29 021.70 -8 942 980.56 Cash and cash equivalents at beginning of financial year 5 605 663.51 14 548 644.07 Cash and cash equivalents at end of financial year 5 634 685.21 5 605 663.51 59 Notes to the Parent Company Financial Statements Notes to accounting principles for financial statements Accounting principles for financial statements The financial statements are prepared in accordance with Accounting Act on the information presented in the financial statements. Valuation and recognition priciples and methods Intangible assets held under non-current assets are carried at cost consisting of related expenditures less amortization according to plan. Tangible assets are carried at cost consisting of related variable expenditures less depreciation according to plan. Trade, loan and other receivables held under current assets are carried at the lower of nominal value and probable value. Recognition priciples and methods Cost of intangible and tangible assets held under non-current assets is amortized/depreciated in accordance with a pre- determined plan by applying the maximum amortization/depreciation allowed under the Finnish Business Tax Act (BTA). The cost of an asset, less its residual value, is depreciated/amortized over its estimated useful life. Asset Estimated usefu life, years Depreciation/amortization: percentage and method Other non-current expenditures 5-10 10% or 20% straight line method Machinery and equipment approx. 8 maximum depreciation allowed under BTA IT software 5 20% straight line method Foreign currency transactions The receivables in foreign currencies are translated into Finnish currency using the exchange rate quoted on the balance sheet date. Notes to parent company Eezy Plc, domicile Helsinki, is the parent company of the Eezy group. A copy of the consolidated financial statements of the Eezy group is available from the Finnish patent and registration office. Notes to the personnel and management Average number of personnel during the financial year: 2022 2021 Salaried employees 49 44 Total 49 44 Auditor’s fees KPMG Oy Ab EUR 2022 2021 Statutory audit 145 689.21 142 235.18 Other advisory services 5 918.70 6 500.00 Tax advisory services 9 135.00 5 250.00 Other services 105 829.66 56 733.00 Total 266 572.57 210 718.18 60 Notes to assets Intangible assets EUR Intangible rights Other non-current expenditures Advances paid Goodwill Total Cost at 1 Jan 2022 34 089.75 209 125.80 0.00 100 000.00 343 215.55 Additions 0,00 79 405.50 0,00 3 058.50 82 464.00 Disposals 0.00 0.00 0.00 -103 058.00 -103 058.50 Cost at 31 Dec 2022 34 089.75 288 531.30 0.00 0.00 322 621.05 Accumulated amortization and impairment losses at 1 Jan 2022 -3 746.82 -43 275.18 - -5 833.31 -52 855.31 Accumulated amortization on disposals and reclassifications 0.00 0.00 - 15 270.82 15 270.82 Amortization -5 902.18 -45 742.60 - -9 437.51 -61 089.29 Accumulated amortization and impairment losses at 31 Dec 2022 -9 649.00 -89 017.78 - 0.00 -98 666.78 Book value 1 Jan 2022 30 342.93 165 850.62 0.00 94 166.69 290 360.24 Book value at 31 Dec 2022 24 440.75 199 513.52 0.00 0.00 223 954.27 EUR Intangible rights Other non-current expenditures Advances paid Goodwill Total Cost at 1 Jan 2021 0.00 163 845.30 0.00 0.00 163 845.30 Additions 34 089.75 154 462.50 126 907.45 100 000.00 415 459.70 Disposals 0.00 -109 182.00 -126 907.45 0.00 -236 089.45 Cost at 31 Dec 2021 34 089.75 209 125.80 0.00 100 000.00 343 215.55 Accumulated amortization and impairment losses at 1 Jan 2021 0.00 -27 295.50 - 0.00 -27 295.50 Amortization -3 746.82 -15 979.68 - -5 833.31 -25 559.81 Accumulated amortization and impairment losses at 31 Dec 2021 -3 746.82 -43 275.18 - -5 833.31 -52 855.31 Book value 1 Jan 2021 0.00 136 549.80 0.00 0.00 136 549.80 Book value at 31 Dec 2021 30 342.93 165 850.62 0.00 94 166.69 290 360.24 61 Tangible assets EUR Machinery and equipment Total Cost at 1 Jan 2022 107 535.43 107 535.43 Additions 41 459.00 41 459.00 Cost at 31 Dec 2022 148 994.43 148 994.43 Accumulated depreciation and impairment losses at 1 Jan 2022 -62 168.89 -62 168.89 Depreciation -21 706.39 -21 706.39 Accumulated depreciation and impairment losses at 31 Dec 2022 -83 875.28 -83 875,28 Book value at 1 Jan 2022 45 366.54 45 366.54 Book value at 31 Dec 2022 65 119.15 65 119.15 EUR Machinery and equipment Total Cost at 1 Jan 2021 107 535.43 107 535.43 Cost at 31 Dec 2021 107 535.43 107 535.43 Accumulated depreciation and impairment losses at 1 Jan 2021 -47 046.73 -47 046.73 Depreciation -15 122.16 -15 122.16 Accumulated depreciation and impairment losses at 31 Dec 2021 -62 168.89 -62 168.89 Book value at 1 Jan 2021 60 488.70 60 488.70 Book value at 31 Dec 2021 45 366.54 45 366.54 Investments EUR Investments in Group companies Total Cost at 1 Jan 2022 115 909 034.40 115 909 034.40 Additions 49 497 339.18 49 497 339,18 Cost at 31 Dec 2022 165 406 373.58 165 406 373,58 Book value at 1 Jan 2022 115 909 034.40 115 909 034.40 Book value at 31 Dec 2022 165 406 373.58 165 406 373,58 EUR Investments in Group companies Total Cost at 1 Jan 2021 109 653 669.23 109 653 669.23 Additions 6 255 365.17 6 255 365.17 Cost at 31 Dec 2021 115 909 034.40 115 909 034.40 Book value at 1 Jan 2021 109 653 669.23 109 653 669.23 Book value at 31 Dec 2021 115 909 034.40 115 909 034.40 Prepayments and accrued income EUR 31 Dec 2022 31 Dec 2021 Other accrued income 273 385.27 198 785.63 Prepayments and accrued income 273 385.27 198 785.63 62 Notes to equity and liabilities Changes in equity EUR 2022 2021 RESTRICTED EQUITY Share capital at 1 Jan 80 000.00 80 000.00 Share capital at 31 Dec 80 000.00 80 000.00 TOTAL RESTRICTED EQUITY 80 000.00 80 000.00 UNRESTRICTED EQUITY Reserve for invested unrestricted equity at 1 Jan 110 507 409.02 109 202 890.02 Issue of shares 0.00 1 304 519.00 Reserve for invested unrestricted equity at 31 Dec 110 507 409.02 110 507 409.02 Retained earnings at 1 Jan 14 567 261.07 15 141 347.78 Dividend distribution -3 757 022.25 -3 737 278.25 Retained earnings at 31 Dec 10 810 238.82 11 404 069.53 Profit (loss) for the financial year 4 349 532.32 3 163 191.54 TOTAL UNRESTRICTED EQUITY 125 667 180.16 125 074 670.09 TOTAL EQUITY 125 747 180.16 125 154 670.09 Specification of distributable funds EUR 31 Dec 2022 Retained earnings 10 810 238.82 Profit (loss) for the financial year 4 349 532.32 Reserve for invested unrestricted equity 110 507 409.02 Total unrestricted equity 125 667 180.16 TOTAL DITRIBUTABLE FUNDS 125 667 180.16 Notes to Report of the Board of Directors according to Limited Liability Companies Act Share capital 2022 2021 Number of shares 25 046 815 25 046 815 The company has one share class, and each share entitles to one vote in the General Meetings. The shares carry no limitations on voting. The shares in the company do not have a nominal value. All Eezy's shares carry equal rights to dividends and other distributions of funds by the company (including distributions of assets in the event of the liquidation of the company). Dividend proposal Board of Directors proposes a dividend of EUR 0.15 per share, of which 0.10 eur will be paid in April and 0.05 eur in October. 63 Accruals and deferred income EUR 31 Dec 2022 31 Dec 2021 Accrued interests of the loans from financial institutions 200 732.87 108 423.60 Accrued income taxes 423 225.38 447 054.66 Personnel related accrued expenses 718 611.52 772 227.10 Other accrued expenses 10 382.68 14 782.15 Accruals and deferred income 1 352 952.45 1 342 487.51 Collaterals and commitments EUR 31 Dec 2022 31 Dec 2021 LIABILITIES, MORTGAGES AND SHARES AS COLLATERALS Liabilities to credit institutions, other mortgage as collateral 51 444 440.00 47 666 664.00 Liabilities to credit institutions 51 444 440.00 47 666 664.00 LIABILITIES, MORTGAGES AND SHARES AS COLLATERALS 51 444 440.00 47 666 664.00 MORTGAGE AND SHARES, COLLATERAL FOR LIABILITIES TO CREDIT INSTITUTIONS Company mortgage given to collateral for liabilities to credit institutions 100 000 000.00 100 000 000.00 Other mortgage, collateral for liabilities to credit institutions 100 000 000.00 100 000 000.00 Book value of pledged shares, collateral for liabilities to credit institutions 160 107 914.32 109 653 669.23 Pledged shares 160 107 914.32 109 653 669.23 MORTGAGE AND SHARES, COLLATERAL FOR LIABILITIES TO CREDIT INSTITUTIONS 260 107 914.32 209 635 669.23 COLLATERALS GIVEN ON OWN BEHALF Guarantees 183 177.91 0.00 Collaterals given 183 177.91 0.00 COLLATERALS GIVEN ON OWN BEHALF 183 177.91 0.00 COLLATERALS GIVEN ON BEHALF OF GROUP COMPANIES Guarantees 10 760 524.40 10 669 997.00 Collaterals given 10 760 524.40 10 669 997.00 COLLATERALS GIVEN ON BEHALF OF GROUP COMPANIES 10 760 524.40 10 669 997.00 COLLATERALS 271 051 616.63 220 323 666.23 COMMITMENTS AND OTHER OBLIGATIONS Rental liabilities, payable in less than one year 453 403.96 61 844.04 Rental liabilities, payble in more than one year 5 052 261.55 242 222.49 Rental liabilities 5 505 665.51 304 066.53 Lease obligations, payable in less than one year 83 577.57 67 547.52 Lease obligations, payble in more than one year 80 888.06 41 203.53 Lease obligations 164 465.63 108 751.05 COMMITMENTS 5 670 131.14 412 817.58 64 Signatures to the Financial Statements and Report of the Board of Directors Helsinki, 15 February 2023 _______ Tapio Pajuharju Chair of the Board of Directors _______ Liisa Harjula Member of the Board of Directors _______ Paul-Petteri Savolainen Member of the Board of Directors _______ Mika Uotila Member of the Board of Directors _______ Pasi Papunen CEO _______ Kati Hagros Member of the Board of Directors _______ Timo Mänty Member of the Board of Directors _______ Jarno Suominen Member of the Board of Directors _______ Mikko Wirén Member of the Board of Directors Auditor’s note An auditor’s statement has been issued today on the complete audit. Helsinki, 15 February 2023 KPMG Oy Ab _______ Esa Kailiala Authorized Public Accountant 65 Auditor’s Report This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding. To the Annual General Meeting of Eezy Oyj Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Eezy Oyj (business identity code 2854570-7) for the year ended 31 December, 2022. The financial statements comprise the consolidated balance sheet, consolidated statement of comprehensive income, changes in equity, cash flow statement and notes, including a summary of significant accounting policies, as well as the parent company’s balance sheet, income statement, statement of cash flows and notes. In our opinion • the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU • the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. Our opinion is consistent with the additional report submitted to the Audit Committee. Basis for Opinion We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements. In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note 10 to the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Materiality The scope of our audit was influenced by our application of materiality. The materiality is determined based on our professional judgement and is used to determine the nature, timing and extent of our audit procedures and to evaluate the effect of identified misstatements on the financial statements as a whole. The level of materiality we set is based on our assessment of the magnitude of misstatements that, individually or in aggregate, could reasonably be expected to have influence on the economic decisions of the users of the financial statements. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for qualitative reasons for the users of the financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of key audit matters below. We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material misstatement due to fraud. 66 THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT Revenue recognition (EUR 247.6 million) (Accounting policies for the consolidated financial statements and note 3) — Eezy Group’s revenue comprises income from staffing services, professional services and self- employment services. Franchising revenue comprises charges based on cooperation agreements. — The amount and timing of recognition of reportable revenues depend on range of services, contract terms and conditions, and contract term. — Revenue recognition involves a risk of revenue being recognized in the financial statements in the incorrect period or at inaccurate amount. — We evaluated the appropriateness of the company’s revenue recognition policies applied and tested related internal controls in place. — We verified the accuracy of revenue recognition by testing on a sample basis that the service provided and the related invoice were recognized in the appropriate period in accordance with the contract terms, among others. In respect of trade receivables we examined doubtful receivables. — Furthermore, we inspected credit notes and controls over credit note approval and recognition. Valuation of consolidated goodwill (EUR 141.7 million) and subsidiary shares in parent company’s financial statements (EUR 165.4 million) (Accounting policies for the consolidated financial statements, note 15 and notes to the parent company financial statements) — At the balance sheet date 31 December 2022 goodwill totaled EUR 141.7 million, representing approximately 65% of the consolidated total assets. The subsidiary shares, EUR 165.4 million, account for approximately 79% for the parent company’s total assets. — Consolidated goodwill is not amortised, but is tested at least annually for impairment. Valuation of subsidiary shares is tested in connection with the goodwill impairment testing. — Group management is responsible for preparing impairment tests. The calculations use discounted future cash flow forecasts in which management makes significant judgments over revenue growth rate, discount rate and long-term growth rate underlying the projections. — Preparation of impairment testing calculations requires management make significant judgments and estimates about the future. — We assessed the appropriateness of the cash flow forecasts and discount rates used in the calculations. We analysed critically the management assumptions underlying the future cash flow forecasts. — We utilised our own valuation specialists that assessed the technical accuracy of the calculations and compared the assumptions used to market and industry information. — In the year-end audit we considered the appropriateness and adequacy of the notes provided on goodwill, subsidiary shares and impairment testing calculations. 67 Interest-bearing liabilities (EUR 57.2 million) (Notes 24 and 26 to the consolidated financial statements) — At the financial year-end 2022 the consolidated interest-bearing liabilities totaled EUR 57.2 million, representing approximately 26 % of the consolidated equity and liabilities. Significant part of the liabilities matures during the next three years. — As part of the year-end audit procedures we reconciled the interest-bearing liability balances to external confirmations. — We considered the appropriateness of the notes concerning the interest-bearing liabilities. Responsibilities of the Board of Directors and the Managing Director for the Financial Statements The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: — Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. — Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal control. — Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. — Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern. — Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view. — Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 68 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Reporting Requirements Information on our audit engagement We have been appointed as auditors by the Annual General Meeting, and our appointment represents a total period of uninterrupted engagement of six years. Eezy Oyj has been a public interest entity since 9.9.2020. Other Information The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the financial statements and our auditor’s report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made available to us after that date. Our opinion on the financial statements does not cover the other information. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Helsinki 15.2.2023 KPMG OY AB ESA KAILIALA Authorised Public Accountant, KHT 69 Independent Auditor’s Reasonable Assurance Report on Eezy Plc’s ESEF Financial Statements To the Board of Directors of Eezy Plc We have undertaken a reasonable assurance engagement in respect of whether the consolidated financial statements for the year ended 31 December 2022 included in the digital financial statements 743700ZKOMTB7X00OW54-2022-12-31-en.zip of Eezy Plc (Business ID 2854570-7) have been marked up with iXBRL markups in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS). The Responsibility of the Board of Directors and Managing Director The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors and financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This responsibility includes: • preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS • marking up the primary statements and the notes to the consolidated financial statements, and the company identification data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the ESEF RTS; and • ensuring consistency between ESEF financial statements and audited financial statements. The Board of Directors and the Managing Director are also responsible for such internal control as they deem necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS. Auditor’s Independence and Quality Management We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply to the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulations requirements. Auditor’s Responsibility In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking up of the consolidated financial statements included in the ESEF financial statements comply in all material respects with the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000. The engagement involves procedures to obtain evidence whether; • the primary statements of the consolidated financial statements included in the ESEF financial statements are, in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and; • whether the notes to the consolidated financial statements and the company identification data included in the ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in accordance with Article 4 of the ESEF RTS; and • whether the ESEF financial statements and the audited financial statements are consistent with each other. The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether due to fraud or error. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 70 Opinion In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated financial statements and the company identification data included in the ESEF financial statements of Eezy Plc identified as 743700ZKOMTB7X00OW54-2022-12-31-en.zip for the year ended 31 December 2022 are, in all material respects, marked up in compliance with the ESEF Regulatory Technical Standard. Our audit opinion on the audit of the consolidated financial statements of Eezy Plc for the year ended 31 December 2022 is set out in our Auditor’s Report dated 15 February 2023. In this report, we do not express any audit opinion or other assurance conclusion on the consolidated financial statements. 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