GFT Technologies SE

Investor Presentation • Nov 17, 2022

GFT Technologies SE | 10 November 2022

© 2022 | GFT Technologies SE and its affiliates. All rights reserved.

Agenda

• gft.com 1. Highlights 9M/2022
• 1. Results 9M/2022
• 1. Outlook 2022

Interim Statement 9M/2022

Continued growth in the first nine months of 2022

Further upgrade in earnings outlook

Strong demand for digital transformation projects remains unchanged

• Growth through new clients and sustained digitalisation pressure in our core markets
• Growth driver: complex and long-term modernisation and transformation projects
• More than 10,000 experts at work for clients
• Successful price and cost management

Outlook for 2022 raised once again

• Revenue: €730m (+29% compared to previous year)
• EBITDA adj.: €87m (+34% compared to previous year)
• EBT: €66m (+65% compared to previous year)

Performance 9M/2022

• +34% revenue
• +70% EBT
• +51% in Insurance sector
• +51% in Industry & Others sector
• +27% in Banking sector
• +20% employees
• 39% equity ratio

Agenda

• gft.com 1. Highlights 9M/2022
• 2. Results 9M/2022
• 1. Outlook 2022

Interim Statement 9M/2022

Strong growth in all key figures, especially EBT

in €m	9M/2022	9M/2021	∆%
Revenue	541 91	405 39	34%
Order backlog	264 46	214 70	23%
adjusted* EBITDA	63 22	46 13	37%
EBITDA	63 22	44 19	43%
EBIT	47 65	28 87	65%
EBT	47 91	28 13	70%
Net income	33 78	21 09	60%
Earnings share (in €) per	1 28	0 80	60%
Earnings share adjusted (in €)* per	1 40	0 98	43%
(in FTE) Employees	8 766 ,	7 286 ,	20%

*Adjusted for non-operational effects from M&A activities (EBITDA) plus applicable tax effects (Net income and EPS)

• Revenue: plus 34% (thereof plus 8% FX effects)
• Order backlog again significantly above previous year
• Adjusted EBITDA grows by 37%
  • Utilisation 9M/2022 stable at 90.2% (Q3/2022: 91%)
  • Capacity adjustments of €-2.23m (9M/2021: €-1.81m)
  • FX effects of €2.09m (9M/2021: €-1.38m)
  • Share price-based effects in the valuation of management remuneration amounting to €2.36m (9M/2021: €-1.45m)
• Disproportionately strong increase in EBT
• EBT margin rises to 8.8% (9M/2021: 6.9%)
• Tax ratio above previous year at 29% (9M/2021: 25%)

Diversification further improved

Well-balanced client portfolio All sectors with strong growth

Largest client with approx. 13% of total revenue*

Insurance and Industry & Others grow by more than 50%

*Annualised extrapolation for 2022 based on the past three quarters

gft.com

Minor variations due to rounding possible

7

Revenue and EBITDA adjusted by quarter

• Q3/2022 vs. Q2/2022: slight revenue growth of 0.4%, EBITDA adjusted rises 14%
• Q3/2022 vs. Q3/2021: revenue plus 28%; EBITDA adjusted increases by 39%

*Adjusted for non-operational effects from M&A activities

8

Revenue by segment

in €m	Revenue		Growth rates
	9M/2022	9M/2021	Organic	M&A	FX	Total
APAC Americas UK & ,	342 25	223 09	40%	0%	13%	53%
Continental Europe	199 16	182 14	9%	0%	0%	9%
Others	0 50	0 16	n/a	n/a	n/a	n/a
GFT Group	541 91	405 39	26%	0%	8%	34%

• Americas, UK & APAC: Strong market position further extended with growth of more than 50%. Strong growth especially in Brazil (+84%), Mexico (+31%), USA (+54%) and UK (+23%), each significantly driven by the banking sector, and Canada (+54%) with strong growth in insurance
• Continental Europe: Continued growth (+9%); strongest growth in Switzerland (+49%)
• GFT Group: Organic revenue growth of 26%, FX effects of +8%. Total revenue growth of 34%

9

Earnings by segment

in €m	EBITDA adjusted*			EBITDA			EBT
	9M/2022	9M/2021	∆%	9M/2022	9M/2021	∆%	9M/2022	9M/2021	∆%
Americas UK & APAC ,	38 72	25 05	55%	38 72	23 12	67%	32 26	16 91	91%
Continental Europe	26 90	24 68	9%	26 90	24 67	9%	18 82	15 82	19%
Others	-2 40	-3 60	33%	-2 40	-3 60	33%	-3 17	-4 60	31%
GFT Group	63 22	46 13	37%	63 22	44 19	43%	47 91	28 13	70%

• Americas, UK & APAC: Significant EBT increase of 91%. Client demand for complex digitalisation solutions remains high. Earnings influenced by positive FX effects (21 percentage points of EBT growth)
• Continental Europe: High customer demand and strong brand are reflected in EBT growth of 19%
• GFT Group: EBT growth of 70%, thereof 13 percentage points from FX effects

*Adjusted for non-operational effects from M&A activities; Adjustments only in prior year

Revenue by markets

Seven individual markets with growth of >30%

103.14	Brazil	84%	56.02
88.27	UK	23%	71.97
64.64	Spain	5%	61.76
55.84	Italy	5%	53.09
50.06	Canada	54%	32.57
48.97	USA	54%	31.77
47.48	Germany	15%	41.19
14.30	M exico	31%	10.90
13.49	Switzerland	49%	9.04
13.00	Singapore	>100%	5.56
10.03	Hong Kong (SAR)	23%	8.14
9.68	Poland	>100%	4.74
7.93	France	-38%	12.72
15.08	Other countries	>100%	5.92
541.91	Total	34%	405.39

Income statement – disproportionate earnings improvements

in €m	9M/2022	9M/2021	∆%
Revenue	541 91	405 39	34%
Other operating income	11 86	8 13	46%
Cost of purchased services	-79 78	-56 79	40%
Personnel expenses	-355 57	-276 16	29%
Other operating expenses*	-55 20	-36 38	52%
EBITDA	63 22	44 19	43%
Depreciation and amortisation	-15 57	-15 32	2%
EBIT	65 47	28 87	65%
Interest income/expenses	0 26	-0 74	>100%
EBT	47 91	28 13	70%
Income taxes	-14 13	04 -7	>100%
income Net	33 78	21 09	60%
Earnings share (in €) per	1 28	0 80	60%

• Profitable revenue growth due to sustained demand for long-term and complex digitalisation solutions
• Increase in other operating income mainly driven by higher foreign exchange gains
• Ratio cost of purchased services to revenue of 15% slightly above prior-year level (9M/2021: 14%)
• Increased personnel expenses caused by higher average headcount, esp. in Brazil. Ratio of personnel expenses w/o capacity adjustments plus purchased services to revenue of 80% (9M/2021: 82%)
• Disproportionate strong increase in other operating expenses primarily due to higher personnel-related expenses and costs for IT licenses
• Increase in effective tax rate of 4 percentage points to 29% (9M/2021: 25%) mainly as a result of EBT improvements in countries with higher tax rates

*incl. results of investments accounted for using the equity method

gft.com

Cash flow analysis (€m) – increased net cash

• Unchanged solid financing structure with unused credit lines of €43.81m (31/12/2021: €35.08m) and improved net liquidity of €7.35m (31/12/2021: €1.93m)
• Slight decrease in group cash to €66.45m (31/12/2021: €70.77m) mainly due to increased funds tied up in trade receivables from customers and repayment of bank loans
• Operating cash flow of €22.91m below prior-year level (9M/2021: €30.97m) predominantly due to negative working capital effects
• Cash flow from financing activities of €-26.06m (9M/2021: €-31.52m) mainly influenced by redemption of bank loans amounting to €9.74m (9M/2021: €19.24m) as well as shareholder dividend of €9.21m (9M/2021: €5.27m)
• Cash flow from investing activities of €-5.43m (9M/2021: €-4.89m) primarily characterised by capital expenditures in property, plant and equipment

Balance sheet (€m) – improved equity ratio

• Balance sheet total expanded by 8% due to increased claims to customers and investments for real estate leasing
• Rise of non-current assets by 3% to €218.65m mainly driven by follow-on investments for real estate leasing. Non-current assets account for 45% of balance sheet total (31/12/2021: 47%)
• Decrease in cash and cash equivalents of €4.32m to €66.45m mainly due to funds tied-up in receivables from customers and bank loan repayments
• Increase in other current assets of €31.89m to €201.37m (31/12/2021: €169.48m) attributed to higher (conditional) receivables from contracts with clients, tax prepayments as well as increased

• With a net income of €33.78m (9M/2021: €21.09m), equity currency-adjusted up by €24.35m; Equity ratio of 39% improved by 3 percentage points (31/12/2021: 36%)
• Increase of non-current liabilities by €11.00m to €107.11 (31/12/2021: €96.11m) mainly due to increased liabilities for leasing and personnel
• Current liabilities of €187.30m by €7.70m below prior year's level (31/12/2021: €195.00m). Decrease primarily influenced by lower contract liabilities (€-20.13m) and liabilities to banks (€-9.49m). Main opposing effect from increased personnel related other provisions (€+16.47m)

gft.com

Minor variations due to rounding possible

Team expansion to more than 10,000 experts

• More than 10,000 experts worldwide
• Employees (FTE): plus 20% year-on-year, growth especially in Brazil and Poland
• Number of external contractors increased from 1,160 to 1,281
• Stable utilisation of 91% in Q3 at very high level (9M/2022: 90.2%)
• Attrition decreases to 18%, prior-year figure influenced by Covid-19

Minor variations due to rounding possible

Agenda

• gft.com 1. Highlights 9M/2022
• 1. Results 9M/2022
• 3. Outlook 2022

Interim Statement 9M/2022

Outlook 2022 – Raised in October for the third time

Earnings 2022e

• Adjusted EBITDA of €87m (after €75.5m in March, €79m in May and €81m in August).
  • EBT of €66m now expected (after €54.5m in March and €58m in May and €60m in August)
  • Influencing factors: persistently high utilisation rate, FX effects and share price-based effects in the valuation of management remuneration

Shaping the future of digital business

GFT Technologies SE

Dr. Jochen Ruetz CFO

Schelmenwasenstr. 34 70567 Stuttgart

T +49 711 62042-422

jochen.ruetz@gft.com

GFT Technologies SE

Andreas Herzog, CIIA, CIRO Head of Investor Relations

Schelmenwasenstr. 34 70567 Stuttgart T +49 711 62042-383 IR@gft.com

Backup

Interim Statement 9M/2022

Results at a glance per quarter

in €m	Q1/2021	Q2/2021	Q3/2021	Q4/2021	FY2021	Q1/2022	Q2/2022	Q3/2022
Revenue	123.92	137.66	143.81	160.80	566.19	173.35	183.90	184.66
EBITDA adjusted*	13.55	15.40	17.18	18.66	64.79	18.52	20.86	23.84
EBITDA	12.90	14.73	16.56	16.56	60.75	18.52	20.86	23.84
EBIT	7.37	9.83	11.67	12.01	40.88	13.45	15.57	18.63
EBT	7.01	9.61	11.51	11.90	40.03	13.42	15.74	18.75
Net income	5.16	6.93	9.00	8.80	29.89	9.58	11.11	13.09
Net income adjusted*	6.82	4.42	14.46	11.35	37.05	10.50	12.18	14.17
Earnings per share adj. (in €)*	0.26	0.17	0.55	0.43	1.41	0.40	0.46	0.54
Earnings per share (in €)	0.20	0.26	0.34	0.34	1.14	0.36	0.43	0.49
Employees (in FTE)	6,225	6,806	7,286	7,718	7,718	8,120	8,451	8,766

*Adjusted for non-operational effects from M&A activities (EBITDA) plus applicable tax effects (Net Income and EPS)

gft.com

Minor variations due to rounding possible

Consolidated income statement

in €	9M/2022	9M/2021	∆%
Revenue	541 912 750 74 , ,	405 392 662 24 , ,	34%
Other operating income	11 855 462 41 , ,	8 134 752 86 , ,	46%
Cost of purchased services	79 781 405 43 , ,	56 787 837 48 , ,	40%
Personnel expenses	355 568 994 53 , ,	276 159 101 62 , ,	29%
Other operating expenses	55 195 119 43 , ,	36 344 783 36 , ,	52%
Result from operating activities before depreciation and amortisation	63 222 693 76 , ,	44 235 692 64 , ,	43%
Depreciation and amortisation of intangible and , plant and equipment assets property	15 574 824 89 , ,	15 323 985 33 , ,	2%
Result from operating activities	47 647 868 87 , ,	28 911 707 31 , ,	65%
Result of investments accounted for using the equity method	0 00	-39 999 00 ,	100%
Interest income	1 241 250 09 , ,	372 722 56 ,	>100%
Interest expenses	977 371 59 ,	1 116 052 68 , ,	-12%
Financial result	263 878 50 ,	-783 329 12 ,	>100%
Earnings before taxes	47 911 747 37 , ,	28 128 378 19 , ,	70%
Income taxes	14 127 080 65 , ,	7 039 756 66 , ,	>100%
Net income for the period	33 784 666 72 , ,	21 088 621 53 , ,	60%
Earnings share – basic per	1 28	0 80	60%

Consolidated cash flow statement

€ in	9 M / 2 0 2 2	9 M / 2 0 2 1	∆%
Net income for the period	33,784,666.72	21,088,621.53	60%
Income taxes	14,127,080.65	7,039,756.66	>100%
Interest result	-263,878.50	783,329.12	< -100%
Income taxes paid	-10,071,473.21	-4,392,690.41	< -100%
Income taxes received	805,930.17	2,041,732.22	-61%
Interest paid	-548,961.42	-498,961.42	-10%
Interest received	1,227,899.45	327,974.67	>100%
Depreciation and amortisation of intangible assets and property, plant and equipment	15,574,824.89	15,323,985.33	2 %
Net proceeds on disposal of intangible assets and property, plant and equipment	339,428.53	131,741.21	>100%
Net proceeds on disposal of financial assets	-59,957.07	-97,820.82	39%
Other non-cash expenses and income	-2,353,742.14	-2,545,982.71	8 %
Change in trade receivables	4,287,501.02	542,719.95	>100%
Change in contract assets	-27,106,646.36	-24,629,084.57	-10%
Change in other assets	-7,270,396.43	821,898.99	< -100%
Change in provisions	17,533,955.28	18,795,248.46	-7%
Change in trade payables	-5,198,141.40	-2,339,440.78	< -100%
Change in contract liabilities	-20,125,197.54	-8,139,301.28	< -100%
Change in other liabilities	8,227,494.50	6,714,613.73	23%
C f f ash low rom operat ing act ivit ies	2 2 ,9 10 ,3 8 7.14	3 0 ,9 6 8 ,3 3 9 .8 8	- 2 6 %
Proceeds from disposal of property, plant and equipment	80,734.66	70,745.82	14%
Proceeds from disposal of financial assets	69,957.07	97,820.82	-28%
Capital expenditure for intangible assets	-25,239.31	-200,665.64	87%
Capital expenditure for property, plant and equipment	-5,553,382.25	-4,815,712.53	-15%
Capital expenditure for financial investments	0.00	-40,000.00	100%
C ash f low f rom invest ing act ivit ies	- 5,4 2 7,9 2 9 .8 3	11.53 - 4 ,8 8 7,8	- 11%
Proceeds from borrowing	19,500,000.00	8,000,000.00	>100%
Cash outflows from loan repayments	-29,241,403.85	-27,235,344.92	-7%
Cash outflows from repayment of lease liabilities	-7,107,548.89	-7,021,889.05	-1%
Dividends to shareholders	-9,214,081.10	-5,265,189.20	-75%
C ash f low f rom f inancing ivit ies act	- 2 6 ,0 6 3 ,0 3 3 .8 4	- 3 1,52 2 ,4 2 3 .17	17%
Effect of foreign exchange rate changes on cash and cash equivalents	4,263,988.01	1,390,619.79	>100%
N increase in cash and cash equivalent et s	- 4 ,3 16 ,58 8 .52	- 4 ,0 51,2 75.0 4	- 7%
Cash and cash equivalents at beginning of period	70,770,150.46	70,872,920.04	0 %
C ash and cash equivalent end of period s at	6 6 ,4 53 ,56 1.9 4	6 6 ,8 2 1,6 4 5.0 0	- 1%

gft.com

Consolidated balance sheet

A sset s				Equit y and liabilit ies
in €	3 0 / 0 9 / 2 0 2 2	3 1/ 12 / 2 0 2 1	∆%	in €	3 0 / 0 9 / 2 0 2 2	3 1/ 12 / 2 0 2 1	∆%
N on- current asset s				Shareholders' equit y
Goodwill	126,457,770.85	124,422,830.73	2 %	Share capital	26,325,946.00	26,325,946.00	0 %
Other intangible assets	7,195,939.18	10,645,292.80	-32%	Capital reserve	42,147,782.15	42,147,782.15	0 %
Property, plant and equipment	64,763,534.27	56,339,245.17	15%	Retained earnings	122,378,261.41	98,024,103.12	25%
Financial investments	696,217.60	706,217.60	-1%	Other reserves	1,208,731.32	-5,833,109.53	>100%
Other financial assets	2,035,537.47	1,805,716.61	13%		19 2 ,0 6 0 ,72 0 .8 8	16 0 ,6 6 4 ,72 1.74	20%
Deferred tax assets	13,420,702.14	12,526,370.47	7%	N on- current liabilit ies
Income tax assets	341,850.26	342,210.60	0 %	Financing liabilities	47,252,040.01	47,500,036.71	-1%
Other assets	3,741,771.44	4,732,078.43	-21%	Other financial liabilities	32,160,996.41	26,181,320.11	23%
	2 18 ,6 53 ,3 2 3 .2 1	2 11,519 ,9 6 2 .4 1	3 %	Provisions for pensions	9,553,237.36	7,706,961.38	24%
C urrent asset s				Other provisions	6,908,030.25	7,511,993.05	-8%
Inventories	12,072.89	17,108.73	-29%	Deferred tax liabilities	4,218,373.84	3,242,324.71	30%
Trade receivables	127,215,267.17	131,502,768.19	-3%	Other liabilities	7,012,699.88	3,969,073.51	77%
Contract assets	43,228,686.45	16,122,040.09	>100%		10 7,10 5,3 77.75	9 6 ,111,70 9 .4 7	11%
Cash and cash equivalents	66,453,561.94	70,770,150.46	-6%	C urrent liabilit ies
Other financial assets	4,399,811.32	3,284,856.74	34%	Trade payables	6,578,200.62	11,776,342.02	-44%
Income tax assets	9,921,025.78	6,852,662.11	45%	Financing liabilities	11,847,405.00	21,340,812.15	-44%
Other assets	16,587,666.63	11,701,642.93	42%	Other financial liabilities	19,789,426.73	18,620,663.31	6 %
	2 6 7,8 18 ,0 9 2 .18	2 4 0 ,2 51,2 2 9 .2 5	11%	Other provisions	74,094,712.47	57,628,451.39	29%
				Income tax liabilities	8,626,330.14	4,475,947.52	93%
				Contract liabilities	25,994,610.25	46,119,807.79	-44%
				Other liabilities	40,374,631.55	35,032,736.27	15%
					18 7,3 0 5,3 16 .76	19 4 ,9 9 4 ,76 0 .4 5	- 4 %

2 18 ,6 53 ,3 2 3 .2 1	2 11,519 ,9 6 2 .4 1	3 %	Provisions for pensions	9,553,237.36	7,706,961.38	24%
2 6 7,8 18 ,0 9 2 .18	2 4 0 ,2 51,2 2 9 .2 5	11%	Other provisions	74,094,712.47	57,628,451.39	29%
			Income tax liabilities	8,626,330.14	4,475,947.52	93%
			Contract liabilities	25,994,610.25	46,119,807.79	-44%
			Other liabilities	40,374,631.55	35,032,736.27	15%
				18 7,3 0 5,3 16 .76	19 4 ,9 9 4 ,76 0 .4 5	- 4 %
4 8 6 ,4 71,4 15.3 9	4 51,771,19 1.6 6	8 %		4 8 6 ,4 71,4 15.3 9	4 51,771,19 1.6 6	8 %

Consolidated statement of comprehensive income

€ in	9M/2022	9M/2021	∆%
Net income for the period	33 784 666 72 , ,	21 088 621 53 , ,	60%
Items that will be reclassified the income not to statement
Actuarial gains/losses from pensions (before taxes)	-277 471 16 ,	0 00	n/a
Income actuarial gains/losses from pensions taxes on	61 043 83 ,	0 00	n/a
Actuarial gains/losses from pensions (after taxes)	-216 427 33 ,	0 00	n/a
Items that be reclassified the income to statement may
Currency translation	7 041 840 85 , ,	4 418 326 06 , ,	59%
Other comprehensive income	6 825 413 52 , ,	4 418 326 06 , ,	54%
Total comprehensive income	40 610 080 24 , ,	25 506 947 59 , ,	59%

gft.com

Consolidated statement of changes in equity

	Share capital	C apital reserve	earnings 1 R etained	Other reserves	T o tal equity
in €				C urrency translatio n
B alance at 1 January 2021	26,325,946.00	42,147,782.15	72,486,275.79	-12,823,318.77	128,136,685.17
Net income for the period	--	--	21,088,621.53	--	21,088,621.53
Other comprehensive income	--	--	0.00	4,418,326.06	4,418,326.06
T o tal co mprehensive inco me	- -	- -	21,088,621.53	4,418,326.06	25,506,947.59
Dividends shareholders to	--	--	-5,265,189.20	--	-5,265,189.20
B alance 30 September 2021 at	26,325,946.00	42,147,782.15	88,309,708.12	-8,404,992.71	148,378,443.56
B alance 1 January 2022 at	26,325,946.00	42,147,782.15	98,024,103.12	-5,833,109.53	160,664,721.74
Net income for the period	--	--	33,784,666.72	--	33,784,666.72
Other comprehensive income	--	--	-216,427.33	7,041,840.85	6,825,413.52
T o tal co mprehensive inco me	- -	- -	33,568,239.39	7,041,840.85	40,610,080.24
Dividends shareholders to	--	--	-9,214,081.10	--	-9,214,081.10
September B alance at 30 2022	26,325,946.00	42,147,782.15	122,378,261.41	1,208,731.32	192,060,720.88

¹ Retained earnings also include items that will not be reclassified to the consolidated income statement.

gft.com

Segment report

	mericas, A UK & A P A C		C o ntinental Euro pe		T o tal segments		R eco nciliatio n		GF T Gro up
in € thsd	/ 9M 2022	/ 9M 2021	/ 9M 2022	/ 9M 2021	/ 9M 2022	/ 9M 2021	/ 9M 2022	/ 9M 2021	/ 9M 2022	/ 9M 2021
External revenue	342 256 ,	223 097 ,	199 159 ,	182 138 ,	541 415 ,	405 235 ,	498	158	541 913 ,	405,393
Intersegment revenue	4 895 ,	6 165 ,	68 108 ,	54 470 ,	73 003 ,	60 635 ,	-73 003 ,	-60 635 ,	0	0
T o tal revenue	347,151	229,262	267,267	236,608	614,418	465,870	-72,505	-60,477	541,913	405,393
Segment result (EB T )	32,257	16,908	18,823	15,817	51,080	32,725	-3,168	-4,597	47,912	28,128
thereof depreciation and amortisation	-6 301 ,	-5,815	-8 053 ,	-8 358 ,	-14 354 ,	-14 173 ,	-1 221 ,	-1 151 ,	-15 ,575	-15 324 ,
thereof interest income	1 311 ,	372	347	67	1 658 ,	439	-417	-66	1 241 ,	373
thereof interest expenses	-1 477 ,	-765	-366	-567	-1 843 ,	-1 332 ,	866	216	-977	-1 116 ,