INVL Technology — Interim / Quarterly Report 2021

Sep 13, 2021

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Novian group’s results for the 1st half of 2021

www.novian.io

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Novian – a digital advantage partner

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• NOVIAN Systems
• Andmevara AS

• Tallinn, Estonia

• NOVIAN Technologies

• Andmevara Services OÜ
• Tallinn, Estonia
• Andmevara SRL

• Chișinău, Moldova

• Zissor a Novian company

• Drammen, Norway

The Novian group’s companies work in IT infrastructure, software services and digitization areas, offering services and solutions for developing an organisation’s digital advantage.

Novian’s main areas of focus are digital transformation services, data empowerment, and artificial intelligence and robotics solutions.

The Novian group’s advantage is its ability to provide integrated IT services and solutions by combining the capabilities of the group’s companies and thus giving clients more value.

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Novian operates as an integrator

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Novian's priority is to empower digital transformation and grow clients' organizations

Long term objectives of the Novian group:

• Novian is an international group of companies that prioritises growth and development in Lithuania, Estonia and the Nordic region.
• The Novian group provides products and services that enable the changes of digital transformation.
• The Novian group creates added value for clients by helping them achieve their goals: to increase business revenue and improve the quality of public sector services.

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Digitalization solutions for business and the public sector

Public sector

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Digital transformation of an organization

STRATEGY
What are our digitalization goals?

TACTICS
How will we reach those goals?

TECHNOLOGICAL SOLUTIONS
How will we reconcile existing and new IT?
How fast do we want to deploy the new solutions?

INTERNAL CULTURE CHANGES
How will the operating model change?
How will we improve user experience?

Activities
→ → → → → → → → → → →

Technologies
FLOW OF RELEVANT DATA

DATA PROCESSING: COMBINATION AND SYNTHESIS

DATA EMPOWERMENT FOR DIGITALIZING PROCESSES

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Novian's digital transformation technological solution

Change that allows an organization to challenge the status quo and experiment often to find the best solution.

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Data mobilization solutions

STORING AND PROTECTION

• Storage
• Backup
• Archiving

EMPOWERMENT

• Search, access, and management capabilities
• Automation
• Artificial intelligence
• Smart Data

DIGITIZATION

• Scanning
• Segmentation

PROCESSING

• Computing power
• Information systems
• Conversion

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Key events

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Key events

Events

• Evaldas Rėkus, the head of Novian, took the role of CEO of Novian Systems and Andmevara AS as of 16 June 2021, replacing Elena Vengrienė, who went on temporary leave for family reasons.

Markets

• At the end of 2020, the Novian group changed the names of its main companies in Lithuania to Novian Technologies and Novian Systems (they previously operated as BAIP and Algoritmu Sistemos, respectively). The group now offers the market a set of services in line with clients’ needs, combining the capabilities of the group’s companies in IT infrastructure, software services, digitization and other areas.
• Novian Technologies introduced critical IT infrastructure managed services on the Norwegian market in the first half of 2021.
• Novian Technologies was recognized by partners with a Dell Technologies award for ‘Excellence in New Business Development’ and an IBM award as ‘Partner of the Year 2020’.
• Novian Technologies achieved the RedHat Advanced partnership level and the Dell Titanium partnership level.
• A representative of Novian Technologies took part in a roundtable discussion with Dell founder and CEO Michael Dell.

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Events

• In May 2021, Novian Technologies held its seventh-annual conference “Technology and Resilience 2021: Changes that Create Value” intended for executives, heads of IT, and other employees involved in making IT-related decisions. A study of the Lithuanian IT market was also presented at the event.
• In the first quarter of 2021, Novian Technologies launched a “Red Hat TechClub” with monthly meetings and online trainings for technology professionals.

• The following webinars were held:

• Novian Technologies:

• “Presentation of digitization services for the Lithuanian, Estonian and Norwegian markets”;
• “Presentation of digitization services and products for Lithuanian libraries”;

• “Presentation of the Red Hat InnoLab for the Lithuanian market”.

• Novian Systems:

• “Use of microservice architecture in the development of information systems. Pluses and minuses”;
• “Vacation requests: How to effectively manage them remotely?”;
• “How to save time or what robots can do in court proceedings”;
• “How to easily submit information to the Tax Inspectorate: a solution for financial market participants”.

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The geography of Novian's companies and projects

Offices operate in 5 countries

The companies' projects in 2016-2021 took place in more than 50 countries

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Financial results

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Novian group key profit (loss) items (thousands of Eur)

	Novian¹	Technologies area				Software services area				Media monitoring and digitization area
			Novian Technologies UAB		Andmevara Services OU / Andmevara SRL²		Novian Systems UAB³		Andmevara AS		Zissor AS
	6 months of 2020	6 months of 2021	6 months of 2020	6 months of 2021	6 months of 2020	6 months of 2021	6 months of 2020	6 months of 2021	6 months of 2020	6 months of 2021	6 months of 2020	6 months of 2021
Revenue	10,547	9,881	7,822	7,158	297	334	1,602	1,544	533	362	293	484
Gross Profit	2,553	2,526	1,265	1,309	297	334	485	339	239	181	268	364
EBITDA	813	642	763	694	23	29	45	2	10	(9)	22	102
EBIT	412	315	478	476	13	24	(19)	(70)	(21)	(40)	13	102
Net Profit (loss)	313	98	420	297	5	14	(28)	(63)	(43)	(74)	12	102

¹ Unaudited aggregated Novian group results. The income of dividends was eliminated by aggregating Net profit (loss). The annual standalone financial statements for 2020 of Novian Technologies UAB, Novian Systems UAB and Zissor AS are audited.
² Results of Andmevara Services OU and Andmevara SRL.
³ Acena UAB was merged into Novian Systems UAB on 31 December 2020. Aggregated Profit (loss) statement is presented of 2020.

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Novian group key balance sheet items (thousands of Eur)

	Novian¹	Technologies area				Software services area				Media monitoring and digitization area
			Novian Technologies UAB		Andmevara Services OU / Andmevara SRL²		Novian Systems UAB³		Andmevara AS		Zissor AS
	2020-12-31	2021-06-30	2020-12-31	2021-06-30	2020-12-31	2021-06-30	2020-12-31	2021-06-30	2020-12-31	2021-06-30	2020-12-31	2021-06-30
Tangible assets	1,006	754	611	443	19	17	233	179	138	108	3	3
Intangible assets	1,969	1,937	62	44	3	3	1,902	1,890	1	-	-	-
Other non-current assets	711	499	512	329	-	-	151	144	-	-	104	107
Current assets	9,820	10,171	7,021	5,984	134	177	2,491	2,602	248	258	426	404
Of which cash	2,344	757	1,323	421	37	24	496	27	21	8	274	251
Total assets	13,506	13,361	8,206	6,800	156	197	4,777	4,815	387	366	533	514
Equity	5,836	5,032	3,365	2,161	(19)	(5)	2,892	2,829	(592)	(666)	365	382
Non-current liabilities	751	688	175	154	-	-	450	415	86	86	40	33
Of which financial debt	360	353	147	147	-	-	87	87	86	86	40	33
Current liabilities	6,919	7,641	4,666	4,485	175	202	1,435	1,571	893	946	128	99
Of which financial debt	1,042	906	209	98	50	50	495	591	729	810	-	-
Total liabilities and equity	13,506	13,361	8,206	6,800	156	197	4,777	4,815	387	366	533	514

¹ Unaudited aggregated Novian group results. The value of investments in subsidiaries was eliminated by aggregating balance sheet items. The annual standalone financial statements for 2020 of Novian Technologies UAB, Novian Systems UAB and Zissor AS are audited.
² Results of Andmevara Services OU and Andmevara SRL.
³ Acena UAB was merged into Novian Systems UAB on 31 December 2020.

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Novian group main financial figures

Aggregated revenue (thousands of EUR)

Aggregated EBITDA (thousands of EUR)

Thousands of EUR	2017	2018	2019	2020	2021 H1
Revenue	15,776	20,317	23,492	24,113	9,881
EBITDA*	791	1,138	1,556	1,788	642

The pandemic also had an impact on disparity of market needs, due to which some projects were slow to start. That also affected the Novian group's results.

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• From 2019 IFRS 16 was adopted, which affected the amount of EBITDA, therefore the EBITDA for the periods 2017-2018 and 2019-2021 is not directly comparable.

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Novian group revenue by country

Thousands of EUR	2020 H1	2021 H1	Change
Lithuania	7,193	6,684	(509)
Other countries	3,354	3,197	(157)
Total	10,547	9,881	(666)

The main countries where the Novian group operates remained Lithuania and Estonia. The geography of the group's activities covered 32 countries in 2021.

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Novian group revenue by sectors. Number of countries

Revenue of Novian group by sectors

Number of countries with Novian group projects

Growth of the Novian group's revenue from the corporate and financial sectors is the result of focused efforts by Novian companies to diversify revenue.

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IC - inter-company revenue

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Technologies business area

Novian Technologies (Lithuania), Andmevara Services OU (Estonia) and Andmevara SRL (Moldova)

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Technologies business area

Solutions and services:

• Critical IT infrastructure design, deployment and maintenance
• Critical IT infrastructure maintenance managed services
• Cloud computing strategy and transformation implementation
• Data storage, recovery and archiving solutions
• Modern digital workplace strategy and implementation
• Supply-chain and infrastructure lifecycle management

Industries where active:

• Finance and insurance
• Wholesale and retail trade
• Logistics and warehousing
• ITT
• Energy
• Manufacturing
• Public sector
• Scientific institutions

Technologies and methodologies:

• Methodologies: CIMF v.3, Migritis
• Technology partners:
• Dell EMC, NVIDIA, Lenovo, IBM, Cisco, Zabbix, Prometheus, Oracle
• Microsoft Azure, Google Cloud, RedHat Openshift
• Commvault, Veritas, Quantum
• Mobile Iron, Solarwinds, Kyocera

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Technologies business area: main financial indicators

Aggregated revenue (thousands of EUR)

Aggregated EBITDA (thousands of EUR)

Thousands of EUR	2017	2018	2019	2020	2021 H1
Revenue	10,065	14,111	17,745	18,874	7,492
EBITDA*	730	839	1,351	1,693	723

Despite the pandemic's effect on the technology market, Novian Technologies essentially maintained last year's scale of operations in the first half of 2021.

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• From 2019 IFRS 16 was adopted, which affected the amount of EBITDA, therefore the EBITDA for the periods 2017-2018 and 2019-2021 is not directly comparable.

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Technologies business area: revenue by country

Thousands of EUR	2020 H1	2021 H1	Change
Lithuania	5,660	5,195	(465)
Other countries	2,459	2,297	(161)
Total	8,119	7,492	(626)

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Novian Technologies focused heavily this year on expansion in the Baltic and Nordic countries.

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Technologies business area: revenue by sectors. Number of countries

Revenue of area by sectors

Number of countries with Novian group projects

The growth of Novian Technologies' business area revenue in 2020 and the public sector's smaller share show increased attention to large and mid-size corporates paid off.

That trend continues in 2021 as well, with even more focus on the big business sectors of finance, insurance and wholesale and retail trade.

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Main projects

Projects	Vilnius University (VU) Faculty of Mathematics and Informatics: installation of high-performance computing cluster	Phase I of GovCloud installation project completed	Digitization of documents at Vilnius city companies Vilniaus Vandenys and Vilniaus Šilumos Tinklai AB	Kyrgyz postal system modernized	Hyperconverged infrastructure solution for Lithuanian Railways
Work performed	A complex high-performance computing cluster was designed and installed using the most advanced HPC technologies. A business plan was created, as were a catalog of services and a system accounting module.	Oracle virtualization platform, backup and recovery solution, and centralized monitoring system installed.	Novian Technologies is conducting projects for digitization and upload of the documents to relevant systems, together with fellow Novian group companies Andmevara Services OU and Zissor.	During the project and in complicated conditions, the companies fully installed and modernized 550 postal offices: they developed modern core IT infrastructure along with back-up infrastructure to ensure business continuity, upgraded workstations and security systems, deployed an app solution for integrated services, upgraded the postal operator's financial accounting system, and integrated the system with the new solutions.	The project will involve installation of a hyperconverged infrastructure (HCI) platform. That is LTG's core IT infrastructure. Additionally, maintenance of the created platform will be provided throughout the contract period, for 48 months, with the possibility of extending that for one more year.
Benefits	The cluster's overall computing power increased 12 times. Compute and storage resources exchange information twice as fast. The solution will enable VU to take part in EuroHPC and similar projects.	The project aims to host the infrastructure for state information resources on cloud service infrastructure that has been created so they can be operated and managed using cloud services.	Digitized documents will enable performance optimization at the companies – they will be easier to access, allowing information to be found more quickly and speeding up work processes.	Novian Technologies together with the INVL Technology group company Etronika digitalized the Kyrgyzstan postal operator's provision of financial services to people in the country. Novian Technologies served as the project's general contractor and lead implementer.	The project aims to increase the capacity, performance and reliability of virtualization infrastructure, more easily and efficiently boost the capacity of equipment, reduce operating costs, and simplify the management of virtualization infrastructure.

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Software services business area

Novian Systems (Lithuania),
Andmevara AS (Estonia)

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Software services business area

Solutions and services:

• Development and maintenance of information systems
• Information systems integration
• Business process digitization
• Performance analytics solutions
• Robotic process automation
• Big data
• Consulting

Industries where active:

• E-governance
• E-tax
• Regulatory institutions
• E-health
• Environmental protection
• Smart cities
• Corporations
• Scientific institutions

Technologies:

• Programming in Oracle/Java and Microsoft.NET
• Low-code solutions with Microsoft Power Apps
• Process robotization
• Big data and performance analytics, artificial intelligence

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Software services business area main financial figures

Aggregated revenue (thousands of EUR)

Aggregated EBITDA (thousands of EUR)

Thousands of EUR	2017	2018	2019	2020	2021 H1
Revenue	5,711	6,206	5,039	4,528	1,906
EBITDA*	103	392	219	138	(7)

Novian Systems' results for the first half of 2021 were affected by the delayed start of some projects due to quarantine-related market uncertainties. This year we are seeing recovery of the market.

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• From 2019 IFRS 16 was adopted, which affected the amount of EBITDA, therefore the EBITDA for the periods 2017-2018 and 2019-2021 is not directly comparable.

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Software services business area by country

Thousands of EUR	2020 H1	2021 H1	Change
Lithuania	1,533	1,449	(84)
Other countries	602	457	(145)
Total	2,135	1,906	(229)

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Software services business area by sectors. Number of countries

Revenue of area by sectors

Number of countries with Novian group projects

Revenue has been affected in recent times by slowdowns or later starts in some public sector projects. The impact of this has largely been offset by revenue from the corporate and financial sectors.

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Main projects

VMI
VILLEYDRIVE MOTORCYCLE HOSPITALS

HARTINGA

SAULÉ
PAZANGOS PIONIRAI
CVP IS 2.0
VISAGINO BÚSTAS

UAB
VISAGINO BÚSTAS

Plenas LT
VISAGINO BÚSTAS

Project	Development of Taxpayer Electronic Education, Consulting and Information Service System (ESKIS)	Vacation process automation at the company Mantinga	Modernization of the Central Public Procurement Information System (CVP IS)	Automated solution for municipal waste collection	Digitization and automation of the milk collection waybill process
Work performed	During the project to modify and integrate ESKIS with information systems and registers of the Tax Inspectorate and other state institutions, new services for taxpayers were created and existing ones modified in the authenticated and non-authenticated parts of the portal. The solutions were adapted to changes in ICT and the information environment.	Automation of the company's vacation request process with the help of Microsoft Power Apps and Microsoft Automate.	The project's goal is to create a new CVP IS – the SAULÉ information system. Links with the information systems of other institutions are being developed along with functionality for tracing potential conflicts of interest and other digital tools.	Installation of specialized equipment and software based on RFID (radio-frequency identification) technology on municipal waste collection vehicles and placement of RFID tags on waste containers.	Use of the Microsoft Power Apps and Microsoft Power Automate technologies to create a solution for processing gathered data and automatically integrating them into a Navision accounting system.
Benefits	Better-quality access to e-services for taxpayers and integration with other information systems and registers making use of existing technical and technological solutions.	Helps speed up vacation queries and gives details of number of vacation days available, approved and rejected vacations, and planned vacations on a team. For employees and HR managers.	The project seeks to boost the efficiency of e-procurement, automating the procurement process from planning to contract signing and develop tools for increasing the visibility of information.	The solution will reduce the cost of waste collection. It will enable automated tracking of when containers are emptied, optimization of collection schedules, and real-time monitoring of waste collection.	On implementation of the project, paper waybills will be digitized, and the data automatically transferred to the central accounting system. This type of low-code platform solution will allow the project to be implemented in much less time than if traditional coding was used.

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Media monitoring and digitization area

Zissor (Norway)

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Media monitoring and digitization area

Solutions and services:

• Media (press, online, broadcast, social networks) monitoring software
• Software to segment and digitize the contents of printed and/or scanned documents
• Media PDF file conversion to XML for other communication channels

Industries where active:

• Providers of media monitoring services
• Magazine and newspaper publishers
• National archives and libraries

Technologies:

Zissor intellectual products

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Zissor revenue by country

United Kingdom
Sweden
Germany
Greece
Others (2 countries)

United Kingdom
Sweden
Norway
Lithuania
Germany
Finland
Others (3 countries)

Thousands of EUR	2020 H1	2021 H1	Change
Lithuania	-	40	40
Other countries	293	444	151
Total	293	484	191

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Main projects

VISIOLINK

VISIOLINK

Ingeniøren

Project	Digitization of the Norwegian newspaper Vesterålen's archives	Collaboration with Visiolink to digitize German newspapers	Digitization of the Danish newspaper Ingeniøren
Work performed	Zissor digitized the full archive of 200 000 newspaper pages for the period 1921-2010 for the Norwegian newspaper Bladet Vesterålen. The digitized content was delivered by end-May 2021.	Zissor started a daily service digitizing two German newspapers. The goal is to convert their full PDF pages to articles and pictures and generate XML files for them.	Zissor has signed up the Danish newspaper Ingeniøren for an ongoing service to digitize the full-page PDF of their newspaper into articles and pictures.
Benefits	The newspaper will add this digitized archive to their e-paper solution for their subscribers to search and view.	The two German newspapers will receive articles that are formatted and easily readable.	The full-page PDF of the newspaper will be digitized into articles and pictures. The XML will be produced for their e-paper solution.

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Thank you

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