Itera

Investor Presentation • Aug 25, 2022

• 1. Highlights of the quarter
• 1. Business Review
• 1. Financial Review
• 1. Outlook
• 1. Q&A

Arne Mjøs CHIEF EXECUTIVE OFFICER

01 Highlights Q2 2022

Q2 in brief

Key figures

02 Business review

Impact of Russia's invasion of Ukraine

Key topic for NHO Annual Conference in May was the new security situation in Europe after the Russia's invasion of Ukraine and the support for Ukraine.

Arne Mjøs of Itera was the first top executive to visit Ukraine after the invasion and shared his stories after meeting our people in Ukraine and the ministries in Kyiv.

Ukraine's fight is also our fight for our freedom and sovereignty. Therefore, buying more products and services from Ukraine is the biggest corporate social responsibility (CSR) contribution that the private and public sectors can make.

This conference is the de facto annual meet up where all key stakeholders of the government and businesses in Norway are attending.

NHO Annual Conference 2022 Link to recording

Visiting Ukraine after the Russian invasion

– As CEO, I visited our offices in Lviv and Kyiv in April and June and went over 2000 km by car through the Western part of Ukraine

I am incredibly proud to witness the way our people of Itera in Ukraine have managed to keep the business running despite the war. Indeed, we achieved almost normal capacity utilisation about one week after the invasion. Today, most of the colleagues have returned to their homes.

Cyber security is not an obstacle since we have implemented advanced security services in the cloud that are basically removing the risks related to any end-user devices in Ukraine.

We also had several meetings in Kyiv with ministries of the Ukrainian government to discuss how Norway and the Nordics can accelerate the green shift in the energy sector as well as taking a leading position within industrial software and services.

Founder & CEO of Itera

A greeting from the Vice Prime Minister of Ukraine and Minister of Digital Transformation in Ukraine

– Of course, it's important to donate and help Ukrainian refugees. But my message will be the following: in order to quickly rebuild Ukraine's economy, world shouldn't be afraid of investing in Ukraine now. "

So, engage Ukrainian IT specialists, take a look at Ukrainian startups and IT companies. They are ready to help any business in any sector in Norway to increase the speed.

Arendalsuka 2022: Ukraina og Norge – et bærekraftens Kinderegg (Itera) (dn.no)

Itera for Energy: Powering a sustainable future

Digital Factory at Scale

Digital Factory at Scale for data-driven businesses

Innovation	Faster business innovation through autonomous teams and adoption of cloud services	CUSTOMER BUSINESS & DIGITAL STRATEGY
Speed	Business agility and reduced time-to-market through efficient DevSecOps teams		CUSTOMER PRODUCT WORKLOADS	ANALYTICS & DATAOPS WORKLOADS	DOMAIN SPECIFIC WORKLOADS	PARTNERS
Scale	Efficient use of distributed delivery across borders and public cloud scale	DIGITAL FACTORY AT SCALE				Microsoft IBM Red Hat Cognite Sales force Confluent Others
Quality	Secure, predictable and flexible service delivery and operations capability end to end	CLOUD CENTRE OF EXCELLENCE (CCoE)

Nordic origin with an international approach

The Nordics is often positioned as digital and sustainable front-runner that show the way globally

We are growing together with international customers and partners based on our ONE Itera model across borders.

Our Digital Factory at Scale with cross-functional teams across border was recognised as best in the world by Global Sourcing Association in 2018.

Since the invasion, we have invested in three new offices to balance the new situation in Ukraine.

New locations

• The 4th largest city of Slovakia with a population of approximately 80,000
• 2 hours drive from Itera office in Bratislava
• Several Itera people working there already

• Ramping up recruitment capacity

• The second-largest city in the Czech Republic with high talent pool due to tech universities

• 1.5 hours drive from Bratislava
• Legal, economical, cultural similarities with Slovakia
• Several relocated Itera people from Ukraine as well are new hires

• Ramping up recruitment capacity

• The second-largest city in Poland

• Tier 1 city for IT talent no scalability limits in observable future
• Direct flights from other Itera offices
• Co-location with a customer
• Several relocated Itera people from Ukraine as well are new hires
• Using recruitment capacity from Ukraine

Increasing supply capacity in Central and Eastern Europe

We are growing our capacity in Central Europe to accommodate new demand and transition out of Ukraine for a couple of customers.

After adapting the normal in Ukraine, we will continue to grow at full speed since more customers will buy more services to stand with Ukraine.

Once the new offices are running at full speed, our growth capacity will be even larger than before the invasion and less vulnerable to any situation in Ukraine.

Illustrative purposes

A typical cloud journey

Creating a sustainable digital business starts with a modern cloud platform. 95% of new digital workloads will be deployed on cloud-native platforms by 2025.

A new growth engine with increasing recurring revenue

There is a gradual shift taking place in the nature of the demand for managed services. Cloud Application Services is our economic investment case with gradually improving profitability during the next 3-12 months.

Increasing managed services and subscription revenue

Low Code at Itera

It's estimated that by 2030 there will be a shortage of about 85 million tech workers worldwide. Part of the solution is to democratise the creation of applications and access to data.

Low Code platforms, like Microsoft Power Platform, aim to empower every developer to do more.

For our customers, Low Code can be a great prototyping tool and a way of quickly validating project goals and business needs before big development projects. We see successful fusion teams where both low coders and pro coders work side-by-side on the same project.

Ulrikke Akerbæl, Practice Lead Low Code at Itera and Microsoft MVP

A unique and preferred partner of Microsoft

In June 2022, Itera and Microsoft's global consultancy division Industry Solutions Delivery (ISD) in Norway entered a unique cooperation agreement to increase sales and deliveries to selected customers.

The agreement obliges both parties to cooperate on sales and deliveries to joint customers. The aim is to accelerate the development of digital strategies and transformations for strategically selected customers.

Through joint sales and delivery teams, Itera is tapping into Microsoft ISD worldwide team of 20,000+ experts and a full range of developed IP (intellectual property) based on best practices from digital transformation of leading companies in the world.

Arne Mjøs, CEO of Itera and Øystein Sulutvedt, Director Microsoft ISD Norway

Developed sustainability dashboard for Storebrand

Itera has assisted Storebrand in developing a new sustainability dashboard. The tool visualises how the pension savings of business customers score on sustainability.

More and more companies have started to report on sustainability in terms of purchasing, operations and investments.

Storebrand has a rich data selection, but availability has been a challenge. In January 2022 Itera was engaged to develop a solution that visualises how pension savings score on various sustainability dimensions.

The solution was developed in close collaboration between Itera and Storebrand, and followed agile development principles. Itera was responsible for developing the solutions for both backend and frontend.

Sustainability is central to Storebrand, which is ranked at the very top in the Global 100 and Dow Jones Sustainability Index ratings.

The dashboard provides insight into how the pension savings deliver in four areas:

• Carbon footprint
• investments in sustainable solutions
• exposure to fossil fuel companies
• sustainability score

In June, the dashboard was launched, and is now available for companies with a defined contribution pension in Storebrand.

Modern digital registry services with IMDi

The Directorate of Integration and Diversity (IMDi) and Itera have entered into a 2+2 years framework agreement with an expected value of 40-60 MNOK.

The framework agreement entails that Itera will work with IMDi to develop and modernise digital registry services and ensure that IMDi has the necessary expertise and capacity to establish a modern, cloud-based platform.

The goal is to bring new digital services to IMDi's target groups and create better user experiences for the individual.

"The collaboration with Itera will play a key role in IMDi's digital transformation," says Christine Rabassa Stautland, who is Head of Digitisation at IMDi.

IMDi's vision is to ensure "equal opportunities, rights and responsibilities in a diverse society".

Itera will deliver according to our Digital Factory at Scale, using all our services as One Itera.

The first product to be developed, called "Jobbsjansen", aims to increase employment among immigrant women who are not part of the labor market today

Order intake

Order intake from selected new and existing customers.

Book-to-bill ratio*) of 1.1 in Q2 and 1.2 for the last 12 months

Customer development

New business

• Existing customers accounted for 89.5% (84.5%) of revenues in Q2 2022
• New customers won over the past year generated revenues of NOK 19.3 (23.4) million in Q2 2022 (10.5% share)

Good visibility

• Share of revenue from top 30 customers 82% (74%)
• High customer concentration signifies
• Strategic relationships
• Full range of services
• Distributed delivery across borders

Largest customers' share of revenue

Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22

Top 30 Top 10

^* Existing customers defined as customers that were invoiced in the corresponding quarter last year

^** New customers defined as customers won since end of corresponding quarter last year

Skilled and innovative employees

661 employees at the end of the quarter

• Up by 19 in the quarter
• Up by 122 (76) last twelve months

Nearshore ratio of 54% (51%)

▪ Our distributed delivery model of onshore and nearshore consultants are increasing our price competitiveness as well as providing high scalability through access to a very large talent pool

Number of employees end of quarter by shore

Rolling 12 months net FTE growth

03 Financial review

Key financials

	2022	2021	Change	2022	2021	Change	2021
NOK Million	4-6	4-6	%	1-6	1-6	%	F Y
Operating revenue	183 5	150 8	22%	359 5	295 3	22%	593 0
profit Gross	169 6	138 5	22%	331 7	271 0	22%	547 3
Personnel expenses	128 0	100 8	27%	245 0	196 6	25%	245 0
Other opex	12 8	9 2	39 %	24 6	17 7	39 %	24 6
EBITDA	28 8	28 6	1 %	62 1	56 7	10%	101 6
margin EBITDA	15 7%	18 9 %	-3 2 pts	17 3%	19 2%	-1 9 pts	17 1%
Depreciation	7 3	6 1	20%	14 5	12 1	20%	2 5
EBIT	21 5	22 4	-4%	47 6	44 6	7 %	77 0
margin EBIT	11 7%	14 9 %	-3 2 pts	13 3%	15 1%	-1 8 pts	13 0%
cash flow from operations Net Cash and cash equivalents	13 0 27 1	23 8 15 4	-45% % 76	12 6 27 1	24 4 15 4	-48% % 76	69 5 37 5
Employees end of period at Employees in average	661 667	539 532	23% 25%	661 664	539 528	23% 26%	617 556

• 1. Stabilising Ukraine
• 1. Investment in new delivery capacity
• 1. Readiness for implementation of industrialised managed services

• Growth of 22% fuelled by volume increases of top customers

• Personnel expenses mainly driven by FTE growth
• Opex increase from new offices and higher spending on sales & marketing, recruitment and travelling
• Depreciation up from amortisation of Cloud Centre of Excellence
• EBIT down 4% to MNOK 21.5
• EBIT margin of 11.7% (14.9%)
• No. of FTEs up 122 to 661

Revenue and earnings development

• Strong sales growth year over year with 2-year CAGR of 17.8% and an average of 12.5% EBIT margin
• Quarterly figures are impacted by number of working days net of vacations. Q2 2022 had 59 (59) days

Statement of cash flow

	2022	2021	2022	2021	2021
Million NOK	4-6	4-6	1-6	1-6	F Y
EBITDA	28 8	28 6	62 1	56 7	101 6
Change in balance sheet items	(15 8)	(4 7)	(49 5)	(32 3)	(32 1)
cash flow from operating activities Net	13 0	23 8	12 6	24 4	69 5
cash flow from investment activities Net	(3 9)	(11 4)	(8 0)	(18 7)	(32 8)
Purchase of shares own	-	(23 5)	(0 6)	(23 5)	(23 5)
Sale of shares	6 6	8 4	6 6	8 4	8 4
Cash settlement of options contract	-	-	-	-	(1 0)
Equity settlement of options contract	-	-	-	-	4 0
Principal elements of lease payments	(3 9)	(4 3)	(7 7)	(11 6)	(17 5)
Instalment of sublease receivable	0 8	0 9	1 8	1 8	3 6
External dividend paid	(16 1)	(19 8)	(16 1)	(19 8)	(27 9)
financing activities cash flow from Net	(12 7)	(38 3)	(16 1)	(44 7)	(53 9)
change in bank deposits and cash Net	(2 4)	(25 8)	(10 4)	(39 0)	(16 9)
Bank deposits the end of the period at	27 1	15 4	27 1	15 4	37 5

▪ Cash flow from operations NOK 13.0 (23.8) million in Q2

▪ 12 month rolling cash flow from operations was NOK 58.0 (76.4) million –

▪ Approx. NOK -22 mill from discontinued operations

Dividend and own shares

• An ordinary dividend of NOK 0.20 per share for 2021 was paid in Q2. The Board is authorised to decide on a supplementary dividend later in the year
• Share price was NOK 12.80 at the end of June 2022, an change of -9% (-6% incl. dividends) from NOK 14.00 at the end of June 2021.
• Current holding of own shares is 1, 011,602 shares. Value at 30 June 2022 was MNOK 12.9

• Consistent high distribution of earnings

• Equity ratio of 25% (12%) per 30 June 2022

• 28% (14%) excl. IFRS 16 Leasing
• Cash balance of MNOK 27 (MNOK 15)
• Total balance increased by MNOK 11 to MNOK 231

04 Outlook

Q2 REPORT 2022

Outlook

Regional expansion in the Nordics and Central Europe for access to more talents.

Microsoft agreement generates more cloud journey assessment leads. Readiness to migrate and operate larger scale cloud transformations.

Full commitment to Ukraine as an invaluable source of IT specialists to realise sustainable digitalisation needs

Profitable growth and cash flow are key focus areas.

31

Itera does not provide guidance to the market on future prospects.

Top 20 shareholders

No Name	%	Nat	Shareholding
MJØS AS* 1 ARNE INVEST	30 62	NOR	25 163 031 , ,
2 OP CAPITAL AS	5 60	NOR	4 605 072 , ,
3 GIP AS	09 5	NOR	185 000 4 , ,
SEPTIM CONSULTING AS 4	3 71	NOR	3 045 762 , ,
5 EIKESTAD AS	3 65	NOR	3 000 000 , ,
6 BOINVESTERING AS	3 39	NOR	2 786 968 , ,
7 GAMST INVEST AS	3 09	NOR	2 537 782 , ,
JØSYRA 8 INVEST AS	2 68	NOR	2 200 000 , ,
9 NOR Bank ASA DnB	2 59	NOR	2 130 710 , ,
10 Privatbank S DZ A	1 65	LUX	360 000 1 , ,
HØGBERG 11 JON ERIK ,	1 39	NOR	1 144 356 , ,
12 ITERA ASA	1 23	NOR	1 011 602 , ,
13 AANESTAD PANAGRI AS	1 16	NOR	950 000 ,
INVEST AS 14 FRAMAR	12 1	NOR	920 000 ,
VERDIPAPIRFONDET STOREBRAND VEKST 15	0 92	LUX	925 755 ,
16 ALTEA PROPERTY DEVELOPMENT AS	0 85	NOR	700 000 ,
17 NYVANG JETMUND GUNNAR ,	0 79	NOR	650 000 ,
18 JENSEN LARS PETTER ,	0 77	DEN	629 850 ,
19 MORTEN JOHNSEN HOLDING AS	0 73	NOR	600 000 ,
GRØSLAND 20 KIM KJETIL ,	0 72	NOR	590 000 ,
TOP 20	71 75		58 966 058 , ,

*Arne Mjøs Invest AS holds a future contract on 2,200,000 shares. The total controlling interest of Arne Mjøs is thus 27,363,031 shares (33.3%).