SmartCraft ASA

Earnings Release • Nov 5, 2024

SmartCraft ASA (SMCRT) - Q3 2024: Continued high growth and strong cash flow, margins impacted by acquisitions and one-off items

SmartCraft ASA (SMCRT) - Q3 2024: Continued high growth and strong cash flow, margins impacted by acquisitions and one-off items

5 November 2024 - SmartCraft ASA, the leading Nordic provider of mission

-critical SaaS solutions to small and mid-sized companies in the construction

sector, today reported its results for the third quarter of 2024, with continued

solid revenue growth, strong cash flow, but margins impacted by dilutive

acquisitions and one-off items.

Reported revenue in the second quarter grew 32 percent year-on-year to NOK 132

million, of which 94 percent was recurring. During the third quarter, SmartCraft

has started to transform the business models in the newly acquired companies to

increase their recurring revenues, which has a short-term impact on revenues and

margins, but drives both revenues and margins over time.

The adjusted EBITDA-capex margin was 25.3 percent (33.8% in Q3 23), including a

negative effect of 4.4 percentage points from acquired companies and a further

negative effect of 4.1 percentage points, partly from one-off initiatives in the

quarter to increase scale and synergies. Customer revenue churn in the third

quarter was slightly up to 8.3 percent. Operating cash flow was 34 million, up

58 percent year-on-year.

"The demand for digital solutions remains high in the construction industry, and

with a challenging macroeconomic backdrop, we are pleased with delivering double

-digit organic growth in annual recurring revenue (ARR) in the third quarter.

From the second to the third quarter, we added NOK 13 million in ARR, to a

record-high growth of 3 percent, lifting ARR to NOK 474 million, said CEO of

SmartCraft Gustav Line and continued:

"The ARR growth since the third quarter last year was 29 percent, including the

contribution of the acquisitions of Clixifix in the UK and Locka in Sweden. This

underpins our strong long-term record with 28 percent compounded annual growth

since 2019".

The acquisition of Clixifix, concluded in the second quarter 2024, was

SmartCraft's first expansion outside the Nordics.

"The entry to the UK opens a huge opportunity space, increasing our total

addressable market to NOK 50 billion, and we have already started multiple

projects to explore organic growth and additional acquisitions with Clixifix as

a base. I am also pleased to see that the Clixifix operation itself is

performing well with significant year-on-year margin improvement and recurring

revenue growth above 30 percent," said Gustav Line.

SmartCraft's SaaS solutions are primarily aimed at small and medium-sized

businesses in the renovation segment, a part of the construction industry which

normally is less affected by the soft macroeconomic conditions than the broader

construction segment. At the same time, the improving economic outlook in Sweden

positively influences trade.

"Three interest rate cuts in Sweden so far this year have resulted in increased

optimism within the construction industry and led to accelerating revenue growth

for SmartCraft Sweden. This is a good indication of what to expect in Norway

when interest rates come down in this market too. All in all, we stay positive

about our prospects and reiterate our target of 15-20 percent organic revenue

growth in the medium term. Similarly, we expect the adjusted EBITDA margin to

increase due to the scalability of the business," said Gustav Line.

The third quarter 2024 report and presentation materials are enclosed.

- ENDS -

WEBCAST PRESENTATION

Investors, analysts, and journalists are welcome to join an English-language

webcast presentation of the report today, Tuesday 5 November 2024, at 08:00 CET.

Webcast link:

https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20241105_2

Presenters: CEO Gustav Line and CFO Kjartan Bø

Viewers are welcome to submit written questions through the webcast player

during and after the presentation. A recording of the presentation will be

available on the same link and at https://smartcraft.com/investor-relations/

immediately after the live stream is concluded.

DISCLOSURE REGULATION

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation, and is subject to the disclosure requirements pursuant

to section 5-12 of the Norwegian Securities Trading Act.

CONTACTS

* Gustav Line, CEO, +47 952 67 104, gustav.line@smartcraft.com

* Kjartan Bø, CFO, +47 410 27 000, kjartan.bo@smartcraft.com

ABOUT SMARCRAFT

SmartCraft is the leading Nordic provider of mission-critical SaaS solutions to

SMEs in the construction sector, increasing their productivity, margins, and

resource efficiency. The Group currently has more than 13 300 customers and 260

employees distributed across Norway, Sweden, Finland and UK. SmartCraft was

listed on the Oslo Stock Exchange in June 2021.