Q3 2024 report NOVEMBER 5TH, 2024

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Solid performance in a challenging marked

o SmartCraft and the market
o Q3 highlights
o Financials
o Summary and Q&A

SaaS for SME construction companies

Industry challenges

o 0-5% margins -> High level of bankruptcies
o High level of conflict between construction company and customer
o High level of accidents and deaths
o Increasing demand for documentation and reporting

SmartCraft digital solutions

o Business overview and insight with control of people and material costs
o Digital flow of documentation to avoid conflict
o Safety at your fingertips
o Digital quality assurance to build according to rules and regulations

Leading position in the Nordics

o Consistent and solid growth before and after the IPO in June 2021
o Constantly gaining market share
o 16 offices in Sweden, Norway, Finland and UK
o ~260 employees

Renovation is our main segment

Renovation is our target market

o Large market, bigger than new build
o Less volatile, with consistent growth
o Downturn in new build affects the large construction companies, engineers and architects
o Existing buildings have constant demand for renovation, maintenance and service
o Energy efficiency drives further demand for renovation
o Ongoing digitalization of a digitally immature market

Norwegian construction market by segment, bNOK

Source: Prognosesenteret, 2023

Positive signals in Sweden and Finland

Swedish market looks to improve after three interest rate cuts

Construction starts have surpassed completions in Finland¹

Norway is still experiencing a tough market as building permits continue to fall²

Housebuilding in the UK must double to meet Labour's target of 1.5m new homes next 5 years3

1. Source: www.stat.fi 2. Source: Statistics Norway 3. Source: National House Building Council

Q3 highlights

Q3 2024 highlights

Continued strong growth, high margins, strong cash flow and low churn

Strong marketing execution and prolonged conversion time to sales

Best in class sales engine with broad reach and highly effective lead conversion

+41% brand exposure ¹

(44 million)

Positioning acquired solutions for future growth

o Clixifix (UK) acquired in May

o Platform for UK expansion
o +30% growth in recurring revenue in Q3 (YoY)
o EBITDA-capex margin gone from negative to double digit in Q3 (YoY)
o Evaluating Nordic solutions to the UK market along with Clixifix
o Developing list of potential acquisition targets

o Locka (Sweden) acquired in April

o Business included in Swedish organization
o Benefits from best practices in sales and marketing
o Shifting revenue from non-recurring to recurring revenue

~ ARR NOK 55 million ~ 600 customers

Q3 key takeaways

o Continued growth, high margins and strong cash flow despite challenging market
o Some positive market signals in Sweden and Finland
o Strong results from marketing and sales activities across the group
o Investing in development and branding to be in pole position when the market turns

Financials

High growth in recurring revenue as basis for success

o 29% growth in ARR

o 10% organic growth year-over-year
o A high level of downgrades and churn affecting a seasonally low new-sales quarter
o Slow start relating to vacations, but both sales and pipeling building momentum in Aug/Sept
o Focus on transitioning non-recurring revenue streams, providing future ARR growth tailwind

Quarterly ARR growth history, mNOK

ARR bridge YoY, mNOK

Continued growth in revenue and strong profitability

o High growth driven by acquisitions
o Seasonally low non-recurring revenue
o Focus on transitioning revenue from non-recurring to recurring. Aiming for mid/high 90s.

41,9 % 39,3 % 40,9 % 38,5 % 36,0 % 33,8 % 31,4 % 33,1 % 29,2 % 25,3 % Acquired Coredination Acquired Locka and Clixifix

Consistently high profitability

Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Adj.EBITDA margin Adj. EBITDA–R&D capex margin
o 4.4pp dilution from acquisitions
o Investments in disruptive development projects and Group brand project
o Proven track-record of ability to increase profitability in acquired solutions

R&D capex

o Investing more in development projects to be in pole position when the market turns
o Higher level of capitalization in existing projects
o Expecting ~9 % for FY'24

Strong revenue growth in Sweden

o Strong growth

o Acquisition of Locka
o Build momentum in sales to new customers after summer holiday
o Positive signals in market
- o Three interest rate cuts starting to materialize in pipeline and sales
o Adjusted EBITDA margin reduced as a result of acquisitions
o Focus on transitioning non-recurring revenue streams to ARR

Sweden (mNOK)

Solid growth and high margin continue in Norway

o Continued good growth in revenue
- o Strong performance in sales to new customers after the summer holiday
- o Growth hampered by increasing churn and downgrades
o Adjusted EBITDA margin increased as less development capacity was needed on existing solutions
o Continued focus on sales and marketing initiatives towards electricians
- o New packaging of existing solutions
- o Preparing to launch new calculation solution based on SmartCraft Core

Positive signals in a challenging Finnish market

o Negative growth improve from -6% in H1, expecting improvements to continue
o ARR growth trending up, churn trending down
o Positive market signals
- o Initiated construction projects exceeded project completion in Q2 – continues in Q3
- o Good marketing and sales activities building potential customer revenue pipeline
o Project based revenue model implies a growth tailwind when market turns

12,4 4,4 12,7 4,7 Q3'23 Q3'24 +2%

Revenue growth

Revenue EBITDA

Finland (mNOK)

Solid financial position and strong cash flow

to support growth strategy and M&A activity

Operating cash flow

o Continuing strong performance in operating cash flow, a YTD Q3 growth of 29%
o Cash positive all quarters (seasonally strong Q1)

o Net cash positive and negative net working capital
o Holds 2,23% (~3,8m) shares

Key focus to drive continued profitable growth Medium-term financial targets remain unchanged

o Customer centric business model
o Continue with marketing and sales excellence to build solid new customer pipeline
o More sales automation & self service
o Use our flexible business model to be prudent on costs
o Value accretive M&A

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SmartCraft ASA

3745_rns_2024-11-05_f94291a1-72e1-4a14-bd5f-178d0543ecaf.pdf