Smartoptics Group AS — Investor Presentation 2025

Feb 13, 2025

Financial Presentation

Q4 2024 February 13, 2025

Q4'24 - Back to growth

GROSS MARGIN	2024	2023
Q4	49.0%	50.5%
12M	48.1%	50.0%

2023 2024
	EBITDA MARGIN
	Q4	14.4%	16.8%
12M 10.1% 18.5%

22.0% Increased revenue in Q4 2024 vs Q4 2023 and record high invoicing in Q4 2024

Growth fueled by high market active combined with attractive product offering

Stable high gross margin - above long-term aspirations

Disciplined and targeted investments for continued growth

Smartoptics in brief

Drivers for revenue growth acceleration

Progress on large account strategy

• Reported new accounts through 2024 have potential to contribute to revenue in 2025 and onwards
• Unchanged focus and scope for large account strategy going forward
• Final rounds of vendor selection from larger accounts in both EMEA and Americas

Very high activity level in all regions

• No major difference in activity levels between the regions when entering 2025

New products well received in the market

• 2024 product releases strengthens our product offering in a material way
• Improving our competitiveness in the Metro and Regional market segment (USD 5 bn*, excl China)

AI demands additional growth driver

• Additional driver to the ever-growing demand for bandwidth in WAN networks
• Major expansion of data centers primarily in the Americas, positive impact on Smartoptics customers.
• Indirectly driving demand as a result of hyperscale investments

Ever-growing demand for bandwidth

Q4'24 deep dive

Revenue growth turned the corner, back to growth

Revenue and EBITDA margin per quarter Comments

• Flat years are a result of four negative quarters
• Smartoptics is among the best performers in this period (source Cignal.AI)
• Mainly caused by low contribution from larger projects and accounts during Q4 2023 to Q3 2024

Continuously growing indirect and direct customer base

Active customers Comments

• Steady growth in invoiced customers YoY
• New customers represented USD 7.8 million in 2024
• High customer retention more than 50% of revenue in 2024 from customers acquired in and before 2020

Of which are business partners

Strong quarter in EMEA demonstrating market comeback, and continued positive development in APAC

Revenue per region and quarter – Last 5 quarters

Growth in all business areas

Revenue per business area and quarter – Last 5 quarters

Summary of Q4 financial performance

Gross margin and EBITDA margin

Comments

• Full year 2024 cash flow from operations is MUSD 6.8 (11.9)
• Full year 2024 Gross Margin is 48.1% (50.0%)
• Full year 2024 EBITDA is 10.1% (18.5%)

Strong financial position

3.0

Q2

11.5

Trade Payables Net other short term liabilities

4.2

Q3

11.8

5.0

Q4

12.5

Balance sheet Dec 31, 2024 Working capital development past 5 quarters

10.2

4.1

Q1

9.9

11

Board intends to propose dividend of NOK 0.60 per share

Board considerations

• Emphasizing stable to increasing dividend
• Anticipating positive financial development
• Solid financial position
• Strong cash flow
• Dividend policy updated to reflect above considerations
• Pending AGM approval

Dividend policy (updated)

When proposing a dividend for a financial year, the Board of Directors will seek a stable to growing dividend, and consider Smartoptics' financial position, one-off item impacts, growth trajectory, investment plans, flexibility, financial targets and covenants.

Long-term ambitions stay firm

	2024 Q4 RESULTS	LTM RESULTS	2025/2026 ASPIRATIONS
REVENUE	16.9 MUSD	55.5 MUSD	~100 MUSD
GROSS MARGIN	49.0%	48.1%	~45%
EBITDA MARGIN	14.4%	10.1%	~17-20%
EBIT MARGIN	10.8%	5.9%	~13-16%

Profit and Loss Statement

Profit and Loss Statement Q4 2024

Amounts in USD 1 000	2024	2023	2024	2023
Total revenue and other operating income	Q4 16 874	Q4 13 831	YTD 55 508	YTD 58 504
Direct cost of sales	-8 603	-6 853	-28 784	-29 234
Employee benefit expenses	-4 246	-3 562	-16 157	-14 141
Other operating expenses	-1 588	-1 096	-4 986	-4 329
Total operating expenses	-14 437	-11 510	-49 926	-47 705
Depreciation	-538	-432	-1 975	-1 577
Amortization of intangible assets	-77	-71	-318	-283
Total depreciation and amortization	-616	-503	-2 293	-1 859
Operating profit/(loss)	1 821	1 818	3 289	8 940
Financial income	312	245	315	252
Financial expenses	-67	-79	-310	-241
Net foreign exchange gains (losses)	900	-117	2 084	638
Net Finance Items	1 144	50	2 090	648
Profit/(loss) before income tax	2 965	1 868	5 379	9 589
Estimated income tax	-701	-421	-1 337	-2 120
Profit/(loss) for the year	2 264	1 447	4 042	7 469
Shares outstanding (Basic)	98 045 518	96 286 593		97 599 464 385 146 372
Shares outstanding (Diluted)	98 045 518	96 758 986		97 876 052 388 718 299
				0
Earnings per share (Basic) USD	0.023	0.015	0.041	0.078
Earnings per share (Diluted) USD	0.023	0.015	0.041	0.077
Earnings per share (Basic) NOK	0.260	0.177	0.450	0.888
Earnings per share (Diluted) NOK	0.260	0.176	0.450	0.880

Balance Sheet

Balance Sheet Dec 31, 2024

Amounts in USD 1 000	2024 Q4	2023 Q4
Capitalized development cost	1 575	1 232
Other Intangible assets	339	110
Property, plant and equipment	3 006	2 796
Right of use assets	1 205	1 912
Deferred tax assets	955	1 066
Total Non Current Assets	7 080	7 116
Inventories	12 615	14 198
Trade receivable	19 864	16 953
Other current assets	1 374	1 420
Cash and cash equivalents	7 972	9 321
Total Current Assets	41 826	41 893

TOTAL ASSETS	48 906	49 010

Amounts in USD 1 000	2024	2023
	Q4	Q4
Share capital	173	189
Share premium	13 121	12 404
Other paid in capital	-	20
Foreign currency translation reserves	294	411
Retained earnings	14 866	17 023
Total Equity	28 454	30 048
Lease liabilities (noncurrent portion)	277	1 271
Contract liabilities (noncurrent deferred revenue)	4 939	3 430
Other noncurrent liabilities	539	883
Total noncurrent liabilities	5 755	5 583
Lease liabilities (current portion)	730	716
Trade payable	5 048	4 483
Contract liabilities (deferred revenue)	4 030	3 133
Tax payable	1 118	1 399
Current Public duties payable	1 057	795
Other current liabilities	2 714	2 853
Total current liabilities	14 697	13 378
Total Liabilities	20 452	18 962
TOTAL EQUITY AND LIABILITIES	48 906	49 010

Cash Flow Statement

Cash Flow Statement Q4 2024

Amounts in USD 1 000	2024 Q4	2023 Q4	2024 YTD	2023 YTD
Cash flows from operating activities
Profit/(loss) before income tax	2 965	1 869	5 379	9 590
Adjustments for
Taxes paid	-913	-	-913	-240
Depreciation and amortization	616	503	2 293	1 860
Change in inventory	1 944	-1 241	1 584	1 225
Change in trade receivable	-5 124	-1 368	-2 911	-1 038
Change in contract liabilities (deferred revenue)	1 476	814	2 407	2 447
Change in trade payable	881	1 144	565	-1 348
Change in other current assets and other liabilities	-1 275	397	-1 657	-642
Net cash inflow from operating activities	571	2 119	6 746	11 853
Net cash (outflow) from investing activities	-481	-900	-3 242	-2 485
Net cash inflow from financing activities	-389	-504	-3 915	-5 526
Net increase/(decrease) in cash and cash equivalents	-299	714	-411	3 842
Cash and cash equivalents at the beginning of period	8 963	7 826	9 321	5 660
Effects of exchange rate changes on cash and cash equivalents	-692	780	-939	-181
Cash and cash equivalents at the end of period	7 972	9 322	7 972	9 322

Thank you