StrongPoint

Earnings Release • Jul 14, 2020

StrongPoint ASA: Robust financial results for the second quarter of 2020

StrongPoint ASA: Robust financial results for the second quarter of 2020

(Oslo, Norway, 14 July 2020) StrongPoint ASA (StrongPoint, OSE: STRONG) reported

revenues of NOK 287.9 million in the second quarter of 2020, up from NOK 287.1

million in the same quarter in 2019. The EBITDA improved to NOK 25.6 million

(22.1). StrongPoint's Retail Technology business area continued a strong

performance in the quarter despite volume effects, primarily in Spain and the

Baltics, from the COVID-19-situation.

"This second quarter and most of this first half of 2020 has obviously been

turbulent. Whilst our primary objective has been safeguarding employees,

customers and business partners, we have in parallel done our upmost to deliver

our business critical products and services to our customers. Focusing on

serving the resilient grocery retail market, we have both mobilized our work

force and served our customers in ways I am proud of. We are stronger positioned

than ever to deliver true value to our customers and achieving our 2025

strategic ambitions", says Jacob Tveraabak, Chief Executive Officer of

StrongPoint.

StrongPoint reported revenues of NOK 287.9 million (287.1) in the second quarter

of 2020 and an EBITDA of 25.6 million (22.1). Retail Technology delivered a

growth of two per cent compared to same quarter last year, Labels delivered a

growth of 21 per cent, and the volatile Cash Security business were highly

influenced by the COVID-19 measures and declined by 43 per cent. Reported

operating profit was NOK 13.4 million, up from NOK 8.3 million in the

corresponding quarter in 2019, while the cash flow from operating activities

ended at NOK -11.0 million (46.5). The company had disposable funds of NOK 97.5

million at the end of the quarter to cover short-term changes in working

capital.

"In this choppy quarter, we have had some parts of the business coming to an

almost complete stand-still at times, like our Retail Technology operations in

Spain and Cash Security. At the same time, we have experienced a very high

demand for our e-commerce logistics solutions, growing more than 70 % vs. same

quarter last year, and constituting 10 % of total revenue this quarter, up from

5 % in the full year 2019. Also, our adhesive labels business grew by more than

20 % growth vs. same quarter last year. The demand for our in-store solutions

and services has mostly been maintained. In total we have managed to uphold our

top line and improve our profitability this quarter. Our operating cash flow is

reduced compared to same quarter last year, however our balance sheet and

finances have remained solid throughout the entire period.," Tveraabak

continues.

In a strategy update session in the first quarter of 2020, StrongPoint outlined

the strategy and ambitions for the company towards 2025. As a foundation for

creating shareholder value, the growth strategy is based on profitable and

organic growth, cost control and a solid balance sheet, targeting revenues of

NOK 2.5 billion and EBITDA margins of 13-15% in 2025. "The COVID-19 pandemic has

marked a shift in shopping behavior, with e-commerce and precautionary in-store

solutions booming, both now during the pandemic, but also likely creating

lasting customer behavior changes. StrongPoint is very well positioned with its

world-class solutions for the grocery retail sector in general. Combined with a

very strong customer base, relationships and partners in defined key countries,

we have the right starting point for further deepening our service with these

customers. With this backdrop I truly believe we have all the reasons to be

optimistic about the future as StrongPointers," Tveraabak concludes.

StrongPoint ASA will present the financial results for the second quarter and

first half 2020 at 08:15 CET Tuesday 14 July 2020. The presentation will be

streamed live and can be followed at the company website.

EBITDA and other alternative performance measures (APMs) are defined and

reconciled to the IFRS financial statements on page 22 in the attached quarterly

report.

For additional information please contact:

Jacob Tveraabak

CEO, StrongPoint ASA

Phone +47 90 82 13 70

Hilde Horn Gilen

CFO, StrongPoint ASA

Phone +47 920 60 158

About StrongPoint | www.strongpoint.com (http://www.strongpoint.com)

StrongPoint is driving productivity for European retailers by providing

innovative, integrated technology solutions for multi-channel retailing based on

long-standing relationships with customers and partners. StrongPoint is also a

leader in IBNS solutions for Cash-In-Transit (Cash Security), and Labels for

customers in Norway and Sweden. StrongPoint offers best-in-class service and

consultancy expertise through its team of 512 employees in Norway, Sweden, the

Baltics, France, Belgium, Spain and Russia. StrongPoint is headquartered in

Rælingen, Norway, and listed on the Oslo Stock Exchange (ticker: STRONG).

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act.