StrongPoint — Investor Presentation 2019

Apr 26, 2019

1 st quarter 2019

CEO Jacob Tveraabak | CFO Hilde Horn Gilen

April 26, 2018

Agenda

• Intro
• Highlights Q1 2019
• Key figures
• Q&A

Mission

"Driving retailers productivity by providing innovative integrated technology solutions"

Strong market fundamentals for retail technology

Double opportunity for StrongPoint

• 1. E-commerce: most of our clients want to grow within e-commerce
• 1. In-store: all of our clients need to improve store operations productivity

Retail Technology is a vital part of the solution for retail companies to grow in e-commerce and to improve in-store productivity

Our Product and Solution offering

Key focus areas

• 1. Maintain and grow relevance with retailers in current key Markets (Norway, Sweden, Baltics)
• 2. Significantly grow presence with retailers in Spain to mirror Home Market penetration
• 3. Grow e-commerce into a substantial portion of StrongPoint's business

… and be the best owner and employer for all businesses under the StrongPoint-umbrella

Highlights Q1 2019

Highlights Q1 2019

Very strong first quarter figures

2

Several customer break-throughs and deliveries

Important milestones for go-to-market model

Very strong 1st quarter figures: 15% revenue growth vs. last year(s)

Revenue MNOK

Very strong 1st quarter figures: growth in all Business Areas

Revenue MNOK

Very strong 1st quarter figures: highest ever EBITDA in Q1

EBITDA MNOK

* Includes positive effect of IFRS 16 of MNOK 5.7

Very strong 1st quarter figures: EBITDA-growth in all Business Areas 1

EBITDA MNOK

* Includes positive effect of IFRS 16 of MNOK 3.5 for Retail Technology, MNOK 0.9 for Cash Security, and MNOK 1.3 for Labels

Several customer break-throughs and deliveries 2

• Contract for Electronic Shelf Labels (ESL) to Rimi Baltic won
• Large increase in revenue for Vensafe in Norway and Sweden
• First ever deal for ESL in a pharmacy: Gintarinė Vaistinė, the 2nd largest pharmacy chain in the Baltic
• Delivery of Self Checkout equipment to a grocery chain in the Baltic
• Production of RFID-enabled tags from Labels to Retail customers

3 Important milestones for go-to-market model

• Partner agreement with Harting Systems for sale and development of self-checkout solutions in Germany
• Exclusive distribution agreement with Radiant Globaltech regarding sale of StrongPoint's solutions in APAC
• Expansion of our RoadRunner concept to Germany

Direction and initiatives forward

• Focus! On Retail Technology; and continued utilization of Partners where that makes sense (adding to the cooperation with Harting Systems, and Radiant Globaltech)
• Transferring Retail Technology offices in Belgium and France into our Partner organization
• Replacing own Retail personnel in Russia to service partner
• Cancelled distribution agreement with CashDefend in the US; exploring other partners
• Maintain and grow relevance with retailers in key markets (Norway, Sweden, Baltics): Exploring new, relevant products/offerings
• Significantly grow presence with retailers in Spain:
• Intensified recruitment, primarily in Sales
• Moved our Madrid office to a new, more appropriate location. Established a StrongPoint office in Catalonia (Barcelona)
• Significantly improving the value proposition for our RoadRunners: adding Unico and Compact to our Cash Management portfolio
• Grow e-commerce into a substantial portion of StrongPoint's business:
• Investments in E-commerce Logistics Suite ("E20") to improve scalability of solution sales
• Recruiting more Sales personnel

Financial Information

IFRS 16 – increase the EBITDA

• Figures

• 2018 Profit & Loss figures are not updated to comparison.
• 2019 Opening Balance is updated with equal Right to Use Asset and Lease Liability values of 70.6 MNOK.
• Equity Ratio is reduced from 40.5 % at 31.12.18 to 36.5 % at 01.01.19.
• 2019 Profit & Loss: Operational lease cost will be replaced by depreciation and interest expenses. Net Profit is not influenced by the change.
• 2019 Cash Flow: Increase Cash Flow from Operations and reduce Cash Flow from Financial activities.
• Major asset groups
• Rent and cars, with majority on rent agreements.
• No optional rental periods are included in the balance sheet, unless it is a high probability that the optional rental contract will be utilised.
• Machinery in Cash Security and Labels was previously recognised as financial lease and IFRS 16 has no impact.

CashFlow effects in Q1 2019

• Working Capital developement mainly related to seasonal changes in receivables and prepaid expenses

Solid cash flow generation last 12 months

Free Cash Flow* Last 12 months, MNOK

• First quarter 2018 had negative cash flow from operational activities

• Sale of the Cash Management as-a-service to Alimerka (MNOK 14.4) in Q2 18

*Cash flow from operations minus Capex

Net leverage of 0.66x R12 EBITDA

71.1 Q4-18 51.4 Q4-17 62.3 Q1-18 Q2-18 71.8 Q3-18 54.6 55.1 Q1-19 120.3 Q1-19** Net Interest Bearing Debt Net Leverage multiples* 0.98 1.17 1.10 1.09 0.81 0.66 1.44

* Net Interest Bearing Debt / Rolling 12 EBITDA ** Including IFRS 16 balance effect

Investor Relations

Main communication channels

• Reports, webcasts, etc. under "Investor" tab
• News articles under "News" tab
• Newsletters and Social Media

Financial calendar 2019

• Q2 16.07
• Q3 31.10

IR-contact: CFO Hilde Horn Gilen

Jacob Tveraabak CEO

Hilde Horn Gilen CFO

Thank you!