Interim report Q2 2021

Making work mobile

Highlights Q2 2021

● Revenue was NOK 325 million, up 36% from NOK 238 million in the second quarter of 2020
● Gross profit was NOK 114 million, up 46% from NOK 78 million in the second quarter of 2020
● EBITDA adjusted was NOK 13 million in the quarter vs NOK 17 million in the second quarter of 2020, a 23% decline
● ARR reported increased to NOK 64 million, up 73% from NOK 37 million in the second quarter of 2020. Proforma ARR including Famoc was NOK 93 million, up 149%
● Signed 6 new managed mobility service contracts, with an estimated value of NOK 77 million and ~7,300 managed devices in the second quarter of 2021
● Acquired software provider Famoc S.A. to strengthen Techstep's MMS capabilities and unlocking a European expansion opportunity. Techstep raised NOK 100 million in gross proceeds on 20 May to fund the acquisition, closing it on 1 July
● Børge Astrup, an experienced software services leader and entrepreneur, was appointed as CEO effective from 1 August 2021

CEO comment

"Techstep has taken a position and built a growth platform that provides extraordinary value creation opportunities in the years to come.

What Techstep does, making work mobile, with all the benefits it brings to our customers, end-users and other stakeholders, matters to a lot of people.

That's why I joined the Techstep team as the company's new CEO. We are improving the work lives of so many people, and we can make a lot of companies more productive, more profitable and more sustainable at the same time.

Techstep faces a truly exciting growth opportunity in the Nordics and Europe, and I look forward to capturing this together with our customers, our partners, the team, the Board, and not least our dedicated investors.

The way organisations handle mobility is immature and you don't see many specialised service providers out there. At the same time, we are all experiencing how technology and digital transformation are changing the way we live and work. Sometimes fundamentally. Mobile solutions are simplifying and enriching life. But mobile devices, their apps and capabilities can also create complexity and security threats. In addition, we cannot hide from the fact that hardware comes with sustainability issues that need to be addressed.

Techstep is in pole position to help businesses and people adopt and enjoy next generation mobility, and deliver substantial value to customers and end users at the same time.

But great opportunities do not create value alone. Techstep needs to accelerate sales growth and progress its transformation into a software-driven company to drive profitability. Strong results are at the core of a successful and viable business over the long term. I look forward to using my experience from sales leadership and from developing and commercialising software and mobile services, as we now

move forward to make work mobile at scale in an easy, secure, and sustainable way for more end-users and companies.

To grow and expand geographically in a successful way, we need to continue the transformation into a cloud-based software and services company with a strong mobility offering. In addition, we need to tailor industry specific solutions to meet the unique mobility needs of enterprises, companies and organisations in different parts of the private and public sectors. And we need to improve and evolve our sales and marketing to make it easier for our customers and Techstep to grow together.

To make sure we deliver growth, create stakeholder value and good returns to our investors, I believe it really boils down to some simple truths: Embrace digital transformation and deliver great user, customer, partner and employee experiences. And that is what we are going to do.

Now let us go and close some deals, develop our software further and seek simplification where we can. This is going to be fun!", says Børge Astrup, Techstep CEO.

About Techstep

Techstep is purpose-built to become a Managed Mobility Services (MMS) leader. Techstep provides a complete Managed Mobility Services offering that presents enterprises and their employees with access to efficient, secure, and value-creating mobile work solutions - wherever and whenever they choose to work. Customer benefits include reduced IT complexity and costs, improved employee capabilities and engagement, as well as increased productivity and sustainability. Techstep has more than 350 employees based in Norway, Sweden, Denmark, and Poland, serving more than 2,000 customers across different industries and sectors. The company is listed on the Oslo Stock Exchange under the ticker TECH. To learn more, please visit www.techstepasa.no.

Key Figures

(Amounts in NOK 1 000)	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020

Revenues	324 737	238 173	630 667	530 850	1 142 866
Annual Recurring Revenue (ARR)	64 303	37 110	64 303	37 110	63 329

Gross profit	113 879	77 882	227 911	158 336	378 287

EBITDA adjusted1)	13 288	17 193	26 619	28 572	95 640
EBITDA	5 251	24 270	18 108	35 899	104 455
EBITA	(19 925)	10 176	(33 135)	9 783	17 122
EBIT	(32 063)	3 816	(56 062)	(1 615)	(10 771)
Net profit (loss) for the period	(23 013)	3 987	(47 709)	596	(23 557)

EBITDA adj. margin (%)	4.1%	7.2%	4.2%	5.4%	8.4%
EBITDA rep. margin (%)	1.6%	10.2%	2.9%	6.8%	9.1%
EBITA margin (%)	(6.1%)	4.3%	(5.3%)	1.8%	1.5%
EBIT margin (%)	(9.9%)	1.6%	(8.9%)	(0.3%)	(0.9%)
Net profit (loss) for the period (%)	(7.1%)	1.7%	(7.6%)	0.1%	(2.1%)

Cash	154 036	36 561	154 036	36 561	27 203
Net interest-bearing debt	64 330	6 503	64 330	6 503	166 838
Capex2)	17 112	5 351	23 872	10 193	21 386

1) EBITDA adjusted in Q2 2021 excludes non-recurring items such as M&A related costs totalling NOK 8.0 million.

2) Capex only includes development capex and not leased out hardware to customers, booked as capex under IFRS 16.

The Optidev acquisition is included in the financial statements from Q4 2020.

Operational review

Main developments

During the second quarter of 2021, Techstep continued to pursue its growth strategy and progress the company's transformation into a leading Managed Mobility Services (MMS) provider. Techstep is continuously strengthening its MMS offering, designed as a recurring services bundle that integrates market leading IP, software and mobility expertise with services including hardware financing, support, service and lifecycle management. A core part of the MMS journey is oriented around demand generation, value-based sales, customer success and account development.

With market conditions still impacted by the Covid-19 pandemic, Techstep saw longer sales cycles, customer onboarding and implementation timelines in the second quarter. In addition to current market conditions, Techstep's ambition of ensuring great customer experience also had an effect. The company has focused on improving sales and marketing during the quarter and is currently re-designing the organisation to support the strategic journey of transitioning to a complete MMS-provider in the Nordics with a European presence.

In Sweden, the integration of recent acquisitions is going as planned; eConnectivity AB has been fully merged and integrated, and the integration of Optidev AB will be completed during the third quarter of 2021.

Sales

As noted in the previous quarter, order intake has been low. The company signed 6 new MMS contracts with a total estimated value of NOK 76.7 million and ~7,300 managed devices in the quarter.

Among the MMS solutions sold in the quarter was 'Flow', a recurring services bundle consisting of software, hardware devices and services. More specifically, 'Flow' includes the Origo Business Cloud software, mobile devices and device service, support, financing and lifecycle management. Origo is Techstep's proprietary cloud software-as-a-service solution, expected to be a core value driver going forward. Techstep Finance is Techstep's own leasing solution that adds customer benefits like lower total cost of ownership.

Techstep's MMS offering also includes TrueMobile, a cloud-based mobile software solution platform. Through apps it creates traceability of work performed by deskless workers. The software application can be paired with a broad selection of certified hardware and can be tailored to the customer's specific needs. TrueMobile also supports back-office personnel by web-based functions in addition to a powerful integration platform enabling integration with the client's business systems.

Techstep is developing its MMS stack with a strong array of its own products to strengthen its value proposition to customers. The acquisition of Famoc with their platform management products is an important step on this journey. Furthermore, key customers continue to expand their business with the company with the purchase of more MMS products. This trend is especially strong with public sector customers.

Techstep's annual recurring revenue base (ARR¹ ) was NOK 64.3 million in the second

¹Refer to alternative performance measures

quarter 2021. Proforma ARR including Famoc (closed 1 July) was NOK 92.6 million, whereof MMS related ARR was NOK 63.8 million. Techstep's recurring revenue relates to the sale of own software with ~95% gross margin comprising Mobile Expense Management, Origo Business Cloud and TrueMobile - sold either as a white-label service through partners or directly by Techstep.

Total Origo users were ~50,000 at the end of the second quarter 2021, up from ~30,000 users at the end of second quarter 2020.

Strategic initiatives to strengthen mobility offering

Techstep has acted as a market consolidator in Norway and Sweden over the past five years and continuously evaluates potential M&A opportunities to further strengthen and expand its managed mobility service offering. In the quarter, Techstep announced the acquisition of software provider Famoc, strengthening Techstep's MMS capabilities and unlocking a European expansion opportunity. Closing of the Famoc acquisition was 1 July 2021.

Financial review

The interim financial information has not been subject to audit or review.

Profit and loss second quarter 2021

Techstep generated total revenue of NOK 324.7 million in the second quarter of 2021, up from NOK 238.2 million in the corresponding quarter last year.

Techstep's Own Software accounted for NOK 15.2 million (NOK 9.5 million), whereas hardware-as-a-service revenue accounted for NOK 32.9 million (NOK 13.4 million). Advisory & Services amounted to NOK 66.3 million (NOK 36.3) and related commissions were NOK 4.8 million in the second quarter (NOK 7.6 million). Hardware revenue (excluding hardware-as-aservice) was NOK 204.8 million (NOK 169.1 million) in the quarter.

Gross profit increased by 46.2% year-over-year to NOK 113.9 million. Gross margin for the quarter thus increased to 35.1%, up from 32.7% in the corresponding quarter of 2020. The improved gross margin relates to increased demand for hardware-as-a-service and Advisory & Services.

Salaries and personnel costs increased by 59.1% year-over-year to NOK 71.7 million (NOK 45.0 million), reflecting higher headcount due to acquisitions. Option costs for the quarter were NOK 1.7 million (NOK 0.1 million), and other operational costs were NOK 28.9 (NOK 15.9 million).

EBITDA amounted to NOK 5.3 million in the second quarter of 2021, and includes one-off costs related to the Famoc acquisition. EBITDA in the corresponding quarter last year was NOK 24.3 million.

Profit and loss first half 2021

Techstep had total revenues of NOK 630.7 million in the first half of 2021 and gross profit was NOK 227.9 million. Total revenues for the first half of 2020 were NOK 530.9 million, while the gross profit was NOK 158.3 million. EBITDA for the first half of 2021 amounted to NOK 18.1 million, while the EBITDA for the first half of 2020 was NOK 35.9 million. The net loss for the first half of 2021 was NOK 47.7 million, compared to a net profit of NOK 0.6 million in the first half of 2020.

Financial position

As at 30 June 2021, total assets were 1,300.5 NOK million, compared with NOK 1,169.6 million as at 31 March 2021.

Intangible assets accounted for NOK 720.2 million. Intangible assets included a deferred tax asset of NOK 9.6 million, goodwill of NOK 567.2 million and customer relations and technology of NOK 143.3 million.

Total tangible assets were NOK 203.2 million as at 30 June 2021 including NOK 170.9 million in hardware-as-a-service to customers and NOK 32.3 million in premises and leased assets.

Total inventories and receivables were NOK 222.8 million as at 30 June 2021. The increase from NOK 194.2 million at the end of the preceding quarter primarily reflects an increase in inventories and accounts receivables due to higher sales volume in the current period.

Total equity after non-controlling interests at the end of the second quarter was NOK 605.6 million (NOK 512.1 million), corresponding to an equity ratio of 47% (44%). The increase from preceding quarter is mainly due to a private placement raising gross proceeds of NOK 100 million.

Non-current interest-bearing debt of NOK 123.7 million (NOK 97.2 million) includes acquisition loans of NOK 70.7 million related to the Optidev

and Famoc acquisitions and a seller's credit of NOK 49.0 million. Other non-current debt of NOK 43.2 million mostly relates to leasing commitments of NOK 23.1 million and a buyback obligation for hardware-as-a-service of NOK 19.9 million.

Current interest-bearing liabilities amounted to NOK 94.7 million. They include net bank overdraft accounts of NOK 44.4 million, as well as a short-term seller's credit of NOK 23.3 million and the short-term acquisition loans of NOK 20.1 million related to the Optidev and Famoc acquisitions.

Other current liabilities of NOK 233.9 million as at 30 June 2021 mainly include payables to employees of NOK 37.1 million, deferred revenue of NOK 131.8 million, leasing commitments of NOK 11.3 million and a buyback obligation for hardware-as-a-service of NOK 9.1 million.

Net interest-bearing debt was NOK 64.3 million at the end of the second quarter 2021, compared to NOK 152.3 million at the end of the preceding quarter. The reduction in net interest bearing is mainly due to the private placement completed in May 2021.

Cash flow second quarter 2021

Net cash inflow from operating activities was NOK 19.2 million in the second quarter of 2021 and includes a positive effect of NOK 16.7 million from the decrease in working capital.

Net cash flow used for investment activities was a negative NOK 38.9 million. This is largely due to capital expenditures related to leased out hardware-as-a-service of NOK 23.4 and investments in own software and IT development of NOK 17.1 million in the quarter.

Net cash flow from financing activities was positive at NOK 109.3 million in the second quarter 2021. This is largely due to issuance of new shares of NOK 101.3 million, in addition to proceeds from borrowings of NOK 12.4 and a

negative effect from lease repayments of NOK 5.0 million.

Cash and cash equivalents increased by NOK 89.6 million from NOK 62.8 million in the previous quarter to NOK 154.0 million at the end of the quarter.

Financial risk and risk management

As described in the Annual Report for 2020, Techstep's regular business activities entail exposure to various types of risk, including risk related to market, operational and financial development.

The company's risk management aims to support value creation and ensure a continued, solid financial platform through transparent and strategic management of both financial and operational risk factors. The company's risk management is coordinated by the head office in cooperation with the Board of Directors, and is continuously monitored, so that appropriate actions can be taken when required, to eliminate or mitigate any potentially negative impact on operational or financial performance.

Techstep monitors and evaluates risks related to the current macroeconomic development including the effects from the Covid-19 pandemic. Market conditions are still affected by the pandemic but have improved since the first outbreak. The majority of Techstep's customers are operating as normal, but some have longer lead times on sales and implementation processes. This is expected to revert to normal with the roll-out of vaccinations and reduction in outbreaks. However, with the possibility for new and more contagious mutations of the Covid-19 virus emerging, Techstep must be prepared for lower economic activity and continued longer lead times on sales. The length and scale of the Covid-19 situation remains uncertain, and thus, represents a risk of lowered activity and profitability.

Furthermore, Techstep has operational, cost and capital expenditure flexibility and will adapt to the market conditions as they evolve. Techstep remains committed to responsible operations and is operating in compliance with rules and recommendations from local and national authorities. Techstep is able to operate via decentralised locations and mobile home office solutions with focus on maintaining its client services in a best possible and efficient manner.

In the short and intermediate term, Techstep's focus is on developing its business platform and maintaining efficient daily operations to secure the Group's cash flow by reducing financial market exposure. Long-term financial investments have been made to generate longterm financial returns.

For the assessment of other risk factors, please refer to the Board of Directors report in the Annual Report for 2020.

Transactions with related parties

There were no material transactions with related parties during the period.

Outlook

Techstep has positioned itself as the leading Nordic enabler of the digital workplace. The company's value proposition is to help enterprises handle the complexity that comes with providing hundreds or thousands of employees with mobility solutions. Through its unique platform for growth, Techstep is serving more than 2,000 customers with over 210,000 managed devices across industries in both private and public sector in the Nordics. Moreover, the acquisition of Famoc has unlocked a European expansion and growth

opportunity. Going forward, Techstep will continue to pursue its growth strategy and progress the company's transformation into a complete Managed Mobility Services (MMS) provider.

As part of its transformation journey, Techstep invests in own software and IP and pursues M&A opportunities to further strengthen and expand its MMS offering and market position. In parallel, Techstep is re-designing the organisation from a transaction to customer relationship to enhance its complete MMS offering.

Techstep has stated clear medium and longterm goals. In the medium term, the ambition is to enter into 30 new MMS contracts per year for a gross profit growth of 20-25%, with a gross profit to EBITDA conversion of 20-25%. Annual development capex is expected to be NOK 30- 35 million. Moving forward, Techstep envisions strong growth and targets managing 1 million devices by 2025, with a gross profit to EBITDA conversion above 30%.

Growth will come from converting existing customers to MMS, onboarding new customers, M&A to acquire new software, IP and market positions and geographical expansion. Techstep is confident that its MMS offering has a strong value proposition to customers as it helps enterprises reduce costs, increase productivity, transform employee capabilities and enhance their engagement, ultimately driving business value and revenue growth, while delivering on ESG goals.

(Amounts in NOK 1 000)	Note	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020

Revenue	2, 3	324 068	235 927	629 318	528 146	1 138 943
Other revenue		669	2 246	1 349	2 704	3 923
Total revenues		324 737	238 173	630 667	530 850	1 142 866

Cost of goods sold		(210 858)	(160 291)	(402 756)	(372 514)	(764 579)
Salaries and personnel costs		(71 654)	(45 039)	(146 247)	(94 819)	(208 243)
Other operational costs		(28 937)	(15 900)	(55 045)	(34 945)	(74 405)
Depreciation	5	(25 176)	(14 094)	(51 243)	(26 116)	(87 332)
Amortisation		(12 138)	(6 360)	(22 927)	(11 398)	(27 892)
Other income	8	-	8 000	-	8 000	17 843
Other expenses	8	(8 037)	(673)	(8 511)	(673)	(9 028)
Operating profit (loss)		(32 063)	3 816	(56 062)	(1 615)	(10 770)

Financial income		837	1 764	5 719	6 412	5 760
Financial expense		(4 462)	(3 065)	(9 608)	(8 641)	(11 822)
Profit before taxes		(35 688)	2 515	(59 951)	(3 844)	(16 832)
Income taxes		12 675	1 472	12 242	4 440	(6 725)
Net profit (loss) for the period		(23 013)	3 987	(47 709)	596	(23 557)

Net income attributable to
Non-controlling interests		91	(27)	205	68	1 188
Shareholders of Techstep ASA		(23 104)	4 014	(47 914)	529	(24 746)

Earnings per share in NOK:
Basic		(0.13)	0.02	(0.26)	-	(0.15)
Diluted		(0.12)	0.02	(0.25)	-	(0.13)

Consolidated income statement

Consolidated statement of comprehensive income

(Amounts in NOK 1 000)	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Net profit (loss) for the period	(23 013)	3 987	(47 709)	596	(23 557)

Items that may be reclassified to
profit and loss
Exchange differences on translating foreign operations	12 395	(7 484)	(13 760)	14 919	22 346
Income tax related to these items	593	(69)	(683)	(2 717)	(730)
Total comprehensive income	(10 024)	(3 566)	(62 153)	12 799	(1 941)

Total comprehensive income
attributable to
Non-controlling interests	91	(2)	205	(2)	1 188
Shareholders of Techstep ASA	(10 115)	(3 564)	(62 358)	12 801	(3 130)

Consolidated statement of financial position

(Amounts in NOK 1 000)
Note ASSETS	Q2 2021	FY 2020
Non-current assets
Deferred tax asset	9 617
Goodwill	567 231	571 372
Customer relations and technology	143 318	161 892
Total intangible assets	720 166	733 263
Right-of-use assets 5	32 305	40 233
Property, plant and equipment	170 890	133 384
Total tangible assets	203 195	173 617
Shares and investments	44	44
Other non-current assets	300	169
Total financial assets	344	213
Total non-current assets	923 705	907 093
Inventories	20 811	28 158
Accounts receivable	164 298	203 083
Other receivables	37 672	33 594
Total inventories and receivables	222 782	264 836
Cash and cash equivalents 7	154 036	27 203
	376 818	292 039
Total current assets
Total assets	1 300 523	1 199 131

Note EQUITY AND LIABILITIES	Q2 2021	2020
Share capital 4	205 951	183 295
Other equity	398 573	379 272
Total equity attributable to the owners of Techstep ASA 4	604 524	562 568
Non-controlling interests	1 088	884
Total equity	605 612	563 451
Deferred tax	24 226	27 659
Non-current interest-bearing debt	123 664	108 539
Other non-current debt	43 159	54 488
Total non-current debt	191 049	190 686
Current interest-bearing liabilities	94 702	85 502
Accounts payable	140 958	154 442
Tax payable	(995)	(750)
Public taxes, provisions	35 334	39 756
Other current liabilities 5, 8	233 862	166 044
Total current debt	503 862	444 994
Total liabilities	694 911	635 680

Consolidated statement of changes in equity

(Amounts in NOK 1 000)	Share capital	Other paid-in capital	Other equity	Reval. reserve	SUM	Minority interest	Total equity capital
Equity as at 1 January 2020	162 795	504 273	(205 402)	(5 394)	456 273	(304)	455 970

Profit for the period	-	-	(24 746)		(24 746)	1 188	(23 557)
Other comprehensive income	-	-		21 616	21 616	-	21 616
Total comprehensive income for
the period	-	-	(24 746)	21 616	(3 130)	1 188	(1 941)

Transactions with owners in their
capacity as owners:
Issue of ordinary shares as
consideration for a business
combination, net of transaction costs
and tax	20 500	87 088			107 588		107 588
Share-based payments	-	-	1 834		1 834	-	1 834
Equity as at 31 December 2020	183 295	591 361	(228 311)	16 222	562 568	884	563 451

Equity as at 1 January 2021	183 295	591 361	(228 311)	16 222	562 568	884	563 451

Profit for the period	-	-	(47 914)		(47 914)	199	(47 715)
Other comprehensive income	-	-		(14 443)	(14 443)	-	(14 443)
Total comprehensive income for
the period	-	-	(47 914)	(14 443)	(62 357)	199	(62 158)
Transactions with owners in their capacity as owners: Issue of ordinary shares as consideration for a business combination, net of transaction costs
and tax	22 655	79 206			101 862		101 862
Share-based payments	-	-	2 459		2 459	-	2 459
Equity as at 30 June 2021	205 951	670 568	(273 767)	1 779	604 530	1 082	605 612

Consolidated statement of cash flow

(Amounts in NOK 1 000)	Note	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Profit before tax
Depreciation equipment and other fixed		(35 688)	2 515	(59 951)	(3 844)	(16 832)
assets	5	22 609	11 104	44 527	20 227	72 590
Depreciation right-of-use assets	5	2 567	2 991	6 716	5 889	14 743
Amortisation		12 138	6 360	22 927	11 398	27 892
Share-based payments		1 707	93	2 459	478	1 834
Dividend and other reclassified to	8
investment activities		-	(8 000)	-	(8 000)	(8 000)
Gain on sale of business reclassified to
investment activities Gain from sale of property plant and		(40)	-	-	-	-
equipment reclassified to investment	5
activities		-	-	-	-	(4 795)
Remeasurement of contingent liability		-	-	-	-	4 859
Net exchange differences		335	(11 280)	335	6	923
Taxes paid		(1 092)	(963)	(1 421)	(2 000)	(5 514)
Changes in core net operating working
capital		9 350	16 148	27 518	(7 257)	(30 107)
Changes in other net operating working
capital		7 355	6 839	69 828	7 841	13 528
Net cash flow from operational activities		19 241	25 807	112 938	24 739	71 120

Payment for acquisition of subsidiaries
net of cash acquired Payment for equipment and other fixed		811	-	-	-	(61 414)
assets	5	(23 407)	(8 945)	(97 631)	(27 437)	(108 650)
Payment for intangible assets		(17 112)	(5 351)	(23 872)	(10 193)	(21 386)
Proceeds from sale of property, plant
and equipment		765	-	8 089	-	13 089
Proceeds from sale of business		-	8 000	-	8 000	8 000
Net cash used on investment
activities		(38 943)	(6 296)	(113 414)	(29 630)	(170 361)

Proceeds from issuance of shares		101 346	-	101 853	-	-
Proceeds from borrowings	7	12 405	-	43 492	-	109 764
Repayment of borrowings		545	(64)	(7 194)	(126)	(12 686)
Lease repayments Net cash flow from financing		(4 988)	(3 363)	(9 427)	(6 549)	(17 459)
activities		109 308	(3 427)	128 724	(6 675)	79 619

Net change in cash and cash equivalents1)
		89 605	16 083	128 247	(11 566)	(19 622)
Cash and cash equivalents at
beginning of period		62 796	19 996	27 203	44 382	44 588
Effects of exchange rate changes on
cash and cash equivalents		1 634	481	(1 414)	3 745	2 236
Cash and cash equivalents at end of period1)	7	154 036	36 561	154 036	36 561	27 203

Cash flow has been restated for FY2020. Bank overdraft and cash is no longer presented net in the consolidated statement of cash flow.

The interim financial information has not been subject to audit or review.

Notes to the consolidated financial statements

Techstep (the Group) consists of Techstep ASA (the Company) and its subsidiaries. Techstep ASA is a limited liability company, incorporated in Norway. The consolidated interim financial statements consist of the Group and the Group's interests in a joint arrangement. As a result of rounding differences, numbers or percentages may not add up to the total.

The figures presented in the quarterly report are in NOK thousand unless otherwise stated.

Note 1. Accounting principles

The interim consolidated financial statements are prepared under International Financial Reporting Standards (IFRS) for the periods presented. The interim financial report is presented in accordance with IAS 34 Interim Financial Reporting. The interim consolidated financial statements do not include all the information and disclosures required in the Annual Financial Statements and should be read in conjunction with the Group's Annual Financial Statements 2020. The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's Annual Financial Statements for the year ended 31 December 2020. The report has not been audited.

Note 2. Business segments

Techstep has three business segments, which are represented by the geographic locations where the Group's entities are incorporated and the newly acquired Optidev group. The entities are controlled and owned by the Techstep Group. Other companies are included in the segment Headquarters and other.

Eliminations comprise intersegment sales. Transactions between operating segments are conducted on normal commercial terms.

1) Norway

Techstep Norway AS: The offerings of the company are mobile hardware, servicing, support and mobility consultancy services. The company is located in Oslo and Sandefjord.
Mytos AS: A Norwegian-based software-as-a-services company with mainly recurring revenue. Mytos offers a full range of mobile expense management (TEM) modules, all with proprietary software and highly user-friendly implementation and operation. The company is located in Oslo.
Techstep Denmark ApS: Established to invoice Danish customers. The company is fully supported from Norway and does not have any employees.
Techstep Finance AS: Provides financing and remarketing services.

2) Sweden:

Techstep Sweden AB: The company offers mobile hardware, industry leading cloud-based (UCaaS) PBX solutions, Mobility consultancy services and Enterprise Mobility Management (EMM) services, including Mobile Security, system design, implementation, mobile device management. The company is located in Karlstad, Gothenburg and Stockholm.
Techstep Finance AB: Provides financing and remarketing services.

3) Optidev:

Optidev AB, Optidev AS and Optidev ApS: The companies develop and provide enterprise mobility software and solutions, predominantly to customers in the transportation, logistics and public safety sectors in Sweden, Norway and Denmark.
eConnectivity CC AB: the company is a specialised developer and provider of enterprise strategic services related to mobility and digitalisation.

4) Headquarters and other:

• Techstep ASA, Techstep Nordic AS and Techstep Holding AB.

				HQ and	Elim
Q2 2021	Norway	Sweden	Optidev	other	inations	Total
Operating revenues from
external customers	196 477	81 900	46 022	338	-	324 737
Operating revenues from other
segments	5 047	2 138	220	9 130	(16 535)	-
Operating revenues	201 524	84 037	46 242	9 469	(16 535)	324 737
Cost of goods sold	(137 329)	(61 458)	(16 054)	-	3 982	(210 858)
Salaries and personnel costs	(30 263)	(14 306)	(17 830)	(10 113)	858	(71 654)
Other operational costs	(11 432)	(5 376)	(5 688)	(15 219)	8 777	(28 937)
Share of profit (loss) of joint venture	-	-	-	-	-	-
Depreciation	(15 376)	(4 296)	(5 156)	(349)	-	(25 176)
Amortisation	(2 623)	(1 902)	(5 610)	(2 002)	-	(12 138)
Impairment	-	-	-	-	-	-
Other income	-	-	-	-	-	-
Other expenses	-	-	-	(8 037)	-	(8 037)
Operating profit (loss)	4 501	(3 300)	(4 096)	(26 250)	(2 917)	(32 063)

Employees 30 June 2021	117	59	96	20		292

				HQ and	Elim
Q2 2020	Norway	Sweden	Optidev	other	inations	Total
Operating revenues from
external customers	165 081	72 846	-	247	-	238 173
Operating revenues from other
segments	363	1 576	-	8 274	(10 213)	-
Operating revenues	165 444	74 422	-	8 521	(10 213)	238 173
Cost of goods sold	(110 724)	(51 054)	-	1	1 486	(160 291)
Salaries and personnel costs	(25 984)	(11 601)	-	(7 569)	115	(45 039)
Other operational costs	(13 372)	(4 974)	-	(12 691)	15 137	(15 900)
Share of profit (loss) of joint venture	-	-	-	-	-	-
Depreciation	(10 417)	(1 644)	-	(2 033)	-	(14 094)
Amortisation	(3 779)	(1 959)	-	(621)	-	(6 360)
Impairment	-	-	-	-	-	-
Other income	8 000	-	-	-	-	8 000
Other expenses	45	-	-	(718)	-	(673)
Operating profit (loss)	9 213	3 189	-	(15 111)	6 525	3 816

Employees 30 June 2020	131	61	-	18		210

				HQ and	Elim
H1 2021	Norway	Sweden	Optidev	other	inations	Total
Operating revenues from
external customers	385 936	149 121	95 026	585	-	630 667
Operating revenues from other
segments	5 183	2 748	368	18 261	(26 560)	-
Operating revenues	391 119	151 869	95 394	18 845	(26 560)	630 667
Cost of goods sold	(268 241)	(104 963)	(34 097)	(267)	4 811	(402 756)
Salaries and personnel costs	(62 726)	(29 784)	(33 901)	(21 094)	1 258	(146 247)
Other operational costs	(22 929)	(12 039)	(10 888)	(26 823)	17 634	(55 045)
Share of profit (loss) of joint venture	-	-	-	-	-	-
Depreciation	(29 525)	(8 530)	(10 503)	(2 684)	-	(51 243)
Amortisation	(5 054)	(3 866)	(10 001)	(4 006)	-	(22 927)
Impairment	-	-	-	-	-	-
Other income	-	-	-	-	-	-
Other expenses	-	-	-	(8 511)	-	(8 511)
Operating profit (loss)	2 645	(7 313)	(3 997)	(44 540)	(2 857)	(56 062)

				HQ and	Elim
H1 2020	Norway	Sweden	Optidev	other	inations	Total
Operating revenues from	375 002	155 355	-	493	-	530 850
external customers
Operating revenues from other	3 034	2 736	-	16 549	(22 319)	-
segments
Operating revenues	378 036	158 091	-	17 042	(22 319)	530 850
Cost of goods sold	(265 087)	(111 942)	-	(283)	4 798	(372 514)
Salaries and personnel costs	(55 907)	(23 181)	-	(16 097)	365	(94 819)
Other operational costs	(28 877)	(10 086)	-	(26 296)	30 315	(34 945)
Share of profit (loss) of joint venture	-	-	-	-	-	-
Depreciation	(18 638)	(3 524)	-	(3 954)	-	(26 116)
Amortisation	(6 477)	(3 821)	-	(1 101)	-	(11 398)
Impairment	-	-	-	-	-	-
Other income	8 000	-	-	-	-	8 000
Other expenses	45	-	-	(718)	-	(673)
Operating profit (loss)	11 096	5 537	-	(31 407)	13 158	(1 615)

				HQ and
FY 2020	Norway	Sweden	Optidev	other	Eliminations	Total
Operating revenues from
external customers	760 611	310 577	70 692	986	-	1 142 866
Operating revenues from
other segments	6 397	4 202	112	32 204	(42 916)	-
Operating revenues	767 007	314 779	70 805	33 190	(42 916)	1 142 886
Cost of goods sold	(511 798)	(224 774)	(34 788)	-	6 782	(764 579)
Salaries and personnel costs	(112 736)	(49 604)	(15 716)	(31 652)	1 465	(208 243)
Other operational costs	(53 544)	(21 928)	(4 324)	(25 580)	30 971	(74 405)
Share of profit (loss) of joint
venture	-	-	-	-	-	-
Depreciation	(61 479)	(11 422)	(5 990)	(8 442)	-	(87 332)
Amortisation	(7 816)	(7 770)	(4 161)	(8 145)	-	(27 892)
Impairment	-	-	-	-	-	-
Other income	8 150	4 835	-	4 859	-	17 843
Other expenses	(105)	-	-	(8 923)	-	(9 028)
Operating profit (loss)	27 679	4 116	5 826	(44 694)	(3 698)	(10 770)

Note 3. Disaggregation of revenues

In the following tables, Total revenue is disaggregated by major revenue streams divided into the reportable segments as shown in Note 2:

				HQ and
Q2 2021	Norway	Sweden	Optidev	other	Eliminations	Group
Total revenues	201 524	84 037	46 242	9 469	(16 535)	324 737

Hardware
Hardware revenues	135 519	48 477	10 765	-	(1 914)	192 847
Leasing	21 643	5 657	5 643	-	-	32 943
Kickback	9 319	2 417	233	-	-	11 968
Total	166 480	56 551	16 641	-	(1 914)	237 758

Solutions
Advisory & Services	20 844	26 486	23 802	-	(4 812)	66 320
Own Software	9 689	-	5 482	-	-	15 171
Commission	3 845	973	-	-	-	4 818
Total	34 379	27 459	29 284	-	(4 812)	86 309

Other revenues
Other	665	28	316	9 469	(9 809)	669
Total	665	28	316	9 469	(9 809)	669

				Headquarter
Q2 2020	Norway	Sweden	Optidev	and other	Eliminations	Group
Total revenues	165 444	74 422	-	8 521	(10 213)	238 173

Hardware
Hardware revenues	106 744	53 969	-	-	(71)	160 642
Leasing	11 314	2 062	-	-	-	13 376
Kickback	7 241	1 218	-	-	-	8 459
Total	125 300	57 249	-	-	(71)	182 477

Solutions
Advisory & Services	24 433	13 705	-	-	(1 868)	36 270
Own Software	9 530	-	-	-	-	9 530
Commission	4 639	3 011	-	-	-	7 650
Total	38 602	16 716	-	-	(1 868)	53 450

Other revenues
Other	1 543	457	-	8 521	(8 274)	2 246
Total	1 543	457	-	8 521	(8 274)	2 246

				HQ and
H1 2021	Norway	Sweden	Optidev	other	Eliminations	Group
Total revenues	391 119	151 869	95 394	18 845	(26 560)	630 667

Hardware
Hardware revenues	263 524	93 314	23 489	-	(2 113)	378 215
Leasing	39 886	10 349	13 229	-	-	63 463
Kickback	17 389	6 044	888	-	-	24 320
Total	320 799	109 707	37 606	-	(2 113)	465 998

Solutions
Advisory & Services	41 789	40 222	45 757	-	(5 360)	122 408
Own Software	19 490	-	11 306	-	-	30 796
Commission	8 200	1 915	-	-	-	10 115
Total	69 479	42 137	57 063	-	(5 360)	163 320

Other revenues
Other	840	25	726	18 845	(19 088)	1 349
Total	840	25	726	18 845	(19 088)	1 349

				Headquarter
H1 2020	Norway	Sweden	Optidev	and other	Eliminations	Group
Total revenues	378 036	158 091	-	17 042	(22 319)	530 850

Hardware
Hardware revenues	278 103	108 868	-	-	(2 743)	384 228
Leasing	-	-	-	-	-	-
Kickback	14 690	2 798	-	-	-	17 488
Total	292 793	111 666	-	-	(2 743)	401 716

Solutions
Advisory & Services	71 735	40 372	-	-	(3 028)	109 079
Own Software	-	-	-	-	-	-
Commission	11 612	5 740	-	-	-	17 352
Total	83 346	46 112	-	-	(3 028)	126 430

Other revenues
Other	1 897	314		17 042	(16 549)	2 704
Total	1 897	314	-	17 042	(16 549)	2 704

				HQ and
FY 2020	Norway	Sweden	Optidev	other	Eliminations	Group
Total revenues	767 007	314 779	70 805	33 190	(42 916)	1 142 866

Hardware
Hardware revenues	492 315	210 373	24 662	-	(3 399)	723 950
Leasing	79 494	14 929	10 883	-	-	105 305
Kickback	31 040	3 138	-	-	-	34 179
Total	602 849	228 440	35 544	-	(3 399)	863 434

Solutions
Advisory & Services	102 351	75 905	29 867	-	(7 199)	200 924
Own Software	38 420	-	4 956	-	-	43 376
Commission	21 031	10 291	-	-	-	31 322
Total	161 802	86 196	34 823	-	(7 199)	275 622

Other revenues
Other	2 356	143	438	33 190	(32 317)	3 811
Total	2 356	143	438	33 190	(32 317)	3 811

Note 4. Share capital and shareholders

The company's share capital as at 30 June 2021 was NOK 205,950,619 consisting of 205,950,619 ordinary shares with a par value of NOK 1.00.

Each share gives the right to one vote at the company's annual general meeting. At the time of this report, Techstep holds 1,914 treasury shares.

Techstep's 20 largest shareholders at 30 June 2021 were as follows:

Shareholder	# of shares	Ownership %
DATUM AS1	35 597 288	17.3%
MIDDELBORG INVEST AS	23 528 007	11.4%
KARBON INVEST AS2	21 804 349	10.6%
SWEBANK AB	19 007 433	9.2%
DnB NOR Bank ASA	11 200 678	5.4%
VERDIPAPIRFONDET DNB SMB	8 146 121	4.0%
CIPRIANO AS3	5 579 946	2.7%
TIGERSTADEN AS	5 000 000	2.4%
ZONO HOLDING AS	4 000 007	1.9%
TORSTEIN TVENGE	3 000 000	1.5%
SÅ&HØSTE AS	2 925 936	1.4%
BRIDGE CAPITAL AS	2 513 317	1.2%
NORDHOLMEN AS	2 075 608	1.0%
ADRIAN AS	2 038 851	1.0%
PIKA HOLDING AS	1 956 512	0.9%
NORDIALOG ENSJØ AS	1 946 253	0.9%
UNIFIED AS	1 849 457	0.9%
SABINUM AS	1 802 813	0.9%
IDEKAPITAL AS4	1 797 532	0.9%
SIMEN THORSEN	1 680 000	0.8%
Total number owned by top 20	157 450 108	76.5%
Total number of shares	205 950 619	100.00%

1) Datum AS is controlled by deputy board member Jan Haudemann-Andersen

2) Karbon Invest AS is owned by chairman of the board Jens Rugseth

3) Zono Holding AS is owned by Middelborg Invest AS 50.44%, Cipriano AS 4.65%, Duo Jag AS 0.93%

4)Idekapital AS, which is controlled by board member Anders Brandt, owns 1,802,8013 shares in Techstep ASA.

Duo Jag AS, which is partly owned by board member Ingrid Leisner, owns 601,562 shares in Techstep ASA.

Share option grant

At the Annual General meeting 22 June 2020, 4,069,883 share options (2.5% of existing shares) were granted under the 2020 program. The share options vested on 22 June 2021 and must be exercised within 22 June 2024. The exercise price is NOK 3.00.

At the Annual General meeting 22 April 2021, 4,593,307 share options (2.5% of existing shares) were granted under the 2021 program. The share options vest 1/3 each year from 22 April 2022 and are fully vested on 22 April 2024. The options must be exercised within 22 April 2026. The exercise price is NOK 5.80.

The Board intends to propose the adoption of a similar option programme in 2022.

As at 30 June 2021, the total number of outstanding share options was 8,303,483 (4.03%).

Name	Position	Shares	Share options
Jens Haviken*	CEO	123 364	2 050 943
Marius Drefvelin	CFO	63 364	1 663 720
Mads Vårdal	CPO	5 019	1 156 726
Erik Haugen	CCO	4 672	1 156 726
Inge Paulsen	Managing Director Norway	150 000	1 156 726
Fredrik Logenius	Managing Director Sweden	9 469 399	229 660
Lars Ole Allum	Managing Director Mytos	2 266 368	329 660
Marius Kyvåg	Managing Director Techstep Finance		329 660
David Landerborn	Dep. Managing Director Optidev		229 660

Overview of shares and share options held by members of the management group as at 30 June 2021:

*See note 9, Subsequent events for Share option grant given after 30 June 2021.

Note 5. Property, plant and equipment

	Land and buildings	Right-of-use assets	Equipment1)	Other fixed assets	Total

Accumulated cost as at 1 January 2021	-	69 045	279 256	35 052	383 353
Additions	-	7 206	99 665	1 141	108 013
Additions arising from business
combinations	-	(824)	-	-	(824)
Disposals Translation differences	- -	(11 240) (524)	(79 242) (4 597)	(3 812) (481)	(94 294) (5 603)
Reclassified to asset classified as held
for sale	-	-	-	-	-
Accumulated cost 30 June 2021	-	63 664	295 082	31 900	390 645

Accumulated cost as at 1 January 2020	-	47 552	105 865	19 966	173 383
Additions	-	9 287	105 340	3 836	118 462
Additions arising from business
combinations	-	11 877	78 768	10 725	101 369
Disposals	-	-	(9 677)	(2 619)	(12 296)
Translation differences	-	330	1 679	425	2 434
Reclassified to asset classified as held for sale	-	-	-	-	-
Accumulated cost 31 December 2020	-	69 045	281 974	32 334	383 353

Accumulated depreciation as at 1
January 2021	-	(29 026)	(153 906)	(27 415)	(210 347)
Additions arising from business
combinations	-	499	-	-	499
Current year depreciation	-	(6 644)	(43 317)	(1 295)	(51 255)
Disposals	-	3 574	63 312	3 676	70 562
Translation differences	-	238	2 370	482	3 091
Reclassified to asset classified as held
for sale Accumulated depreciation 30 June	-	-	-	-	-
2021	-	(31 359)	(131 540)	(24 552)	(187 451)

Accumulated depreciation as at 1
January 2020		(10 962)	(33 871)	(16 703)	(61 536)
Additions arising from business
combinations	-	(3 639)	(47 936)	(6 969)	(58 544)
Current year depreciation	-	(14 361)	(71 560)	(1 411)	(87 332)
Disposals	-	-	-	(1 971)	(1 971)
Translation differences	-	149	(538)	35	(353)
Reclassified to asset classified as held for sale	-	-	-	-	-
Accumulated depreciation 31
December 2020	-	(28 813)	(153 906)	(27 018)	(209 736)

Book value of assets 31 December 2020	-	40 233	128 068	5 316	173 617
Book value of assets 30 June 2021	-	32 305	163 542	7 348	203 195

1) Equipment comprises mobile phones, tablets and other equipment where the Group is the lessor.

Note 6. Impairment

The group's assets have been assessed for impairment, and it is management's judgement that no impairment charge is necessary.

Note 7. Cash and cash equivalents

Current assets	Q2 2021	FY 2020
Cash at bank and in hand, not included in cash pool	154 036	27 203
of which is restricted	10 358	6 356

The Group has a credit facility of NOK 80 million related to the cash pool.

Note 8. Changes in Group structure and business combinations

2021

In May 2021, Techstep merged its two subsidiaries eConnectivity CC AB and Optidev Integration AB into Optidev AB.

2020

In 2020, Techstep invested NOK 73.2 million in cash (net of cash acquired NOK 61.4 million) related to the acquisition of subsidiaries and businesses (Business combinations). Furthermore, the Group issued consideration shares amounting to NOK 107.6 million in 2020. In addition, seller credits amounting to NOK 74.0 million have been recognised. All investments have been accounted for as business combinations.

Techstep acquired 100% of the shares in Optidev AB 1 October 2020. The transaction was settled partly in 19,744,177 consideration shares in Techstep ASA. At the time of completion, this corresponded to NOK 103.7 million.

On 18 December 2020 Techstep acquired 100% of the shares in eConnectivity CC AB. The transaction was settled partly in 755,958 consideration shares in Techstep ASA. At the time of completion, this corresponded to NOK 0.8 million.

Acquisition-related costs amounting to NOK 7.0 million are recognised in the consolidated income statement in the line item Other expenses.

The tables below summarise the consideration transferred, and the amounts recognised for assets acquired and liabilities assumed after the business combinations:

Consideration and amount recognised	Optidev	eConnectivity	Total
Cash payments	69 706	3 893	73 599
Consideration shares	103 657	3 893	107 550
Seller credit	70 092	3 893	73 985
Total	243 455	11 680	255 135

Net assets	Optidev	eConnectivity	Total
Intangible assets	1 829	-	1 829
Property plant and equipment	43 052	325	43 377
Other non-current assets	38	-	38
Inventories	28 753	-	28 753
Trade and other receivables	50 040	3 772	53 812
Cash and cash equivalents	11 110	299	11 409
Deferred tax liabilities	(3 118)	-	(3 118)
Other non-current liabilities	(19 949)	(153)	(20 101)
Current liabilities	(69 487)	(3 664)	(73 151)

Net assets	42 268	580	42 848
Excess value	201 187	11 100	212 287

Purchase price allocation	Optidev	eConnectivity	Total
Technology	17 683	-	17 683
Customer relations	56 379	5 464	61 843
Customer contracts	9 882	-	9 882
Deferred tax	(19 965)	(1 126)	(21 091)
Goodwill	137 208	6 761	143 969
Total	201 187	11 100	212 287

The goodwill of NOK 144.0 million relates to the know-how within the mobility space. The acquired companies broaden the Group's scope on Managed mobility in specific vertical segments. There are synergies with existing Group companies by cross selling of products. None of the goodwill recognised is expected to be deductible for income tax purposes. The business combinations are carried out as part of the Group's growth strategy.

The companies acquired in business combinations completed through purchase of shares have since the acquisition dates contributed NOK 70.8 million to operating revenues and NOK 4.9 million to consolidated net profit. If the acquisition date of all business combinations completed through purchase of shares was as at 1 January 2020, the operating revenues of the Group would have increased by NOK 184.0 million and the effect on the consolidated net profit would have been positive NOK 21.0 million.

Note 9. Subsequent events

Acquisition of Famoc S.A.

Techstep announced on 1 July 2021 the closing of the Acquisition and assumed 100% ownership of Famoc.

The purchase price for Famoc will partly be settled by the issuance of new Techstep shares, and the board of directors of Techstep has thus resolved to issue 3,679,211 new shares (the "Consideration Shares") to the sellers of Famoc. The Consideration Shares will be issued pursuant to the existing authorisation for the Company's board of directors to increase the share capital, as adopted at the general meeting held on 22 April 2021. Following the resolution, Techstep's new share capital is NOK 209,629,830 divided into 209,629,830 shares, each with a par value of NOK 1. The Company registered the new share capital with the Norwegian Register of Business Enterprises on 7 July 2021. The Consideration Shares are subject to a lock up, of which 1/3 of the Consideration Shares will be released every 12 months as of the date hereof.

The estimated total purchase is NOK 109.9 million, of which NOK 79.1 million will be settled by cash, NOK 19.1 million in shares and NOK 11.7 million in seller's credit. Consequently, this will increase the net interested bearing debt with an estimated NOK 90.7 million (cash reduction and seller's credit increase). The final purchase price will be determined during Q3 2021 after a closing balance sheet review.

Børge Astrup appointed as new CEO of Techstep

Børge Astrup started in the role as CEO of Techstep on 1 August 2021, replacing Jens Haviken, who has been with the company since March 2018. Jens Haviken stepped down as CEO on 2 July and CFO Marius Drefvelin acted as interim CEO until Børge Astrup took over in August.

Grant of share options to Børge Astrup

Børge Astrup was on 9 July 2021 awarded 4,500,000 share options in Techstep ASA. The share option award is subject to the approval of an extraordinary general meeting of Techstep, which is expected to be held in September 2021.

The share options vest 1/3 each year from 1 September 2024 and are fully vested on 1 September 2026. The exercise period is two years from the vesting date. The strike price is NOK 4.75, NOK 5.75 and NOK 6.75 for the respective tranches.

Name	Position	Shares	Share options
Børge Astrup	CEO (from 1 August 2021)	32 396	4 500 000

Alternative performance measures

Techstep Group's financial information is prepared in accordance with international financial reporting standards (IFRS). In addition, it is management's intention to provide alternative performance measures that are regularly reviewed by management to enhance the understanding of Techstep's performance, but not instead of the financial statements prepared in accordance with IFRS. The alternative performance measures presented may be determined or calculated differently by other companies. The principles for measuring the alternative performance measures are in accordance with the principles used both for segment reporting in Note 2 and internal reporting to Group Executive Management (chief operating decision makers) and are consistent with financial information used for assessing performance and allocating resources.

Gross profit

Gross profit is defined as Total revenue less Cost of goods sold.

Gross margin

Gross margin is defined as Total revenue less Cost of goods sold divided by Total revenue.

EBITDA

Earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) is a key financial parameter for Techstep. This measure is useful to users of Techstep's financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciation and amortisation expense related primarily to leases, capital expenditures and acquisitions that occurred in the past. The EBITDA margin presented is defined as EBITDA divided by total revenues.

Adjusted EBITDA

Adjusted Earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) is based on EBITDA but adjusted for transactions of a non-recurring nature. Such non-recurring transactions include, but are not limited to restructuring costs, gains or losses related to sale of subsidiaries, acquisition-related costs and other nonrecurring income and expenses.

EBITA

Earnings before interest, tax and amortisation (EBITA) is a key financial parameter for Techstep. This measure is useful to users of Techstep's financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciation related primarily to leases and capital expenditures and acquisitions that occurred in the past. The EBITA margin presented is defined as EBITA divided by total revenue.

EBIT

Earnings before interest and tax (EBIT) is useful to users with regard to Techstep's financial information in evaluating operating profitability on the cost basis as well as the historic cost related to past business combinations and capex. The EBIT margin presented is defined as EBIT divided by total revenue.

Total net operating expenses

Total net operating expenses includes the line items Cost of goods sold, Salaries and personnel costs, Other operating costs, Share of profit (loss) in joint venture, Depreciation, Amortisation, Impairment and Other income.

Hardware revenue

Hardware revenue is defined as revenue from sales of tangible goods and related discounts from suppliers and partners.

Hardware share of revenue is the hardware revenue divided by total revenues.

Solutions revenue

Solutions revenue is defined as revenue from sales of licenses, support and other non-tangible items to customers. Also included are discounts from suppliers and partners. Solutions share of revenue is the solutions revenue divided by total revenue.

Net interest-bearing debt (NIBD)

Net interest-bearing debt is non-current interest-bearing debt plus current interest-bearing liabilities less cash and cash equivalents.

Equity ratio

Equity ratio is defined as Total equity divided by total equity and liabilities.

Capital Expenditure (Capex)

Capital expenditure is the same as payment for property, plant and equipment and intangible assets.

Annual Recurring Revenue (ARR)

ARR is calculated as the revenue the following 12 months from own software as at the balance sheet date. The ARR is calculated by multiplying the number of users of own software with the price per product and in turn annualised.

APM's in the income statement	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Total revenue	324 737	238 173	630 667	530 850	1 142 866
Cost of goods sold	(210 858)	(160 291)	(402 756)	(372 514)	(764 579)
Gross profit	113 879	77 882	227 911	158 336	378 287
Gross margin	35%	33%	36%	30%	33%
Salaries and personnel costs	(71 654)	(45 039)	(146 247)	(94 819)	(208 243)
Other operational costs	(28 937)	(15 900)	(55 045)	(34 945)	(74 405)
Share of profit (loss) in joint ventures	-	-	-	-	-
Other income	-	8 000	-	8 000	17 843
Other expenses	(8 037)	(673)	(8 511)	(673)	(9 028)
EBITDA	5 251	24 270	18 108	35 899	104 455
Depreciation	(25 176)	(14 094)	(51 243)	(26 116)	(87 332)
Impairment	-	-	-	-	-
EBITA	(19 925)	10 176	(33 135)	9 783	17 122
Amortisation	(12 138)	(6 360)	(22 927)	(11 398)	(27 892)
EBIT	(32 063)	3 816	(56 062)	(1 615)	(10 771)

Adjusted EBITDA	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
EBITDA	5 251	24 943	18 108	35 899	104 455
Other income	-	(8 000)	-	(8 000)	(17 843)
Other expense	8 037	673	8 511	673	9 028
Adjusted EBITDA	13 288	17 193	26 619	28 572	95 640

Total net operating expenses	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Cost of goods sold	(210 858)	(160 291)	(402 756)	(372 514)	(764 579)
Salaries and personnel costs	(71 654)	(45 039)	(146 247)	(94 819)	(208 243)
Other operational costs	(28 937)	(15 900)	(55 045)	(34 945)	(74 405)
Share of profit (loss) in joint ventures	-	-	-	-	(162)
Depreciation	(25 176)	(14 094)	(51 243)	(26 116)	(87 332)
Amortisation	(12 138)	(6 360)	(22 927)	(11 398)	(27 892)
Impairment	-	-	-	-	-
Other expenses	(8 037)	(673)	(8 511)	(673)	(9 028)
Total net operating expenses	(356 800)	(242 357)	(686 729)	(540 465)	(1 171 479)

Revenue splits	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Revenue	324 737	238 173	630 667	530 850	1 142 866
Hardware revenue	238 428	184 723	467 347	404 420	867 244
Solutions revenue	86 309	53 450	163 320	126 430	275 622
Hardware share of revenue	73%	78%	74%	76%	76%
Solutions share of revenue	27%	22%	26%	24%	24%

NIBD Q2 2021	FY 2020
Cash and cash equivalents 154 036	27 203
Non-current interest-bearing borrowings 123 664	108 539
Current interest-bearing borrowings 94 702	85 502
NIBD (64 330)	166 838

Equity ratio Q2 2021	FY 2020
Total equity 605 612	563 451
Total equity and liabilities 1 300 523	1 199 131
Equity ratio 47%	47%

ARR Q2 2021	FY 2020
Number of users (1 000) 251	249
Average price own software 256	254
ARR (1 000) 64 303	63 329

Responsibility statement

Oslo, 18 August 2021

From the Board of Directors and CEO of Techstep ASA

We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2021 has been prepared in accordance with IAS 34 – Interim Financial Reporting and gives a true and fair view of the (Company's and) group's assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related party transactions.

Jens Rugseth Chairman

Ingrid Leisner Board member

Anders Brandt Board member

Melissa Mulholland Board member

Børge Astrup CEO

TECHSTEP ASA

Brynsalléen 4 0667 Oslo, Norway +47 915 233 37