Interim report Q4 2020

Highlights Q4 and FY 2020

● Execution of growth strategy and successful acquisitions drive financial results
● Stable full-year 2020 revenues of NOK 1 143 million explained by business model transition from lower margin hardware sales to higher margin services
● Gross profit of NOK 149 million in the quarter and NOK 378 million for the full year, compared with NOK 75 million in the fourth quarter and NOK 279 million for the full year 2019
● EBITDA adjusted increased to NOK 51 million in the quarter and NOK 96 million for the full year, compared with NOK 7.5 million in the fourth quarter and NOK 29 million for the full year 2019
● ARR increased to NOK 63 million, including ARR from newly acquired Optidev of NOK 24 million, up from NOK 37 million in the fourth quarter 2019
● Signed three new contracts for Techstep's software-based managed mobility service 'Flow', with an estimated value of NOK 25 million and 3,500 users

CEO comment

2020 was both transformative and a strong year for Techstep, despite the challenges the pandemic presented to us all. We delivered on our growth strategy with sharp focus on helping customers adopt our Managed Mobility Services (MMS) offering, as well as acquisitions and Nordic expansion. Moving into 2021, our team and market position are even stronger with two new great companies being integrated into Techstep. Being well positioned in an MMS market that is expected to experience strong growth, we are excited about the many opportunities ahead" said Jens Haviken, Techstep CEO.

"The months that have passed since the pandemic broke out, have indeed shown us what a workforce can achieve even when outside the normal office environment. But it has shown us even more what is possible to achieve with mobile technology for that large part of the workforce that don't have an office - the deskless worker. Techstep is purpose-built to service the mobility needs of enterprises and their workforce, regardless of how and where their employees work.

At the same time, Managed Mobility Services (MMS) is a market in its early stages. And while we are positioned for leadership in the Nordic region, we continuously need to educate our customers and the market, as well as relentlessly making sure that our solutions deliver great customer, employee and end-user experiences. In short, we need to ensure that our solutions are easy to use and delivers clarity in an otherwise complex digital reality.

We want to help enterprises and the Nordic workforce experience great MMS-solutions, and our ambition is to manage more than 1 million devices by 2025. With more devices under management, we can drive our value creation further by adding services and solutions. Techstep's MMS-offering is based on a service stack that can be combined into bundled solutions, and we will grow gross profit by ensuring that existing, and new customers, adopt this MMS-offering. In addition, we aim to add further customer value through the sale of new services.

We are confident that our mobility services and MMS-solutions will be increasingly adopted across the Nordics, because we have clear and very strong value propositions to our customers: Helping enterprises reduce cost, increase productivity, transform employee capabilities and enhance their

engagement, driving business value and revenue growth, while at the same time delivering on their ESG goals.

Providing Managed Mobility Services that benefit workers, enterprises, society and our planet, energizes Techstep's team of 300 dedicated mobility experts every day, and we are highly motivated to continue delivering on our growth journey and create stakeholder value in the years to come", Jens Haviken adds.

About Techstep

Techstep is purpose-built to become a leading Managed Mobility Services provider in the Nordics. Techstep combines device management, software, hardware and connectivity into a managed service. This enables enterprises and their employees to do their work across mobile devices and locations, with a high degree of security and operational stability. Techstep has 290 employees based in Norway, Sweden and Denmark, serving 550+ enterprise customers across various industries in the private and public sectors. The company is listed on the Oslo Stock Exchange. For more information, see www.techstepasa.no.

Key Figures

(amounts in NOK 1 000)	Q4 2020	Q4 2019	FY 2020	FY 2019

Revenues	399 284	334 724	1 142 866	1 132 059
Annual Recurring Revenue (ARR)	63 329	36 632	63 329	36 632
Gross profit	148 504	75 227	378 287	279 338
EBITDA adjusted	50 598	7 533	95 640	29 007
EBITDA	54 615	5 566	104 455	27 040
EBITA	14 048	949	17 122	(58 174)
EBIT	3 580	(4 771)	(10 771)	(80 191)
Net profit (loss) for the period	(10 884)	11 409	(23 557)	(64 329)

EBITDA adj. margin (%)	12.7 %	2.3 %	8.4 %	2.6 %
EBITDA rep. margin (%)	13.7 %	1.7 %	9.1 %	2.4 %
EBITA margin (%)	3.5 %	0.3 %	1.5 %	(5.1 %)
EBIT margin (%)	0.9 %	(1.4 %)	(0.9 %)	(7.1 %)
Net profit (loss) for the period (%)	(2.7 %)	3.4 %	(2.1 %)	(5.7 %)

Cash	27 203	44 588	27 203	44 588
Net interest-bearing debt	166 838	1 996	166 838	1 996
Capex	43 599	19 845	130 036	33 610

EBITDA adjusted excludes non-recurring items such as M&A related costs of NOK 1 million and an earn-out reversal (other income) of NOK 4.9 million.

The 2020 financial statements include the full consolidation effect of the leasing portfolio from Techstep Finance and the Optidev acquisition. The effect in Q4 2020 of Techstep Finance is an increase of NOK 41.2 million on revenue, an increase of NOK 38.1 million on gross profit and EBITDA and an increase of NOK 33.0 million in depreciation.

The effect in Q4 2020 of Optidev is NOK 70.8 million in revenue, NOK 36.0 million in gross profit and 16.0 million in EBITDA.

Operational review

Main developments

In the fourth quarter, Techstep continued its organic development through a strong anchored strategy of building a leading Managed Mobility Services (MMS) provider in the Nordic region. Techstep's MMS offering is a result of developments of high-margin software and a service stack bundle that combines market leading IP, software and mobility expertise. The MMS solution includes a recurring services bundle, and the service stack's key components comprise of Advisory Services, Platform Management and Asset Management.

Techstep continued its operational progress in the quarter with strong delivery on operational goals. The company signed three large 'Flow' contracts with a total estimated value of NOK 25 million, for a total of 3,500 new managed devices. Techstep will report on the total number of managed devices for the Group from 2021 onwards.

Techstep also strengthened its goal of building a leading MMS provider in the Nordics through growth and geographically driven acquisitions; first through the acquisition of Optidev AB, and then through Optidev's acquisition of eConnectivity CC AB. Both were completed in the fourth quarter. The acquisitions enhance Techstep's service and advisory capabilities especially for the Enterprise market, which are important parts of the company's services stack and end-to-end bundled solutions.

Optidev is a developer and provider of enterprise mobility software and solutions, predominantly to customers in the transportation, logistics and public safety sectors in Scandinavia. eConnectivity is a specialized developer and provider of enterprise strategic services related to mobility and digitalisation. The acquisitions complement Techstep's offering in the growing Nordic MMS market.

Market conditions are still impacted by the Covid-19 pandemic and subsequent lockdown, resulting in longer lead times on sales and implementation processes for some of Techstep's customers.

Strong transition towards making work mobile by investing in own software and IP

Techstep has over the last quarter increased its service stack offering and strengthening its everything as-a-service bundle by providing advisory services, platform management and asset management.

The Advisory Services consist of a highly experienced team that helps customers enable the power of the Asset and Platform Management services, in addition to ongoing support. Platform Management is made up of services designed to manage all types of mobile devices at enterprise level. These services manage user profiles, apps, OS updates and security. Asset Management provides services tied to the lifecycle of each individual device, comprising of Techstep's software solution 'Origo Business Cloud' and the as-a-service concept, 'Flow'.

'Flow' is one of Techstep's bundles of managed mobility services consisting of hardware, software and services. 'Flow' consists of a mobile device, Origo software, device lifecycle management, service, support and financing. Origo is Techstep's proprietary software-as-aservice solution, and a core value driver going forward. Techstep Finance is Techstep's own leasing solution that adds customer benefits like lower total cost of ownership and a residual value at the end of the leasing period.

The Optidev TrueMobile platform is a cloudbased mobile software solution. Through apps it creates traceability of work performed by

deskless workers, for example tracking goods in supply chains, picking orders in warehouses, controlling tickets or documenting service done by field-service-technicians. 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 such as transport planning and order handling. The solution includes a powerful integration platform enabling integrations with the clients' business systems.

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.

In line with Techstep's growth strategy, the company concluded the acquisition of Optidev AB for SEK 200 million on 1 October and eConnectivity CC AB for SEK 11 million on 18 December 2020.

eConnectivity is a specialized developer and provider of enterprise strategic services related to mobility and digitalisation. eConnectivity offers solutions within SAP mobility, project management, enterprise app development, and mobility business analysis. The company's six mobility experts provide services to large enterprises such as SKF, Volvo Cars and City of Gothenburg.

The combined company will be a leading IP, software and mobility expertise provider of deskless technology in the Nordics, designed to make work mobile and to help companies enhance their capabilities through mobile digital transformation. In the fourth quarter Techstep has strengthen its position in Norway and Sweden and grown its presence in Denmark.

Techstep will continue to pursue organic growth and M&A to further strengthen and expand its MMS offering in the Nordic region.

Increasing sales activity

During the fourth quarter Techstep signed three new 'Flow' agreements with a potential value of NOK 25 million and 3,500 new users.

Since 'Flow' was launched in late 2019, Techstep has signed a total of 24 customers with a total value potential of NOK 116 million.

The acquisition of Optidev has had a substantial positive effect on sales activity. Optidev contributed with NOK 71 million in revenue and NOK 24 million in ARR in the fourth quarter of 2020.

Techstep sees a solid pipeline for 'Flow', 'Origo' and 'TrueMobile' offerings going into 2021.

Recurring revenue base

Techstep's annual recurring revenue base (ARR¹ ) was NOK 63 million per fourth quarter 2020 including Optidev. Techstep's recurring revenue relates to the sale of own software with ~98% 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 ~43,000 at the end of the year, up from ~27,000 users at year-end 2019.

¹ *Refer to alternative performance measures

Financial review

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

Techstep ASA acquired Optidev 1 October 2020, and Optidev was included in the Techstep group consolidated financial statements from this date. Techstep ASA acquired eConnectivity 18 December 2020 and eConnectivity was included in the Techstep Group financial statements from this date.

Profit and loss fourth quarter 2020

Techstep generated total revenue of NOK 399.3 million in the fourth quarter of 2020, up from NOK 334.7 million in the corresponding quarter last year. The increase is primarily due to higher hardware volumes and advisory activities as well as Optidev being consolidated in Techstep's Q4 reporting.

Own Software accounted for NOK 14.5 million (NOK 8.8 million), whereas leasing revenue accounted for NOK 54.2 million (NOK 1.8 million). Advisory & Services amounted to NOK 80.7 million (NOK 48.1) and related commissions were NOK 8.0 million in the fourth quarter (NOK 8.9). Hardware sales (excluding leasing) remain the largest revenue generator with NOK 241.1 million (NOK 267.0 million).

Gross profit increased by 97.4% year-over-year to NOK 148.5 million. Gross margin for the quarter thus increased to 37.2%, from 22.5% in the corresponding quarter of 2019. In addition, there was an increased demand for Advisory & Services, an important driver for gross profit alongside Own Software going forward.

Salaries and personnel costs increased by 49% year-on-year to NOK 71.8 million (NOK 48.3 million), included option costs of NOK 0.7 million (NOK 0.5 million) in the fourth quarter of 2020, reflecting a higher headcount due to Techstep Finance and Optidev acquisitions.

Other operational costs were NOK 26.0 million in the fourth quarter 2020, up from NOK 19.2 million in the same quarter of 2019.

EBITDA amounted to NOK 54.6 million in the fourth quarter of 2020, compared to NOK 5.6

million in the same quarter last year. The EBITDA in the quarter includes other expenses related to M&A costs of NOK 1.0 million and other income of NOK 5.0 million, mainly related to an earn-out reversal of NOK 4.9 million from the acquisition of Wizor AS in 2018.

Adjusted EBITDA margin increased to 12.7% from 2.3% in the corresponding quarter last year, which reflects the improved gross profit in the quarter.

Operating profit (EBIT) came to NOK 3.6 million in the fourth quarter of 2020. This compares to an operating loss (EBIT) of NOK 4.8 million for the fourth quarter of 2019.

Tax expense in the quarter relates primarily to the Swedish companies, with the full year effect of Optidev being the main contributor.

Net loss in the fourth quarter of 2020 amounted to NOK 10.9 million, compared to a net profit of NOK 11.4 million in the fourth quarter of 2019.

Profit and loss full-year 2020

Techstep had total revenue of NOK 1,142.9 million in 2020, gross profit of NOK 378.3 million and EBITDA of NOK 104.5 million. Optidev was included in the Q4 reporting and had a positive impact on revenue of NOK 70.8 million, gross profit of NOK 36.0 million and EBITDA of NOK 16.0 million for the full year. Total revenues for 2019 were NOK 1,132.0 million, while gross profit was NOK 279.3 and EBITDA was NOK 27.0 million.

Total net operating expenses were NOK 1,171.5 million for 2020, compared with NOK 1,212.3 million the previous year. The ordinary operating loss (EBIT) amounted to NOK 10.8

million, compared to an operating loss of NOK 80.2 million in 2019, which included NOK 70 million in impairment of goodwill.

The net loss for 2020 was NOK 23.6 million, compared to a net loss of NOK 64.3 million in 2019.

Financial position

As at 31 December 2020, total assets were NOK 1,199.1 million, compared with NOK 817.2 million as at 31 December 2019.

Intangible assets account for NOK 733.3 million. Intangible assets include goodwill of NOK 571.4 million and customer relations and technology of NOK 161.9 million.

Total tangible assets were NOK 173.6 million as at 31 December 2020 including NOK 133,4 million in hardware leased out to customers and NOK 40.2 million in premises and leased assets.

Total inventories and receivables were NOK 264.8 million as at 31 December 2020. The increase from NOK 175.3 million at the end of the preceding year reflects an increase of NOK 31.4 million in inventories, NOK 40,6 million in accounts receivables and NOK 17.5 million in other receivables.

Total equity at the end of the fourth quarter was NOK 563.5 million (NOK 455.9 million), corresponding to an equity ratio of 47% (56%).

Non-current interest-bearing debt of NOK 108.5 million (NOK 0.2 million) includes an acquisition loan of NOK 50.0 million and seller's credits of NOK 50.8 million. Other non-current debt of NOK 54.5 million mostly relates to leasing commitments of NOK 26.3 million and a buyback obligation for leased hardware of NOK 25.3 million.

Current interest-bearing liabilities amounted to NOK 85.5 million. This includes net bank overdraft accounts of NOK 43.3 million, as well as short-term seller's credit of NOK 24.1 million and short-term part of the acquisition loan of NOK 13.3 million.

Other current liabilities of NOK 166.0 million 31 December 2020 mainly include payables to employees NOK 39.8 million, deferred revenue of NOK 78.8 million, leasing commitments of NOK 14.1 million and a buy-back obligation for leased hardware of NOK 1.9 million.

Net interest-bearing debt was NOK 166.8 million at the end of the fourth quarter 2020, compared to NOK 2 million at the end of the preceding year. The increase is mainly due to interest-bearing debt from the Optidev acquisition.

Cash flow fourth quarter 2020

Net cash inflow from operating activities was NOK 48.8 million in the fourth quarter of 2020 and includes a negative effect of NOK 21.7 million from increased net operating working capital, mainly due to inventory increase and pre-payments from customers in Optidev.

Net cash flow used for investment activities was a negative NOK 105.0 million. This is largely due to acquisition expenditure of NOK 61.4 million net of cash acquired, as well as capital expenditures mostly related to leased out hardware of NOK 35.8. Techstep also invested NOK 7.8 million in own software and IT development in the quarter.

Net cash flow from financing activities was negative at NOK 12.9 million in the fourth quarter 2020. This includes lease repayments of NOK 7.6 million and repayment of bank loans of NOK 5.4 million. Cash and cash equivalents decreased by NOK 69.1 million in the fourth quarter to negative NOK 15.9 million. Refer to note 7.

Outlook

Techstep is transitioning from a hardware supplier to an IP and software purpose-driven MMS provider. Techstep combines device management, software, hardware and connectivity into a managed service. The company will continue to invest in own software as well as pursue M&A opportunities to further expand its Nordic position and its MMS offering.

The recent acquisitions of the enterprise mobility service provider Optidev and eConnectivity will strengthen Techstep's position in the MMS segment, one of the fastest growing segments in the global telecom and ITservices industry.

Techstep targets to close 30 new MMS contracts as well as increase the number of Origo business cloud users with 100% in the medium term. Moreover, the expected gross profit growth is 20-25% and EBITDA to gross profit conversion is 20-25% in the same period. Development capex is expected to be NOK 30- 35 million medium term.

Medium term outlook is influenced by long term ambitions to drive growth in managed devices and gross profit per device. Techstep will achieve long term ambition through valuecreation for existing and new customers by offering tailormade requiring bundled MMS solutions, as well as by continuously adding new services.

Consolidated income statement

Note (amounts in NOK 1 000)	Q4 2020	Q4 2019	FY 2020	FY 2019

2, 3 Revenue	398 364	334 898	1 138 943	1 127 763
Other revenue	919	(174)	3 923	4 296
Total revenues	399 284	334 724	1 142 866	1 132 059

Cost of goods sold	(250 779)	(259 498)	(764 579)	(852 722)
Salaries and personnel costs	(71 845)	(48 331)	(208 243)	(187 994)
Other operational costs	(26 062)	(19 201)	(74 405)	(63 396)
Share of profit (loss) in joint ventures	-	(162)	-	1 059
5 Depreciation	(40 567)	(4 618)	(87 332)	(15 214)
Amortisation	(10 469)	(5 719)	(27 892)	(22 018)
Impairment	-	-	-	(70 000)
Other income	5 048	-	17 843	-
Other expenses	(1 031)	(1 967)	(9 028)	(1 967)
Operating profit (loss)	3 580	(4 770)	(10 770)	(80 192)

Remeasurement on equity interests	-	18 206	-	18 206
Financial income	460	1 726	5 760	5 546
Financial expense	(2 443)	(1 951)	(11 822)	(5 948)
Profit before taxes	1 596	13 211	(16 832)	(62 388)
Income taxes	(12 480)	(1 802)	(6 725)	(1 941)
Net profit (loss) for the period	(10 884)	11 409	(23 557)	(64 329)

Net income attributable to
Non-controlling interests	1 075	(1)	1 188	(1)
Shareholders of Techstep ASA	(11 960)	11 410	(24 746)	(64 328)

Earnings per share in NOK:
Basic	(0.07)	0.07	(0.15)	(0.40)
Diluted	(0.07)	0.07	(0.13)	(0.40)

Consolidated statement of comprehensive income

(amounts in NOK 1 000)	Q4 2020	Q4 2019	FY 2020	FY 2019
Net profit (loss) for the period	(10 884)	11 409	(23 557)	(64 329)

Items that may be reclassified to profit and loss
Exchange differences on translating foreign operations	3 844	1 483	22 346	(7 613)
Income tax related to these items	2 623	(415)	(730)	923
Total comprehensive income	(4 417)	12 477	(1 941)	(71 019)

Total comprehensive income attributable to
Non-controlling interests	1 075	(1)	1 188	-
Shareholders of Techstep ASA	(5 492)	12 477	(3 130)	(71 019)

Consolidated statement of financial position

(amounts in NOK 1 000)
ASSETS	Note	Q4 2020	2019
Non-current assets
Goodwill	6, 8	571 372	418 385
Customer relations and technology	8	161 892	61 901
Total intangible assets		733 263	480 285
Right-of-use assets	5	40 233	36 590
Property, plant and equipment	5	133 384	75 197
Total tangible assets		173 617	111 787
Shares and investments		44	44
Other non-current assets		169	181
Total financial assets		213	225
Total non-current assets		907 093	592 298
Inventories		43 258	11 828
Accounts receivable		187 983	147 411
Other receivables		33 594	16 104
Total inventories and receivables		264 836	175 343
Cash and cash equivalents	7	27 203	44 588
Assets classified as held for sale		-	4 962
Total current assets		292 039	224 893

Total assets		1 199 131	817 191

EQUITY AND LIABILITIES	Note	Q4 2020	2019
Share capital	4	183 295	162 795
Other equity		379 272	293 478
Total equity attributable to the owners of Techstep ASA	4	562 568	456 273
Non-controlling interests		884	(304)
Total equity		563 451	455 970
Deferred tax		27 659	4 483
Non-current interest-bearing debt	8	108 539	162
Other non-current debt		54 488	47 688
Total non-current debt		190 686	52 333
Current interest-bearing liabilities	7	85 502	46 423
Accounts payable		154 442	122 328
Tax payable		(750)	936
Public taxes, provisions		39 756	22 381
Other current liabilities		166 044	116 820
Total current debt		444 994	308 888
Total liabilities		635 680 1 199 131	361 221 817 191

Consolidated statement of changes in equity

	Share	Other paid-in	Other	Reval.		Minority	Total equity
(amounts in NOK 1 000)	capital	capital	equity	reserve	SUM	interest	capital

Equity as at 1 January 2019	159 057	497 096	(143 670)	1 296	513 780	-	513 780

Profit for the period	-	-	(64 328)	-	(64 328)	(1)	(64 329)
Other comprehensive income	-	-	-	(6 690)	(6 690)	-	(6 690)
Total comprehensive income for
the period	-	-	(64 328)	(6 690)	(71 018)	(1)	(71 019)

Transactions with owners in their capacity as owners:
Issue of ordinary shares as
consideration for a business
combination, net of transaction costs
and tax	3 738	7 178	-	-	10 916	(305)	10 611
Share-based payments	-	-	2 597	-	2 597	-	2 597
Equity as at 31 December 2019	162 795	504 273	(205 402)	(5 394)	456 273	(304)	455 970

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

Consolidated statement of cash flow

(amounts in NOK 1 000)	Note	Q4 2020	Q4 2019	FY 2020	FY 2019

Profit before tax		1 596	13 211	(16 832)	(62 388)
Profit from joint venture		-	162	-	(1 059)
Depreciation equipment and other fixed assets	5	35 139	10 336	72 590	4 281
Depreciation right-of-use assets	5	5 429	-	14 743	10 933
Amortisation		10 469	-	27 892	22 018
Share-based payments		675	535	1 834	2 597
Dividend and other reclassified to investment		-	-	(8 000)	(2 103)
activities
Gain from sale of property plant and equipment reclassified to investment activities		-	-	(4 795)	-
Impairment		-	-	-	70 000
Remeasurement of contingent liability		4 859	-	4 859
Remeasurement of equity interest		-	(18 206)	-	(18 206)
Net exchange differences		1 056	1 072	923	1 451
Taxes paid		(2 664)	(801)	(5 514)	(2 508)
Changes in net operating working capital core		(21 747)	8 120	(30 107)	2 681
Changes in other net operation working capital		14 038	18 920	13 528	23 382
Net cash flow from operational activities		48 849	33 340	71 120	51 079

Payment for acquisition of subsidiaries net of	8	(61 414)	5 184	(61 414)	5 184
cash acquired
Payment for equipment and other fixed assets		(35 787)	(19 845)	(108 650)	(16 221)
Payment for intangible assets		(7 812)	-	(21 386)	(17 389)
Repayment of invested capital		-	-	-	8 073
Proceeds from dividends received		-	-	-	2 094
Proceeds from sale of property, plant and		-	-	13 089	-
equipment
Proceeds from sale of business		-	-	8 000	-
Net cash used on investment activities		(105 014)	(14 661)	(170 361)	(18 259)
Proceeds from borrowings		-	-	66 665	-
Repayment of borrowings		(5 366)	(84)	(12 686)	-
Lease repayments		(7 552)	(3 993)	(17 459)	(15 350)
Net exchange differences finance		-	2 990	-	(12 145)
Net cash flow from financing activities		(12 918)	(1 088)	36 520	(27 494)

Net change in cash and cash equivalents		(69 083)	17 592	(62 721)	5 326
Cash and cash equivalents at beginning of		54 920	26 694	44 588	39 716
period
Effects of exchange rate changes on cash and		(1 733)	305	2 236	(453)
cash equivalents Cash and cash equivalents at end of period	7	(15 896)	44 588	(15 896)	44 588

*Refer to note 7

Notes to the consolidated financial statements

1. Accounting principles

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.

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 2019. 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 2019. 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 specialized developer and provider of enterprise strategic services related to mobility and digitalization.

4) Headquarters and other:

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

				HQ and	Elim
Q4 2020	Norway	Sweden	Optidev	other	inations	Total
Operating revenues from
external customers	235 197	93 148	70 692	247	-	399 284
Operating revenues from other
segments	3 251	931	112	7 382	(11 677)	-
Operating revenues	238 448	94 079	70 805	7 628	(11 677)	399 284
Cost of goods sold	(152 501)	(65 106)	(34 788)	283	1 333	(250 779)
Salaries and personnel costs	(33 909)	(15 138)	(15 716)	(8 182)	1 100	(71 845)
Other operational costs	(13 005)	(6 856)	(4 324)	12 738	(14 615)	(26 062)
Share of profit (loss) of joint venture	-	-	-	-	-	-
Depreciation	(26 245)	(6 072)	(5 990)	(2 260)	-	(40 567)
Amortisation	2 128	(1 991)	(4 161)	(6 445)	-	(10 469)
Impairment	-	-	-	-	-	-
Other income	150	40	-	4 859	-	5 048
Other expenses	-	-	-	(1 031)	-	(1 031)
Operating profit (loss)	15 066	(1 043)	5 826	7 589	(23 859)	3 580

Employees 31 December 2020	124	56	84	19		283

				HQ and	Elim
Q4 2019	Norway	Sweden	Optidev	other	inations	Total
Operating revenues from external
customers	246 665	88 059	-	-	-	334 725
Operating revenues from other
segments	1 721	598	-	7 184	(9 503)	-
Operating revenues	248 386	88 657	-	7 185	(9 503)	334 725
Cost of goods sold	(194 387)	(66 890)	-	(25)	1 804	(259 498)
Salaries and personnel costs	(29 313)	(11 551)	-	(7 670)	204	(48 331)
Other operational costs	(15 900)	(4 381)	-	(5 641)	6 721	(19 201)
Share of profit (loss) of joint venture	-	-	-	(162)	-	(162)
Depreciation	(1 996)	(654)	-	(1 968)	-	(4 618)
Amortisation	(4 982)	(1 800)	-	1 063	-	(5 719)
Impairment	-	-	-	-	-	-
Other income	-	-	-	-	-	-
Other expenses	-	-	-	(1 967)	-	(1 967)
Operating profit (loss)	1 807	3 382	-	(9 185)	(774)	(4 770)

Employees 31 December 2019	134	59		18		211

				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)

			HQ and
FY 2019	Norway	Sweden	Optidev other	Eliminations	Total
Operating revenues from
external customers	824 119	307 940	-	-	1 132 059
Operating revenues from
other segments	6 057	3 172	22 567	(31 796)	-
Operating revenues	830 176	311 112	22 567	(31 796)	1 132 059
Cost of goods sold	(622 397)	(238 273)	(35)	7 984	(852 722)
Salaries and personnel costs	(114 929)	(42 444)	(31 587)	965	(187 994)
Other operational costs	(55 118)	(12 888)	(18 577)	23 187	(63 396)
Share of profit (loss) of joint
venture	-	-	1 059	-	1 059
Depreciation	(7 094)	(2 600)	(5 519)	-	(15 214)
Amortisation	(13 298)	(7 068)	(1 653)	-	(22 018)
Impairment	(70 000)	-	-	-	(70 000)
Other income	-	-	-	-	-
Other expenses	-	-	(1 967)	-	(1 967)
Operating profit (loss)	(52 660)	7 839	(35 712)	340	(80 192)

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
Q4 2020	Norway	Sweden	Optidev	other	Eliminations	Group
Total revenues	238 448	94 079	70 805	7 628	(11 677)	399 284

Hardware
Hardware revenues	146 521	61 298	24 662	-	(626)	231 855
Leasing	38 193	5 128	10 883	-	-	54 203
Bonus	9 062	188	-	-	-	9 250
Total	193 775	66 615	35 544	-	(626)	295 309

Solutions
Advisory & Services	30 158	24 256	29 867	-	(3 557)	80 723
Own Software	9 518	-	4 956	-	-	14 473
Commission	4 655	3 317	-	-	-	7 972
Total	44 330	27 573	34 823	-	(3 557)	103 168

Other revenues
Other	343	(108)	438	7 628	(7 494)	807
Total	343	(108)	438	7 628	(7 494)	807

			Headquarter
Q4 2019	Norway	Sweden	Optidev and other	Eliminations	Group
Total revenues	248 386	88 657	7 185	(9 503)	334 725

Hardware
Hardware revenues	194 285	64 367	-	(891)	257 761
Leasing	1 540	263	-	-	1 804
Bonus	9 363	69	-	-	9 432
Total	205 189	64 699	-	(891)	268 997

Solutions
Advisory & Services	27 516	22 110	-	(1 427)	48 199
Own Software	8 825	-	-	-	8 825
Commission	6 776	2 103	-	-	8 878
Total	43 117	24 212	-	(1 427)	65 902

Other revenues
Other	80	(254)	7 185	(7 184)	(174)
Total	80	(254)	7 185	(7 184)	(174)

				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
Bonus	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

				HQ and
FY 2019	Norway	Sweden	Optidev	other	Eliminations	Group
Total revenues	830 176	311 112		22 567	(31 796)	1 132 059

Hardware
Hardware revenues	605 596	203 723		-	(5 266)	804 053
Leasing	1 540	263		-	-	1 804
Bonus	28 380	2 807		-	-	31 187
Total	635 517	206 793		-	(5 266)	837 044

Solutions
Advisory & Services	121 390	95 765		-	(3 963)	213 192
Own Software	34 361	-		-	-	34 361
Commission	34 388	8 780		-	-	43 167
Total	190 139	104 544		-	(3 963)	290 720

Other revenues
Other	4 521	(225)		22 567	(22 567)	4 296
Total	4 521	(225)		22 567	(22 567)	4 296

Note 4: Share capital and shareholders

The company's share capital as at 31 December 2020 was NOK 183,295,472 consisting of 183,295,472 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 31 December 2020 were as follows:

Shareholder	# of shares	Ownership %
DATUM AS	32 317 975	17.63%
MIDDELBORG INVEST AS	30 617 764	16.70%
KARBON INVEST AS	19 448 795	10.61%
SWEDBANK AB	19 000 430	10.37%
TIGERSTADEN AS	5 000 000	2.73%
CIPRIANO AS	4 968 835	2.71%
VERDIPAPIRFONDET DNB SMB	4 206 320	2.29%
ZONO HOLDING AS	4 000 007	2.18%
TVENGE	3 800 000	2.07%
BRIDGE CAPITAL AS	3 738 317	2.04%
SÅ&HØSTE AS	2 925 936	1.60%
NORDHOLMEN AS	2 206 512	1.20%
ADRIAN AS	2 038 851	1.11%
SKANDINAVISKA ENSKILDA BANKEN AB	1 969 703	1.07%
PIKA HOLDING AS	1 956 512	1.07%
NORDIALOG ENSJØ AS	1 946 253	1.06%
UNIFIED AS	1 849 457	1.01%
IDEKAPITAL AS	1 797 532	0.98%
DATUM VEKST AS	1 600 000	0.87%
SPIRALIS AS	1 580 864	0.86%
Total number owned by top 20	146 970 063	80.18 %
Total number of shares	183 295 472	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) Cipriano AS, owned by vice chairman of the board Einar J. Greve

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

Idekapital AS, which is controlled by board member Anders Brandt, owns 1,797,532 shares in Techstep ASA.

Duo Jag AS, which is partly owned by board member Ingrid Leisner, owns 554,834 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 will become exercisable (vest) on 22 June 2021 and must be exercised within 22 June 2024. The exercise price is NOK 3.00. The exercise price will be adjusted for any dividends paid or accrued before exercise. Each option holder's aggregated gross profit from exercising the options shall be limited to the amount equal to 3 years' gross base salary at the time of exercising the options.

The exercise of share options can be settled in cash, and/or with new or existing treasury shares. The Board intends to propose the adoption of a similar option program in 2021 and 2022.

As at 31 December 2020, the total number of outstanding share options was 4,910,274 (2.7%) which includes 1,200,000 share options from the 2018 grant to other key employees.

Overview of shares and share options held by members of the management group as at 31 December 2020:

Name	Position	Shares	Share options
Jens Haviken	CEO	100 000	1 017 471
Marius Drefvelin	CFO	40 000	813 976
Mads Vårdal	CPO	5 019	559 609
Erik Haugen	CCO	-	559 609
Inge Paulsen	Managing Director Norway	150 000	559 609

Note 5: Property, plant and equipment

	Land and	Right-of-use		Other fixed
	buildings	assets	Equipment*	assets	Total

Accumulated cost as at 1 January 2020	-	47 552	105 865	19 966	173 383
Additions Additions arising from business	-	9 287	105 340	3 836	118 462
combinations	-	11 877	78 768	10 725	101 369
Disposals	-	-	(9 677)	(2 618)	(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 cost as at 1 January 2019	8 166	-	-	17 950	26 115
Additions	-	47 686	14 858	2 049	64 593
Additions arising from business combinations	-	-	91 007	-	91 007
Disposals	-	-	-	-	-
Translation differences	(133)	(135)	-	(32)	(300)
Reclassified to asset classified as held
for sale	(8 032)	-	-	-	(8 032)
Accumulated cost
31 December 2019	-	47 552	105 865	19 966	173 383

Accumulated depreciation as at 1
January 2020
Additions arising from business combinations	-	(10 962)	(33 871)	(16 703)	(61 536)
Current year depreciation	-	(3 639)	(47 936)	(6 969)	(58 544)
Reclassified to held for sale	-	(14 361)	(71 560)	(1 411)	(87 333)
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)	(209 737)

Accumulated depreciation as at 1 January 2019	(3 261)	-	-	(13 682)	(16 943)
Additions arising from business
combinations	-	-	(32 034)	-	(32 034)
Current year depreciation	(240)	(10 933)	(1 834)	(2 970)	(15 978)
Disposals	-	-	-	(60)	(60)
Translation differences	81	(28)	(3)	(110)	(61)
Reclassified to asset classified as held
for sale	3 420	-	-	-	3 420
Accumulated depreciation
31 December 2019	-	(10 962)	(33 871)	(16 823)	(61 656)

Book value of assets 31 December 2019 Book value of assets 31 December 2020	- -	36 590 40 233	71 994 128 068	3 203 5 316	111 787 173 617

* Equipment comprise mobile phones, tablets and other equipment where the Group is the lessor.

Note 6: Impairment

Management has assessed Covid-19 and the global pandemic to be an indicator for 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 FY 2020	FY 2019
Cash at bank and in hand, not included in cash pool 27 203	44 588
of which is restricted 6 356	6 102
Reconciliation with cash flow statement

Balances above 27 203	44 588
Net bank overdrafts in cash pool* (43 099)	-
Balance as per cash flows (15 896)	44 588

*Net bank overdrafts in cash pool comprise all bank accounts in the cash pool, including the drawn down credit facility. Negative net bank overdrafts in cash pool are classified as current interest-bearing debt. Positive net bank overdrafts in cash pool are classified as cash and cash equivalents.

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

Note 8 Changes in Group structure and Business combinations

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 corresponds to NOK 3.9 million.

Acquisition-related costs amounting to NOK 7.0 million are recognized 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	-	-
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	215 107	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 verticals. 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.

2019

In Q4 2019, Techstep acquired 30% of the shares in Techstep Finance AS, increase the total ownership to 80%. The transaction was settled in 3,738,317 consideration shares in Techstep ASA. At the time of completion, this corresponded to NOK 10.9 million.

As a consequence of the acquisition, Techstep Finance AS and its subsidiary Techstep Finance AB are consolidated as a subsidiary in the Techstep Group accounts. Up until 31 December 2019, Techstep Finance AS was accounted for as a joint venture.

Acquisition-related costs amounting to NOK 0.3 million are recognised in the consolidated income statement in the line item Other operational costs.

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

Calculation of remeasurement of previously held equity interest
Techstep Finance valuation	40 000
Techstep's share	50 %
Value of previously held equity interest	20 000
Book value of previously held equity interest	1 794
Remeasurement gain	18 206

Consideration and amount recognised

Consideration shares	10 916
Book value of previously held equity interest	1 794
Remeasurement of previously held equity interest	18 206
Total	30 916

Net assets

Property plant and equipment	58 973
Trade and other receivables	3 535
Cash and cash equivalents	5 169
Other non-current liabilities	(2 360)
Current liabilities	(66 105)
Net assets	(788)
Excess value	31 704

Purchase price allocation

Goodwill	31 704
Total	31 704

The goodwill of NOK 31.4 million recognised is the systems, back-to-back contracts, work practices and know-how in the company for efficient execution of transactions as well as proven synergies with other companies in the Group. None of the goodwill recognised is expected to be deductible for income tax purposes. The business combination is 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 1.8 million to operating revenues and NOK 0.0 million to consolidated net profit. If the acquisition date of all business combinations completed through purchase of shares was as at 1 January 2019, the operating revenues of the Group would have increased by NOK 36.2 million and the effect on the consolidated net profit would have been positive NOK 0.6 million.

Note 9: Subsequent events

No subsequent events.

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 non-recurring 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 annualized.

APM's in the income statement	Q4 2020	Q4 2019	FY 2020	FY 2019
Total revenue	399 284	334 724	1 142 866	1 132 059
Cost of goods sold	(250 779)	(259 498)	(764 579)	(852 722)
Gross profit	148 504	75 227	378 287	279 338
Gross margin	37 %	22 %	33 %	25 %
Salaries and personnel costs	(71 845)	(48 331)	(208 243)	(187 994)
Other operational costs	(26 062)	(19 201)	(74 405)	(63 396)
Share of profit (loss) in joint ventures	-	(162)	-	1 059
Other income	5 048	-	17 843	-
Other expenses	(1 031)	(1 967)	(9 028)	(1 967)
EBITDA	54 615	5 566	104 455	27 040
Depreciation	(40 567)	(4 618)	(87 332)	(15 214)
Impairment	-	-	-	(70 000)
EBITA	14 048	949	17 122	(58 174)
Amortisation	(10 469)	(5 719)	(27 892)	(22 018)
EBIT	3 580	(4 771)	(10 771)	(80 191)

Adjusted EBITDA	Q4 2020	Q4 2019	FY 2020	FY 2019
EBITDA	54 615	5 566	104 455	27 040
Other income	(5 048)	-	(17 843)	-
Other expense	1 031	1 967	9 028	1 967
Adjusted EBITDA	50 598	7 533	95 640	29 007

Total net operating expenses	Q4 2020	Q4 2019	FY 2020	FY 2019
Cost of goods sold	(250 779)	(259 498)	(764 579)	(852 722)
Salaries and personnel costs	(71 845)	(48 331)	(208 243)	(187 994)
Other operational costs	(26 062)	(19 201)	(74 405)	(63 396)
Share of profit (loss) in joint ventures		-	(162)	-
Depreciation	(40 567)	(4 618)	(87 332)	(15 214)
Amortisation	(10 469)	(5 719)	(27 892)	(22 018)
Impairment	-	-	-	(70 000)
Other income	(1 031)	(1 967)	(9 028)	(1 967)
Total net operating expenses	(400 752)	(339 494)	(1 171 479)	(1 212 252)

Revenue splits	Q4 2020	Q4 2019	FY 2020	FY 2019
Revenue	399 284	334 724	1 142 866	1 132 059
Hardware revenue	296 115	268 823	867 244	841 340
Solutions revenue	103 168	65 902	275 622	290 720
Hardware share of revenue	74 %	80 %	76 %	74 %
Solutions share of revenue	26 %	20 %	24 %	26 %

NIBD	FY 2020	FY 2019
Cash and cash equivalents	27 203	44 588
Non-current interest-bearing borrowings	108 539	162
Current interest-bearing borrowings	85 502	46 423
NIBD	166 838	1 996

Equity ratio	FY 2020	FY 2019
Total equity	563 451	455 970
Total equity and liabilities	1 199 131	817 191
Equity ratio	47 %	56 %

ARR	FY 2020	FY 2019
Number of users (1 000)	249	201
Average price own software	254	182
ARR (1 000)	63 329	36 632

TECHSTEP ASA

Brynsalléen 4 0667 Oslo, Norway +47 915 233 37