Interim report Q1 2022

Highlights Q1 2022

Revenue of NOK 346.2 million, representing 13% year-over-year growth, organic revenue growth was 15% due to divestment of non-core business in Q4 2021
Strong growth within Own Software, Hardware-as-a-Service (HWaaS) and Hardware one-off sales year-over-year
Gross profit of NOK 113.6 million (NOK 114.0 million) reflects product and customer mix in the quarter, with a strong quarter for hardware one-off sales with lower overall margins
EBITDA adjusted of NOK 14.1 million (NOK 13.3 million) due to stable development in reported gross profit
Transformation into a software-driven recurring services company progressing, but financial results are lagging due to implementation and lead times
Recurring revenues up 2% quarter-on-quarter to NOK 270 million (annualised), driven by Own Software, Advisory & Services and Hardware-as-a-Service
Signed 17 new Managed Mobility Services (MMS) and upsell contracts with a value of NOK 11 million in annualised recurring revenues expected to be delivered over the coming quarters
Increased commercial momentum with positive sales bookings and MMS contracts backlog development, Q1 wins include Norwegian, Specsavers, Felleskjøpet, DHL, ISS, and Postnord
Launched rebranding reinforcing Techstep as a leading European enabler of smarter mobile technology making people work more effectively, securely, and sustainably
Acquired remaining shares in HWaaS subsidiary Techstep Finance AS, solidifying the recurring revenue MMS business

After the close of the quarter

• Announced acquisition of cybersecurity SaaS company Crypho, which sells end-to-end encrypted mobile messaging and sharing software, expanding our product offering to existing and new customers

CEO comment

Techstep's transformation journey is progressing, and while our quarterly result is not where we want it to be, I'm happy to see that the underlying factors are pointing in the right direction. As we transform the company from one-off transactional sales to recurring revenues, we are focusing on delivering high customer value through our services and products – every day. Which in turn results in a mutual, recurring commitment between our customers and Techstep.

As part of our transformation, the strengthening and streamlining of our product portfolio of smarter mobile technology led us to the acquisition of Crypho AS in May 2022. Crypho will be part of our SmartControl platform, and elements of the product will also be utilised in our SmartWorks offering. Crypho provides secure communication internally and externally for organisations, with awardwinning end-to-end encrypted mobile messaging and information sharing software. The software is built with a mobile first mindset that is easy to use and implement, and its capabilities match what has been requested by our customers. We will further enhance the Crypho platform and utilise our commercial organisation to bring the software out to customers in all our markets.

Building a recurring business that focuses on underlying factors is a key success criteria. These give us clear indications of how our financial results will be going forward. Delivering recurring value for our customers will offer operational predictability for them as well as financial predictability for Techstep and our other stakeholders.

In Q1 we signed 17 MMS contracts with new customers, and increased the offering to existing customers, delivering a total value of NOK 11 million in annualised recurring revenue. In addition, we are still increasing the volume of mobile devices sold to customers both in the traditional transactional way and as-a-service. We have a clear focus on delivering on our targets with midsize customer agreements every month to ensure a solid steady performance. Signing large enterprise agreements in addition then exponentially adds to our results.

Mobile technology and the management of it can be a challenge for many businesses, and we see this through an increased interest from customers regarding our Managed Services. When we help customers through our Managed Services, we use a wide array of products from our portfolio so that our customers can realise the full benefits of an integrated product offering. And when they are ready to manage the solution themselves it is set up and ready to use.

In Q1 we launched the previously announced rebranding of Techstep and set a new long-term vision of making the world of work smarter and more sustainable. And we defined a new mission of using mobile technologies to make positive changes to the world of work; freeing people to work more effectively, securely, and sustainably, ensuring that we will have the right focus on delivering great value to our customers.

The new branding shows a more modern mobile technology profile for the company, giving a clearer message, storyline, and position of how we through our "Smart" product portfolio bring more value to our customers through smarter mobile technology for a brighter tomorrow.

We have an exciting market opportunity ahead of us and we are sharpening our products and goto-market approach to capture in the best possible way in the years to come a market that has an expected annual double-digit growth.

To make the world of work smarter and more sustainable, we passionately believe in the power of technology as it also helps our customers deliver on their ESG commitments. We strongly believe in building sustainable solutions for today and for the future, to deliver great value for our customers. Our solutions help our customers to work smarter and purchase software and devices with a clear conscience. To be able to succeed with lifecycle management, this needs to be part of an automated system.

With our SmartDevice solution we help organisations reduce their environmental footprint, offer better value to their employees, and save time and money. Through SmartDevice, we prolonged the lifespan of 88% of the end-of-life returns in 2021 and reduced their environmental impact by displacing the production of new devices.

Techstep's financial results are in line with our expectations, and with our focus on the underlying factors we expect to see a stronger performance in the future. Our focus is to build a recurring revenue base with better predictability for future financial results and increased value for our customers as they adopt more of our services. In the time to come we expect to start harvesting the optimisation and changes done in our organisation, where we already see clear improvements in

underlying factors. Performance management in the organisation is closely linked to customer success, recurring services, and revenue growth, and ultimately value creation and profitability.

All of this is important for us to be the leading European mobile technology enabler for customers that want to work smarter and more sustainably.

Børge Astrup, CEO, Techstep ASA

About Techstep

Techstep is a complete mobile technology enabler, making positive changes to the world of work, freeing people to work more effectively, securely, and sustainably. We help customers who want to work smarter, while also delivering on their ESG commitments. With more than 350 employees based in Norway, Sweden, Denmark, and Poland, we serve more than 2 000 enterprise customers in Europe. Techstep had NOK 1.3 billion in full year 2021 revenues, and is listed on the Oslo Stock Exchange under the ticker TECH. To learn more, please visit www.techstep.io/investor

Key figures

(Amounts in NOK 1 000)	Q1 2022	Q1 2021	FY 2021

Revenues	346 226	305 930	1 305 090
Annual Recurring Revenue (ARR) - own software	98 821	65 948	97 423
Gross profit	113 565	114 032	459 785
EBITDA adjusted1)	14 091	13 331	69 616
EBITDA	53 457	12 857	52 430
EBITA	29 568	(13 209)	(55 799)
EBIT	15 019	(23 999)	(110 522)
Net profit (loss) for the period	12 484	(24 696)	(102 660)
EBITDA adj. margin (%)	4.1%	4.4%	5.3%
EBITDA rep. margin (%)	15.4%	4.2%	4.0%
EBITA margin (%)	8.5%	(4.3%)	(4.3%)
EBIT margin (%)	4.3%	(7.8%)	(8.5%)
Net profit (loss) for the period (%)	3.6%	(8.1%)	(7.9%)
Cash	38 591	62 796	50 350
Net interest-bearing debt	189 530	152 307	121 600
Capex2)	18 908	6 760	48 883
Employees	331	299	341

1) EBITDA adjusted in Q1 2022 excludes non-recurring items such as M&A related costs of NOK 0.5 million and structural gains from sales of NOK 40.5 million.

2) Capex excludes investment in the hardware-as-a-service portfolio, shown as a separate line item under investing activities in the consolidated statement of cash flow.

Operational review

Main developments

In the first quarter of 2022, Techstep has continued to pursue its growth strategy and transform the company into a software-driven mobile technology leader with a recurring services business model. We continue to improve and refine our product offering to ensure we also deliver recurring value to our customers, through market leading products, own software, and mobile technology expertise.

The alignment of the organisation is showing increased traction in several areas, and we are now implementing the OKR (Objective, Key Result) framework to increase visibility, transparency, and execution in the business. It has been well received by the employees, and we already see positive results in the organisation.

In the first quarter, Techstep announced the hiring of a new CMO. Ms Sheena Lim is a senior marketing expert, who will take charge and further develop Techstep's marketing department with a clear focus of building the new Techstep brand, and significantly increase incoming leads by explaining the benefits of our solutions, to both new and existing customers.

Sales development

Techstep experienced continuous sales improvements in the first quarter with several important wins with both existing and new customers, including demand for our own software and managed services. We signed 17 MMS customers contracts, and with the upsell to existing customers we reached sales bookings of NOK 11 million in annualised recurring revenue, which are expected to be delivered over the coming quarters.

Our Managed Mobility Services solutions consist of SmartControl, SmartWorks and SmartDevice. All solutions are provided as-aservice, though customers who would like to buy SmartDevice transactionally can also do so.

Techstep's total annualised recurring revenue was NOK 270 million, up from NOK 266 million in the previous quarter, of which own software ARR was NOK 99 million at the end of the quarter. As compared to the first quarter 2021, this represents a 50% growth year-over-year. Techstep's annualised recurring revenue base had a gross margin of ~90% – sold either as a white-label service through our channel partners or directly by Techstep. The annualised recurring revenue portfolio includes recurring revenue streams from Own Software, Advisory & Services and Hardwareas-a-Service.

Rebranding

The Techstep rebranding simplifies and encapsulates our brand story in a clear, purposeful, and meaningful way. It expresses who we are, and why we do what we do. This new identity will set us apart from our competitors and present a memorable impression, enabling us to increase our company value, set high expectations, and make securing new customers easier.

The rebranding of Techstep would not deliver the full impact without a new website. Our new website is built to amplify the Techstep story, create a seamless user experience, maximise leads generation, and has a solid foundation that makes it scalable for our continuous growth. Please visit www.techstep.io to experience our new website.

Strengthened product offering

Techstep is focused on evolving its product offering and has introduced new Managed Mobility Services solutions with an official launch in the first half of 2022, consisting of SmartControl, SmartWorks and SmartDevice. SmartControl is Techstep's management solution, with software and managed services that provide the customer with a complete view and control of its mobile devices. It configures mobile devices, optimises apps, and manages user groups, profiles and policies for optimal performance and information security. The acquisition of Crypho will also strengthen our security offering in SmartControl, supporting customers to securely communicate and share files both internally and externally with an end-to-end encrypted solution.

SmartWorks is a cloud-based mobile software solution platform, where customers through dedicated B2B-apps enable their frontline workers to deliver higher quality and efficiency in their work. The software applications can be paired with a broad selection of certified hardware and can be tailored to the customer's specific needs. SmartWorks also supports back-office personnel through a powerful integration platform enabling integration of the apps with the client's existing business systems.

SmartDevice is Techstep's mobile device lifecycle solution. The lifecycle handling software enables clients to order, purchase and manage their devices throughout the entire lifecycle. It provides a complete ecosystem, with the recycling or repurposing of obsolete devices included as standard, subsequently enhancing sustainability by reducing our customers' carbon footprint.

The market opportunity

The market opportunity for Techstep can be divided into two main areas: The Managed Mobility market and mobile technology for frontline workers.

For the Managed Mobility market, Techstep is seen as a challenger in the way we combine software and hardware to increase value for our customers. In the past five years we have acted as a consolidator in this market.

Frontline workers make up the largest portion of the workforce, estimated at 2.8 billion workers on a global basis, and Gartner predicts that up to 70% of new mobile and endpoint investments over the next five years will be for frontline workers. There has been an increased focus in supporting frontline workers to deliver higher quality and to ensure they're safe and productive.

We continue to evaluate potential M&A opportunities to further strengthen and expand our offering both for the Managed Mobility market and the Mobile Technology market across Europe.

Financial review

The interim financial information has not been subject to audit.

Profit and loss first quarter 2022

Techstep generated total revenue of NOK 346.2 million in the first quarter of 2022, up from NOK 305.9 million in the corresponding quarter last year. The increase of 13% in revenues is mainly driven by strong hardware sales, but also solid growth in the software portfolio.

Techstep's Own Software accounted for NOK 20.7 million (NOK 16.6 million), whereas Hardware-as-a-Service revenue accounted for NOK 34.5 million (NOK 30.5 million). Advisory & Services amounted to NOK 50.8 million (NOK 55.1) and related commissions were NOK 4.1 million in the quarter (NOK 5.3 million). Hardware revenue (excluding Hardware-as-a-Service) was NOK 236.7 million (NOK 197.7 million) in the quarter.

Gross profit of NOK 113.6 million remained flat vs last year (-0.4% YoY). Gross margin for the quarter thus decreased to 33%, down from 37.3% in the corresponding quarter of 2021. The decrease in gross margin mainly relates to the product and customer mix in Q1, where hardware was a larger part of the revenue mix, with a few large customer deals supporting the growth.

Salaries and personnel costs decreased by 3% compared with same quarter last year, to NOK 72.2 million, despite growth in the number of employees, which was 331 at the end of the quarter compared with 299 at end of the same quarter last year. NOK 4.0 million of personnel cost from R&D is capitalised as development cost (NOK 2.0 million). Options costs in the quarter were NOK 1.5 million (NOK 0.8 million). Other operational costs were NOK 27.3 million (NOK 26.1 million). The quarter had a reduction in reorganisation project costs offset by an increase in marketing and IT spending supporting rebranding and the transition

towards a software led recurring business model.

EBITDA amounted to NOK 53 million in the first quarter of 2022 and includes other income related to the divestment of the Voice and contact centre business unit of NOK 40.1 million. EBITDA in the corresponding quarter last year was NOK 12.9 million.

Financial position

As of 31 March 2022, total assets were NOK 1 248 million, compared with NOK 1 315 million as of 31 December 2021.

Intangible assets accounted for NOK 786.2 million (NOK 777.9 million). They included a deferred tax asset of NOK 11.8 million (NOK 2.1 million), goodwill of NOK 590.5 million (NOK 592.5 million), customer relations of NOK 69.3 (NOK 80.0) and technology of NOK 114.6 million (NOK 103.3 million).

Total tangible assets were NOK 180.4 million (NOK 179.0 million) as of 31 March 2022 including NOK 147.1 million (NOK 142.8 million) in Hardware-as-a-Service to customers and NOK 28.0 million (NOK 30.3 million) in right-of-use assets such as premises and other.

Total inventories and receivables were NOK 241.0 million (NOK 281.1 million) as of 31 March 2022. The decrease in accounts receivable of NOK 58 million from the preceding quarter is mainly related to the shortage of iPhone 13's, which were delivered at the end of the preceding quarter, and paid in the current quarter.

Total equity at the end of the fourth quarter was NOK 554.3 million (NOK 555.6 million), corresponding to an equity ratio of 44% (42%).

Non-current interest-bearing debt of NOK 98.1 million (NOK 97.4 million) includes acquisition loans of NOK 65.0 million (NOK 65.4 million) related to the Optidev and Famoc acquisitions and a seller's credit of NOK 33.1 million (NOK 27.6 million). Other non-current debt of NOK 35.2 million (NOK 43.3 million) mostly relates to leasing commitments of NOK 20.5 million (NOK 22.2 million) and a buy-back obligation for Hardware-as-a-Service of NOK 15.3 million (NOK 20.3 million).

Current interest-bearing borrowings amounted to NOK 130.0 million (NOK 74.5 million). They include net bank overdraft accounts of NOK 85.1 million (NOK 21.9 million).

Other current liabilities of NOK 221.3 million (NOK 295.1 million) mainly include payables to employees of NOK 31.5 million (NOK 37.4 million) and deferred revenue of NOK 135.8 million (NOK 200.9 million). The decrease in deferred revenue is partly explained by the recognition of the proceeds received in advance from the sale of the Voice and contact centre. Other current liabilities include leasing commitments of NOK 8.9 million (NOK 10.6 million) and a buy-back obligation for Hardware-as-a-Service of NOK 16.9 million (NOK 9.8 million).

Net interest-bearing debt was NOK 189.5 million at the end of the fourth quarter 2021, compared to NOK 121.6 million at the end of the preceding quarter. The increase is mainly related to the utilisation of the bank overdraft to support the transition to the software-led business model.

Cash flow first quarter 2022

Net cash outflow from operating activities was NOK 6.0 million in the quarter compared with

inflow of NOK 93.7 million in the same quarter last year. Current year cash flow from operating activities includes a negative effect of NOK 40.2 million from the reversal of deferred revenue related to the Voice and contact centre transaction.

Net cash outflow from investment activities was NOK 58.0 million (NOK 74.5 million). This is due to capital expenditures for equipment related to Hardware-as-a-Service of NOK 30.2 million (NOK 74.2 million), Own Software and IT of NOK 18.9 million (NOK 6.8 million) and the acquisition of the last 20% of shares in Techstep Finance AS for NOK 9.0 million. The cash outflow related to Own Software and IT is in line with expectations and relates to building scalable solutions on both the product side and operations side in line with the group's strategy.

Net cash inflow from financing activities was NOK 53.0 million (NOK 19.4 million) in the quarter. This is largely due to utilisation of the group's bank facility.

Cash and cash equivalents decreased by NOK (11.0) million from NOK 50.3 million in the previous quarter to NOK 38.6 million at the end of the quarter.

Outlook

Techstep has positioned itself to be the leading European mobile technology enabler for customers that want to work smarter and more sustainably. The company's vision is to make the world of work smarter and more sustainable.

Through its software-led growth strategy, Techstep is serving more than 2 000 customers across industries in both the private and public sector. Going forward, Techstep will continue to transform into a software and value-adding services company targeting strong growth and geographic expansion in the Nordics and in Europe.

As part of its transformation journey, Techstep invests in Own Software and IP and pursues M&A opportunities to further strengthen and expand its Managed Mobility Services (MMS) offering and market position.

In parallel, Techstep is transforming the business model from a transactional to recurring revenue model by redesigning and streamlining its product offering. The company will offer a software-led standardised and scalable product portfolio to attract, develop, and retain customers. The new product offering consists of SmartControl, SmartWorks and SmartDevice, and was launched in the first quarter of 2022. The new offering is designed to strengthen the value proposition to customers and drive recurring revenues.

Techstep has stated medium-term goals. The ambition is a gross profit growth of 20-25% and a gross profit to EBITDA conversion of 20- 25%. Annual development capex is expected to be NOK 40-45 million, with acquired software

bringing it further up. The transformation to a recurring revenue model is expected to support sales growth and profitability. Techstep is targeting to manage 1 million devices by 2025, with a gross profit to EBITDA conversion above 30%.

According to the Global Managed Mobility Service Market (2022-2027) report from Mordor Intelligence, the growth of the European managed mobility service market was 21% in 2021. The global market is expected to grow 24% annually from 2022 to 2027.

Important focus areas going forward are data privacy, security, and sustainability with careful life-cycle handling of devices.

Techstep also recognises the expectations for cloud migration from on-premises software is increasing as well. This fits perfectly with the product offering of SmartControl, SmartWorks and SmartDevice.

Growth will come from converting existing customers to MMS, onboarding of new customers, M&A to acquire new software IP and from geographical expansion. To unleash growth, Techstep will increase focus on the customer, the products it brings to market, and the technology and software that power its solutions. Techstep is confident that its MMS offering has a strong value proposition and increasing relevance 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.

Consolidated income statement

(Amounts in NOK 1 000) Note	Q1 2022	Q1 2021	FY 2021

Revenue 2, 3	346 788	305 251	1 303 192
Other revenue	(563)	679	1 898
Total revenues	346 226	305 930	1 305 090

Cost of goods sold	(232 661)	(191 898)	(845 305)
Salaries and personnel costs	(72 201)	(74 593)	(281 620)
Other operational costs	(27 273)	(26 107)	(108 630)
Depreciation 5	(23 889)	(26 066)	(108 229)
Amortisation	(14 549)	(10 790)	(54 723)
Other income 7	40 067	-	22
Other expenses	(701)	(474)	(17 209)
Operating profit (loss)	15 019	(23 998)	(110 522)

Financial income	1 246	4 881	12 232
Financial expense	(3 618)	(5 146)	(20 460)
Profit before taxes	12 647	(24 263)	(118 750)
Income taxes	(163)	(433)	16 091
Net profit (loss) for the period	12 484	(24 696)	(102 660)

Net income attributable to
Non-controlling interests	(312)	120	(390)
Shareholders of Techstep ASA	12 173	(24 816)	(103 050)

Earnings per share in NOK:
Basic	0.06	(0.14)	(0.55)
Diluted	0.06	(0.14)	(0.55)

Consolidated statement of comprehensive income

(Amounts in NOK 1 000) Note	Q1 2022	Q1 2021	FY 2021

Net profit (loss) for the period	12 484	(24 696)	(102 660)

Items that may be reclassified to profit
and loss
Exchange differences on
translating foreign operations	(12 686)	(26 156)	(21 586)
Income tax related to these	(702)	(1 276)	(1 304)
items Other comprehensive income	(13 388)	(27 432)	(22 890)

Total comprehensive income	(1 215)	(27 432)	(125 549)

Total comprehensive income attributable
to Non-controlling interests	(312)	120	390
Shareholders of Techstep ASA	(903)	(52 248)	(125 939)

Consolidated statement of financial position

(Amounts in NOK 1 000)
ASSETS Note	Q1 2022	2021
Non-current assets
Deferred tax asset	11 775	2 149
Goodwill	590 547	592 549
Customer relations and technology	183 849	183 214
Sum intangible assets	786 170	777 912
Right of use assets	28 033	30 267
Property, plant and equipment 5	152 404	148 775
Sum tangible assets	180 437	179 043
Shares and investments	568	590
Other non-current assets	1 524	1 224
Sum financial assets	2 092	1 814
Total non-current assets	968 699	958 768
Inventories	25 818	19 391
Accounts receivable	172 036	230 229
Other receivables	43 191	31 435
Total inventories and receivables	241 045	281 055
Cash and cash equivalents	38 591	50 350
Assets classified as held for sale 7	-	24 482
Total current assets	279 635	355 887
Total assets	1 248 335	1 314 655

EQUITY AND LIABILITIES Note	Q1 2022	2 021
Share capital 4	209 630	209 630
Other equity	344 644	344 682
Total equity attributable to the owners of Techstep ASA 4	554 274	554 312
Non-controlling interests	-	1 274
Total equity	554 274	555 586
Deferred tax	23 215	14 645
Non-current interest-bearing borrowings	98 098	97 402
Other non-current debt	35 240	43 305
Total non-current liabilities	156 554	155 353
Current interest-bearing borrowings	130 022	74 548
Accounts payable	147 021	193 833
Tax payable	1 414	653
Public duties	37 724	39 577
Other current liabilities 5, 7	221 326	295 106
Total current liabilities	537 507	603 716
Total liabilities	694 061	759 069

Total equity and liabilities 1 248 335 1 314 655

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 start of 2021	183 295	591 361	(230 465)	18 373	562 566	884	563 450

Profit for the period	-	-	(103 050)	-	(103 050)	390	(102 660)
Other comprehensive income	-	-	-	(22 890)	(22 890)	-	(22 890)
Total comprehensive income for the period	-	-	(103 050)	(22 890)	(125 939)	390	(125 549)
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	75 264	-	-	97 920	-	97 920
Proceeds from issuance of shares net of transaction costs	3 679	12 141	-	-	15 821	-	15 821
Share-based payments	-	-	3 946	-	3 946	-	3 946
Equity as at end of 2021	209 630	678 767	(329 569)	(4 516)	554 312	1 274	555 586

Equity as at start of 2022	209 630	678 767	(329 569)	(4 516)	554 311	1 274	555 586
Profit for the period Other comprehensive income	- -	- -	12 173 -	- (13 388)	12 173 (13 388)	312 -	12 484 (13 388)

Total comprehensive income for the period	-	-	12 173	(13 388)	(1 216)	312	(904)
Transactions with owners in their capacity as owners:
Transactions with non controlling interests			-		-	(1 585)	(1 585)
Share-based payments	-	-	1 178	-	1 178	-	1 178
Equity as at end of Q1 2022	209 630	678 767	(316 218)	(17 905)	554 273	-	554 274

(Amounts in NOK 1 000)	Note	Q1 2022	Q1 2021	FY 2021

Profit before tax		12 647	(24 263)	(118 750)
Depreciation equipment and other fixed assets	5	22 000	21 918	94 786
Depreciation right-of-use assets	5	1 889	4 149	13 443
Amortisation		14 549	10 790	54 723
Share-based payments		-	752	3 946
Gain from sale of business units	7	(40 049)	-	-
Gain from sale of property plant and	5	-	40	0
equipment reclassified to investment activities
Net exchange differences		-	-	2 136
Taxes paid		(1 124)	(329)	(1 474)
Interest expense (revenue) reclassified to		2 070	-	7 880
investing/financing activities
Changes in net operating working capital		(17 949)	80 641	72 242
Net cash flow from operational activities		(5 967)	93 697	128 930

Payment for acquisition of subsidiaries net of		(9 000)	(811)	(78 759)
cash acquired
Payment for equipment and other fixed assets	5	(30 189)	(74 224)	(141 392)
Payment for intangible assets		(18 908)	(6 760)	(48 883)
Proceeds from sale of property, plant and		-	7 324	27 393
equipment
Proceeds from sale of business		-	-	65 678
Interest received		54	-	1 368
Net cash used on investment activities		(58 043)	(74 471)	(174 594)

Proceeds from issuance of shares		-	507	101 853
Proceeds from borrowings		63 325	31 087	35 145
Repayment of borrowings		(1 507)	(7 739)	(41 783)
Lease repayments		(1 790)	(4 439)	(16 240)
Interest paid		(7 024)	-	(7 731)
Net cash flow from financing activities		53 004	19 416	71 244

Net change in cash and cash equivalents		(11 006)	38 642	25 580

Cash and cash equivalents at beginning of period		50 350	27 203	27 203
Effects of exchange rate changes on cash and		(754)	(3 048)	(2 433)
cash equivalents

Cash and cash equivalents at end of period		38 591	62 796	50 350

Consolidated statement of cash flow

Notes to the consolidated financial statements

Note 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. 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 2021. 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 2021. The report has not been audited.

Note 2. Business segments

Techstep has four segments, which are represented by the four geographic locations where the Group's entities are incorporated. The entities are controlled and owned by the Techstep Group. A fifth segment HQ comprises Techstep ASA. 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, Son and Sandefjord.
Mytos AS: A Norwegian-based software-as-a-service 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 Finance AS: Provides financing and remarketing services.

2) Sweden

Techstep Sweden AB: The company offers mobile hardware, 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.
Optidev AB: The company develop and provide enterprise mobility software and solutions, predominantly to customers in the transportation, logistics and public safety sectors in Sweden, Norway, and Denmark.
Techstep Finance AB: Provides financing and remarketing services.

3) Denmark

Techstep Denmark ApS: Established to invoice Danish customers. The company is fully supported from Norway and does not have any employees.
Optidev ApS: Established as a sales office for Optidev AB.

4) Poland

Famoc S.A.: A Polish software-as-a-service company with mainly recurring revenue. Famoc offers a portfolio of solutions for the mobile device lifecycle management market. The company is located in Gdansk.
Famoc Software Ltd: An Ireland-based company acting as a reseller of Famoc S.A. software to customers outside Poland.
Santa Maria Private Ventures sp. z.o.o.: A holding company owning shares in Famoc S.A. and Famoc Software Ltd.

5) Headquarters (HQ)

• Techstep ASA

					Elim
Norway	Sweden	Denmark	Poland	HQ	inations	Total
220 603	113 122	6 181	6 319	-	-	346 226
171	6 586	-	896	19 497	(27 150)	-
220 774	119 708	6 181	7 215	19 497	(27 150)	346 226
(156 162)	(75 612)	(5 191)	(2 145)	-	6 449	(232 661)
(24 660)	(28 932)	(748)	(3 888)	(15 630)	1 657	(72 201)
(15 675)	(13 214)	(741)	(2 529)	(13 347)	18 232	(27 273)
(14 764)	(8 808)	(122)	(194)	(1)	-	(23 889)
(4 690)	(7 128)	-	(2 455)	(285)	9	(14 549)
19 600	20 449	-	18	-	-	40 067
(500)	-	-	0	(201)	-	(701)
23 923	6 463	(621)	(3 977)	(9 966)	(802)	15 019
131	146	3	44	7	-	331

						Elim
Q1 2021*	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external	191 337	102 689	11 903	-	-	-	305 930
customers Operating revenues from other	(955)	16 173	-	-	9 060	(24 277)	-
segments Operating revenues	190 382	118 862	11 903	-	9 060	(24 277)	305 930
Cost of goods sold	(130 911)	(61 548)	(10 506)	-	(267)	11 335	(191 898)
Salaries and personnel costs	(38 369)	(30 269)	(440)	-	(5 514)	-	(74 593)
Other operational costs	(9 575)	(11 679)	(183)	-	(12 585)	7 915	(26 107)
Depreciation	(14 149)	(9 506)	(75)	-	(2 336)	-	(26 066)
Amortisation	(2 430)	(6 355)	-	-	(2 004)	-	(10 790)
Other expenses	-	-	-	-	(474)	-	(474)
Operating profit (loss)	(5 052)	(496)	700	-	(14 121)	(5 028)	(23 999)
Employees 31 March 2021*	135	156	4	-	4	-	299

*The above table is restated in accordance with new segment reporting

						Elim
FY 2021	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external	813 205	435 838	41 441	14 607	-	-	1 305 090
customers Operating revenues from other	72 317	41 404	7	2 718	37 148	(153 593)	-
segments Operating revenues	885 522	477 242	41 448	17 325	37 148	(153 593)	1 305 090
Cost of goods sold	(573 144)	(280 461)	(34 671)	(6 770)	-	49 741	(845 305)
Salaries and personnel costs	(130 854)	(115 246)	(2 981)	(8 540)	(24 549)	550	(281 620)
Other operational costs	(54 309)	(44 341)	(1 121)	3 108	(87 220)	75 334	(108 549)
Depreciation	(69 208)	(38 139)	(473)	(403)	(6)	-	(108 229)
Amortisation	(20 118)	(27 709)	-	(6 896)	-	-	(54 723)
Impairment	(3 815)	-	-	-	-	3 815	-
Other income	-	-	-	22	-	-	22
Other expenses	(6 728)	-	-	-	(9 716)	(764)	(17 208)
Operating profit (loss)	27 346	(28 654)	2 202	(2 155)	(84 343)	(24 917)	(110 522)
Employees year end 2021*	129	154	4	48	6	-	341

*Restated in accordance with new segment reporting

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:

						Elim
Q1 2022	Norway	Sweden	Denmark	Poland	HQ	inations	Group
Total revenues	220 774	119 708	6 181	7 215	19 497	(27 150)	346 226

Hardware
Hardware	156 639	67 954	3 383	-	-	(3 006)	224 970
Hardware-as-a-Service	23 238	11 465	1 119	-	-	(1 331)	34 491
Bonus	9 690	2 054	-	-	-	-	11 744
Total	189 567	81 473	4 502	-	-	(4 337)	271 205

Solutions
Advisory & Services	17 281	32 878	1 588	291	-	(1 278)	50 759
Own Software	9 996	5 113	123	6 924	-	(1 440)	20 717
Commission	4 094	13	-	-	-	-	4 107
Total	31 371	38 004	1 711	7 215	-	(2 717)	75 583

Other revenues
Other	(164)	231	(31)	-	19 497	(20 095)	(563)
Total	(164)	231	(31)	-	19 497	(20 095)	(563)

						Elim
Q1 2021	Norway	Sweden	Denmark	Poland	HQ	inations	Group
Total revenues	190 382	118 862	11 903	-	9 060	(24 277)	305 930

Hardware
Hardware	128 230	58 272	7 854	-	-	(6 911)	185 368
Hardware-as-a-Service	18 841	12 770	1 078	-	-	(808)	30 520
Bonus	8 070	4 282	-	-	-	-	12 352
Total	155 141	75 324	8 932	-	-	(7 719)	228 240

Solutions
Advisory & Services	21 612	34 797	2 798	-	-	(2 382)	55 068
Own Software	9 825	7 625	168	-	-	(391)	16 645
Commission	4 355	942	-	-	-	-	5 297
Total	35 792	43 364	2 966	-	-	(2 773)	77 010

Other revenues
Other	(550)	174	5	-	9 060	(13 785)	679
Total	(550)	174	5	-	9 060	(13 785)	679

						Elim
FY 2021	Norway	Sweden	Denmark	Poland	HQ	inations	Group
Total revenues	789 491	456 82	41 448	17 325	58 360	(58 360)	1 305 09
		6					0
Hardware
Hardware	524 717	221 641	24 790	365	-	-	771 513
Hardware-as-a-Service	82 948	46 557	4 732	-	-	-	134 237
Bonus	37 044	12 119	-	-	-	-	49 163
Total	644 709	280 317	29 522	365	-	-	954 912

Solutions
Advisory & Services	86 400	155 216	11 255	1 458	-	-	254 329
Own Software	39 090	18 505	689	15 503	-	-	73 787
Commission	17 791	2 372	-	-	-	-	20 164
Total	143 281	176 094	11 944	16 960	-	-	348 279

Other revenues
Other	1 501	415	(18)	-	58 360	(58 360)	1 898
Total	1 501	415	(18)	-	58 360	(58 360)	1 898

Note 4. Share capital and shareholders

The company's share capital as of 31 March 2022 was NOK 209 629 841 consisting of 209 629 841 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 on 31 March 2022 were as follows:

Shareholder	# of shares	Ownership %

DATUM AS1)	36 615 646	17.47%
KARBON INVEST AS2)	21 804 349	10.40%
MIDDELBORG INVEST AS	19 014 507	9.07%
Swedbank AB	18 959 968	9.04%
ALUNDO INVEST AS	9 000 000	4.29%
VERDIPAPIRFONDET DNB SMB	7 203 900	3.44%
DnB NOR Bank ASA	7 175 612	3.42%
CIPRIANO AS	4 538 498	2.17%
Saxo Bank A/S	3 043 183	1.45%
TVENGE	3 000 000	1.43%
GIMLE INVEST AS	2 520 077	1.20%
BRIDGE CAPITAL AS	2 500 000	1.19%
NORDHOLMEN AS	2 262 551	1.08%
PIKA HOLDING AS	2 143 455	1.02%
ADRIAN AS	2 038 851	0.97%
UNIFIED AS	1 969 264	0.94%
IDEKAPITAL AS	1 949 690	0.93%
NORDIALOG ENSJØ AS	1 946 253	0.93%
CAMIKO AS	1 807 894	0.86%
SPIRALIS AS	1 714 800	0.82%
Total number owned by top 20	144 197 526	68.79%
Total number of shares	209 629 841	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

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 programme. The share options will become exercisable (vest) on 22 June 2021 and must be exercised by 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 programme. 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 by 22 April 2026. The exercise price is NOK 5.80. 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.

CEO Børge Astrup was awarded 4 500 000 share options on an extraordinary general meeting held 22 September 2021. The options vest in three tranches with 1/3 per tranche, on 1 September 2024, 2025, and 2026. The exercise period is two years from the applicable vesting date. The strike price is NOK 4.75, NOK 5.75 and NOK 6.75 for the respective tranches. If the average, weighted Techstep share price for seven calendar days exceeds NOK 30 per share, then the Company may require that all vested options are exercised by Børge Astrup.

The Annual General Meeting 22 April 2022 approved a similar option program starting in April 2022.

As at 31 March 2022, the total number of outstanding share options was 7 932 088 (3.8%).

Name	Position	Shares	Share options
Børge Astrup	CEO	1 282 082	4 500 000
Anita Huun	CFO	40 000	-
Ellen Skaarnæs	Chief People Officer	41 411	-
Sheena Lim	Chief Marketing Officer	-	-
Mads Vårdal	Chief Product Officer	5 019	1 156 726
Erik Haugen	Chief Transformation Officer	4 672	1 156 726
Fredrik Logenius	Chief Operating Officer	9 469 399	229 660
Bartosz Leoszewski	Chief Technology Officer	312 628	-
Gunnar Aasen	Chief Revenue Officer	-	-

Overview of shares and share options held by members of the management group as of 31 March 2022:

Note 5. Property, plant, and equipment

	Right-of-use		Other fixed
	assets	Equipment1)	assets	Total
Accumulated cost as of 1 January 2022	63 881	292 234	31 090	387 205
Additions	205	29 328	861	30 394
Disposals	(855)	(18 006)	(13 853)	(32 714)
Translation differences	(366)	(2 902)	(311)	(3 579)
Accumulated cost 31 March 2022	62 864	300 655	17 788	381 307

Accumulated cost as at 1 January 2021	65 953	282 727	35 210	383 891
Additions	11 424	140 212	1 179	152 815
Additions arising from business combinations	-	-	869	869
Disposals	(12 152)	(122 605)	(4 979)	(139 736)
Translation differences	(1 344)	(8 101)	(1 190)	(10 634)
Accumulated cost 31 December 2021	63 881	292 234	31 090	387 205

Accumulated depreciation as of 1 January 2022	(33 613)	(149 468)	(25 081)	(208 163)
Current year depreciation	(1 889)	(20 900)	(1 100)	(23 889)
Disposals	813	14 967	13 842	29 622
Translation differences	(142)	1 818	(117)	1 560
Accumulated depreciation 31 March 2022	(34 832)	(153 583)	(12 455)	(200 870)

Accumulated depreciation as of 1 January 2021	(26 341)	(157 897)	(27 485)	(211 723)
Additions arising from business combinations	-	-	(766)	(766)
Current year depreciation	(13 443)	(92 167)	(2 619)	(108 229)
Disposals	5 386	95 875	4 982	106 242
Translation differences	784	4 722	807	6 313
Accumulated depreciation 31 December 2021	(33 613)	(149 468)	(25 081)	(208 163)

Book value of assets 31 March 2022	28 033	147 072	5 332	180 437
Book value of assets 31 December 2021	30 267	142 766	6 009	179 043

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

Note 6 Cash and cash equivalent

Current assets	Q1 2022	FY 2021
Cash at bank and in hand, not included in cash pool	38 591	50 350
of which is restricted	6 233	6 196

The Group has a credit facility of NOK 90 million related to the cash pool.

Note 7. Changes in Group structure and business combinations

2022

Divestment of Voice and Contact centre business unit

On January 3 the divestment of the Voice and contact centre business unit was completed for the total consideration of NOK 65.5 million. The settlement was received in December 2021. The gain of NOK 40.1 million has been recognised in the income statement on the line item other income in Q1 2022. NOK 24.5 million has been derecognised from the statement of financial position's line item assets held for sale.

Acquisition of last 20% of shares in Techstep Finance AS

On February 14 the company acquired the remaining 20% of the shares in Techstep Finance AS for NOK 9 million. The amount was settled in cash. Following the transaction, Techstep owns 100% of the shares in Techstep Finance AS.

Note 8. Subsequent events

After the balance sheet date, Techstep has signed an agreement to acquire the entire share capital of Crypho AS, an end-to-end encrypted enterprise software-as-a-service (SaaS) messaging and file-sharing application.

There are no other subsequent events to report.

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 annualised.

APM's in the income statement	Q1 2022	Q1 2021	FY 2021

Total revenue	346 226	305 930	1 305 090
Cost of goods sold	(232 661)	(191 898)	(845 305)
Gross profit	113 565	114 032	459 785
Gross margin	33%	37%	35%
Salaries and personnel costs	(72 201)	(74 593)	(281 620)
Other operational costs	(27 273)	(26 107)	(108 549)
Other income	40 067	-	22
Other expenses	(701)	(474)	(17 186)
EBITDA	53 457	12 858	52 452
Depreciation	(23 889)	(26 066)	(108 229)
EBITA	29 568	(13 208)	(55 799)
Amortisation	(14 549)	(10 790)	(54 723)
EBIT	15 019	(23 999)	(110 522)

Adjusted EBITDA	Q1 2022	Q1 2021	FY 2021
EBITDA	53 457	12 858	52 452
Other income	(40 067)	-	(22)
Other expense	701	474	17 186
Adjusted EBITDA	14 091	13 332	69 616

Total net operating expenses
Cost of goods sold	(232 661)	(191 898)	(845 305)
Salaries and personnel costs	(72 201)	(74 593)	(281 620)
Other operational costs	(27 273)	(26 107)	(108 549)
Depreciation	(23 889)	(26 066)	(108 229)
Amortisation	(14 549)	(10 790)	(54 723)
Other expenses	(701)	(474)	(17 209)
Total net operating expenses	(371 273)	(329 928)	(1 415 635)

Revenue splits
Revenue	346 226	305 930	1 305 090
Hardware revenue	274 750	228 920	956 811
Solutions revenue	71 476	77 010	348 279
Hardware share of revenue	79%	75%	73%
Solutions share of revenue	21%	25%	27%

NIBD	Q1 2022	FY 2021
Cash and cash equivalents	38 591	50 350
Non-current interest-bearing borrowings	98 098	97 402
Current interest-bearing borrowings	130 022	74 548
NIBD	(189 530)	(121 600)

Equity ratio
Total equity	554 274	555 586
Total equity and liabilities	1 248 335	1 314 655
Equity ratio	44%	42%

ARR on own software	Q1 2022	FY 2021
Number of own software users (1 000)	71	66
Average price own software	1 005	1 050
MMS-Related ARR (1 000)	70 927	69 613
Number of own software users (1 000)	71	183
Average price MEM white label	154	152

White-label ARR 27 802 27 860 Total ARR from own IP 98 729 97 473