Techstep ASA — Interim / Quarterly Report 2022

Feb 17, 2023

Q4 2022 Report

Interim report Q4 2022

1

Making the world of work smarter and more sustainable

Highlights Q4 2022

Signed extended agreement with ISS, with ARR of NOK 850 000 on own software

• In line with growth strategy to move customers from transactional to recurring services, and providing the full value of the SmartDevice portfolio
• Agreement to be deployed in Q2/Q3, when customer goes live

Stable and flat development in Q4 and 2022, recurring revenue base increasing

• Q4 trending on par with full year, overall flat development in revenue and small improvements in net gross profit
• Total recurring revenue up 3% sequentially and 14% yearly in Q4, driven by NOK 7 million increase in ARR from Own Software to NOK 111 million, in line with the company's strategic objective to lead with software and scale with recurring revenue base

Cost optimisation on track, majority of impact visible from 2023. Q4 EBITA adj. positive for the first time in eight quarters

• NOK 90-100 million cost optimisation plan implemented in Q4. One-time restructuring charge of NOK 8.4 million booked, due to reduction of 45 employees
• Profitable on EBITA adj. for the first time in eight quarters, as cost optimisation is filtering through. NOK 2.4 million in EBITA adj., due to a 6% y/y decline in opex and salaries

Strengthening of the balance sheet, NIBD down NOK 112 million sequentially in Q4

• Capital raise of NOK 103 million strengthening the balance sheet and new long-term financing creating flexibility
• Net Interest-bearing debt end of year at NOK 113 million, down 50% sequentially
• Cash position at NOK 61 million at the end of the year

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 around 300 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 2022 revenues, and is listed on the Oslo Stock Exchange under the ticker TECH. To learn more, please visit www.techstep.io/investor

CEO comment

2022 was a challenging year for Techstep, as balancing growth while transforming the business and integrating acquired companies, proved harder than anticipated. The result shows a relatively flat development in both revenue and gross profit for 2022, clearly an outcome we are not satisfied with. While the overall results are not where we wanted them to be, our transformation towards a recurring services business model is materialising. We have grown our total recurring revenue base by 14% in 2022, now reaching north of NOK 300 million in total. Of this, more than one-third is from our high margin Own software portfolio, building a basis for profitable growth, with upsell opportunities across our large customer base.

Another very important step in the right direction was transforming our product offering in 2022. During the year we have successfully commercialised and standardised our product portfolio, moving from 47 different products to seven products and three distinct product portfolios. Years of investing in our own software and IP, has resulted in the most launch intensive year on record. The majority of the launches were in the second half of 2022 and there are still a few to come in the first half of 2023. Naturally, the positive financial effects of these new initiatives have not yet materialised. However, now we have a solid platform for growth and will reap the benefits of these investments in the coming years. We are intensifying our go-to-market strategies and are optimistic when we see a growing customer demand for our solutions, evident in large frame agreements and tenders. Even the current challenging macroeconomic environment might benefit us, as we have compelling costefficient solutions to offer the customers, with clear and significant direct and indirect cost savings.

2022 was all about getting the fundamentals and right structures in place, setting us up for future success. Now, it is all about execution. We are committed to turning Techstep profitable in 2023, returning value to our patient shareholders and employees. We are moving from the investment phase to execution phase, and our NOK 90-100 million cost optimisation plan has been effectuated and set into motion. Our 2025 ambition is to reach more than NOK 150 million in EBITA adj., and more than double the size of revenue from our Own Software portfolio, and we believe the turning point will start in 2023.

Overall, the main goal remains clear - To be the leading European mobile technology enabler for customers that want to work smarter and more sustainably.

Børge Astrup, CEO - Techstep ASA

Key figures

(Amounts in NOK 1000)	Q4 2022	Q4 2021	FY 2022	FY 2021
Revenues	369 845	384 117	1 323 126	1 305 090
Annual recurring revenue (ARR) - Own Software	110 800	97 473	110 800	97 423
Net gross profit1)	100 444	97 595	367 279	367 618
EBITDA adjusted2)	34 205	25 300	85 466	69 616
EBITA adjusted2)	2 379	(3 585)	(23 756)	(38 613)
EBIT	(20 677)	(23 817)	(52 205)	(110 522)
Net profit (loss) for the period	(31 818)	(25 799)	(68 614)	(102 660)
EBITDA adj. margin (%)	9.2%	6.6%	6.5%	5.3%
EBITA adj. margin (%)	0.6%	(0.9%)	(1.8%)	(3.0%)
EBIT margin (%)	(5.6%)	(6.2%)	(3.9%)	(8.5%)
Net profit (loss) for the period (%)	(8.6%)	(6.7%)	(5.2%)	(7.9%)
Cash	61 119	50 350	61 119	50 350
Net interest-bearing debt	112 868	121 601	112 868	121 600
Capex3)	(7 712)	(23 913)	(52 250)	(48 883)
Employees	315	341	315	341

1) Net gross profit is defined as Total revenue less Cost of goods sold and depreciation from Hardware-asa-Service.

2) EBITDA adj. and EBITA adj. in 2022 exclude non-recurring items such as M&A and restructuring related costs of NOK 10.0 million and structural gains from sale of NOK 40.1 million.

3) 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

Key focus in Q4 2022 was executing on Techstep's NOK 90-100 million cost optimisation plan, while at the same time continuing the transformation into a softwaredriven mobile technology player with a recurring services business model. The latter cemented itself more clearly, with a more intensified product launch schedule throughout H2 2022.

Over the last couple of years, Techstep has invested heavily in a new technology platform, integration of acquired entities and commercialisation of the product offering. Techstep is at the end of this investment phase, and the key focus going forward is to extract synergies and increase profitability from these investments.

Cost optimalisation effectuated

At the end of Q3, Techstep announced a NOK 90-100 million cost optimisation programme, to align the cost base to the simplified portfolio, and extract synergies from acquired companies.

During the fourth quarter the programme was executed on, where a plan to reduce overall operating costs by approximately NOK 40-50 million was set into place. Techstep will achieve this through rationalising marketing, IT, and administrative spending, and at the same time reduce external consultant usage.

Unfortunately, the cost optimisation programme also impacted Techstep employees, and during Q4 a right-sizing of the organisation was effectuated. The restructuring has reduced the headcount by 45, and Techstep has booked a NOK 8.4 million one-time restructuring cost related to this. The full effect of the reduction in headcount will take place in Q1 2023, but all cost related to the restructuring was booked in Q4 2022. The

headcount reduction is expected to have a cost reduction impact of approximately NOK 40-50 million.

Interim report Q4 2022

The reduction process was done in a relatively short time frame, from announcement to implementation, with the intent to reduce uncertainty and keep the commercial speed and momentum high.

New solutions gaining momentum

As communicated in Q3, Techstep has reached the end of an intensive investment phase, particularly into the new technology platform and the commercialisation of the product portfolio. This resulted in a launchintensive second half of 2022, where new products and offerings have been brought to market.

During Q3, Techstep brought two new commercial solutions in the SmartDevice and SmartControl portfolios to market. The solutions are designed to drive demand and deliver great customer value. In Q4, marketing campaigns, webinars, and initiatives were ramped up to drive momentum. Leads generated and positive customer attention are expected to be converted to actual sales during 2023.

The new solution in the SmartDevice portfolio will be a key differentiator for Techstep, being the most complete product for device lifecycle management on the market today. The solution also enables Techstep to deliver new features, functionality, and services down the road.

Sales development

Despite the cost optimisation and restructuring efforts implemented in the fourth quarter, the commercial momentum and speed was good, but conversion to actual sales was slower than anticipated. The macroeconomic environment during the quarter clearly deteriorated, and Techstep did see some longer lead times and a bit more cautiousness on the customer side

due to this. Techstep expects these to be more temporary effects, as the new product portfolio is gaining traction and momentum in the market, and customers are requesting the new portfolio in bids and larger frame agreements.

A key focus for Techstep is to upsell and convert existing customers from transactional sales to recurring sales, by increasing customer value through the software platform. In Q4, a great example of this was the announced contract extension with ISS Facility Services. Techstep will deliver SmartDevice to 1 700 employees in Norway, increasing ARR Own Software with NOK 850 000. The deal will be deployed and invoiced in Q2/Q3 2023 and shows the value potential when upselling software solutions to existing customers.

In the fourth quarter, the first phase of the Nortel product cooperation was delivered, providing 25 000 new users. During 2023, a solid growth in users is expected, and an evolvement of the product cooperation is anticipated as demand for additional services has been identified.

In Q4, Techstep's total recurring revenue annualised was NOK 303 million, up from NOK 295 million in the previous quarter. Of this, Own Software ARR was NOK 111 million at the end of the quarter, up 7% sequentially. This was slightly lower than the anticipated NOK 115 million, communicated in late September, and is due to churn from some early Hardware-asa-Service customers residing on the old platform. However, most of these customers have decided to stay with Techstep as transactional customers, so the hardware volume stays the same.

The market opportunity

Mobile technology is one of the fastest growing technologies in the world, and Techstep is well positioned in the Managed Mobility Services market (MMS). Research shows strong supporting trends and expected CAGR is

assumed to be in the +20% range over the coming years (Modor Intelligence).

Interim report Q4 2022

There are many key drivers of the MMS market, but in the short-term there are clearly two drivers that stand out, where Techstep is considered to have a unique value offering: cost efficiency and sustainability.

The current macroeconomic environment and cost inflation affect many businesses, hence companies will look for cost reductions and efficiencies wherever they can. The prices of mobile phones are increasing, and organisations lack both the competence and solutions to handle and utilise the cost saving potential. Techstep's software helps the customers gain control of their devices and optimise the corresponding costs. The SmartDevice solution enables customers to order, purchase and manage every step of the process to increase efficiency and lower cost. Data suggests estimated cost savings of NOK 4 000-10 000 per employee over a two-year period, when calculating both direct and indirect costs.

Techstep's SmartDevice solution further support companies' increasing focus on sustainability and ESG. SmartDevice offers a more sustainable way of managing devices, by applying circular economy principles with repair and return solutions to extend the devices' lifespan and responsibly recycle when devices can no longer be used. SmartDevice also helps customers get control on emissions data for devices procured, for easy climate reporting and insight to support their emissions reduction plan.

Financial review

The interim financial information has not been subject to audit. Figures in brackets refer to the corresponding quarter in 2021.

In Q3, Techstep launched new financial targets, with key operating metrics being net gross profit, EBITA adjusted and ARR on Own Software. These key figures will be incorporated, updated and tracked in the financial review going forward.

Profit and loss fourth quarter 2022

Techstep generated total revenue of NOK 369.8 million in the fourth quarter of 2022, down from 384.1 million in the corresponding quarter last year. On a proforma basis, revenue in Q4 was down 1% y/y, adjusted for the divestment of the Voice and Contact centre business. Overall revenue trend has been stable over the recent quarters, and for the full year 2022 Techstep's revenue grew 3% organically.

Techstep's Own Software accounted for NOK 26.6 million (NOK 22.6 million). Hardware-as-a-Service revenue rose to NOK 39.7 million (NOK 37.3 million). Advisory & Services amounted to NOK 96.5 million (NOK 79.2 million) and related commissions were NOK 1.6 million in the quarter (NOK 4.9 million). Hardware revenue (excluding Hardware-as-a-Service) was NOK 193.4 million (NOK 226.9 million) in the quarter.

Net gross profit increased by 2.9% year-overyear to NOK 100.4 million (NOK 97.6 million). The increase in net gross profit is driven by higher net gross profit from Hardware-as-a-Service. Net gross margin for the quarter was 27.2% (25.4%), also driven by strong net gross profit from Hardware-as-as-Service.

Salaries and personnel costs decreased by about -6% compared to the same quarter last year to NOK 68.1 million. The number of employees was 315 at the end of the quarter compared to 341 at the end of same quarter last year. NOK 4.0 million of personnel cost

from R&D is capitalised as development cost (NOK 4.3 million). Options costs in the quarter were NOK 1.0 million (NOK 0.5 million). Other operational costs were NOK 24.3 million (NOK 25.0 million).

Interim report Q4 2022

As announced at the end of Q3, Techstep has in the fourth quarter taken measures to optimise the cost base, by extracting synergies from acquisitions and by streamlining operations. The target is to reduce the cost base by NOK 90-100 million annualised, by the end of 2023. The restructuring will reduce the headcount by 45, and Techstep booked a NOK 8.4 million one-time restructuring cost related to this, for personnel cost going into 2023.

EBITA adjusted amounted to NOK 2.4 million in the fourth quarter of 2022. EBITA adjusted in the corresponding quarter last year was NOK -3.6 million and the improvement of NOK 6 million was driven by the above-mentioned cost reductions in salaries and personnel costs.

Operating loss amounted to NOK 20.7 million in the fourth quarter of 2022. In corresponding quarter last year, the operating loss was NOK 23.8 million. Amortisations in Q4 were NOK 14.2 million, which was a reduction from NOK 18.4 million last quarter. Amortisations are related to investments in Techsteps own software IP and acquisitions. They have as such no cash effect. One-off operating expenses included in Operating loss was NOK 8.9 million (NOK 1.9 million), related to the restructuring done in Q4. Net loss in fourth quarter was NOK 31.8 million (NOK 25.8 million). This includes net financial expenses of NOK 3.1 million (NOK 2.3 million) and tax of NOK 8.1 million (NOK 0.3 million).

Profit and loss 2022

Techstep generated total revenue of NOK 1 323.1 million in 2022, up by 1.4% from NOK 1 305.1 million last year, or 3% adjusted for the sale of the Voice and Contact centre business. Net gross profit was NOK 367.3 in 2022, a flat

development from last year's NOK 367.6 million. EBITA adjusted amounted to NOK -23.8 million in 2022. This is an improvement of NOK 14.9 million from last year due to reduction in salaries and personnel cost. Net loss for 2022 was NOK 68.6 million, compared to a net loss of NOK 102.7 in 2021. The reduction of the net loss of NOK 34.1 million is a combination of a reduction in personnel expenses, income from divestment of the Voice and Contact centre business, and increased net financial expenses and tax.

Financial position

As at 31 December 2022, total assets were NOK 1 323 million, compared to NOK 1 315 million as at 31 December 2021.

Intangible assets accounted for NOK 789.8 million (NOK 777.9 million). They included a deferred tax asset of NOK 6.5 million (NOK 2.1 million), goodwill of NOK 601.1 million (NOK 592.5 million) and customer relations of NOK 55.6 (NOK 80.0 million) and technology of NOK 126.7 million (NOK 103.3 million).

Total tangible assets were NOK 198.1 million (NOK 179.0 million) as at 31 December 2022 including NOK 160.7 million (NOK 142.8 million) in Hardware-as-a-Service to customers and NOK 29.7 million (NOK 30.3 million) in right-ofuse assets such as premises and other.

Total inventories and receivables were NOK 271.0 million (NOK 281.1 million) as at 31 December 2022. The increase in accounts receivable of NOK 61.5 million from the preceding quarter relates to normal seasonal patterns, with a large sequential increase in revenue from Q3 to Q4.

Total equity at 31 December 2022 was NOK 571.5 million (NOK 555.6 million), corresponding to an equity ratio of 43% (42%).

Non-current interest-bearing debt of NOK 90.7 million (NOK 97.4 million) includes loans related to the Optidev and Famoc acquisitions and new long-term borrowing. At the end of

last year, the non-current interest-bearing debt consisted of acquisitions loans and sellers' credit. Other non-current debt of NOK 37.6 million (NOK 43.3 million) mostly relates to leasing commitments of NOK 16.7 million (NOK 22.2 million) and a buy-back obligation for Hardware-as-a-Service of NOK 20.8 million (NOK 20.3 million).

Interim report Q4 2022

Current interest-bearing borrowings amounted to NOK 83.3 million (NOK 74.5 million). They include net bank overdraft accounts of NOK 27.8 million (NOK 21.9 million).

Other current liabilities of NOK 269.5 million (NOK 295.1 million) mainly include payables to employees of NOK 40.4 million (NOK 37.4 million) and deferred revenue of NOK 151.6 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 15.1 million (NOK 10.6 million) and a buy-back obligation for Hardware-as-a-Service of NOK 16.6 million (NOK 9.8 million).

Net interest-bearing debt was NOK 112.9 million at 31 December 2022, compared to NOK 121.6 million at the start of the year and NOK 224.5 million after Q3. The sequential decline in net interest-bearing debt from Q3 of NOK 111 million is mainly related to the completion of the private placement that was made in order to support the transformation of Techstep and strengthening of the balance sheet. Net proceeds from the capital raise, including conversion of the seller's credit, amounted to NOK 103 million.

Cash flow fourth quarter 2022

Net cash inflow from operating activities was NOK 66.3 million in the quarter compared with inflow of NOK 9.6 million in the same quarter last year. The higher cash flow from

operational activities is mainly driven by positive changes in working capital.

Net cash outflow from investment activities was NOK 42.3 million (NOK 30.9 million). This is due to capital expenditures for equipment related to Hardware-as-a-Service of NOK 37.2 million (NOK 14.2 million) and Own Software and IT of NOK 7.7 million (NOK 23.9 million). The cash outflow related to Own Software and IT (capex) is in line with communication during Q2, in the range of NOK 45-55 million. The positive cash flow from investment activities in fourth quarter last year was due to proceeds from the sale of the Voice and Contact centre business of NOK 65.7 million.

Net cash flow from financing activities was NOK 8.0 million (NOK -49.0 million) in the quarter. This relates mainly to the net effect of cash inflow from the private placement and reduction of bank overdraft.

Cash and cash equivalents increased by NOK 31.9 million from NOK 29.9 million in the previous quarter to NOK 61.1 million at the end of the quarter.

Cash flow 2022

Net cash inflow from operating activities was NOK 123.7 million in 2022 compared to NOK 128.9 million last year. Profit before tax in 2022 includes the sale of the Voice and Contact centre transaction. In operating cash flow the transaction was reversed as the cash effect of the transaction occurred in 2021.

Net cash outflow from investment activities was NOK 180.4 million (NOK -174.6 million). The cash outflow primarily relates to expenditures for equipment to Hardware-as-a-Service of NOK 132.5 million (NOK 141.4 million), and Own software and IT of NOK 52.3 million (NOK 48.9 million). 2021 outflow from investment activities also contained the acquisition of Famoc and

inflow included proceeds from the sale of the Voice and Contact centre business.

Interim report Q4 2022

Net cash inflow from financing activities was NOK 67.6 million (NOK 71.2 million). This relates mainly to the net effect of cash inflow from the private placement. This was also the main contributor to the positive cash inflow from financing activities in 2021.

Corporate actions

On 29 September 2022, Techstep successfully completed a private placement of NOK 103 million at NOK 1.15 per share. An additional NOK 0.5 million was raised through a subsequent offering completed on 15 December 2022. The net proceeds from the capital raise will be used to fund the final phase of the transformation process, restructuring, to strengthen the balance sheet and for general corporate purposes. The net proceeds had financial effect in Q4 2022. For more information, please see stock exchange announcements of 28 and 29 September and 29 December 2022.

Subsequent events

On 1 February 2023, Techstep strengthened its executive management team by appointing Ellen Solum as new CFO and Anita Huun taking on a new role as Chief Commercial Officer. Together they will help Techstep further sharpen its focus on both commercial growth, cost efficiencies and profitability.

On 15 February, the extraordinary general meeting approved changes to the board. Jens Rugseth stepped down as chairperson and will continue as ordinary board member. Board member Michael Jacobs was elected as new Chairperson of the Board.

Risk and uncertainties

Techstep's business activities entail exposure to changes in market conditions, operational and financial development. Techstep strives to take an active approach to risk management through monitoring and mitigation initiatives of identified risks. Below is a summary of the main risks identified for Techstep in the next three to six months.

The war in Ukraine, combined with the tension between China and Taiwan and the US sanctions on China, have led to increased uncertainty regarding the development of the global economy. The evolving conflicts do not impact Techstep directly, and Techstep has no operating presence in the affected areas. Indirect effects however, such as financial market volatility and general economic market conditions, might have an impact on financial results. The high inflation and energy prices may further weaken the economic outlook. Techstep has a large base of public sector and large corporate customers, which are less vulnerable to volatile market conditions.

The global component shortage, combined with production, logistics and transportation challenges in the supply chain, may result in Techstep experiencing delays in hardware deliveries. At the time of this report, there are no such indications. Techstep continues to maintain close cooperation with key suppliers to ensure timely deliveries.

Techstep's operations, revenues and profits are dependent on its ability to generate sales through existing and new customers. Techstep operates in a competitive market segment, and the group's success depends on its ability to meet changing customer preferences, to

anticipate and respond to market and technological changes, and develop effective and competitive relationships with its customers and partners. Techstep continues to focus on improving its product offering, reducing customer implementation time, and becoming a software-led growth business, yielding higher cash flow and profit from operations, and transforming into a recurring revenue business model. The operational risk mainly relates to the ongoing transformation process, including standardisation of the product portfolio and keeping key personnel and necessary competence.

Interim report Q4 2022

Techstep's liquidity risk is related to a mismatch between cash flows from operations and financial commitments. Techstep is transforming itself from a transactional business model to a software-led recurring revenue model, which leads to postponed cash inflows, negatively affecting the liquidity of the group. Investments in simplification and standardisation of the company's product portfolio and solutions, new organisational capabilities and acquisitions and integration, have furthermore increased the company's debt over time. The group's liquidity is closely monitored by management and the board of directors. If the need arises, the group has access to multiple funding sources during the transformation process.

For more information on Techstep's risk factors and risk management, reference is made to the Board of Directors report in the Annual Report for 2021 and the prospectus from 29 December 2022, both available from www.techstep.io/investor.

Outlook

Techstep is positioned as a leading Nordic provider of managed mobility services and recognised by Gartner as the only challenger in the Magic Quadrant for Managed Mobility Services. The goal is to become the leading European mobile technology enabler for customers that want to work smarter and more sustainably.

Techstep is serving more than 2 000 customers across industries in both the private and public sector in Europe. The company is on a transformational journey, from a hardware and transactional business model to a software-led recurring revenue model. After integrating seven different companies into One Techstep, the product offering has been streamlined from 47 to 7 products to a new, simplified and scalable product portfolio that enables increased software sales to existing and new customers.

Techstep is now streamlining its operations and aligning its cost base to the simplified portfolio and extracting synergies from acquired companies. Through standardisation and automation, change of ERP systems, and right-sizing the organisation, Techstep expects to reduce its external capex and opex cost

base by NOK 90-100 million over the next 6-18 months. Techstep saw effect of these initiatives already from the fourth quarter 2022.

Interim report Q4 2022

Techstep has stated new and clear medium and longer-term financial goals. In 2023, the ambition is an ARR on Own Software of NOK 140 million, net gross profit of 420 million and EBITA adj. of NOK 50 million. By 2025, Techstep targets an ARR on Own Software above NOK 225 million, net gross profit above NOK 540 million and EBITA adj. of NOK 150 million.

Moving forward, growth will be driven by the new product portfolio, the refocused sales strategy, and converting existing customers to MMS contracts. This is expected to have a positive tailwind on Advisory & Services as well as Hardware revenues.

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	Q4 2022	Q4 2021	FY 2022	FY 2021
Revenue	2, 3	369 845	383 704	1 323 126	1 303 192
Other revenue		(0)	413	0	1 898
Total revenues		369 845	384 117	1 323 126	1 305 090
Cost of goods sold		(243 274)	(261 212)	(863 007)	(845 305)
Salaries and personnel costs		(68 069)	(72 634)	(265 027)	(281 620)
Other operational costs		(24 297)	(24 971)	(109 626)	(108 549)
Depreciation	5	(31 826)	(28 885)	(109 222)	(108 229)
Amortisation		(14 185)	(18 369)	(58 492)	(54 723)
Other income		(460)	11	40 058	22
Other expenses		(8 410)	(1 874)	(10 015)	(17 209)
Operating profit (loss)		(20 677)	(23 817)	(52 205)	(110 522)
Financial income		2 619	5 060	5 601	12 232
Financial expense		(5 702)	(7 364)	(17 565)	(20 460)
Profit before taxes		(23 761)	(26 121)	(64 170)	(118 750)
Income taxes		(8 057)	323	(4 445)	16 091
Net profit (loss) for the period		(31 818)	(25 798)	(68 614)	(102 660)
Net income attributable to
Non-controlling interests		-	142	312	390
Shareholders of Techstep ASA		(31 818)	(25 941)	(68 926)	(103 050)
Earnings per share in NOK:
Basic		(0.12)	(0.14)	(0.25)	(0.55)
Diluted		(0.12)	(0.13)	(0.25)	(0.55)

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

Consolidated statement of comprehensive income

(Amounts in NOK 1 000) Note	Q4 2022	Q4 2021	FY 2022	FY 2021
Net profit (loss) for the period	(31 818)	(25 799)	(68 614)	(102 660)
Items that may be reclassified to profit
and loss Exchange differences on
translating foreign operations	(12 606)	(2 079)	(25 596)	(21 586)
Income tax related to these	-	(497)	-	(1 304)
items Other comprehensive income	(12 606)	(2 576)	(25 596)	(22 890)
Total comprehensive income	(44 424)	(28 375)	(94 522)	(125 549)
Total comprehensive income attributable
to Non-controlling interests	-	142	(312)	390
Shareholders of Techstep ASA	(44 424)	(28 517)	(94 211)	(125 939)

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

Consolidated statement of financial position

(Amounts in NOK 1 000)
ASSETS Note	2022	2021
Non-current assets
Deferred tax asset	6 470	2 149
Goodwill	601 083	592 549
Customer relations and technology	182 296	183 214
Sum intangible assets	789 849	777 912
Right of use assets	29 738	30 267
Property, plant and equipment	5 168 325	148 775
Sum tangible assets	198 064	179 043
Shares and investments	608	590
Other non-current assets	2 655	1 224
Sum financial assets	3 264	1 814
Total non-current assets	991 176	958 768
Inventories	23 431	19 391
Accounts receivable	213 773	230 229
Other receivables	33 801	31 435
Total inventories and receivables	271 005	281 055
Cash and cash equivalents	6 61 119	50 350
Assets classified as held for sale	-	24 482
Total current assets	332 124	355 887
Total assets	1 323 300	1 314 655
EQUITY AND LIABILITIES Note	2 022	2021
Share capital	4 305 131	209 630
Other equity	266 389	344 682
Total equity attributable to the owners of Techstep ASA	4 571 520	554 312
Non-controlling interests	-	1 274
Total equity	571 520	555 586
Deferred tax	20 536	14 645
Non-current interest-bearing borrowings	90 665	97 402
Other non-current debt	37 555	43 305
Total non-current liabilities	148 756	155 353
Current interest-bearing borrowings	83 322	74 548
Accounts payable	205 797	193 833
Tax payable	3 315	653
Public duties	41 100	39 577
Other current liabilities
	269 490	295 106
Total current liabilities	603 024	603 716
Total liabilities	751 780	759 069

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

Consolidated statement of changes in equity

(Amounts in NOK 1 000)	Share capital	Other paid-in capital	Other equity	Reval. Reserve	SUM	Minority interest	Total equity capital
Equity as at start of 2021	183 295	591 361	(228 313)	16 221	562 565	884	563 449
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	22 655	75 264	-	-	97 920	-	97 920
transaction costs and tax Proceeds from issuance of shares net of transaction	3 679	12 141	-	-	15 821	-	15 821
costs
Share-based payments	-	-	3 946	-	3 946	-	3 946
Equity as at end of 2021	209 630	678 767	(327 417)	(6 668)	554 312	1 274	555 586
Equity as at start of 2022	209 630	678 767	(327 417)	(6 668)	554 312	1 274	555 586
Profit for the period	-	-	(68 926)	-	(68 926)	312	(68 614)
Other comprehensive income	-	-	-	(25 596)	(25 596)	-	(25 596)
Total comprehensive income for the period	-	-	(68 926)	(25 596)	(94 522)	312	(94 211)
Transactions with owners in their capacity as owners:
Transactions with non controlling interests	-	-	(0)	-	(0)	(1 585)	(1 585)
Issue of ordinary shares as consideration for a business combination, net of	2 014	3 442	-	-	5 456	-	5 456
transaction costs and tax Proceeds from issuance of shares net of transaction	93 487	8 698	-	-	102 185	-	102 185
costs Share-based payments	-	-	4 091	-	4 091	-	4 091
Equity as at end of Q4 2022	305 131	690 906	(392 252)	(32 264)	571 521	-	571 521

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

Consolidated statement of cash flow

(Amounts in NOK 1 000)	Note	Q4 2022	Q4 2021	FY 2022	FY 2021
Profit before tax Depreciation equipment and other fixed	5	(23 761) 26 184	(26 121) 25 505	(64 170) 94 976	(118 750) 94 786
assets
Depreciation right-of-use assets	5	5 642	3 380	14 246	13 443
Amortisation		14 185	18 369	58 492	54 723
Share-based payments		4 091	473	4 091	3 946
Gain from sale of business units		-	-	(40 119)	-
Gain from sale of property plant and
equipment reclassified to investment	5	(1 317)	-	(2 523)	0
activities
Net exchange differences		-	3 480	-	2 136
Taxes paid		(809)	156	(996)	(1 474)
Interest expense (revenue) reclassified to		4 157	-	12 807	7 880
investing/financing activities
Changes in net operating working capital		37 919	(15 652)	46 937	72 242
Net cash flow from operational activities		66 293	9 591	123 741	128 930
Payment for acquisition of subsidiaries net of		-	-	294	(78 759)
cash acquired
Payment for equipment and other fixed	5	(37 188)	(14 195)	(132 450)	(141 392)
assets
Payment for intangible assets		(7 712)	(23 914)	(52 250)	(48 883)
Proceeds from sale of property, plant and
equipment		2 292	3 379	3 499	27 393
Proceeds from sale of business		-	65 678	-	65 678
Interest received		302	-	531	1 368
Net cash used on investment activities		(42 305)	30 948	(180 376)	(174 594)
Changes in ownership in Subsidiary			-	(9 000)
Proceeds from issuance of shares		73 808	-	76 969	101 853
Proceeds from borrowings		49 925	-	55 768	35 145
Repayment of borrowings		(106 151)	(45 297)	(29 019)	(41 783)
Lease repayments including interest		(5 923)	(3 726)	(15 423)	(16 240)
Interest paid		(3 709)	-	(11 701)	(7 731)
Net cash flow from financing activities		7 950	(49 023)	67 594	71 244
Net change in cash and cash equivalents		31 937	(8 484)	10 959	25 580
Cash and cash equivalents at beginning of		29 188	59 163	50 350	27 203
period
Effects of exchange rate changes on cash		(6)	(329)	(191)	(2 433)
and cash equivalents
Cash and cash equivalents at end of period	6	61 119	50 350	61 119	50 350

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

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. This 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. The 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 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 Finance AS: Provides financing and remarketing services.

2) Sweden

• Techstep AB (formerly Techstep Sweden AB and Optidev AB): The company's offerings include mobile hardware, mobility consultancy services and Enterprise Mobility Management (EMM) services, including mobile security, system design, implementation, mobile device management. The company also develop and provide enterprise mobility software and solutions, predominantly to customers in the transportation, logistics and public safety sectors in Sweden, Norway and Denmark. The company is located in Karlstad, Borås, Gothenburg and Stockholm.
• 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 Techstep AB (formerly Optidev AB).

4) Poland

• Techstep Poland S.A. (formerly Famoc S.A.): A Polish software-as-a-services company with mainly recurring revenue. The company offers a portfolio of solutions for the mobile device lifecycle management market. The company is located in Gdansk.
• Famoc Ltd: A company based in Ireland acting as a reseller of Techstep Poland 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 sp. z.o.o.

5) Headquarters (HQ)

• Techstep ASA

Q4 2022	Norway	Sweden	Denmark	Poland	HQ	Elim	Total
						inations
Operating revenues from external customers	184 894	169 751	7 614	7 586	-	-	369 845
Operating revenues from other segments	6 719	10 927	-	37	13 950	(31 632)	-
Operating revenues	191 613	180 678	7 614	7 623	13 950	(31 632)	369 845
Cost of goods sold	(118 931)	(124 446)	(5 798)	(1 864)	-	7 765	(243 274)
Salaries and personnel costs	(24 577)	(27 445)	(586)	(2 797)	(14 335)	1 670	(68 069)
Other operational costs	(23 573)	(11 779)	279	406	(11 015)	21 385	(24 297)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(17 066)	(12 687)	(399)	(197)	(1 478)	-	(31 826)
Amortisation	(5 190)	(4 287)	-	(2 312)	(2 397)	-	(14 185)
Impairment	-	-	-	-	-	-	-
Other income	-	(479)	-	19	-	-	(460)
Other expenses	(4 400)	(2 360)	(76)	(387)	(1 188)	0	(8 410)
Operating profit (loss)	(2 122)	(2 804)	1 034	491	(16 464)	(812)	(20 677)

Employees 31 December 2022	119	144	3	43	6	-	315
----------------------------	-----	-----	---	----	---	---	-----

Q4 2021*	Norway	Sweden	Denmark	Poland	HQ	Elim inations	Total
Operating revenues from external customers	228 154	133 739	13 670	8 552	-	-	384 117
Operating revenues from other segments	41 764	14 007	2	2 718	9 969	(68 458)	-
Operating revenues	269 918	147 746	13 672	11 270	9 969	(68 458)	384 116
Cost of goods sold	(166 078)	(95 938)	(11 189)	(5 675)	-	17 667	(261 213)
Salaries and personnel costs	(26 025)	(29 537)	(961)	(5 186)	(9 725)	(1 200)	(72 634)
Other operational costs	9 323	(12 106)	(269)	3 093	(49 142)	24 130	(24 972)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(18 652)	(9 855)	(178)	(199)	(1)	-	(28 885)
Amortisation	(6 059)	(6 821)	-	(5 491)	-	-	(18 371)
Impairment	(3 815)	-	-	-	-	3 815	-
Other income	-	-	-	11	-	-	11
Other expenses	(6 728)	-	-	-	5 619	(764)	(1 873)
Operating profit (loss)	51 884	(6 511)	592	(2 177)	(43 280)	(24 810)	(23 817)
Employees 31 December 2021*	129	154	4	48	6	-	341

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

FY 2022	Norway	Sweden	Denmark	Poland	HQ	Elim inations	Total
Operating revenues from external customers	787 272	476 582	34 794	24 478	-	-	1 323 126
Operating revenues from other segments	32 881	41 588	-	3 448	67 555	(145 473)	-
Operating revenues	820 153	518 170	34 794	27 926	67 555	(145 473 )	1 323 126
Cost of goods sold	(539 551)	(324 274)	(27 806)	(7 779)	-	36 403	(863 007)
Salaries and personnel costs	(89 565)	(111 032)	(2 356)	(7 831)	(60 936)	6 693	(265 027)
Other operational costs	(97 750)	(55 148)	(1 703)	(7 878)	(46 277)	99 130	(109 626)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(60 761)	(42 142)	(1 166)	(766)	(4 387)	-	(109 222)
Amortisation	(22 054)	(23 685)	-	(8 655)	(4 107)	9	(58 492)
Impairment	-	-	-	-	-	-	-
Other income	19 600	20 047	-	165	246	-	40 058
Other expenses	(4 900)	(2 360)	(76)	(388)	(2 292)	-	(10 015)
Operating profit (loss)	25 171	(20 423)	1 687	(5 206)	(50 197)	(3 238)	(52 205)

FY 2021*	Norway	Sweden	Denmark	Poland	HQ	Elim inations	Total
Operating revenues from external customers	813 205	435 838	41 441	14 607	-	-	1 305 090
Operating revenues from other segments	72 317	41 404	7	2 718	37 148	(153 593)	1
Operating revenues	885 522	477 242	41 448	17 325	37 148	(153 593 )	1 305 091
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	(108 548)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
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)

*The above table is 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:

Q4 2022	Norway		Sweden Denmark	Poland	HQ	Eliminations	Group
Total revenues	191 614	180 678	7 614	7 623	13 950	(31 634)	369 845
Hardware
Hardware	116 822	76 866	1 963	157	-	(2 423)	193 386
Hardware-as-a-Service	24 581	14 956	1 367	-	-	(1 218)	39 687
Bonus	10 210	1 647	-	-	-	-	11 857
Total	151 614	93 469	3 330	157	-	(3 640)	244 930
Solutions
Advisory & Services	20 413	78 274	4 135	(1 373)	-	(4 914)	96 534
Own Software	11 287	6 878	199	8 839	-	(582)	26 620
Total	31 700	85 151	4 334	7 465	-	(5 496)	123 155
Other revenues
Commission*	1 604	(0)	-	-	-	-	1 604
Other	6 696	2 057	(50)	-	13 950	(22 497)	156
Total	8 300	2 057	(50)	-	13 950	(22 497)	1 760

*reclassified from Solutions

Q4 2021*	Norway		Sweden Denmark	Poland	HQ	Eliminations	Group
Total revenues	173 887	127 330	13 672	11 270	31 181	26 775	384 117
Hardware
Hardware	132 875	68 729	8 744	365	-	15 964	226 677
Hardware-as-a-Service	19 484	12 619	1 240	-	-	3 982	37 326
Bonus	10 040	2 873	-	-	-	-	12 914
Total	162 399	84 221	9 984	365	-	19 946	276 917
Solutions
Advisory & Services	22 573	41 809	3 550	882	-	10 419	79 234
Own Software	9 798	858	173	10 023	-	1 766	22 618
Total	32 371	42 667	3 723	10 905	-	12 185	101 852
Other revenues
Commission**	4 568	368	-	-	-	-	4 936
Other	(25 450)	74	(36)	-	31 181	(5 355)	414
Total	(20 882)	442	(36)	-	31 181	(5 355)	5 350

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

**reclassified from Solutions

FY 2022	Norway		Sweden Denmark	Poland	HQ	Eliminations	Group
Total revenues	820 154	518 170	34 794	27 926	67 555	(145 474)	1 323 126
Hardware
Hardware	531 897	252 711	16 372	477	-	(16 313)	785 144
Hardware-as-a-Service	87 966	54 657	5 587	-	-	(5 185)	143 026
Bonus	41 766	7 708	-	-	-	-	49 473
Total	661 629	315 076	21 960	477	-	(21 498)	977 643
Solutions
Advisory & Services	69 914	170 988	12 307	306	-	(12 735)	240 780
Own Software	44 164	25 247	669	27 143	-	(5 631)	91 593
Total	114 078	196 235	12 976	27 449	-	(18 366)	332 372
Other revenues
Commission*	13 036	64	-	-	-	-	13 100
Other	31 412	6 796	(142)	-	67 555	(105 609)	11
Total	44 448	6 859	(142)	-	67 555	(105 609)	13 111

*reclassified from Solutions

FY 2021*	Norway		Sweden Denmark	Poland	HQ	Eliminations	Group
Total revenues	789 491	456 826	41 448	17 326	58 360	(58 360)	1 305 090
Hardware
Hardware
	524 717	221 641	24 790	365	-	-	771 513
Hardware-as-a-Service	82 948	46 557	4 732	-	-	-	134 236
Bonus	37 044	12 119	-	-	-	-	49 162
Total	644 709	280 317	29 522	365	-	-	954 910
Solutions
Advisory & Services	86 400	155 216	11 255	1 458	-	-	254 329
Own Software	39 090	18 505	689	15 503	-	-	73 787
Total	125 490	173 722	11 944	16 960	-	-	328 116
Other revenues
Commission**	17 791	2 372	-	-	-	-	20 164
Other	1 501	415	(18)	-	58 360	(58 360)	1 898
Total	19 292	2 788	(18)	-	58 360	(58 360)	22 062

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

**reclassified from Solutions

Note 4. Share capital and shareholders

The company's share capital as at 31 December 2022 was NOK 305 131 066 consisting of 305 131 066 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.

Shareholder	# of shares	Ownership %
DATUM AS 1)	58 354 776	19.12%
KARBON INVEST AS 2)	43 718 974	14.33%
Swedbank AB	33 478 881	10.97%
DNB Markets Aksjehandel/-analyse	14 770 000	4.84%
STEENCO AS	8 695 652	2.85%
AS CLIPPER	8 695 652	2.85%
VERDIPAPIRFONDET DNB SMB	6 851 311	2.25%
MIDDELBORG INVEST AS	6 341 228	2.08%
CIPRIANO AS	5 999 158	1.97%
Saxo Bank A/S	5 674 201	1.86%
TIGERSTADEN AS	4 795 000	1.57%
DNB BANK ASA	4 285 438	1.40%
CAMIKO AS	3 480 151	1.14%
TVENGE	3 000 000	0.98%
TIGERSTADEN MARINE AS	2 500 000	0.82%
SPECTER INVEST AS	2 490 000	0.82%
GIMLE INVEST AS	2 485 987	0.81%
NORDHOLMEN AS	2 462 551	0.81%
PIKA HOLDING AS	2 143 455	0.70%
Carnegie Investment Bank AB	2 072 173	0.68%
Total number owned by top 20	222 294 588	72.85%
Total number of shares	305 131 075	100.00%

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

2) Karbon Invest AS is owned by the board member 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 became 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 at 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.

At the Annual General Meeting 21 April 2022, share options (1.4% of existing shares) were granted under the 2022 programme. The granted share options vest 1/3 each year from 21 April 2023 and are fully vested on 21 April 2025. The options must be exercised within 5 years. The exercise price is NOK 3.245. The exercise price will be adjusted for any dividends paid or accrued before exercise. The exercise of share options can be settled in cash, and/or with new or existing treasury shares.

As at 31 December 2022, the total number of outstanding share options was 10 075 764 (3.3%).

Name	Position	Shares	Share options
Børge Astrup	CEO	1 455 362	4 500 000
Anita Huun	CFO	125 324	838 518
Ellen Skaarnæs	Chief People Officer	54 209	340 647
Sheena Lim	Chief Marketing Officer	21 331	340 647
Mads Vårdal	Chief Product Officer	5 019	1 497 374
Fredrik Logenius	Chief Operating Officer	23 817 225	570 306
Bartosz Leoszewski	Chief Technology Officer	397 952	340 647
	Chief Delivery & Advisory
David Landerborn	Officer	294 162	229 659

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

Note: David Landerborn took on the role as Chief Delivery & Advisory Officer in Q4 2022.

Note 5. Property, plant and equipment

	Right-of-use assets	Equipment1)	Other fixed assets	Total
Accumulated cost as at 1 January 2022	63 881	292 234	31 097	387 212
Additions	12 435	126 507	5 943	144 885
Additions arising from business combinations	0	0	83	83
Disposals	(2 608)	(78 997)	(15 473)	(97 079)
Translation differences	(103)	(2 166)	(186)	(2 455)
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated cost 31 December 2022	73 604	337 578	21 464	432 646
Accumulated cost as at 1 January 2021	65 953	282 727	35 217	383 898
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)
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated cost 31 December 2021	63 881	292 234	31 097	387 212
Accumulated depreciation as at 1 January 2022	(33 613)	(149 468)	(25 081)	(208 163)
Additions arising from business combinations	(0)	(0)	-	(0)
Current year depreciation	(13 763)	(92 840)	(2 620)	(109 222)
Disposals	3 811	64 004	14 082	81 897
Translation differences	(301)	1 429	(223)	905
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated depreciation 31 December 2022	(43 866)	(176 874)	(13 842)	(234 583)
Accumulated depreciation as at 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
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated depreciation 31 December 2021	(33 613)	(149 468)	(25 081)	(208 163)
Book value of assets 31 December 2022	29 738	160 704	7 622	198 064
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 equivalents

Current assets	FY 2022	FY 2021
Cash at bank and in hand, not included in cash pool	61 119	50 350
of which is restricted	5 196	6 196

The Group has a credit facility of NOK 92 million. As at 31 December 2022 NOK 27.8 million of the facility has been utilised.

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.

Net gross profit

Net gross profit is defined as Total revenue less Cost of goods sold and depreciation from Hardwareas-a-Service.

Gross margin

Gross margin is defined as Total revenue less Cost of goods sold and depreciation from Hardwareas-a-Service, divided by Total revenue.

EBITDA

Earnings before interest, tax, depreciation (excluding depreciation from Hardware-as-a-Service), 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.

EBITDA adjusted

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

EBITA

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

EBITA adjusted

Adjusted earnings before interest, tax, amortisation and impairment (EBITA) is based on EBITA 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, acquisitionrelated costs and other non-recurring income and expenses.

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 include 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 defined as Annual Recurring Revenue from Techstep's own software portfolio and is calculated by multiplying the monthly recurring revenue with twelve. Techstep only includes contracts where invoicing to customers has started.

Recurring Revenue Annualised

Recurring revenue includes contracts of 24 months or more, excluding mobile expense management (MEM) white label (with three months notice before year-end). The figures are based on the recognised recurring revenue isolated each quarter, annualised.

APM's in the income statement	Q4 2022	Q4 2021	FY 2022	FY 2021
Total revenue	369 845	384 117	1 323 126	1 305 090
Cost of goods sold	(243 274)	(261 212)	(863 007)	(845 305)
Gross profit	126 571	122 905	460 119	459 785
Gross margin	34%	32%	35%	35%
Salaries and personnel costs	(68 069)	(72 634)	(265 027)	(281 620)
Other operational costs	(24 297)	(24 971)	(109 626)	(108 549)
Other income	(460)	11	40 058	22
Other expenses	(8 410)	(1 874)	(10 015)	(17 209)
EBITDA	25 335	23 437	115 509	52 430
Depreciation	(31 826)	(28 885)	(109 222)	(108 229)
EBITA	(6 491)	(5 448)	6 287	(55 799)
Amortisation	(14 185)	(18 369)	(58 492)	(54 723)
EBIT	(20 677)	(23 817)	(52 205)	(110 522)

Net gross profit	Q4 2022	Q4 2021	FY 2022	FY 2021
Gross profit	126 571	122 905	460 119	459 785
Depreciation from hardware-as-a service	(26 128)	(25 310)	(92 840)	(92 167)
Net gross profit	100 444	97 595	367 279	367 618
Net gross margin	27%	25%	28%	28%

Adjusted EBITDA	Q4 2022	Q4 2021	FY 2022	FY 2021
EBITDA	25 335	23 437	115 509	52 430
Other income	460	(11)	(40 058)	(22)
Other expense	8 410	1 874	10 015	17 209
Adjusted EBITDA	34 205	25 300	85 466	69 616
Adjusted EBITA
EBITA	(6 491)	(5 448)	6 287	(55 799)
Other income	460	(11)	(40 058)	(22)
Other expense	8 410	1 874	10 015	17 209
Adjusted EBITA	2 379	(3 585)	(23 756)	(38 613)
Total net operating expenses
Cost of goods sold	(243 274)	(261 212)	(863 007)	(845 305)
Salaries and personnel costs	(68 069)	(72 634)	(265 027)	(281 620)
Other operational costs	(24 297)	(24 971)	(109 626)	(108 549)
Depreciation	(31 826)	(28 885)	(109 222)	(108 229)
Amortisation	(14 185)	(18 369)	(58 492)	(54 723)
Other expenses	(8 410)	(1 874)	(10 015)	(17 232)
Total net operating expenses	(390 062)	(407 944)	(1 415 389)	(1 415 658)
Revenue splits
Revenue	369 845	384 117	1 323 126	1 305 090
Hardware revenue	244 930	278 836	977 643	956 811
Solutions revenue	124 915	105 281	345 483	348 279
Hardware share of revenue	66%	73%	74%	73%
Solutions share of revenue	34%	27%	26%	27%
NIBD			FY 2022	FY 2021
Cash and cash equivalents			61 119	50 350
Non-current interest-bearing			90 665	97 402
borrowings Current interest-bearing borrowings			83 322	74 548
NIBD			(112 868)	(121 600)
Equity ratio
Total equity			571 520	555 586
Total equity and liabilities			1 323 300	1 314 655

ARR	FY 2022	FY 2021
Number of own software users (1 000)	71	66
Average price own software	1 107	1 050
MMS-Related ARR (1 000)	78 600	69 613
Number of own software users (1 000)	209	183
Average price MEM white label	154	152
White-label ARR	32 200	27 860
Total ARR from own IP	110 800	97 473

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