Techstep ASA — Investor Presentation 2017

May 11, 2017

Q1 2017 11 May 2017

" We make the work life mobile"

Agenda

Highlights and Summary

Customer Value Proposition

Financials

Customers and End-User Base

Techstep is positioning itself as a leading digital workplace provider in the Nordics

Simplified company structure

Highlights Q1 2017

Operations	• End-user-base grown ~7% in total since YE 2016 (growth in all categories except HW) • Solution revenue increased 114% compared to Q1 2016 • Secured contract with an international service company • Heavy M&A activity and planning of integrations • Initiated cross-company product development
	• Pro forma adjusted revenues of NOK 180.3 million (Q1 2016: NOK 165.9 million)
Financials and M&A	• Pro forma EBITDA adjusted of NOK 9.9 million (Q1 2016: NOK 0.7 million) • Private placement of NOK 100 million to finance acquisitions and further growth • Acquired MytosAS • Agreement to acquire AproTele og Data AS and InfraAdvice Sweden AB
Key Events Post Q1-17	• Completed acquisitions of Apro and InfraAdvice • Established Techstep Finance • Established a "one stop shop" and Mobile as a Service (MaaS) • Agreement with Norsk Sykepleierforbund

Financial summary Q1 2017

Key figures (pro forma)

(amounts in NOK 1 000)	Q1 2017	Q1 2016	FY 2016
Revenue	180 328	165 977	719 391
Adjusted EBITDA 1) Adjusted EBITA 1)	9 862 9 407	701 258	29 441 28 196	• Increase in Solutions revenue above expectations, key driver in profitability
Adjusted EBITDA margin (%)	5.5 %	0.4 %	4.1 %
Adjusted EBITA margin (%)	5.2 %	0.2 %	3.9 %	• Growth in Solutions revenue in existing
Hardware, provision and bonuses, share of revenue (%)	76.4 %	88.0 %	84.7 %	business units (organic)
Solutions, share of revenue (%)	23.6 %	12.0 %	15.3 %	and the acquired
Key figures (as reported)				companies
Revenue	145 218	135 017	573 498	• Decline in hardware as expected
EBITDA	(5 439)	170	(4 433)
EBITA	(5 883)	(37)	(5 336)	• Equity ratio 71%
Total assets	637 190	469 980	508 409
Cash	74 184	6 885	81 692
Equity	450 400	34 114	260 294

Customer value proposition

© Nordialog 2016

Although majority of workforce is mobile in nature, mobility solutions mostly present in 'stationary' jobs

= high mobility = some mobility = little mobility

Industry sector	Mobility	# people
Agriculture, forestry and fishing		58753
Mining and quarrying	娇娇	59 994
Manufacture	咏	215521
Electricity, water supply, sewerage, waste management	娇	29 639
Construction	盛	207 492
Wholesale and retail trade		349 128
Transportation and storage	娇	138614
Accommodation and food service activities	咏	86 117
nformation and communication	ç	88 199
inancial and insurance activities	ç	46839
Real estate, professional, scientific and echnical activities	Ĥ	161247
Administrative and support service activities	모	120678
2 ublic adm., defense, soc. security	ç	163 153
Education	ı۸ı	209 533
Human health and social work activities	咏	532 683
Other service activities	ıПı	99 002
Jnspecified	ıN,	21112

Consumers accustomed to advanced mobile solutions; businesses to follow suit

Consumer solutions Business solutions

'Work is the place I go to use old technology'

Digitization and mobility is on everybody's mind

Customer value proposition –digitization through mobility leads to increased efficiency

The demand for mobility is undisputable – enabling mobility entails a high degree of complexity

Techstep delivers a complete stack of solutions that provides an improved total-cost-of-ownership (TCO) and lower risk to the customer

MaaS will drive both "one-offs" and recurring revenues for Techstep. The customers buy the service at a fixed monthly cost

Financials

© Nordialog 2016

Consolidated income statement – as reported

Amounts in NOK 1 000	Q1 2017	Q1 2016	2016
Revenue	144,963	133,958	570,526
Other revenue	256	1,059	2,972
Total revenue	145,218	135,017	573,498
Cost of materials	98,275	96,709	405,210
Salaries and personnel costs	27,995	24,722	104,041
Depreciation	444	207	903
Amortisation intangible assets	3,709	4,783	18,984
Other operational costs	13,837	13,416	51,169
Other costs	10,551	-	17,511
Total operating expenses	154,811	139,836	597,818
EBIT/ Operating profit	(9,592)	(4,820)	(24,319)
Financial income and expense	(196)	(1,571)	(5,117)
Technical loss	-	-	(21,217)
Net financial expense	(196)	(1,571)	(26,334)
Profit before taxes	(9,788)	(6,391)	(50,654)
Income taxes	526	1,196	5,954
Net income	(9,262)	(5,195)	(44,700)
Net income attributable to
Non-controlling interests	-	(493)	(4,245)
Shareholders of Techstep ASA	(9,262)	(4,702)	(40,455)
Earnings per share in NOK:
Net income after tax	(0.08)	(0.47)	(1.29)
Other comprehensive income	(9,262)	(5,195)	(44,700)

• Revenues increased by 7.6% (YoY)
• Organic growth in Solutions segment
• Positive contribution from Mytos acquisition
• Decrease in Hardware sales, mainly due to increased replacement time. Focus on MaaS concepts expected to reduce replacement time again
• EBITDA negative at NOK 5.4 million
• Transaction costs of NOK ~10.5 million
• EBIT negative at NOK 9.6 million
• Amortization of NOK 3.7 million from booked value of customer relations from acquisitions made in 2012-2016.

Revenue development in Hardware and Solution Q1 2016 – Q1 2017

Revenue and EBITDA development Q1 2016 – Q1 2017

T E C H S T E P ¹⁶ Note:

Balance sheet – as reported

Amounts in NOK 1 000	Q1 2017	Q1 2016	2016
Goodwill	379,956	253,378	253,378
Customer relations	23,769	32,464	18,116
Other non-current assets	33,836	23,560	45,845
Inventories	8,549	23,943	9,526
Accounts receivable	76,958	104,590	83,250
Other receivables	39,939	25,161	16,603
Cash and cash equivalents	74,184	6,885	81,692
Total assets	637,190	469,980	508,409
Total equity	450,400	34,114	260,294
Deferred tax	-	8,705	-
Long-term interest bearing debt	12,656	52,501	12,656
Other long-term debt	2,025	-	-
Short-term interest bearing debt	68,161	241,800	113,721
Accounts payable	48,187	23,352	62,050
Other current liabilities	55,760	109,507	59,687
Total equity and liabilities	637,190	469,980	508,409

Changes vs. 31 December 2016

• The increase in goodwill relates to the acquisition of Mytos (mNOK 117) and Nordialog Asker (mNOK 9)
• Accounts receivable include mNOK 29.4 in factoring
• Other receivables include mNOK 30 related to the tranche 2 of the private placement made in February 2017 (paid in April 2017)
• Year-end cash position of mNOK 74
• Equity increased with NOK ~170 million
• NOK 100 million from completed private placement
• NOK ~70 million from the Mytos acquisition
• Short-term interest-bearing debt includes factoring mNOK 29.4 and credit facility of mNOK 31.8.
• The decrease vs. 31 December 2016 mainly relates to a conversion of shareholder loan (mNOK 24.4) and a loan repayment (mNOK 14.4)

Customers and end-user base

Organic growth, but no effect of cross-sales yet

Share of customers' employees

Employees at customers' (employees, in millions) 0,0 2,0 1,0 1,5 0,5 Q1 2017 Pro forma YE 2016 Pro forma YE 2016 actual +23% +50% M&A effect Organic growth M&A effect Organic growth M&A effect Organic growth

• Strong organic growth in end-user base in Q1 from all categories other than hardware
• Only a small percentage of the employees at customers are endusers
• Only around half of Techstep's end users buy hardware from us

Hardware and subscribers (users, in thousands)

Organic growth, but no effect of cross-sales yet

Solid customer base of spanning across the Nordics with both public and private sector represented

Summary

© Nordialog 2016

Techstep business model and growth potential

"One stop shop"	Techstep will act as a "one stop shop" that allows companies to have access to work applications on mobile devices, enabling the digital workplace
MaaS	Techstep's main product will be MaaS (Mobile as a service) – a combination of hardware, connectivity, service & support, related software and financing solutions offered as an integrated and simple to buy package.
Growth strategies	Growth will be pursued by: 1) Converting the current customer base to MaaS 2) Winning new customers through this simplified approach to mobility 3) Through acquisitions either extending Techstep's customer base or expanding the MaaS offering
Profitability	Profitability will be ensured trough MaaS and solutions inherent focus on quality and reliability rather than price, and an optimized valued chain.  Target of EBITDA margin above 10%*

market

• Potential for low double digit growth

Appendix

Appendix

Established hardware and subscriptions business provide the basis for a growing Solutions business

Hardware and subscriptions Solutions

T E C H S T E P ²⁵ Note: *) Authentication, authorization and accounting

Top 20 shareholders at 10 May 2017

Name	Shareholding	% Share
ZONO HOLDING AS	62 706 966	44,39%
DATUM AS	14 358 772	10,16%
PALOS AS	11 666 667	8,26%
SKARESTRAND INVEST AS	7 513 372	5,32%
DOVRAN INVEST AS	3 763 372	2,66%
JYST INVEST AS	3 763 372	2,66%
TINDE INDUSTRIER AS	3 763 372	2,66%
TVENGE	2 664 185	1,89%
NOMO HOLDING AS	1 946 253	1,38%
NORDIALOG ENSJØ AS	1 946 253	1,38%
ARCTIC FUNDS PLC	1 871 434	1,32%
VERDIPAPIRFONDET DNB SMB	1 579 483	1,12%
SONGA TRADING INC	1 438 596	1,02%
VINTERSTUA AS	1 200 000	0,85%
INTELCO CONCEPT AS	1 101 706	0,78%
KAPPA FINANS AS	1 069 504	0,76%
TVENGE	1 000 000	0,71%
CIPRIANO AS	877 193	0,62%
MIDDELBORG INVEST AS	877 193	0,62%
VATNE EQUITY AS	820 000	0,58%
Total number owned by top 20	125 927 693	89,13%
Other shareholders	15 350 127	10,87%
Total number of shares	141 277 820	100,00%

Appendix

Management team

Gaute Engbakk – CEO

Mr. Engbakk is an experienced change leader from working many years in Accenture with large international companies. He joined Techstep in November 2016. In Accenture, he worked in a variety of markets and industries and built up a division within analytics and information management. Mr. Engbakk led Creuna AS, a significant Nordic player within digital solutions, branding and advertising during 2010-2014, and during 2014-2016 he was the CEO of Gambit Hill & Knowlton Strategies.

Marius Drefvelin – CFO

Mr. Drefvelin joined Techstep in January 2017 and was previously the Group CFO of Creuna, a leading Nordic technology and communications consultancy firm with 350 employees. He has been with Creuna since 2012. During 2010-2012, he was a financial advisor at Deloitte, working with mergers, acquisitions and IPOs. Before this, he worked at Jebsen Asset Management from 2007-2009. During 2001-2007, Mr. Drefvelin worked at KPMG, also working with transactions.

Mads Vårdal – Chief Innovation Officer

Mr. Vårdal has been with companies within the Techstep sphere for more than eleven years. He came from a central position in Teki Solutions AS and has been a leading figure for the development of Smartworks. He has previously had a leading position in Nordialog Skøyen AS and CEO in Buskerud Tele AS

Board of directors

Einar J. Greve – Chairman of the board

Mr. Greve has served on the Board in Techstep since November 2016. Mr. Greve works as a strategic advisor at Cipriano AS, and has previously worked as partner of Wikborg Rein & Co and as Partner of Arctic Securities ASA. Mr. Greve has held and holds various positions in listed and unlisted companies, including but not limited to Weifa ASA (chairman), Solon Eiendom ASA (Vice chairman), Vistin Pharma ASA (board member), Elliptic Labs AS (board member), Future Group (board member) and Hæhre and Isachsen Holding AS (board member). He holds a degree in law (cand.jur) from the University of Oslo

Kristian Lundkvist – Board member

Mr. Lundkvist has served on the Board of Techstep since November 2016. Mr. Lundkvist is the CEO and founder of Middelborg AS, a corporation with roots from the retail business in the telecom industry, which has grown into a diversified holding company including investments in real estate, equities, and shipping. Middelborg AS is a long term industrial owner who actively participates in the value creation of the companies in the portfolio, especially business development, optimization of capital structures and networking. His directorships are including but not limited to NRC Group ASA (board member), Middelborg AS (chairman), Folksom (board member) and Kjedehuset AS (board member)

Ingrid E. Leisner - Board member

Ms. Leisner has served on the Board in Techstep since January 2016. Ms. Leisner's directorships over the last five years include current board positions in Vistin Pharma ASA, Hunter Group AS, Spectrum ASA, Maritime and Merchant ASA. Ms. Leisner has a background as a trader of different oil and gas products in her 15 years in Statoil ASA. Her years of experience and skills within business strategy, M&A, management consulting and change management has been very valuable when serving on the board of several companies listed on Oslo Børs. She holds a Bachelor of Business degree with honors from the University of Texas in Austin.

Camilla Magnus - Board member

Ms. Magnus has served on the Board of Techstep since November 2016. Ms. Magnus is a partner in Advokatfirma Selmer DA and heads the firm's Corporate and Finance Department. Her area of expertise includes M&A, contract law and corporate law. Ms. Magnus graduated with a law degree from University of Oslo in 2011. She regularly holds lectures and seminars on transaction related legal subjects for Norwegian and foreign lawyers, business community and students.

Stein Erik Moe - Board member

Mr. Moe has served on the Board of Techstep since November 2016. Mr. Moe is the CEO and cofounder of Gture AS, a digital services company. Mr. Moe has over 27 years of experience with Accenture, and was a global lead in the Technology, Media and Communication division. He has led large scale projects and transformations, cross strategy, technology, organization and business processes. His directorships are including but not limited to Gture AS (Chairman), Gvalueinvest AS (Deputy Chairman), GoDigitalChina AS and Digitread AS (Board member). He holds a degree in Computer Science from the University of Strathclyde in Glasgow, and courses from BI Norwegian Business School.

Disclaimer

This presentation (the "Presentation") has been prepared by Techstep ASA ("Techstep" or the "Company" and together with its subsidiaries the "Techstep Group"). The Presentation has been prepared and is delivered for information purposes only. It has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place.

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The Company makes no representation or warranty (whether express or implied) as to the correctness or completeness of the information contained herein, and neither the Company nor any of its subsidiaries, directors, employees or advisors assume any liability connected to the Presentation and/or the statements set out herein. This Presentation is not and does not purport to be complete in any way. By receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the Company, its financial position and prospects and that you will conduct your own analysis and be solely responsible for forming your own view of any refinancing and the potential future performance of the Company's business.

The information included in this Presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Techstep Group and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely views and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any other company in the Techstep Group, or any of its advisors or any of their parent or subsidiary undertakings or any such person's affiliates, officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company and its advisors assume no obligation to update any forward-looking statements or to conform these forward-looking statements to the Techstep Group's actual results. Investors are advised, however, to inform themselves about any further public disclosures made by the Company, such as filings made with Oslo Børs or press releases.

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