Techstep ASA — Investor Presentation 2019

May 10, 2019

Q1 2019 presentation

Highlights Q1 2019

• Revenue increased by 22% reflecting growth in both Norway and Sweden
• EBITDA at NOK 9.2 million
• Awarded contracts in the quarter with a potential value of NOK 184 million
• Continued to streamline operations

Work is going mobile

Tasks can be done across mobile devices and locations

Work gets done when needed more easily and efficiently

Mobile first solutions enable new levels of employee productivity

The employee-focused enterprise can personalise mobility solutions

Enterprises can buy the benefits mobile technology offers via the cloud

Making work mobile – secure, simple and cost efficient

Adding value to large volume foundation

Purpose-built to serve users in the mobile workplace

• Techstep combines robust, safe and smart tools to make work mobile - whatever the business, there`s a better way to do it.
• We enable enterprises and their employees do their work across mobile devices and locations, with a high degree of security and operational stability.
• Our ambition is to become the leading provider of the mobile workplace in the Nordics through innovation, acquisitions and partnerships.

Financials

Key figures

NOK 1 000	Q1 2019	Q1 2018	2018
Revenue	284 101	232 278	1 064 114
Gross profit	74 961	68 171	294 419
EBITDA	9 221	6 050	43 023
EBITA	5 543	5 621	41 280
EBIT	20	898	22 362
Net profit (loss) for the period	(1 511)	1 083	21 329
EBITDA margin (%)	3.2%	2.6%	4.0%
EBITA margin (%)	2.0%	2.4%	3.9%
EBIT margin (%)	0.0%	0.4%	2.1%
Net profit (loss) for the period (%)	(0.5%)	0.1%	2.0%
Hardware, share of revenue	64%	74%	74%
Solutions, share of revenue	36%	26%	26%
Cash	48 647	29 477	53 996
Net interest-bearing debt	20 759	64 334	19 444
Capex	5 625	3 014	11 689

• Revenue growth 22% year-over-year
• Gross profit growth 10% year-overyear
• EBITDA growth 52%
• Share of solutions 36%, includes a large one-off delivery in Sweden
• Cash NOK 48.6 million

The share of revenue from hardware and solutions were restated in Q3 2018 to include related commission and bonuses. Previously, all commission and bonus revenues were allocated to hardware. As such, the share of revenue reported in the Q1 2018 report cannot be reconciled with the table above.

The FY 2018 EBITDA includes two one-off items with a positive net effect of NOK 13 million, comprising a reversal of an earn-out obligation of NOK 20 million for an acquisition in Sweden, offset by the provision of NOK 7 million for remaining rent obligations on vacated premises in Norway

The effect of IFRS 16 Leases is a reduction of operational costs of NOK 2.8m in Q1 2019. See note 5 in the quarterly report for further details.

Revenue

Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

Hardware Solutions Other

• Revenue growth driven by both Norway and Sweden
• Hardware sales increased by 5% year-over-year, primarily increased sales to public customers in Norway
• Solutions revenue increased by 71% year-over-year. Includes an EMM case of NOK 23 million in Sweden

Increasing share of solution users

Distribution of total unique end-users % share of total end-users base

• Share of end-users in solutions and combined steadily increasing
• Focus on solutions sales going forward with large upsale possibility for MaaS

Profitability

Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

The FY 2018 EBITDA includes two one-off items with a positive net effect of NOK 13 million, comprising a reversal of an earn-out obligation of NOK 20 million for an acquisition in Sweden, offset by the provision of NOK 7 million for remaining rent obligations on vacated premises in Norway

• Norway performance below expectation

• Sweden performance above expectation
• Continued investments in mobility expertise

The effect of IFRS 16 Leases is a reduction of operational costs of NOK 2.8m in Q1 2019. See note 5 in the quarterly report for further details

Income statement

NOK 1 000	Q1 2019	Q1 2018	2018
Revenue	283 455	231 827	1 059 596
Other income	646	451	4 518
Total revenues	284 101	232 278	1 064 114
Cost of goods sold	(209 140)	(164 107)	(769 695)
Salaries and personnel costs	(51 395)	(47 426)	(195 376)
Other operational costs	(14 709)	(14 658)	(76 101)
Share of profit (loss) in joint ventures	365	(37)	119
Depreciation	(3 679)	(428)	(1 743)
Amortisation	(5 523)	(4 723)	(18 918)
Other income and expenses	-	-	19 962
Operating profit (loss)	20	898	22 362
Financial income	455	163	1 108
Financial expense	(1 192)	(1 574)	(4 462)
Profit before taxes	(717)	(513)	19 009
Income taxes	(794)	1 596	2 320
Net profit (loss) for the period	(1 511)	1 083	21 329

• IFRS 16 effect from leasing of NOK 2.8 million in reduced other operational costs. Depreciation period 3-7 years
• Amortisation mainly relates to customers relations from acquisitions made in 2017 and 2018, completed by 2022
• Amortization also includes development costs (NOK 1 million capitalised in Q1 2019)

The FY 2018 EBITDA includes two one-off items with a positive net effect of NOK 13 million, comprising a reversal of an earn-out obligation of NOK 20 million for an acquisition in Sweden, offset by the provision of NOK 7 million for remaining rent obligations on vacated premises in Norway.

Balance sheet

NOK 1 000	Q1 2019	2018
Intangible assets	523 469	527 560
Tangible assets	27 692	9 377
Financial assets	11 901	11 420
Inventories	18 897	16 155
Accounts receivable	134 444	146 565
Other receivables	27 814	22 881
Cash and cash equivalents	48 647	53 996
Total assets	792 864	787 954
Total equity	505 767	513 780
Deferred tax	7 292	3 608
Non -current interest -bearing debt	7 190	7 341
Other non -current debt	17 444	8 081
Current interest -bearing liabilities	62 216	66 009
Accounts payable	106 619	116 694
Tax payable	3 244	3 470
Public taxes, provisions	26 635	21 842
Other current liabilities	56 458	47 131
Total equity and liabilities	792 864	787 954

• Intangible assets include goodwill of NOK 454m and customer relations and other intangible assets of NOK 69m
• Equity ratio at 65%
• Non-current interest -bearing debt relates to a long -term property loan for premises in Karlstad, Sweden
• Current interest -bearing liabilities include factoring of NOK 37m, bank overdraft of NOK 10m and vendor note of NOK 15m
• Positive cash flow from operations of NOK 4.3m
• Investments (capex) of NOK 5.6 million, mainly IT development

Sales

Quarterly and rolling 12 months sales update

New contracts awarded Potential value in NOK million

Sales in Q1

• Mix of hardware, solutions and combined contracts
• Increased share of MaaS contracts
  • Signed five new MaaS agreements with a potential total value of NOK 59 million
• Largest EMM licence deal in the Nordic booked as a one-off solution sale in Sweden for NOK 23 million
  • Largest of its kind in the Nordics
• The largest contract awarded was a hardware deal with a large Swedish industrial company valued at NOK 75 million

Techstep to deliver mobile solutions to Oslo municipality

Techstep will work with Oslo Kommune in the digital- and green shift where mobile solutions play an important part

Hardware and solution products like mobile phones and operational support, as well as aftermarket handling will be delivered to secure consistent mobile work conditions for the municipality's teachers, social workers, technicians and administrative

The framework agreement with Oslo Kommune is estimated at NOK 100 million. In the renewed agreement, neighbouring municipalities and related organisations are included

More than 80% of the Norwegian and Swedish workforce are highly mobile

Sources: Statistisk sentrabyrå (SSB) 2018; Statistiska centralbyrån (SCB) 2017

Focusing on high mobility and size

Employees in Norway and Sweden by sector and mobility

Sources: Statistisk sentrabyrå (SSB) 2018; Statistiska centralbyrån (SCB) 2017

Focusing on high mobility and size

Cases

Sources: Statistisk sentrabyrå (SSB) 2018; Statistiska centralbyrån (SCB) 2017

Priorities and summary

Priorities for 2019

• Organic growth fulfil frame agreements, increase share of wallet
• Acquisitions Revenue Gross Profit Profitability Efficiency
• Own software
• Services
• 3rd party software

• Streamlining operations

• Digitalization of core

processes

Summary

• Revenue increased by 22%, with growth in Norway and Sweden
• Increasing number of customers opting for combined hardware and software solutions
• Techstep´s business model and position has proven to be robust in a relatively challenging quarter for the hardware players

Appendix

Top 20 shareholders at 6 May 2019

NAME	SHAREHOLDING	% SHARE
DATUM AS	31,817,975	20.00 %
MIDDELBORG INVEST AS	30,517,764	19.19 %
SEVENCS AS	8,269,455	5.20 %
RUGZ A/S	7,954,972	5.00 %
CIPRIANO AS	4,968,835	3.12 %
SKANDINAVISKA ENSKILDA BANKEN AB	4,011,390	2.52 %
TIGERSTADEN AS	4,000,000	2.51 %
PALOS NORGE AS	3,966,667	2.49 %
TINDE INDUSTRIER AS	3,063,372	1.93 %
ZONO HOLDING AS	3,000,007	1.89 %
SÅ&HØSTE AS	2,925,936	1.84 %
TVENGE TORSTEIN INGVALD	2,920,000	1.84 %
SKARESTRAND INVEST AS	2,583,097	1.62 %
UBS SWITZERLAND AG	2,301,906	1.45 %
NOMO HOLDING AS	1,946,253	1.22 %
NORDIALOG ENSJØ AS	1,946,253	1.22 %
DOVRAN INVEST AS	1,863,372	1.17 %
UNIFIED AS	1,849,457	1.16 %
RAKNES HOLDING AS	1,649,348	1.04 %
GUTTIS AS	1,630,000	1.02 %
Total number owned by top 20	123,186,059	77.45 %
Other	35,870,961	22.55 %
Total number of shares	159,057,020	100 %

Management team

Jens Haviken – CEO

Mr. Haviken is an experienced executive within consulting, managed services, software and hardware distribution. He has a proven track record of developing, rebuilding and streamlining operations of companies in the ICT sector. Prior positions held by Haviken includes VP Services and Solutions and Country Manager at Dustin Group AB (publ). and various Director roles at Microsoft and Accenture.

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.

Inge Paulsen – Chief Operations Officer

Mr. Paulsen is an experienced executive manager with a proven track record from companies like Clear Channel, Eltel Networks/Sønnico Tele, Infratek/Hafslund, Implement and Accenture. His broad experience comes from heading strategic business development projects in venture businesses or turn around cases as well as holding various executive positions responsible for profit & loss.

Erik Haugen – Chief Commercial Officer

Mr Haugen is an international business professional, bringing with him broad commercial experience. He spent spent twelve years in London working with focus on sales, marketing and business management for companies like Pioneer and Sony Ericsson. Subsequently he moved into finance and professional services sales at Lindorff AS (now Intrum) in 2011 where he has been responsible for strategic sales, key account management and business development for a large portfolio of clients within telecoms, utilities, trade, SME and public sector.

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

Jens Rugseth – Chairman of the board (since 2019)

Jens Rugseth is a co-founder and Chairman of the Board of Crayon Group ASA and Link Mobility Group ASA. He has been a serial founder of a number of companies within the IT-sector over the past 30 years. Mr. Rugseth has also held the position a chief executive officer in some of the largest ITcompanies in Norway, including ARK ASA, Cinet AS and Skrivervik Data AS. Mr. Rugseth studied business economics at the Norwegian School of Management. Jens Rugseth is a Norwegian citizen, currently residing in Oslo, Norway.

Einar J. Greve – Vice chairman (board member since 2016)

Mr. Greve was Chairman of the Board of Techstep from 2016 to April 2019. 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 as chairman or director in several listed and unlisted companies. He holds a degree in law (cand.jur) from the University of Oslo.

Anders Brandt - Board member (since 2018)

Mr. Brandt has more than 20 years of experience in international entrepreneurship, technology, venture capital and digital services. He is managing partner in the venture capital fund Idekapital, and has cofunded and exited numerous companies including DinSide, OMG, Viken Fibernett, Mytos, Meshtech and Bubbly Group. Brandt has 14 years of board experience of listed companies on Oslo Børs and Nasdaq Stockholm, whereof several tech companies.

Ingrid Leisner - Board member (since 2016)

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 Storage Group ASA, 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.

Toril Nag - Board member (since 2018)

Ms. Nag is Group Executive Vice President, responsible for customer service and the telecommunications business area of the Lyse Group. She holds extensive experience in telecom and digital service, as well as banking and finance. She has held a number of board appointments in technology, energy and R&D-related companies, and her directorships includes Dolphin Group ASA, IKT-Norge, Kolumbus AS and Altibox AS. Nag is a qualified civil engineer in Computer Science from the University of Strathclyde and has further education in management from the Norwegian Business School BI.

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.

The contents of the Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. Each recipient should consult with its own professional advisors for any such matter and advice.

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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This Presentation speaks as of the date set out on the front page, and there may have been changes in matters which affect the Techstep Group subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the Techstep Group have not since changed, and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo City Court as exclusive venue.

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