Techstep ASA — Investor Presentation 2021

Nov 4, 2021

Making work mobile

Q3 2021 Presentation

4 November 2021

Highlights

• million in the third quarter of 2020
• Q3 EBITDA adjusted of NOK 17 million vs NOK 16 million in the third quarter of 2020
• Recurring revenues in Q3 of NOK 259 million¹
• Signed 8 new managed mobility service contracts in Q3, with an estimated value of NOK 34 million and ~5,900 managed devices
• New CEO aligning organisation around customer journey, sharp focus on product and sales growth

1) *Recurring revenue includes Own Software, Advisory & Services and Hardware-as-a-Service with contracts of 24 months or more except mobile expenses management (MEM) white label (with three months notice before year-end) *The figure above is based on the recognised recurring revenue isolated each quarter, annualised. Advisory & Services includes third party software.

Evolving our MMS product offering

SmartControl

Manage & Control your devices Easily & Securely

SmartWorks

Increase Quality & Efficiency through tailormade industry solutions

SmartDevice

Sustainable, Affordable & Freedom to choose

SmartControl

Manage and control your devices easily and securely

SmartWorks

Increase Quality & Efficiency through tailormade industry solutions

Complete solution including application for route planning and parcel handing

Ticket scanning, work planning and mobile point of sale

Employees do admin work on mobile devices while in-store

Retail

SmartDevice

Sustainable, Affordable & Freedom to choose

Large addressable market in the Nordics and Europe

Addressable market:

• White-collar businesses with more than 250 employees
• Blue-collar businesses that can improve work with smart mobile technology
• Leveraging Nordic position for European expansion opportunity

Q3 2021

Continued increase in MMS wins: added NOK 34 million in contract value in Q3 2021

Adding new brands and organisations

Signed upsale agreement with Olav Thon Group

• 2-year contract commencing late 2021 with an estimated total value of NOK 11 million
• Includes our own cloud-software solution for device and lifecycle management, service and support, and hardware
• Simplifying work processes, reducing IT complexity and improving security, as well as making device handling more sustainable for Olav Thon Group
• Reflects strategy of converting existing customers to wider offering

SmartControl

SmartDevice

To deliver complete product offering to Region Uppsala

• Region Upsala is responsible for healthcare, public transport and regional development in Uppsala County
• Contract value: NOK ~5.3 million over three years with a 5-year extension option. Agreement signed in Q4 2021
• The agreement includes development of a new ticketing inspection system for public transport based on Techstep's own IP, overall responsibility for service and support, and hardware
• Improving efficiency of ticket inspections and reducing manual labour as well as maintaining data security and GDPR-compliance

SmartWorks

SmartControl

SmartDevice

Techstep recognised as accredited supplier by Kammarkollegiet

• Kammarkollegiet is a Swedish administrative authority under the Ministry of Finance, consisting of ~300 public member organisations
• Techstep is now accredited as supplier of a complete offering of mobile software, services and hardware to Sweden's public sector
• The recognition represent a significant market opportunity with SEK 4bn in contracts to be awarded over the next 4 years

SmartWorks

SmartControl

SmartDevice

Expanded market opportunity

Financials

Q3 2021

Reporting on all recurring revenue to reflect ongoing focus and transformation

Recurring Revenue*

Transforming to a recurring revenue business model is of high priority

• Overall gross margin ~96% from recurring revenue portfolio
• Of NOK 259 million, 37% is from Own Software, previously reported as ARR
  • NOK 96 million in reported ARR from Own Software, whereof NOK 67 million is MMS related

*Recurring revenue includes contracts of 24 months or more excluding mobile expenses management (MEM) white label (with three months notice before year-end) *The figures above are based on the recognised recurring revenue isolated each quarter, annualised. Advisory & Services includes third party software

Key figures

(Amounts in NOK 1 000)	Q3 2021	Q3 2020	YTD 2021	YTD 2020	FY 2020
Revenues	290 122	212 732	920 790	743 582	1 142 866
Annual Recurring Revenue - own IP (ARR)	95 912	37 632	95 912	37 632	63 329
Gross profit	108 665	71 447	336 575	229 783	378 287
EBITDA adjusted	17 311	16 470	43 930	45 042	95 640
EBITDA	10 499	13 940	28 606	49 839	104 455
EBITA	(17 440)	(6 709)	(50 575)	3 074	17 122
EBIT	(30 618)	(12 734)	(86 680)	(14 351)	(10 771)
Net profit (loss) for the period	(25 057)	(13 269)	(72 766)	(12 673)	(23 557)
EBITDA adj. margin (%)	6.0%	7.7%	4.8%	6.1%	8.4%
EBITDA rep. margin (%)	3.6%	6.6%	3.1%	6.7%	9.1%
EBITA margin (%)	-6.0%	-3.2%	-5.5%	0.4%	1.5 %
EBIT margin (%)	-10.6%	-6.0%	-9.4%	-1.9%	(0.9%)
Net profit (loss) for the period (%)	-8.6%	-6.2%	-7.9%	-1.7%	(2.1%)
Cash	59 164	54 920	59 164	54 920	27 203
Net interest-bearing debt	182 166	12 337	182 166	12 337	166 838
Capex1)	9 492	3 271	26 664	13 464	21 386

1) EBITDA adjusted in Q3 2021 excludes non-recurring items such as M&A and restructuring related costs totalling NOK 6.8 million.

2) Capex does not include Hardware-as-a-Service to customers, booked as capex under IFRS 16.

The Optidev acquisition is included in the financial statements from Q4 2020 and the Famoc acquisition is included from Q3 2021.

• Gross profit increase of 52% in Q3 from same period previous year due to acquisitions and an increase in Hardwareas-a-Service revenues
• EBITDA adjusted impacted by the transition from one-off revenue to a recurring revenue business model and required investments
• Increase in depreciation relates to growth in Hardware-as-a-Service portfolio, and increase in amortisation is mainly related to intangible assets from Optidev acquisition
• Net interest-bearing debt includes completion of the Famoc acquisition early Q3 2021

Reported gross profit development by segment

Gross Profit - last twelve months rolling NOK million

• Growth in the segments related to Managed Mobility Services; Own Software, Advisory & Services and Hardware-as-a-Service, driven by acquisitions and increased product adoption
• Focus on rolling out the Managed Mobility Services offering to grow gross profit going forward

Proforma gross profit and EBITDA adj. development

Gross profit, EBITDA adj. and in % of GP – LTM

NOK million and percent

• Growth in the recurring revenue portfolio; partly replacing transactional sales
• Profitability impacted by the transition to a recurring revenue business model, including investments to achieve in long term growth
• Long-term focus to increase EBITDA conversion
  • Focus on customer and product offering to drive sales growth
  • Increasing software, IP and mobility expertise driven profit

Balance sheet

(Amounts in NOK 1 000)	30.09.2021	31.12.2020
Intangible assets	816 692	733 263
Tangible assets	189 120	173 617
Financial assets	1 550	213
Inventories	19 533	28 158
Accounts receivable	193 222	203 083
Other receivables	37 523	33 594
Cash and cash equivalents	59 164	27 203
Total assets	1 316 804	1 199 131
Total equity	590 066	563 451
Deferred tax	23 208	27 659
Non-current interest-bearing debt	125 798	108 539
Other non-current debt	41 733	54 488
Current interest-bearing liabilities	115 532	85 502
Accounts payable	153 131	154 442
Tax payable	-	(750)
Public taxes, provisions	39 886	39 756
Other current liabilities	227 449	166 044
Total equity and liabilities	1 316 804	1 199 131

• Equity ratio at 45%
• Intangible assets are mainly goodwill of NOK 624 million and customer relations and technology of NOK 182 million
• Tangible assets consist of right-of-use assets of NOK 29 million from premises and IT licenses and Hardware-as-a-Service to customers of NOK 160 million
• Non-current interest-bearing debt includes acquisition loans of NOK 66 million and seller's credit of NOK 55 million
• Other current liabilities consist of deferred revenue from Hardware-as-a-Service of NOK 138 million

Cash flow

(Amounts in NOK 1 000)	Q3 2021	Q3 2020	YTD 2021	YTD 2020	FY 2020
Net cash flow from operational activities	2 673	(2 262)	115 610	2 673	71 120
Net cash used on investment activities	(98 806)	(35 717)	(212 219)	(98 806)	( 170 361)
Net cash flow from financing activities	1 681	56 113	130 405	49 438	79 619
Net change in cash and cash equivalents	( 94 452)	18 134	33 796	6 362	( 19 622)
Cash and cash equivalents at beginning of period	154 036	36 560	27 203	44 390	44 588
Effects of exchange rate changes on cash and cash eq.	( 421)	225	( 1 835)	4 168	2 236
Cash and cash equivalents at end
of the period	59 164	54 920	59 164	54 920	27 203

• Operational cash inflow includes D&A effect of NOK 41 as well as a negative working cash flow effect of NOK 7 million
• Net investments mainly include payments for the Famoc acquisition net of cash of NOK 79 million, Hardware-as-a-Service equipment of NOK 35 million, partly offset by the sale of equipment of NOK 16 million
• Net financing includes borrowing of NOK 12 million, offset by repayments of NOK 10 million

Outlook and summary

Q3 2021

Purpose-built to make mobile work smarter

Targeting strong Managed Mobility Services in 2021

	KPI	Q3 2021	YTD 2021	Medium Term
Managed Mobility	New MMS contracts	8	22	> 30
Services	Origo user growth	60%*	26%	> 100%
Financials	Gross profit growth	52%*	47%*	20-25%
	EBITDA/Gross profit	16%	13%	20-25%
	Development capex	9M NOK	27M NOK	35-40M NOK

Summary

• All time high gross profit and recurring revenue driven by strategic acquisitions and product development
• New CEO aligning organisation around the customer journey
• Sharp focus on product, sales and marketing to drive recurring revenue growth

Q&A Techstep ASA Q3 2021 results

4 November, 10:00 CET Join us here: https://bit.ly/2ZmEv4S

Submit questions via Teams chat function, or send e-mail to ir@techstep.no

Making work mobile

Q3 2021 Q&A Session

4 November 2021 at 10:00 CET

Q&A Techstep ASA Q3 2021 results

Submit questions via Teams chat function, or send e-mail to ir@techstep.no

Q&A Techstep ASA Q3 2021 results

Submit questions via Teams chat function, or send e-mail to ir@techstep.no

Appendix

Management team (1/2)

Børge Astrup – Chief Executive Officer

Børge is an experienced business leader committed to creating a winning working environment. Børge Astrup has experience as the CEO of Puzzel, an international fast-growing cloud contact center software (CCaaS) company, as well as the managing director of Intelecom Group. He has also held various management positions at Visma, the leading European provider of core business software.

Gunnar Aasen – Chief Revenue Officer

Gunnar Aasen is a commercial leader with substantial C-level experience at driving international B2B market penetration and commercial change, delivering growth from existing and new customers via direct sales and channels. Mr. Aasen comes from the position as CCO of Puzzel and member of the Executive Board, a fastgrowing cloud contact center software (CCaaS) company. He has also held various management positions at SuperOffice and Loxysoft with experience from Management of Sales & Marketing and Customer Relationship, Enterprise Software and Telecommunications.

Marius Drefvelin – Chief Financial Officer

Mr. Drefvelin joined Techstep in January 2017 and was previously the CFO of Creuna, a leading Nordic technology and communications consultancy, for five years. Prior to this, he worked nine years as a consultant within mergers, acquisitions and IPOs.

Bartosz Leoszewski – Chief Technology Officer

Mr. Leoszewski is an experienced IT and software leader and entrepreneur. He is experienced in building software products and their strategy, setting a long-term technology direction with cybersecurity always at the forefront. As a software engineer in 2006 Mr. Leoszewski co-founded Famoc, where he was first responsible for product development and engineering as Chief Technology Officer, and in 2012 transitioned to a CEO role. Famoc was acquired by Techstep in 2021.

Ellen Skaarnæs – Chief HR Officer

Mrs. Skaarnæs is an experienced, strategic and business-oriented HR leader with a keen focus on delivering results and adding value to the business. She has a broad background from international organizations at both strategic and operational level. With her 13 years in Shell as HR advisor to Managing Director, and 5 years at Coca-Cola Enterprises as Ass. she brings an extensive experience from Performance- and Talent management and Change management in addition to solid leadership and coaching experience.

Management team (2/2)

Fredrik Logenius – Chief Commercial Officer

Mr Logenius is a first-mover, entrepreneur and an experienced executive within the information technology and services industry. His skill set is broad and based on entrepreneurship and strategy, agile methodologies, software development and mobile solutions. Mr Logenius was awarded Entrepreneur of the Year 2020 in Borås due to business achievements as Managing Director in Optidev AB.

Mads Vårdal – Chief Product Officer

Mr Vårdal has been with companies within the Techstep sphere for more than 11 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.

Erik Haugen – Chief Transformation Officer

Mr Haugen is an international business professional, bringing with him broad commercial experience. He spent twelve years in London working with 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.

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 of Chief Executive Officer in some of the largest IT-companies 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.

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 co-funded 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.

Harald Arnet - Board member (since 2021)

Mr. Arnet has served on the Board in Techstep since September 2021. Mr. Arnet has more than 30 years of experience in national and international finance, industrial and financial investments. He is the CEO of Datum AS, one of the Company's larger shareholders, and has held several board positions in listed and non-listed companies, including Kahoot! AS, NRC Group ASA and several companies within the Datum group. He holds a master's degree from University of Denver and London Business School.

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 Xplora Technologies AS, Storage Group ASA, Norwegian Air Shuttle ASA, Maritime and Merchant ASA. Ms. Leisner has a background as a trader of different oil and gas products in her 15 years in Equinor 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 honours from the University of Texas in Austin.

Melissa Mulholland - Board member (since 2021)

Ms. Mulholland is Chief Executive Officer of Crayon, a worldwide digital transformation expert. Prior to Crayon, Melissa spent 12 years at Microsoft, leading strategy and business development through cloud transformation. Prior to Microsoft, she spent two years at Intel Corporation, driving a cross-company analysis into the effectiveness of using recycled chips for solar technology. She has authored 12 books focused on how to build a business in the Cloud and is a board advisor for SHE, Europe's largest gender equality conference. Ms. Mulholland holds an MA in Business Administration and Strategic Management from Regis University in Colorado.

Largest shareholders

Investor	Number of shares	% of top 20
DATUM AS	36 615 646	17.5%
MIDDELBORG INVEST AS	23 528 007	11.2%
KARBON INVEST AS	21 804 349	10.4%
SWEDBANK AB	18 998 133	9.1%
DNB NOR BANK ASA	10 333 304	4.9%
VERDIPAPIRFONDET DNB SMB	8 005 334	3.8%
TIGERSTADEN AS	5 000 000	2.4%
CIPRIANO AS	4 538 498	2.2%
TORSTEIN TVENGE	3 000 000	1.4%
SÅ&HØSTE AS	2 925 936	1.4%
ZONO HOLDING AS	2 801 938	1.3%
Saxo Bank A/S	2 777 435	1.3%
BRIDGE CAPITAL AS	2 513 317	1.2%
NORDHOLMEN AS	2 075 608	1.0%
ADRIAN AS	2 038 851	1.0%
UNIFIED AS	1 969 264	0.9%
PIKA HOLDING AS	1 956 512	0.9%
NORDIALOG ENSJØ AS	1 946 253	0.9%
SABINUM AS	1 802 813	0.9%
IDEKAPITAL AS	1 797 532	0.9%
Total number owned by top 20	156 428 730	74.6%
Total number of shares	209 629 830	100.0%

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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