Techstep ASA — Investor Presentation 2021

Sep 1, 2021

Making work mobile

Investor presentation

September 2021

Making work mobile

Bus drivers uses tablets for damage reports and timetables in the field

Electricians document their work and invoice immediately between site visits

Doctors and nurses doing admin work on devices in between patients

Global demand for Managed Mobility Services (MMS) is growing rapidly

Gartner Definition: Managed mobility services (MMS) comprise the vendor-provided IT and business process services required to plan, procure, provision, activate, manage, secure and support mobile devices, mobile network services, related mobile management systems and mobile applications.

Gartner Forecast: Enterprise Managed Communications Services, Growth Trends, Worldwide, 2019 Update

3 2) https://www.mordorintelligence.com/industry-reports/mobility-managed-services-market - Global MMS market valued at NOK 65 billion in 2019

Large addressable market in the Nordics

Addressable market is white-collar businesses with more than 200 employees and blue-collar businesses that can improve work with mobility solutions

Manufacturing and construction

Retail

Healthcare

Education

Banking and finance

Digital maturity

~14 million workforce in the Nordics

~11 million Nordic workforce in target sectors

Nordic enterprise workforce of ~6 million

Our Managed Mobility Services offering

Techstep's Managed Mobility Service (MMS) offering consisting of hardware, software, device lifecycle management and financing

5

Our value propositions

Techstep's Managed Mobility Services…

…make work mobile while improving financial and ESG performance

Our services and solutions benefit workers, enterprises, society and our planet*

Techstep's transformation journey: Becoming a Managed Mobility Services market leader

NOK 491 Million Gross profit 2021 Q2 LTM

Further expansion with new partners and Swedish operations

Focus on integration and transition towards a software & services-led company

Managed Mobility Services and recurring business model

M&A to strengthen MMS offering and unlock European expansion

Organic business development and 11 acquisitions

acquisitions and consolidation of the Norwegian market

Techstep established,

Strengthening own IP-offering and geographical reach through recent acquisition

Famoc completes Techstep

• Provides customers with a complete, automated and fully integrated MMS platform based on own IP
• Gives users control, security, compliance and lifecycle management
• All within one dashboard all at a lower cost

Techstep completes Famoc

• Techstep's structural capabilities and know-how to accelerate Famoc's channel sales
• Inclusion of Techstep's own IP and software into Famoc's current offering will add significant customer value, and thus quicken Famoc's growth

The combined force of the two companies are set to embrace Managed Mobility Services-opportunities in a vastly expanded market – with a serious competitive advantage

Continued increase in MMS wins: added NOK 77 million in contract value in Q2 2021

Purpose-built to make work mobile

Financials

Q2 2021

Techstep at a glance (proforma per Q2 2021)

Key figures

(Amounts in NOK 1 000)	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Revenues	324 737	238 173	630 667	530 850	1 142 866
Annual Recurring Revenue (ARR)	64 303	37 110	64 303	37 110	63 329
Gross profit	113 879	77 882	227 911	158 336	378 287
EBITDA adjusted	13 288	17 193	26 619	28 572	95 640
EBITDA	5 251	24 270	18 108	35 899	104 455
EBITA	(19 925)	10 176	(33 135)	9 783	17 122
EBIT	(32 063)	3 816	(56 062)	(1 615)	(10 771)
Net profit (loss) for the period	(23 013)	3 987	(47 709)	596	(23 557)
EBITDA adj. margin (%)	4.1%	7.2%	4.2%	5.4%	8.4 %
EBITDA rep. margin (%)	1.6%	10.2%	2.9%	6.8%	9.1 %
EBITA margin (%)	(6.1%)	4.3%	(5.3%)	1.8%	1.5 %
EBIT margin (%)	(9.9%)	1.6%	(8.9%)	(0.3%)	(0.9 %)
Net profit (loss) for the period (%)	(7.1%)	1.7%	(7.6%)	0.1%	(2.1 %)
Cash	154 036	36 561	154 036	36 561	27 203
Net interest-bearing debt	64 330	6 503	64 330	6 503	166 838
Capex1)	17 112	5 351	23 872	10 193	21 386

1) EBITDA adjusted in Q2 2021 excludes non-recurring items such as M&A related costs totalling NOK 8.0 million.

2) Capex only includes development capex and not hardware-as-a-service portfolio, booked as capex under IFRS 16.

The Optidev acquisition is included in the financial statements from Q4 2020.

• Gross profit increase of 46% in Q2 and 44% in H1 2021 from same period previous year, mainly due to acquisitions and increase in hardware-as-a-service
• EBITDA adjusted affected by the effect of gradual change from one-off revenue to recurring revenue
• Increase in depreciation relates to growth in hardware-as-a-service portfolio, as well as prudent approach on residual values
• Cash of NOK 154 million, increased by private placement of NOK 100 million in May 2021, reducing net interest-bearing debt to NOK 64 million

Reported gross profit development by segment

Hardware one-off Hardware-as-a-service Own software

Advisory & Services Operating commissions Other

Gross Profit - last twelve months rolling NOK million

• Continued transformation from traditional one-off deliveries to recurring revenue
• Further growth in the MMS related segments, Hardware-as-a-service, Own software and Advisory & Services, driven by acquisitions and increased product adoption from existing customers
• As expected, continued reductions in commissions
• Focus on rolling out MMS offering expected to grow gross profit going forward
  • Driving recurring revenue/ARR, visibility and profitability

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Proforma gross profit and EBITDA adj. development

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

• NOK million and percent Gross profit growth driven by growth in the recurring revenue portfolio, replacing transactional one-off revenue
  • Profitability impacted by the recurring revenue transition and investments in long term growth
  • Long-term focus to increase EBITDA conversion
    • Operational leverage and economies of scale
    • Increasing software, IP and mobility expertise driven profit

ARR of NOK 93 million on own IP including Famoc

ARR NOK million MMS

• NOK 64 million in reported ARR on own IP and 93 million with Famoc (closed in Q3 2021)
• Of the 93 million in proforma ARR, MMS related ARR of NOK 64 million
  • 50k users on the Origo platform, up 69% YoY and 16% YTD
  • Gross margin on ARR from own IP ~95%
  • Increase in sale and roll-out of MMS offering to drive ARR growth

Summary

Q2 2021

Investment highlights

In a world going mobile, Techstep is purpose-built to service the mobility needs of enterprises and their workforce

Positioned to be the market leader in a large Managed Mobility Services market

Ambition to manage >1 million devices by 2025 and drive value creation with value-adding services and solutions

Business plan focused on organic growth, M&A and Nordic expansion while maintaining financial flexibility

Dedicated leadership team, board and key investors with proven services, IT and tech growth track record

Appendix

Management team

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.

Erik Haugen – Chief Commercial 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.

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.

Inge Paulsen – Managing Director Norway

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 turnaround cases as well as holding various executive positions responsible for profit & loss.

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.

Fredrik Logenius – Managing Director Sweden

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.

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.

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.

Balance sheet

(Amounts in NOK 1 000)	31.06.2021	31.12.2020
Intangible assets	720 166	733 263
Tangible assets	203 195	173 616
Financial assets	344	213
Inventories	20 811	43 258
Accounts receivable	164 298	187 983
Other receivables	37 672	33 594
Cash and cash equivalents	154 036	27 203
Total assets	1 300 523	1 199 131
Total equity	605 612	563 451
Deferred tax	24 226	27 659
Non-current interest-bearing debt	123 664	108 539
Other non-current debt	43 159	54 488
Current interest-bearing liabilities	94 702	85 502
Accounts payable	140 958	154 442
Tax payable	(995)	(750)
Public taxes, provisions	35 334	39 756
Other current liabilities	233 862	166 044
Total equity and liabilities	1 300 523	1 199 131

• Equity ratio at 47%
• Intangible assets are mainly goodwill of NOK 567 million and customer relations and technology of NOK 143 million
• Tangible assets consist of right-of-use assets of NOK 32 million from premises and IT licenses and hardware-asa-service to customers of NOK 170 million
• Non-current interest-bearing debt includes acquisition loans of NOK 71 millionand seller's credit NOK 49 million
• Other current liabilities consist of deferred revenue from hardware-as-a-service of NOK 132 million
• Net interest-bearing debt NOK 64 million, including bank deposits of NOK 154 million, acquisition loans of NOK 91 million and seller's credit of NOK 72 million

Cash flow

(Amounts in NOK 1 000)	Q2 2021	Q2 2020	H1 2021	H1 2020	FY 2020
Net cash flow from operational activities	19 241	25 807	112 938	24 739	71 120
Net cash used on investment activities	( 38 943)	( 6 296)	( 113 414)	( 29 630)	(170 361)
Net cash flow from financing activities	109 308	( 3 427)	128 724	( 6 675)	79 619
Net change in cash and cash equivalents	89 605	16 083	128 247	( 11 566)	(19 622)
Cash and cash equivalents at beginning of period	62 796	19 996	27 203	44 382	44 588
Effects of exchange rate changes on cash
and cash eq.	1 634	481	( 1 414)	3 745	2 236
Cash and cash equivalents at end
of the period	154 036	36 561	154 036	36 561	27 203

• Operational cash inflow includes an improvement in working capital of NOK 17 million as well as increased deferred revenue from hardware-as-a-service
• Net investments include leased out equipment of NOK 23 million and investments in software and IT development of NOK 17 million
• Net financing includes proceeds of NOK 101 million from private placement in May 2021 and borrowing of NOK 12 million, offset by lease repayments of NOK 5 million

Largest shareholders

Investor	Number of shares	% of top 20	% of total	Type	Country
DATUM AS	36 615 646	23.08%	17.47%	Ordinary	Norway
MIDDELBORG INVEST AS	23 528 007	14.83%	11.22%	Ordinary	Norway
KARBON INVEST AS	21 804 349	13.75%	10.40%	Ordinary	Norway
SWEDBANK AB	19 006 683	11.98%	9.07%	Nominee	Sweden
DNB NOR BANK ASA MEGLERKONTO INNLAND	11 223 553	7.08%	5.35%	Ordinary	Norway
VERDIPAPIRFONDET DNB SMB	8 017 940	5.05%	3.82%	Ordinary	Norway
CIPRIANO AS	5 579 946	3.52%	2.66%	Ordinary	Norway
TIGERSTADEN AS	5 000 000	3.15%	2.39%	Ordinary	Norway
SAXO BANK AS MEGLERKONTO	3 025 411	1.91%	1.44%	Ordinary	Denmark
TVENGE TORSTEIN INGVALD	3 000 000	1.89%	1.43%	Ordinary	Norway
SÅ&HØSTE AS	2 925 936	1.84%	1.40%	Ordinary	Norway
ZONO HOLDING AS	2 801 938	1.77%	1.34%	Ordinary	Norway
BRIDGE CAPITAL AS	2 513 317	1.58%	1.20%	Ordinary	Norway
NORDHOLMEN AS	2 075 608	1.31%	0.99%	Ordinary	Norway
ADRIAN AS	2 038 851	1.29%	0.97%	Ordinary	Norway
UNIFIED AS	1 969 264	1.24%	0.94%	Ordinary	Norway
PIKA HOLDING AS	1 956 512	1.23%	0.93%	Ordinary	Norway
NORDIALOG ENSJØ AS	1 946 253	1.23%	0.93%	Ordinary	Norway
SABINUM AS	1 802 813	1.14%	0.86%	Ordinary	Norway
IDEKAPITAL AS	1 797 532	1.13%	0.86%	Ordinary	Norway
Total number owned by top 20	158 629 559	100.00%	75.67%
Total number of shares	209 629 830		100.00%

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.

This Presentation does not constitute any solicitation for any offer to purchase or subscribe any securities and is not an offer or invitation to sell or issue securities for sale in any jurisdiction, including the United States. Distribution of the Presentation in or into any jurisdiction where such distribution may be unlawful, is prohibited. The Company and its advisors require persons in possession of this Presentation to inform themselves about, and to observe, any such restrictions.

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.

By receiving this Presentation, you accept to be bound by the terms above.