Techstep ASA — Investor Presentation 2021

Aug 19, 2021

Making work mobile

Q2 2021 Presentation

19 August 2021

CEO Børge Astrup

Børge is a business leader committed to creating a winning working environment by engaging and embracing diversity. Børge uses goal-oriented methodologies to drive fast, focused, and uncomplicated market delivery.

Børge Astrup comes from the position as CEO of Puzzel, an international fast-growing cloud contact center software (CCaaS) company with an industry leading product platform, with over 200 employees and annual revenue of USD 40 million. He led Puzzel's demerger from Intelecom Group, a Norwegian telecom, contact center and mobile services provider.

Prior to the demerger, Børge was the managing director of Intelecom Group. He has also held various management positions at Visma, the leading European provider of core business software.

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

Techstep's transformation journey: Becoming a Managed Mobility Services (MMS) leader

Gross profit 2016-2021 Q2 LTM

M&A to strengthen MMS offering and unlock European expansion

Further expansion with new partners and Swedish operations

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

Organic business development and 11 acquisitions

2016

Techstep established,

acquisitions and consolidation of the Norwegian market

2016 2017 2018 2019 2020 2021

Managed Mobility Services and recurring

business model

Highlights

• Q2 and H1 gross profit of NOK 114 million and NOK NOK million, EBITDA/GP % 228 million respectively, up from NOK 78 million and NOK 158 million in the same periods in 2020
• Q2 and H1 EBITDA adjusted of NOK 13 million and NOK 27 million respectively, down from NOK 17 million and NOK 29 million in the same periods in 2020
• Signed 6 new managed mobility service contracts in Q2, with an estimated value of NOK 77 million and ~7,300 managed devices
• Raising NOK 100 million in private placement to fund the Famoc acquisition, closed on 1 July
• Børge Astrup, an experienced software services leader and entrepreneur, appointed as CEO from 1 August

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

Adding new brands and organizations to Techstep's MMS customer base

MMS contracts signed in the quarter

6 +7,300

New managed devices in the quarter

+210k

Total managed devices at the end of the quarter

Increased adoption of MMS for better processes

Techstep will, under an existing framework agreement, support Posten in reducing its IT complexity and cost, and deliver efficient and timely operations through Techstep's as-a-service model

The agreement will deliver "Flow" to 2,400 managed devices with support and services, device lifecycle management and hardware financing

The MMS solution will ensure that Posten's in-the-field workforce has easy and secure access to work applications wherever and whenever, and at the same time improving employee experiences

Asset management

2,400 Managed devices

MMS to deliver cost effective public transport

Techstep, through its subsidiary Optidev AB, has signed an agreement with the Swedish public transport company AB Storstockholms Lokaltrafik (SL) to deliver a complete MMS -solution

The MMS solution will use software developed by Optidev to deliver an integrated public transport ticketing system, with operational support for software and hardware

Techstep's MMS offering will improve mobile workflows and increase operational efficiency, in addition to reduce IT complexity for SL. Enabling SL to deliver a cost -effective public transport system with higher quality and better capacity

Advisory Services

Platform management

14 NOKm

revenue over four years

Asset management

Famoc acquisition - strengthening MMS capabilities and unlocking European expansion

Famoc completes Techstep

• Provides customers with a complete, automated and fully integrated MMS platform
• 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 MMS opportunities in a vastly expanded market – with a serious competitive advantage

Helping customers harvest the value of Managed Mobility Services

~210 000

Devices managed by Techstep

~550

Techstep's enterprise customer base

~6 000 Enterprises in the Nordics

Some of Techstep's enterprise customers

Financials

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

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

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 including Famoc

ARR

NOK million

• NOK 64 million in reported ARR, 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 software ~95%
• Increase in sale and roll-out of MMS offering to drive ARR growth

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

Outlook and summary

Q2 2021

Targeting strong MMS growth in 2021

	KPI	Q2 2021	H1 2021	Medium Term
Managed Mobility	New MMS contracts	6	14	> 30
Services	Origo user growth	69%*	69%*	> 100%
Financials	Gross profit growth	46%*	44%*	20-25%
	EBITDA/Gross profit	12%	12%	20-25%
	Development capex	17 NOKm	24 NOKm	35 – 40 NOKm

Summary

• Raising NOK 100 million to fund Famoc acquisition, strengthening Techstep's MMS capabilities and unlocking European expansion
• Gross profit growth continues
• Signed 6 new MMS contracts with 7,300 managed devices
• Continuous focus on:
• Delivering customer value
• Ensure sustainability
• Accelerate conversion to recurring revenue

Q&A

19 August at 10:00 CET

Send your questions to ir@techstep.no

Join us here: https://bit.ly/2UbbYNn

Q&A Techstep ASA Q2 2021 results

19 August, 10:00 CET

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 Norway

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.

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.

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