Techstep ASA — Investor Presentation 2022

Aug 19, 2022

Techstep at a glance

A mobile technology company enabling your organisation to utilise software & hardware to strengthen your performance

• 1 • We enable remote and frontline workers to perform smartly, securely, and sustainably
• We combine software, mobile devices, and services to meet your business and ESG goals
• Our experts proactively ensure that your mobile ecosystem is optimised for success

Highlights Q2 2022

Techstep strengthening its position in a growing global managed mobility market

• Recognised as a global challenger by Gartner in a market with double digit growth1
• Techstep last twelve months revenues of NOK 1.3 billion and record recurring revenues highlights position

Financials reflect transformation phase, with recurring revenues at record level in line with software, recurring services, and M&A focused growth strategy

• Total revenue of NOK 317.2 million (324.7), gross profit of NOK 111.9 million (113.9) and adjusted EBITDA of 12.2 million (13.3)
• Recurring revenue annualised of NOK 281 million of which Own software ARR of NOK 101 million with 90% gross margin
• In addition, NOK 10 million from recent software wins, not yet included in ARR

Strong commercial momentum

• 11 new Managed Mobility Services (MMS) contracts in Q2 adding NOK 14 million in contract value and NOK 9 million in annualised recurring revenue expected to be delivered over the coming quarters
• Growing with existing and new clients, second quarter wins include Equinor and Bane Nor

Continued transformation to unlock profitable MMS growth at scale

• Simplification and standardisation of product portfolio and solutions
• Aligning organisation around simplified offering to accelerate growth
• Streamlining cost base to improve profitability

CEO comment

Since I joined the company one year ago, we have continued to build Techstep into a leading mobile technology enabler, helping organisations utilise the combination of mobile devices and software smarter and more sustainably.

In June, Gartner acknowledged what we have achieved so far when they announced the inclusion of Techstep as the Challenger, the only Nordic and one of very few European players, in their 2022 Global Magic Quadrant for Managed Mobility Services. Gartner's recognition makes us proud and is a clear validation of our product offering and the company. It strengthens our brand and will support our sales and marketing activities.

In Q2, our underlying factors continued to develop in the right direction with improved sales bookings, improved customer implementation speed, and increased share of software and recurring revenue. Also, we delivered record recurring revenues from Own Software, Advisory & Services and Hardware-as-a-Service. This is in line with our growth strategy focused on software, recurring services, and M&A.

While the implementation of the sold agreements started slower than expected in Q1, we have managed to improve in Q2. Still, we need to accelerate deliveries to deliver on our growth ambitions. Our current ARR include the customers that are on-boarded and invoiced, and we have a good

¹ Mordor Intelligence

backlog of signed sales contracts that will be implemented the coming quarters, and thus a stronger development in ARR is expected. We also have a positive tail effect on the hardware of the newly implemented contracts that will come during the contract period.

We saw increased traction through our sales partner ecosystem in Q2. We announced an agreement with Norwegian telecom company Nortel. All of Nortel's customers and users will be offered Techstep Expense, our own software that is a part of Techstep's managed mobility portfolio, SmartDevice, representing a minimum annual recurring revenue (ARR) value of NOK 3 million materialising by the end of 2022.

To succeed with our longer-term growth strategy, it is important to have a product portfolio and solutions that are easy to understand and that help solve the customers' challenges. We often see that organisations recognise the importance of mobile technologies but lack the strategic and operational expertise needed to succeed with mobility. A growing concern for work-life balance due to remote and hybrid work, combined with rapidly evolving technology, create an even greater need for responsible mobile technology and device management.

Historically, Q2 is a slower quarter than Q1 for Techstep. We signed 11 MMS contracts in Q2 adding NOK 14 million in contracted value and NOK 9 million in annualised recurring revenue including Own Software, Advisory & Services and Hardware-as-a-Service. We have a clear focus on delivering on our targets with mid-size customer agreements every month to ensure a solid and steady performance. The signing of additional large enterprise agreements then exponentially adds to our results.

We have a sharp focus on simplifying the company and creating one Techstep. Over the years we have acquired and combined multiple companies, resulting in many different products and solutions. To strengthen the commercial momentum, we have reorganised the company to bring our simplified and standardised product portfolios to our customers in a better way, improving value creation for customers and Techstep. Performance management in the organisation is now closely linked to customer success, recurring services, and revenue growth, and ultimately Techstep's value creation and profitability. Going forward, continued standardisation, and streamlining of all parts of Techstep will be key for us to be able to scale and deliver on our ambitions.

We have an exciting market opportunity ahead of us, and we are sharpening our products and goto-market approach to capture a market with an expected annual double-digit growth in the years to come.

Techstep's financial results are not in line with our ambitions. With the ongoing transformation and positive operational development, we expect to see a stronger performance in the future. As our existing and new customers adopt more of our services, Techstep's recurring revenue base and future earnings visibility will improve.

Overall, the main goal is clear - To be the leading European mobile technology enabler for customers that want to work smarter and more sustainably.

Børge Astrup, CEO - Techstep ASA

About Techstep

Techstep is a complete mobile technology enabler, making positive changes to the world of work; freeing people to work more effectively, securely, and sustainably. We help customers who want to work smarter, while also delivering on their ESG commitments. With more than 350 employees based in Norway, Sweden, Denmark, and Poland, we serve more than 2 000 enterprise customers in Europe. Techstep had NOK 1.3 billion in full year 2021 revenues, and is listed on the Oslo Stock Exchange under the ticker TECH. To learn more, please visit www.techstep.io/investor

Key figures

(Amounts in NOK 1000)	Q2 2022	Q2 2021	H1 2022	H1 2021	2021
Revenues	317 199	324 737	663 425	630 667	1 305 090
Annual Recurring Revenue (ARR) - own software	101 469	64 303	101 469	64 303	97 423
Gross profit	111 938	113 879	225 502	227 911	459 785
EBITDA adjusted1)	12 182	13 288	26 273	26 619	69 616
EBITDA	12 178	5 251	65 634	18 108	52 430
EBITA	(15 571)	(19 925)	13 997	(33 135)	(55 799)
EBIT	(31 106)	(32 063)	(16 087)	(56 062)	(110 522)
Net profit (loss) for the period	(31 467)	(23 013)	(18 983)	(47 709)	(102 660)
EBITDA adj. margin (%)	3.8%	4.1%	4.0%	4.2%	5.3%
EBITDA rep. margin (%)	3.8%	1.6%	9.9%	2.9%	4.0%
EBITA margin (%)	(4.9%)	(6.1%)	2.1%	(5.3%)	(4.3%)
EBIT margin (%)	(9.8%)	(9.9%)	(2.4%)	(8.9%)	(8.5%)
Net profit (loss) for the period (%)	(9.9%)	(7.1%)	(2.9%)	(7.6%)	(7.9%)
Cash	29 922	154 036	29 922	154 036	50 350
Net interest-bearing debt	237 054	64 330	237 054	64 330	121 600
Capex2)	(16 702)	(17 112)	(35 609)	(23 872)	(48 883)
Employees	338	299	338	299	341

1) EBITDA adjusted in H1 2022 excludes non-recurring items such as M&A related costs of NOK 0.5 million and structural gains from sales of NOK 40.5 million.

2) Capex excludes investment in hardware-as-a-service portfolio, shown as a separate line item under investing activities in the consolidated statement of cash flow.

Operational review

Main developments

In the second quarter of 2022, Techstep has continued to pursue its growth strategy and transform into a software-driven mobile technology enabler with a recurring services business model.

To accelerate growth, Techstep has simplified and standardised its product portfolio and solutions, as well as aligned its organisation around the simplified offering. An OKR (Objective, Key Result) framework has been implemented to concentrate organisational resources around Techstep's priorities.

Through standardisation, change of ERP systems and continued transformation into a recurring services business model, Techstep expects to streamline the opex and capex base and reduce costs by 40-50 million the next 6-18 months.

Simplified product offering

Techstep's simplified customer offering now consists of three product portfolios with seven solutions in total. This standardised offering is expected to solve customer challenges more efficiently and consistently deliver great customer value.

Techstep's Managed Mobility Services (MMS) portfolio now consists of SmartControl, SmartWorks and SmartDevice. All three portfolios are provided as-a-service. In addition, customers who wish to purchase SmartDevice transactionally may do so.

The products have the following distinct value propositions:

SmartDevice is the complete and sustainable solution to help enterprises integrate and manage all mobile devices from procurement to end of life. Users are empowered to choose, fix, and replace mobile devices whilst enterprises have visibility and cost control over their mobile fleet.

SmartControl experts deliver best practice implementations, support, and proactive services. Techstep manages and secures the entire mobile ecosystem of an enterprise, by combining Apple and Google Android-knowledge with best-in-class software. This ensures that the enterprises' devices and apps are always compliant, secure, and up to date.

SmartWorks transforms everyday deskless working practices. By combining the right software, hardware, and services, Techstep brings power to the fingertips of frontline workers - enhancing usability, productivity and performance whilst reducing environmental impact.

Sales development

Historically, Q2 is a slower quarter for Techstep. At the same time, the company closed contract renewals and wins with both existing and new customers, and experienced growing demand for own software and managed services. 11 MMS customer contracts were closed in the quarter, and with upsell to existing customers the company reached sales bookings of NOK 9 million in recurring revenue annualised, including Own Software, Advisory & Services and Hardware-as-a-Service. These 11 agreements are expected to be delivered in the coming quarters.

Techstep's total recurring revenue annualised was NOK 281 million, up from NOK 270 million in the previous quarter, of which own software ARR was NOK 101 million at the end of the quarter. Compared to the second quarter 2021, this represents 58% growth year-over-year. Techstep's recurring revenue annualised base had a gross margin of ~90% – sold either as a white-label service through channel partners or directly by Techstep. The recurring revenue annualised portfolio includes recurring

revenue streams from Own Software, Advisory & Services and Hardware-as-a-Service.

Strategic initiatives

Techstep has acted as a market consolidator in Norway and Sweden since its inception and continuously evaluates potential M&A opportunities to further strengthen and expand its managed mobility service offering.

In the quarter, Techstep acquired the cybersecurity SaaS company Crypho to expand and strengthen Techstep's product offering.

Sustainability

Techstep's mission is to make positive changes to the world of work through mobile technologies; freeing people to work more effectively, securely, and sustainably. During the past year, Techstep has strengthened focus on ESG, including materiality, priorities, and metrics, and became a member of UN Global Compact. Techstep has also improved its Ecovadis' rating in environmental and social performance to silver, placing Techstep among the top 9% of more than 90 000 companies evaluated globally. Techstep's latest sustainability report was published in March 2022.

Gartner recognises Techstep as the only Challenger in the Magic Quadrant for Managed Mobility Services

Techstep is proud to be recognised as the only Challenger and one of very few European players in Gartner's Magic Quadrant for Managed Mobility Services. Gartner highlighted the following strengths for Techstep:

• Big focus on self-service. Techstep resolves 60%+ of all help desk incidents via selfheal or self-service portal

• Techstep targets business outcomes. Techstep is also one of few providers that includes sustainability considerations in its strategy

The recognition is a milestone for Techstep, showing that the company is one of the top European vendors within its market. This is a quality stamp for Techstep and its customers.

The market opportunity

Gartner's recognition of Techstep as the only Challenger, and one of very few European players in the global Magic Quadrant for Managed Mobility Services, shows that the strategic position and offering that Techstep has built through the ongoing transformation resonates well in the marketplace. The recognition will help Techstep utilise the market opportunity and drive the managed mobility market. The market opportunity for Techstep can be divided into two main areas: enterprises and mobile technology for frontline workers.

Techstep is seen as a challenger in the Managed Mobility Services market, because of the company's combined software and hardware offering built over the past five years via M&A and market consolidation.

Frontline workers make up the largest portion of the workforce, estimated at 2.8 billion workers on a global basis, and Gartner predicts that up to 70% of new mobile technology investments over the next five years will be for frontline workers. There has been an increased focus on supporting frontline workers to deliver higher quality and to ensure they're safe and productive.

Techstep continues to evaluate potential M&A opportunities to further strengthen and expand the company's' offering in the Managed Mobility Services market across Europe.

Financial review

The interim financial information has not been subject to audit.

Profit and loss second quarter 2022

Techstep generated total revenue of NOK 317.2 million in the second quarter of 2022, down from NOK 324.7 million in the corresponding quarter last year. The decline of 2% in revenues is driven by lower advisory and services revenues, mostly due to the divestment of the voice and contact centre business unit. The decline in revenue is partly mitigated by an increase in Own Software, driven mostly by the acquisition of Famoc.

Techstep's Own Software accounted for NOK 23.7 million (NOK 15.2 million). Hardware-as-a-Service revenue accounted for NOK 32.2 million (NOK 32.9 million). Advisory & Services amounted to NOK 48.6 million (NOK 66.3 million) and related commissions were NOK 3.8 million in the quarter (NOK 4.8 million). Hardware revenue (excluding Hardware-as-a-Service) was NOK 207.9 million (NOK 204.8 million) in the quarter.

Gross profit decreased by 1.7% year-over-year to NOK 111.9 million (NOK 113.9 million). The decline in gross profit is explained by the abovementioned divestment of the voice and contact centre impacting advisory and services revenue which is partly mitigated by increases in gross profit from own software. Gross margin for the quarter was 35%, equal to the corresponding quarter of 2021.

Salaries and personnel costs decreased by 1% compared with same quarter last year to NOK 71.0 million, despite growth in the number of employees. There were 338 employees at the end of the quarter compared with 299 at end of same quarter last year. NOK 3.3 million of personnel cost from R&D is capitalised as development cost (NOK 1.8 million). Option costs in the quarter were NOK 1.2 million (NOK 1.7 million). Other operational costs were NOK

28.8 million (NOK 28.9 million). Compared with same quarter last year, opex has been reallocated from reorganisation projects to execution costs within human resources, IT spending and marketing. The cost structure is supporting rebranding and the ongoing transition towards a software-led recurring business model.

EBITDA amounted to NOK 12 million in the second quarter of 2022. EBITDA in the corresponding quarter last year was NOK 5.3 million. Adjusted EBITDA this quarter was NOK 12.2 million (NOK 13.3 million), down NOK 1.1 million year-over-year.

Profit and loss first half 2022

Techstep had total revenues of NOK 663.4 million in the first half of 2022 and gross profit was NOK 225.5 million. Total revenues for the first half of 2021 were NOK 630.7 million, while the gross profit was NOK 227.9 million. EBITDA for the first half of 2022 amounted to NOK 66 million, while the EBITDA for the first half of 2021 was NOK 18.1 million. EBITDA adjusted for H1 2022 was NOK 26.3 million, while EBITDA adjusted was NOK 26.6 million for the first half of 2021. The net loss for the first half of 2022 was NOK 19 million, compared to a net loss of NOK 47.7 million in the first half of 2021.

Financial position

As at 30 June 2022, total assets were NOK 1 278 million, compared with NOK 1 315 million as at 31 December 2021.

Intangible assets accounted for NOK 805.5 million (NOK 777.9 million). They included a deferred tax asset of NOK 11.2 million (NOK 2.1 million), goodwill of NOK 603.8 million (NOK 592.5 million), customer relations of NOK 64.5 (NOK 80.0 million) and technology of NOK 126.0 million (NOK 103.3 million).

Total tangible assets were NOK 187.6 million (NOK 179.0 million) as at 30 June 2022 including NOK 156.8 million (NOK 142.8 million) in Hardware-as-a-Service to customers and NOK 24.3 million (NOK 30.3 million) in right-of-use assets such as premises and other.

Total inventories and receivables were NOK 252.1 million (NOK 281.1 million) as at 30 June 2022. The increase in accounts receivable of NOK 20.7 million from the preceding quarter is mainly related to deliveries late in the quarter in Denmark and other normal fluctuations.

Total equity at 30 June 2022 was NOK 530.5 million (NOK 555.6 million), corresponding to an equity ratio of 42% (42%).

Non-current interest-bearing debt of NOK 97.0 million (NOK 97.4 million) includes acquisition loans of NOK 67.5 million (NOK 65.4 million) related to the Optidev and Famoc acquisitions and a seller's credit of NOK 29.6 million (NOK 27.6 million). Other non-current debt of NOK 36.1 million (NOK 43.3 million) mostly relates to leasing commitments of NOK 19.3 million (NOK 22.2 million) and a buy-back obligation for Hardware-as-a-Service of NOK 18.6 million (NOK 20.3 million).

Current interest-bearing borrowings amounted to NOK 170.0 million (NOK 74.5 million). They include net bank overdraft accounts of NOK 128.3 million (NOK 21.9 million).

Other current liabilities of NOK 223.0 million (NOK 295.1 million) mainly include payables to employees of NOK 36.3 million (NOK 37.4 million) and deferred revenue of NOK 134.2 million (NOK 200.9 million). The decrease in deferred revenue is partly explained by the recognition of the proceeds received in advance from the sale of the voice and contact centre. Other current liabilities include leasing commitments of NOK 7.0 million (NOK 10.6 million) and a buy-back obligation for Hardware-as-a-Service of NOK 15.8 million (NOK 9.8 million).

Net interest-bearing debt was NOK 237.1 million at 30 June 2022, compared to NOK 121.6 million

at the start of the year. The increase is mainly related to the utilisation of the bank overdraft to support the transition.

Cash flow second quarter 2022

Net cash inflow from operating activities was NOK 7.5 million in the quarter compared with inflow of NOK 19.2 million in the same quarter last year. The lower cash flow from operational activities is mostly related to working capital positions.

Net cash flow outflow from investment activities was NOK 48.5 million (NOK 38.9 million). This is due to capital expenditures for equipment related to Hardware-as-a-Service of NOK 34.7 million (NOK 23.4 million) and Own software and IT of NOK 16.7 million (NOK 17.1 million). The cash outflow related to own software and IT is in line with expectations and relates to building scalable solutions on both the product and operations side in line with the group's strategy.

Net cash inflow from financing activities was NOK 31.6 million (NOK 109.3 million) in the quarter. This is largely due to utilisation of the groups bank facility.

Cash and cash equivalents decreased by NOK 8.7 million from NOK 38.6 million in the previous quarter to NOK 29.9 million at the end of the quarter.

Cash flow first half of 2022

Net cash inflow from operating activities was NOK 1.6 million in the period compared with inflow of NOK 112.9 million in the same quarter last year. Current year cash flow from operating activities includes a negative effect of NOK 40.2 million from the reversal of deferred revenue related to the voice and contact centre transaction. The cash flow from operational activities was unusually high for the group in H1 2022. The net working capital in H1 2021 was impacted by improvement in

accounts receivables as well as high activity in the hardware-as-a-service offering.

Net cash flow outflow from investment activities was NOK 106.5 million (NOK 113.4 million). This is due to capital expenditures for equipment related to Hardware-as-a-Service of NOK 64.9 million (NOK 97.6 million) and Own software and IT of NOK 35.6 million (NOK 23.9 million). The cash outflow related to own software and IT is in line with expectations and relates to building scalable solutions on both the product and operations side in line with the group's strategy.

Net cash inflow from financing activities was NOK 84.6 million (NOK 128.7 million) in the period. This is largely due to utilisation of the group's bank facility. In the comparable period the cash inflow from financing activities was in

preparation for the payment of the acquisition of Famoc.

Cash and cash equivalents decreased by NOK 20.4 million from NOK 50.3 million in the previous quarter to NOK 29.9 million at the end of the period.

Related parties

There were no material transactions with related parties during the first half of 2022.

Corporate governance

At the annual general meeting 21 April 2022, one new director was elected to the Board of Techstep ASA, with Michael Jacobs replacing Anders Brandt. The current Board of Directors comprises Jens Rugseth (Chair), Melissa Mulholland, Ingrid Leisner, Harald Arnet and Michael Jacobs.

Risk and uncertainties

As described in the Annual Report for 2021, Techstep's business activities entail exposure to changes in market conditions, operational and financial development. Techstep strives to take an active approach to risk management through monitoring and mitigation initiatives of identified risks. Below is a summary of the main risks identified for Techstep in the next six months.

The outbreak of war in Europe has led to increased uncertainty regarding the development of the global economy. The evolving conflict does not impact Techstep directly, and Techstep has no operating presence in either Russia, Belarus, or Ukraine. Indirect effects however, such as financial market volatility and general economic market conditions, might have an impact on financial results. Techstep has a large base of public sector and large corporate customers, which are less vulnerable to volatile market conditions.

The global component shortage and logistics and transportation challenges which have been challenging in prior quarters, appear to be normalising. Techstep continues to maintain close cooperation with key suppliers to ensure timely deliveries.

Techstep's operations, revenues and profits are dependent on its ability to generate sales through existing and new customers. Techstep operates in a competitive market segment, and the group's success depends on its ability to meet changing customer preferences, to

anticipate and respond to market and technological changes, and develop effective and competitive relationships with its customers and partners. Techstep continues to focus on improving its product offering, reducing customer implementation time, and becoming a software-led growth business, yielding higher cash flow and profit from operations, and transforming into a recurring revenue business model. The operational risk mainly relates to successfully standardising and scaling the product portfolio.

Techstep's liquidity risk is related to a mismatch between cash flows from operations and financial commitments. Techstep is transforming itself from a transactional business model to a software-led recurring revenue model, which leads to postponed cash inflows, negatively affecting the liquidity position of the group. Investments in simplification and standardisation of the company's product portfolio and solutions, new organisational capabilities and acquisitions and integration, have furthermore increased the company's debt over time. The group's liquidity is closely monitored by management and the board of directors. If the need arises, the group has access to multiple funding sources during the transformation process.

For more information on Techstep's risk factors and risk management, reference is made to the Board of Directors report in the Annual Report for 2021.

Outlook

Techstep is positioned to be the leading European mobile technology enabler for customers that want to work smarter and more sustainably. The company's vision is to make the world of work smarter and more sustainable.

According to the Global Managed Mobility Service Market (2022-2027) report from Mordor Intelligence, the growth of the European managed mobility service market was 21% in 2021. The global market is expected to grow 24% annually from 2022 to 2027.

As of today, Techstep is serving more than 2 000 customers across several industries in both the private and public sector. Going forward, Techstep will continue to transform into a software and recurring services company targeting strong growth and geographic expansion in the Nordics and in Europe.

As part of the company's growth strategy and transformation journey, Techstep invests in Own Software and IP and pursues M&A opportunities to further strengthen and expand its Managed Mobility Services (MMS) offering and market position.

In parallel, Techstep is transforming the business model from a transactional to recurring revenue model. The company offers a software-led standardised and scalable product portfolio to attract, develop, and retain customers. The new product offering consists of SmartControl, SmartWorks and SmartDevice.

The new simplified and standardised offering is designed to strengthen the value proposition to customers experiencing growing challenges related to data privacy, cyber security, hardware sustainability including life-cycle handling of devices and migration to the cloud. Techstep's product portfolios are developed specifically to address these

customer needs via recurring services solutions. This business model should generate increased recurring revenues as market adoption increases, while improving the profitability of Techstep.

Techstep has stated medium and longer-term goals. Medium term, the ambition is a gross profit growth of 20-25% and a gross profit to EBITDA conversion of 20-25%. Annual development capex is targeted to be NOK 45- 55 million, with acquired software bringing it further up. Longer term, Techstep targets managing 1 million devices by 2025, with a gross profit to EBITDA conversion above 30%.

Techstep has simplified its product portfolios and solutions and aligned the organisation around this simplified offering to improve sales and strengthen revenue and gross profit growth. In addition, the company is investing in standardisation and streamlining the cost base to improve profitability.

Through standardisation, change of ERP systems and continued transformation into a recurring services business model, Techstep expects to streamline the opex and capex base and reduce costs by 40-50 million the next 6-18 months.

While accelerated growth and improved profitability are key short-term priorities for Techstep, the company acknowledges that transformation takes time, and that continued transformation is needed to unlock profitable MMS growth at scale.

Moving forward, Techstep will grow via conversion of existing customers to MMS, onboarding of new customers, M&A to acquire new software, IP, and market positions, and from geographical expansion in the Nordics and Europe.

Consolidated income statement

(Amounts in NOK 1000)	Note	Q2 2022	Q2 2021	H1 2022	H1 2021	2021
Revenue	2, 3	316 318	324 068	663 106	629 318	1 303 192
Other revenue		881	669	319	1 349	1 898
Total revenues		317 199	324 737	663 425	630 667	1 305 090
Cost of goods sold		(205 262)	(210 858)	(437 923)	(402 756)	(845 305)
Salaries and personnel costs		(71 000)	(71 654)	(143 201)	(146 247)	(281 620)
Other operational costs		(28 756)	(28 937)	(56 028)	(55 045)	(108 549)
Depreciation	5	(27 749)	(25 176)	(51 638)	(51 243)	(108 229)
Amortisation		(15 534)	(12 138)	(30 083)	(22 927)	(54 723)
Other income	7	377	-	40 444	-	22
Other expenses	7	(382)	(8 037)	(1 082)	(8 511)	(17 209)
Operating profit (loss)		(31 106)	(32 063)	(16 087)	(56 062)	(110 522)
Financial income		318	837	1 564	5 719	12 232
Financial expense		(3 233)	(4 462)	(6 851)	(9 608)	(20 460)
Profit before taxes		(34 021)	(35 688)	(21 374)	(59 951)	(118 750)
Income taxes		2 554	12 675	2 390	12 242	16 091
Net profit (loss) for the period		(31 467)	(23 013)	(18 983)	(47 709)	(102 660)
Net income attributable to
Non-controlling interests		-	91	(312)	205	(390)
Shareholders of Techstep ASA		(31 467)	(23 104)	(19 295)	(47 914)	(103 050)
Earnings per share in NOK:
Basic		(0.15)	(0.13)	(0.09)	(0.26)	(0.55)
Diluted		(0.15)	(0.13)	(0.09)	(0.25)	(0.55)

The interim financial information has not been subject to audit or review.

Consolidated statement of comprehensive income

(Amounts in NOK 1000)	Note	Q2 2022	Q2 2021	H1 2022	H1 2021	2021
Net profit (loss) for the period		(31 467)	(23 013)	(18 983)	(47 709)	(102 660)
Items that may be reclassified to profit
and loss
Exchange differences on
translating foreign operations		304	12 395	(12 990)	(13 760)	(21 586)
Income tax related to these		(509)	593	(192)	(683)	(1 304)
Other comprehensive income		(205)	12 988	(13 182)	(14 443)	(22 890)
Total comprehensive income		(31 672)	(10 024)	(32 477)	(62 152)	(125 549)
Total comprehensive income attributable
Non-controlling interests		-	91	(312)	205	390
Shareholders of Techstep ASA		(31 672)	(10 115)	(32 165)	(62 358)	(125 939)

The interim financial information has not been subject to audit or review.

Consolidated statement of financial position

(Amounts in NOK 1000)
ASSETS	Note	Q2 2022	2021
Non-current assets
Deferred tax asset		11 179	2 149
Goodwill		603 811	592 549
Customer relations and technology		190 510	183 214
Sum intangible assets		805 500	777 912
Right of use assets		24 342	30 267
Property, plant and equipment	5	163 264	148 775
Sum tangible assets		187 606	179 043
Shares and investments		598	590
Other non-current assets		2 035	1 224
Sum financial assets		2 633	1 814
Total non-current assets		995 739	958 768
Inventories		18 680	19 391
Accounts receivable		192 796	230 229
Other receivables		40 659	31 435
Total inventories and receivables		252 135	281 055
Cash and cash equivalents	6	29 922	50 350
Assets classified as held for sale	7	-	24 482
Total current assets		282 057	355 887
Total assets		1 277 796	1 314 655
EQUITY AND LIABILITIES	Note	Q2 2022	2021
Share capital	4	211 983	209 630
Other equity		318 501	344 682
Total equity attributable to the owners of Techstep ASA	4	530 483	554 312
Non-controlling interests		-	1 274
Total equity		530 483	555 586
Deferred tax		21 875	14 645
Non-current interest-bearing borrowings		97 016	97 402
Other non-current debt		36 053	43 305
Total non-current liabilities		154 943	155 353
Current interest-bearing borrowings		169 961	74 548
Accounts payable		168 332	193 833
Tax payable		2 247	653
Public duties		28 838	39 577
Other current liabilities	5, 7	222 991	295 106
Total current liabilities		592 370	603 716
Total liabilities		747 313	759 069

The interim financial information has not been subject to audit or review.

Consolidated statement of changes in equity

	Share	Other paid-in	Other	Reval.		Minority	Total equity
(Amounts in NOK 1000)	capital	capital	equity	Reserve	SUM	interest	capital
Equity as at start of 2021	183 295	591 361	(228 313)	16 222	562 566	884	563 450
Profit for the period	-	-	(103 050)	-	(103 050)	390	(102 660)
Other comprehensive income	-	-	-	(22 890)	(22 890)	-	(22 890)
Total comprehensive income
for the period	-	-	(103 050)		(22 890) (125 939)	390	(125 549)
Transactions with owners in their capacity as owners: Issue of ordinary shares as
consideration for a business combination, net of transaction costs and tax	22 655	75 264	-	-	97 920	-	97 920
Proceeds from issuance of shares net of transaction costs	3 679	12 141	-	-	15 821	-	15 821
Share-based payments	-	-	3 946	-	3 946	-	3 946
Equity as at end of 2021	209 630	678 767	(327 417)	(6 668)	554 312	1 274	555 586
Equity as at start of 2022	209 630	678 766	(327 417)	(6 667)	554 311	1 274	555 586
Profit for the period	-	-	(19 295)	-	(19 295)	312	(18 983)
Other comprehensive income	-	-	-	(13 182)	(13 182)	-	(13 182)
Total comprehensive income for the period	-	-	(19 295)	(13 182)	(32 477)	312	(32 166)
Transactions with owners in their capacity as owners: Transactions with non controlling interests	-	-	-	-	-	(1 585)	(1 585)
Issue of ordinary shares as consideration for a business combination, net of transaction costs and tax	1 498	2 801	-	-	4 299	-	4 299
Proceeds from issuance of shares net of transaction costs	855	1 149	-	-	2 004	-	2 004
Share-based payments	-	-	2 345	-	2 345	-	2 345
Equity as at end of Q2 2022	211 983	682 716	(344 367)	(19 849)	530 483	-	530 483

The interim financial information has not been subject to audit or review.

Consolidated statement of cash flow

(Amounts in NOK 1000)	Note	Q2 2022	Q2 2021	H1 2022	H1 2021	2021
Profit before tax		(34 021)	(35 688)	(21 374)	(59 951)	(118 750)
Depreciation equipment and other fixed	5	23 768	22 609	45 768	44 527	94 786
assets
Depreciation right-of-use assets	5	3 981	2 567	5 870	6 716	13 443
Amortisation		15 534	12 138	30 083	22 927	54 723
Share-based payments		-	1 707	-	2 459	3 946
Gain from sale of business units		(113)	-	(40 162)	-	-
Gain from sale of property plant and	5	-	(40)	-	-	0
equipment reclassified to investment
activities
Net exchange differences		-	335	-	-	2 136
Taxes paid		(856)	(1 092)	(1 980)	335	(1 474)
Interest expense (revenue) reclassified to		2 881	-	4 950	(1 421)	7 880
investing/financing activities
Changes in net operating working capital		(3 633)	16 705	(21 582)	97 346	72 242
Net cash flow from operational activities		7 540	19 240	1 573	112 938	128 930
Payment for acquisition of subsidiaries net of		294	811	(8 706)	-	(78 759)
cash acquired
Payment for equipment and other fixed	5	(34 702)	(23 407)	(64 891)	(97 631)	(141 392)
assets
Payment for intangible assets		(16 702)	(17 112)	(35 609)	(23 872)	(48 883)
Proceeds from sale of property, plant and		2 585	765	2 585	8 089	27 393
equipment
Proceeds from sale of business		-	-	-	-	65 678
Interest received				87	-	1 368
Net cash used on investment activities		(48 491)		(38 943) (106 534)		(113 414) (174 594)
Proceeds from issuance of shares		2 004	101 346	2 004	101 853	101 853
Proceeds from borrowings		43 015	12 405	106 340	43 492	35 145
Repayment of borrowings		(10 830)	545	(12 337)	(7 194)	(41 783)
Lease repayments		(4 881)	(4 988)	(6 672)	-	(16 240)
Interest paid		2 273	-	(4 751)	(9 427)	(7 731)
Net cash flow from financing activities		31 580	109 308	84 584	128 724	71 244
Net change in cash and cash equivalents		(9 370)	89 605	(20 377)	128 247	25 580
Cash and cash equivalents at beginning of		38 591	62 796	50 350	27 203	27 203
period
Effects of exchange rate changes on cash		702	1 634	(51)	(1 414)	(2 433)
and cash equivalents
Cash and cash equivalents at end of period	6	29 922	154 034	29 922	154 036	50 350

The interim financial information has not been subject to audit or review.

Notes to the consolidated financial statements

Note 1. Accounting principles

Techstep (the Group) consists of Techstep ASA (the Company) and its subsidiaries. Techstep ASA is a limited liability company, incorporated in Norway. The consolidated interim financial statements consist of the Group. As a result of rounding differences, numbers or percentages may not add up to the total.

1. ACCOUNTING PRINCIPLES

The interim consolidated financial statements are prepared under International Financial Reporting Standards (IFRS) for the periods presented. The interim financial report is presented in accordance with IAS 34 Interim Financial Reporting. The interim consolidated financial statements do not include all the information and disclosures required in the Annual Financial Statements and should be read in conjunction with the Group's Annual Financial Statements 2021. The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's Annual Financial Statements for the year ended 31 December 2021. The report has not been audited.

Note 2. Business segments

Techstep has four Segments, which are represented by the four geographic locations where the Group's entities are incorporated. The entities are controlled and owned by the Techstep Group. The segment HQ comprise Techstep ASA. Eliminations comprise intersegment sales. Transactions between operating segments are conducted on normal commercial terms.

1) Norway

• Techstep Norway AS: The offerings of the company are mobile hardware, servicing, support and mobility consultancy services. The company is located in Oslo, Son and Sandefjord.
• Mytos AS: A Norwegian-based software as a services company with mainly recurring revenue. Mytos offers a full range of mobile expense management (TEM) modules, all with proprietary software and highly user-friendly implementation and operation. The company is located in Oslo.
• Techstep Finance AS: Provides financing and remarketing services.

2) Sweden

• Techstep Sweden AB: The company offers mobile hardware, mobility consultancy services and Enterprise Mobility Management (EMM) services, including mobile security, system design, implementation, mobile device management. The company is located in Karlstad, Gothenburg and Stockholm.
• Techstep AB (formerly Optidev AB): The company develops and provides enterprise mobility software and solutions, predominantly to customers in the transportation, logistics and public safety sectors in Sweden, Norway and Denmark.
• Techstep Finance AB: Provides financing and remarketing services.

3) Denmark

• Techstep Denmark ApS: Established to invoice Danish customers. The company is fully supported from Norway and does not have any employees.
• Optidev ApS: Established as a sales office for Optidev AB.

4) Poland (acquired 1 July 2021)

• Techstep Poland S.A. (Formerly Famoc S.A.): A Polish software-as-a-services company with mainly recurring revenue. The company offers a portfolio of solutions for the mobile device lifecycle management market. The company is located in Gdansk.
• Famoc Ltd: A company based in Ireland acting as a reseller of Techstep Poland S.A. software to customers outside Poland.
• Santa Maria Private Ventures sp. z.o.o.: A holding company owning shares in Famoc S.A. and Famoc Software sp. z.o.o.

5) Headquarters (HQ)

• Techstep ASA

						Elim
Q2 2022	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external customers	188 357	116 070	6 378	6 394	-	-	317 199
Operating revenues from other segments	8 171	8 745	-	2	17 054	(33 972)	-
Operating revenues	196 528	124 815	6 378	6 396	17 054	(33 972)	317 199
Cost of goods sold	(130 816)	(75 064)	(4 633)	(1 643)	-	6 894	(205 262)
Salaries and personnel costs	(22 830)	(28 885)	(597)	(3 709)	(16 661)	1 682	(71 000)
Other operational costs	(24 806)	(15 738)	(583)	(376)	(11 837)	24 585	(28 756)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(17 363)	(9 789)	(441)	(156)	-	-	(27 749)
Amortisation	(5 767)	(6 699)	-	(2 783)	(285)	-	(15 534)
Impairment	-	-	-	-	-	-	-
Other income	-	113	-	18	246	-	377
Other expenses	-	-	-	(1)	(381)	-	(382)
Operating profit (loss)	(5 054)	(11 247)	125	(2 253)	(11 864)	(812)	(31 106)
Employees 30 June 2022	124	147	3	43	7	-	324

						Elim
Q2 2021*	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external customers	202 201	115 100	7 436	-	-	-	324 738
Operating revenues from other segments	22 290	(2 051)	5	-	9 060	(29 305)	-
Operating revenues	224 491	113 049	7 441	-	9 060	(29 305)	324 738
Cost of goods sold	(141 944)	(65 904)	(5 980)	-	267	2 702	(210 858)
Salaries and personnel costs	(35 860)	(30 600)	(665)	-	(5 880)	1 350	(71 654)
Other operational costs	(31 778)	(10 404)	(311)	-	(12 629)	26 184	(28 938)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(18 678)	(8 769)	(62)	-	2 332	-	(25 176)
Amortisation	(6 630)	(7 512)	-	-	2 004	-	(12 137)
Impairment	-	-	-	-	-	-	-
Other income	-	-	-	-	-	-	-
Other expenses	-	-	-	-	(8 037)	-	(8 037)
Operating profit (loss)	(10 398)	(10 139)	423	-	(12 882)	931	(32 063)
Employees 30 June 2021*	133	150	4	-	5	-	292

*The above table is restated in accordance with new segment reporting

						Elim
YTD 2022	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external customers	408 960	229 193	12 559	12 713	-	-	663 425
Operating revenues from other segments	16 875	15 331	-	898	36 551	(69 655)	-
Operating revenues	425 835	244 524	12 559	13 611	36 551	(69 655)	663 425
Cost of goods sold	(286 978)	(150 676)	(9 824)	(3 788)	-	13 342	(437 923)
Salaries and personnel costs	(47 490)	(57 817)	(1 345)	(7 597)	(32 291)	3 339	(143 201)
Other operational costs	(10 944)	(28 952)	(1 323)	(2 905)	(25 184)	13 280	(56 028)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(32 127)	(18 597)	(563)	(350)	(1)	-	(51 638)
Amortisation	(10 458)	(13 828)	-	(5 238)	(570)	9	(30 083)
Impairment	-	-	-	-	-	-	-
Other income	19 600	20 562	-	35	246	-	40 444
Other expenses	(500)	-	-	(1)	(582)	-	(1 082)
Operating profit (loss)	56 938	(4 784)	(496)	(6 231)	(21 830)	(39 684)	(16 087)

						Elim
YTD 2021*	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external customers	393 538	217 789	19 340	-	-	-	630 667
Operating revenues from other segments	21 336	14 122	5	-	18 119	(53 582)	-
Operating revenues	414 874	231 911	19 345	-	18 119	(53 582)	630 667
Cost of goods sold	(272 855)	(127 452)	(16 486)	-	-	14 036	(402 756)
Salaries and personnel costs	(74 229)	(60 869)	(1 105)	-	(11 393)	1 350	(146 247)
Other operational costs	(41 353)	(22 083)	(494)	-	(25 214)	34 099	(55 045)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(32 827)	(18 275)	(137)	-	(4)	-	(51 243)
Amortisation	(9 060)	(13 867)	-	-	-	-	(22 927)
Impairment	-	-	-	-	-	-	-
Other income	-	-	-	-	-	-	-
Other expenses	-	-	-	-	(8 511)	-	(8 511)
Operating profit (loss)	(15 449)	(10 635)	1 123	-	(27 003)	(4 097)	(56 062)

*The above table is restated in accordance with new segment reporting

						Elim
FY 2021	Norway	Sweden	Denmark	Poland	HQ	inations	Total
Operating revenues from external customers	813 205	435 838	41 441	14 607	-	-	1 305 090
Operating revenues from other segments	72 317	41 404	7	2 718	37 148	(153 593)	-
Operating revenues	885 522	477 242	41 448	17 325	37 148	(153 593)	1 305 090
Cost of goods sold	(573 144)	(280 461)	(34 671)	(6 770)	-	49 741	(845 305)
Salaries and personnel costs	(130 854)	(115 246)	(2 981)	(8 540)	(24 549)	550	(281 620)
Other operational costs	(54 309)	(44 341)	(1 121)	3 108	(87 220)	75 334	(108 549)
Share of profit (loss) of joint venture	-	-	-	-	-	-	-
Depreciation	(69 208)	(38 139)	(473)	(403)	(6)	-	(108 229)
Amortisation	(20 118)	(27 709)	-	(6 896)	-	-	(54 723)
Impairment	(3 815)	-	-	-	-	3 815	-
Other income	-	-	-	22	-	-	22
Other expenses	(6 728)	-	-	-	(9 716)	(764)	(17 208)
Operating profit (loss)	27 346	(28 654)	2 202	(2 155)	(84 343)	(24 917)	(110 522)
Employees year end 2021*	129	154	4	48	6	-	341

*Restated in accordance with new segment reporting

Note 3. Disaggregation of revenues

In the following tables, Total revenue is disaggregated by major revenue streams divided into the reportable segments as shown in note 2:

						Elim
Q2 2022	Norway		Sweden Denmark	Poland	HQ	inations	Group
Total revenues	196 528	124 815	6 378	6 396	17 054	(33 972)	317 199
Hardware
Hardware	130 262	65 875	2 197	321	-	(3 736)	194 918
Hardware-as-a-Service	17 576	14 149	1 731	-	-	(1 239)	32 217
Bonus	10 380	2 619	-	-	-	-	12 999
Total	158 218	82 643	3 928	321	-	(4 975)	240 135
Solutions
Advisory & Services	14 811	33 211	2 385	491	-	(2 263)	48 635
Own Software	11 390	7 205	80	5 584	-	(552)	23 708
Commission	3 790	51	-	-	-	-	3 841
Total	29 991	40 467	2 465	6 075	-	(2 815)	76 183
Other revenues
Other	8 319	1 705	(15)	-	17 054	(26 182)	881
Total	8 319	1 705	(15)	-	17 054	(26 182)	881

						Elim
Q2 2021*	Norway		Sweden Denmark	Poland	HQ	inations	Group
Total revenues	224 490	113 049	7 442	-	9 060	(29 305)	324 736
Hardware
Hardware	139 038	47 703	3 870	-	-	2 236	192 847
Hardware-as-a-Service	22 153	10 170	1 183	-	-	(563)	32 943
Bonus	9 319	2 650	-	-	-	(0)	11 968
Total	170 510	60 522	5 053	-	-	1 673	237 758
Solutions
Advisory & Services	21 457	47 005	2 218	-	-	(4 360)	66 320
Own Software	9 713	4 458	161	-	-	839	15 171
Commission	3 845	973	-	-	-	0	4 818
Total	35 015	52 436	2 379	-	-	(3 521)	86 309
Other revenues
Other	18 965	91	9	-	9 060	(27 456)	669
Total	18 965	91	9	-	9 060	(27 456)	669

*The above table is restated in accordance with new segment reporting

						Elim
YTD 2022	Norway		Sweden Denmark	Poland	HQ	inations	Group
Total revenues	425 835	244 524	12 559	13 611	36 551	(69 655)	663 425
Hardware
Hardware	286 901	133 829	5 580	321	-	(6 742)	419 888
Hardware-as-a-Service	40 815	25 614	2 850	-	-	(2 570)	66 709
Bonus	20 070	4 673	-	-	-	-	24 743
Total	347 786	164 116	8 430	321	-	(9 312)	511 340
Solutions
Advisory & Services	32 092	66 089	3 973	782	-	(3 541)	99 394
Own Software	21 386	12 319	203	12 508	-	(1 991)	44 425
Commission	7 884	64	-	-	-	-	7 948
Total	61 362	78 471	4 176	13 290	-	(5 533)	151 766
Other revenues
Other	16 687	1 936	(46)	-	36 551	(54 810)	319
Total	16 687	1 936	(46)	-	36 551	(54 810)	319

						Elim
YTD 2021*	Norway		Sweden Denmark	Poland	HQ	inations	Group
Total revenues	414 873	231 911	19 345	-	18 119	(53 582)	630 668
Hardware
Hardware	267 268	105 975	11 724	-	-	(6 751)	378 215
Hardware-as-a-Service	40 994	22 940	2 262	-	-	(2 732)	63 463
Bonus	17 389	6 932	-	-	-	-	24 320
Total	325 651	135 846	13 985	-	-	(9 484)	465 999
Solutions
Advisory & Services	43 069	81 802	5 017	-	-	(7 479)	122 408
Own Software	19 538	12 083	329	-	-	(1 154)	30 796
Commission	8 200	1 915	-	-	-	0	10 115
Total	70 807	95 800	5 345	-	-	(8 633)	163 319
Other revenues
Other	18 415	265	14	-	18 119	(35 465)	1 349
Total	18 415	265	14	-	18 119	(35 465)	1 349

*The above table is restated in accordance with new segment reporting

						Elim
FY 2021	Norway		Sweden Denmark	Poland	HQ	inations	Group
Total revenues	789 491	456 826	41 448	17 325	58 360	(58 360)	1 305 090
Hardware
Hardware	524 717	221 641	24 790	365	-	-	771 513
Hardware-as-a-Service	82 948	46 557	4 732	-	-	-	134 237
Bonus	37 044	12 119	-	-	-	-	49 163
Total	644 709	280 317	29 522	365	-	-	954 912
Solutions
Advisory & Services	86 400	155 216	11 255	1 458	-	-	254 329
Own Software	39 090	18 505	689	15 503	-	-	73 787
Commission	17 791	2 372	-	-	-	-	20 164
Total	143 281	176 094	11 944	16 960	-	-	348 279
Other revenues
Other	1 501	415	(18)	-	58 360	(58 360)	1 898
Total	1 501	415	(18)	-	58 360	(58 360)	1 898

Note 4. Share capital and shareholders

The company's share capital as at 30 June 2022 was NOK 211 982 788 consisting of 211 982 788 ordinary shares with a par value of NOK 1.00.

Each share gives the right to one vote at the company's annual general meeting. At the time of this report, Techstep holds 1 914 treasury shares.

Techstep's 20 largest shareholders at 30 June 2022 were as follows:

Shareholder	# of shares	Ownership %
DATUM AS1	36 615 646	17.34%
KARBON INVEST AS2	21 927 928	10.39%
MIDDELBORG INVEST AS	20 017 707	9.48%
Swedbank AB	18 965 381	8.98%
VERDIPAPIRFONDET DNB SMB	7 129 473	3.38%
DnB NOR Bank ASA	5 362 610	2.54%
ALUNDO INVEST AS	5 000 000	2.37%
TIGERSTADEN AS	4 630 000	2.19%
CIPRIANO AS	4 538 498	2.15%
Saxo Bank A/S	3 043 183	1.44%
TVENGE	3 000 000	1.42%
ZONO HOLDING AS3	2 725 238	1.29%
BRIDGE CAPITAL AS	2 500 000	1.18%
GIMLE INVEST AS	2 465 987	1.17%
NORDHOLMEN AS	2 262 551	1.07%
CAMIKO AS	2 243 821	1.06%
PIKA HOLDING AS	2 143 455	1.02%
ADRIAN AS	2 038 851	0.97%
UNIFIED AS	1 969 264	0.93%
IDEKAPITAL AS	1 949 690	0.92%
Total number owned by top 20	150 529 283	78.67%
Total number of shares	211 982 788	100.00%

1) Datum AS is controlled by deputy board member Jan Haudemann-Andersen

2) Karbon Invest AS is owned by chairman of the board Jens Rugseth

Duo Jag AS, which is partly owned by board member Ingrid Leisner, owns 601 562 shares in Techstep ASA.

Share option grant

At the Annual General meeting 22 June 2020, 4 069 883 share options (2.5% of existing shares) were granted under the 2020 programme. The share options will become exercisable (vest) on 22 June 2021 and must be exercised by 22 June 2024. The exercise price is NOK 3.00.

At the Annual General meeting 22 April 2021, 4 593 307 share options (2.5% of existing shares) were granted under the 2021 programme. The share options vest 1/3 each year from 22 April 2022 and are fully vested on 22 April 2024. The options must be exercised by 22 April 2026. The exercise price is NOK 5.80. The exercise price will be adjusted for any dividends paid or accrued before exercise. Each option holder's aggregated gross profit from exercising the options shall be limited to the amount equal to 3 years' gross base salary at the time of exercising the options. The exercise of share options can be settled in cash, and/or with new or existing treasury shares.

CEO Børge Astrup was awarded 4 500 000 share options on an extraordinary general meeting held 22 September 2021. The options vest in three tranches with 1/3 per tranche, on 1 September 2024, 2025, and 2026. The exercise period is two years from the applicable Vesting Date. The strike price is NOK 4.75, NOK 5.75 and NOK 6.75 for the respective tranches. If the average, weighted Techstep share price for seven calendar days exceeds NOK 30 per share, then the Company may require that all vested options are exercised by Børge Astrup.

At the Annual General Meeting 21 April 2022, share options (1.4% of existing shares) were granted under the 2022 programme. The granted share options vest 1/3 each year from 21 April 2023 and are fully vested on 21 April 2025. The options must be exercised within 5 years. The exercise price is NOK 3.245. The exercise price will be adjusted for any dividends paid or accrued before exercise. The exercise of share options can be settled in cash, and/or with new or existing treasury shares.

As at 30 June 2022, the total number of outstanding share options was 10 814 495 (5.1 %).

Overview of shares and share options held by members of the management group as at 30 June 2022:

Name	Position	Shares	Share options
Børge Astrup	CEO	1 282 082	4 500 000
Anita Huun	CFO	40 000	838 519
Ellen Skaarnæs	Chief People Officer	41 411	340 648
Sheena Lim	Chief Marketing Officer	-	340 648
Mads Vårdal	Chief Product Officer	5 019	1 497 374
Erik Haugen	Chief Transformation Officer	4 672	1 156 726
Fredrik Logenius	Chief Operating Officer	9 469 399	570 307
Bartosz Leoszewski	Chief Technology Officer	312 628	340 648
Gunnar Aasen	Chief Revenue Officer	-	340 648

Note 5. Property, plant and equipment

	Right-of-use		Other fixed
	assets	Equipment1)	assets	Total
Accumulated cost as at 1 January 2022	63 881	292 234	31 090	387 205
Additions	(19)	61 030	3 861	64 872
Additions arising from business combinations	0	0	83	83
Disposals	(858)	(31 830)	(15 682)	(48 370)
Translation differences	302	643	284	1 229
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated cost 30 June 2022	63 305	322 077	19 637	405 019
Accumulated cost as at 1 January 2021	65 953	282 727	35 210	383 891
Additions	11 424	140 212	1 179	152 815
Additions arising from business combinations	-	-	869	869
Disposals	(12 152)	(122 605)	(4 979)	(139 736)
Translation differences	(1 344)	(8 101)	(1 190)	(10 634)
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated cost 31 December 2021	63 881	292 234	31 090	387 205
Accumulated depreciation as at 1 January	(33 613)	(149 468)	(25 081)	(208 163)
Additions arising from business combinations	(0)	(0)	-	(0)
Current year depreciation	(5 870)	(43 887)	(1 881)	(51 638)
Disposals	981	28 337	14 194	43 512
Translation differences	(461)	(267)	(396)	(1 124)
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated depreciation 30 June 2022	(38 963)	(165 285)	(13 164)	(217 412)
Accumulated depreciation as at 1 January 2021	(26 341)	(157 897)	(27 485)	(211 723)
Additions arising from business combinations	-	-	(766)	(766)
Current year depreciation Disposals	(13 443)	(92 167)	(2 619)	(108 229)
	5 386	95 875	4 982	106 242
Translation differences	784	4 722	807	6 313
Reclassified to asset classified as held for sale	-	-	-	-
Accumulated depreciation 31 December 2021	(33 613)	(149 468)	(25 081)	(208 163)
Book value of assets 30 June 2022	24 342	156 792	6 472	187 606
Book value of assets 31 December 2021	30 267	142 766	6 009	179 043

1) Equipment comprises mobile phones, tablets and other equipment where the Group is the lessor.

Note 6. Cash and cash equivalents

Current assets	Q2 2022	FY 2021
Cash at bank and in hand, not included in cash pool	29 922	50 350
of which is restricted	6 233	6 196

The Group has a credit facility of NOK 140 million related to the cash pool. As at 30 June 2022, NOK 128.3 million of the facility has been utilised.

Note 7. Changes in Group structure and business combinations

Q2 2022

On 1 June Techstep acquired 100% of the shares in Crypho AS. Chrypho AS has an end-to-end encrypted enterprise software as a service (SaaS) messaging and file-sharing application. The transaction was partly settled in 368 902 consideration shares in Techstep ASA. At the time of completion, this corresponded to NOK 1.1 million. The earnout (refer to table below) is to be settled in Techstep shares.

The tables below summarise the consideration transferred, and the amounts recognised for assets acquired and liabilities assumed after the business combinations:

Consideration and amount recognised	Chrypho	Total
Settlement of shareholder loans*	3 673	3 673
Consideration shares	1 059	1 059
Seller credit	1 818	1 818
Total	6 550	6 550
Consideration to be allocated	Chrypho	Total
Consideration shares	1 059	1 059
Seller credit	1 818	1 818
Total	2 877	2 877
Net assets	Chrypho	Total
Intangible assets	3 566	3 566
Property plant and equipment	83	83
Trade and other receivables	28	28
Cash and cash equivalents	294	294
Other non-current liabilities	- 5 983	- 5 983
Current liabilities	- 142	- 142
Net assets	- 2 153	- 2 153
Excess value	5 030	5 030

Purchase price allocation	Chrypho	Total
Goodwill	4 844	4 844
Long-term debt	186	186
Total	5 030	5 030

*Settlement of shareholder loans:

Crypho had shareholder loans NOK 3.7 million. In conjunction with closing of the transaction, Techstep assumed the position as debtor. The shareholder loans were subsequently settled with 1 129 118 shares in Techstep ASA.

H1 2022

Divestment of Voice and Contact centre business unit

On 3 January, the divestment of the Voice and contact centre business unit was completed for a total consideration of NOK 65.5 million. The settlement was received in December 2021. The gain of NOK 40.1 million has been recognised in the income statement on the line item other income in Q1 2022. NOK 24.5 million has been derecognised from the statement of financial position's line-item assets held for sale.

Acquisition of last 20% of shares in Techstep Finance AS

On 14 February, the company acquired the remaining 20% of the shares in Techstep Finance AS for NOK 9 million. The amount was settled in cash. Following the transaction, Techstep owns 100% of the shares in Techstep Finance AS.

Note 8. Subsequent events

There are no subsequent events to report in the period.

Alternative performance measures

Techstep Group's financial information is prepared in accordance with international financial reporting standards (IFRS). In addition, it is management's intention to provide alternative performance measures that are regularly reviewed by management to enhance the understanding of Techstep's performance, but not instead of the financial statements prepared in accordance with IFRS. The alternative performance measures presented may be determined or calculated differently by other companies. The principles for measuring the alternative performance measures are in accordance with the principles used both for segment reporting in Note 2 and internal reporting to Group Executive Management (chief operating decision makers) and are consistent with financial information used for assessing performance and allocating resources.

Gross profit

Gross profit is defined as Total revenue less Cost of goods sold.

Gross margin

Gross margin is defined as Total revenue less Cost of goods sold divided by Total revenue.

EBITDA

Earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) is a key financial parameter for Techstep. This measure is useful to users of Techstep's financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciation and amortisation expense related primarily to leases, capital expenditures and acquisitions that occurred in the past. The EBITDA margin presented is defined as EBITDA divided by total revenues.

Adjusted EBITDA

Adjusted Earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) is based on EBITDA but adjusted for transactions of a non-recurring nature. Such non-recurring transactions include, but are not limited to restructuring costs, gains or losses related to sale of subsidiaries, acquisition-related costs and other non-recurring income and expenses.

EBITA

Earnings before interest, tax and amortisation (EBITA) is a key financial parameter for Techstep. This measure is useful to users of Techstep's financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciation related primarily to leases and capital expenditures and acquisitions that occurred in the past. The EBITA margin presented is defined as EBITA divided by total revenue.

EBIT

Earnings before interest and tax (EBIT) is useful to users with regard to Techstep's financial information in evaluating operating profitability on the cost basis as well as the historic cost related to past business combinations and capex. The EBIT margin presented is defined as EBIT divided by total revenue.

Total net operating expenses

Total net operating expenses includes the line items Cost of goods sold, Salaries and personnel costs, Other operating costs, Share of profit (loss) in joint venture, Depreciation, Amortisation, Impairment and Other income.

Hardware revenue

Hardware revenue is defined as revenue from sales of tangible goods and related discounts from suppliers and partners.

Hardware share of revenue is the hardware revenue divided by total revenues.

Solutions revenue

Solutions revenue is defined as revenue from sales of licenses, support and other non-tangible items to customers. Also included are discounts from suppliers and partners. Solutions share of revenue is the solutions revenue divided by total revenue.

Net interest-bearing debt (NIBD)

Net interest-bearing debt is non-current interest-bearing debt plus current interest-bearing liabilities less cash and cash equivalents.

Equity ratio

Equity ratio is defined as Total equity divided by total equity and liabilities.

Capital Expenditure (Capex)

Capital expenditure is the same as payment for property, plant and equipment and intangible assets.

Annual Recurring Revenue (ARR)

ARR is calculated as the revenue the following 12 months from own software as at the balance sheet date. The ARR is calculated by multiplying the number of users of own software with the price per product and in turn annualised.

APM's in the income statement	Q2 2022	Q2 2021	H1 2022	H1 2021	2021
Total revenue	317 199	324 737	663 425	630 667	1 305 090
Cost of goods sold	(205 262)	(210 858)	(437 923)	(402 756)	(845 305)
Gross profit	111 938	113 879	225 502	227 911	459 785
Gross margin	35%	35%	34%	36%	35%
Salaries and personnel costs	(71 000)	(71 654)	(143 201)	(146 247)	(281 620)
Other operational costs	(28 756)	(28 937)	(56 028)	(55 045)	(108 549)
Other income	377	-	40 444	-	22
Other expenses	(382)	(8 037)	(1 082)	(8 511)	(17 209)
EBITDA	12 178	5 251	65 634	18 108	52 430
Depreciation	(27 749)	(25 176)	(51 638)	(51 243)	(108 229)

EBITA	(15 571)	(19 925)	13 997	(33 135)	(55 799)
Amortisation	(15 534)	(12 138)	(30 083)	(22 927)	(54 723)
EBIT	(31 106)	(32 063)	(16 087)	(56 062)	(110 522)
Adjusted EBITDA	Q2 2022	Q2 2021	H1 2022	H1 2021	2021
EBITDA	12 178	5 251	65 634	18 108	52 430
Other income	(377)	-	(40 444)	-	(22)
Other expense	382	8 037	1 082	8 511	17 209
Adjusted EBITDA	12 182	13 288	26 273	26 619	69 617
Total net operating expenses
Cost of goods sold	(205 262)	(210 858)	(437 923)	(402 756)	(845 305)
Salaries and personnel costs	(71 000)	(71 654)	(143 201)	(146 247)	(281 620)
Other operational costs	(28 756)	(28 937)	(56 028)	(55 045)	(108 549)
Depreciation	(27 749)	(25 176)	(51 638)	(51 243)	(108 229)
Amortisation	(15 534)	(12 138)	(30 083)	(22 927)	(54 723)
Other expenses	(382)	(8 037)	(1 082)	(8 511)	(17 232)
Total net operating expenses	(348 682)	(356 800)	(719 956)	(686 729)	(1 415 658)
Revenue splits
Revenue	317 199	324 737	663 425	630 667	1 305 090
Hardware revenue	241 016	238 428	511 659	467 347	956 811
Solutions revenue	76 183	86 309	151 766	163 320	348 279
Hardware share of revenue	76%	73%	77%	74%	73%
Solutions share of revenue	24%	27%	23%	26%	27%
NIBD				Q2 2022	2021
Cash and cash equivalents				29 922	50 350
Non-current interest-bearing				97 016	97 402
Current interest-bearing borrowings				169 961	74 548
NIBD				(237 054)	(121 600)
Equity ratio
Total equity				530 483	555 586
Total equity and liabilities				1 277 796	1 314 655
Equity ratio				42%	42%

ARR	Q2 2022	2021
Number of own software users (1 000)	70	66
Average price own software	1 057	1 050
MMS-Related ARR (1 000)	73 978	69 613
Number of own software users (1 000)	182	183
Average price MEM white label	151	152
White-label ARR	27 491	27 860
Total ARR from own IP	101 469	97 473

Responsibility statement

Oslo, 18 August 2022

From the Board of Directors and CEO of Techstep ASA

We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2022 has been prepared in accordance with IAS 34 – Interim Financial Reporting and gives a true and fair view of the group's assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related party transactions.

Jens Rugseth	Ingrid Leisner
Chairman	Board Member
Harald Arnet	Melissa Mulholland
Board Member	Board Member
Michael Jacobs	Børge Astrup
Board member	CEO

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