Vitec Software Group B — Interim / Quarterly Report 2021

Jul 15, 2021

Interim report January–June 2021

This is Vitec

Vitec is the leading software company in Vertical Software Market in the Nordic region. We develop and deliver standardized software for various functions in society. They can be found at the heart of a variety of businesses and activities, including pharmacies, banks, car repair shops, property management, health care and education. Our products enable us to help our customers achieve greater efficiency and to generate societal benefit. The Group's overall processes, together with the employees' in-depth knowledge of the customer´s local market enables continuous improvement and innovation. Vitec is listed on Nasdaq Stockholm.

Growth by acquisition

Vitec has an explicit acquisitions-based growth strategy with a sharp focus on profitability and stable cash flows. Our focus on strong cash flows creates the financial prerequisites for continued acquisition-driven growth.

Recurring revenues

Our business model is based on a high percentage of recurring revenues, This provides us with stable and predictable cash flows that create the prerequisites for a long-term approach. It also makes the Group less sensitive to temporary declines within individual business units.

Value-driven organization

Within the framework of our decentralized organization, the corporate culture plays a significant role in corporate governance and is important for our long-term success. Our values, brand promise and Code of Conduct are the three cornerstones of our corporate culture. Through an array of forums, we create conditions for employees and leaders to become part of our corporate culture.

Vitec's business concept

To offer customers business-critical and proprietarily developed software, and thus provide them with the best conditions to develop their operations.

Vitec's brand promise

To rely on – today and tomorrow

Summary of interim period, January–June 2021

• Net sales SEK 769 million (630), an increase of 22%
• Recurring revenues SEK 639 million (519), an increase of 23% including 8% organic
• EBITA was SEK 218 million (161), with an EBITA margin of 28% (26)
• Operating profit was SEK 142 million (97), with an operating margin of 18% (15)
• Earnings per share before dilution SEK 3.06 (2.19)
• Cash flow from operating activities SEK 340 million (302)

Summary of interim period, April–June 2021

• Net sales SEK 396 million (321), an increase of 24%
• Recurring revenues SEK 325 million (266), an increase of 22% including 9% organic
• EBITA was SEK 121 million (96), with an EBITA margin of 31% (30)
• Operating profit was SEK 86 million (64), with an operating margin of 22% (20)
• Earnings per share before dilution SEK 1.85 (1.52)
• Cash flow from operating activities SEK 30 million (69)
• Acquisition of Nordman

Stable business model continues to deliver

This is my first quarterly report as the CEO of Vitec and in many ways, it is "business as usual, but in an unusual way," which is fully in line with how we want to move forward. To further underscore the long-term nature of our strategy and approach, I would like to start with our co-founder and chairman Lars Stenlund's favorite conclusion to many of his 100+ report comments as CEO: Supported by our acquisition of well-established companies and a high and increasing percentage of recurring revenues, Vitec will stay its course – to be a vertical software company with excellent risk diversification, as well as sustainable and profitable growth.

In terms of earnings, we are pleased once again to see organic growth, especially in our recurring revenues, +8% so far this year and +7% for rolling 12-month ARR. During the second quarter, we completed our third acquisition of the year: Nordman, with sales support software for customers such as retailers, which will be a new vertical for us. EBITA for the first half increased by +35% to a margin of 28%. We continue to believe that around 1 percentage point of the margin is not

sustainable since it is based on non-existent travel, low marketing costs and some delayed hiring.

Over the past 16 months we have lived with a pandemic that has affected everything around us, both privately and professionally. Our business model has proven to be both stable and evolving. We will synthesize the good examples of how we can work together and continue to evolve. This makes us well prepared for further good development and growth.

With presumably eased restrictions, many of us are looking forward to meeting colleagues and customers again after the summer, to give an extra boost to the creative process that characterizes a software company like Vitec.

Have a great summer!

Olle Backman, CEO Vitec Software Group

OLLE BACKMAN – NEW CEO

5

Olle Backman has taken over as CEO after Lars Stenlund. "I feel both honored and humbled to take over from Lars, with whom I have had the privilege of working closely. I look forward to working together with all of the talented employees to drive Vitec forward with the long-term perspective that has always been a common thread throughout the company," says Olle Backman.

Group financial information

NET SALES AND EARNINGS

January–June 2021

Net sales

Net sales for the period totaled SEK 769.5 million (629.7) and included recurring revenues of SEK 638.7 million (519.0), license revenues of SEK 15.3 million (4.5), service revenues of SEK 101.3 million (90.4) and other revenues of SEK 14.1 million (15.9).

Comments on sales

Net sales rose a total of 22% for the period; recurring revenues rose 23%, including 8% organically. Aggregate recurring revenues amounted to SEK 1,266 million on a rolling 12-month basis, corresponding to organic growth of 7%. Other revenues decreased by 11%, mainly through lower hardware sales, which is completely in line with our strategy. Licensing increased by 244%, mainly attributable to newly acquired companies. Service revenues gained 12%, compared with the corresponding period in 2020. Recurring revenues accounted for 83% of net sales, compared with 82% for the corresponding period in 2020. During the year acquired companies contributed SEK 64 million in net sales.

Earnings

EBITA was SEK 217.5 million (160.7), with an EBITA margin of 28% (26). Operating profit was SEK 141.9 million (96.5), with an operating margin of 18% (15). Profit after tax for the period amounted to SEK 101.0 million (71.2). Earnings per share before dilution totaled SEK 3.06 (2.19).

Comments on earnings

EBITA gained 35%, compared with the corresponding period in 2020. We continue to estimate that about 1 percentage point of the improved margin represents temporary positive effects from factors such as reduced travel, canceled trade fairs and other customer-related activities. The impact of IFRS 16 on leases amounts to SEK 20.4 million (19.4) in operating profit, and to SEK -23.3 million (-17.2) in depreciation. The net of capitalized development costs and amortization and impairment losses on intangible fixed assets had a positive effect on operating profit of SEK 3.9 million, compared with negative SEK 8.4 million the corresponding period last year.

April–June 2021

Net sales

Net sales for the period totaled SEK 396.1 million (320.6) and included recurring revenues of SEK 325.2 million (265.6), license revenues of SEK 8.4 million (1.8), service revenues of SEK 53.5 million (45.7) and other revenues of SEK 9.0 million (7.5).

Comments on sales

Net sales rose a total of 24% for the period; recurring revenues rose 22%, including 9% organically. Other revenues rose by 21% from SEK 7.5 million to SEK 9 million. Licensing increased by 373%, mainly attributable to newly acquired companies. Service revenues gained 17%, compared with the corresponding period in 2020. Recurring revenues accounted for 82% of net sales, compared with 83% for the corresponding period in 2020. During the year acquired companies contributed SEK 35 million in net sales.

Earnings

EBITA was SEK 121.4 million (95.8), with an EBITA margin of 31% (30). Operating profit was SEK 86.1 million (64.2), with an operating margin of 22% (20). Profit after tax for the period amounted to SEK 61.0 million (49.4). Earnings per share before dilution totaled SEK 1.85 (1.52).

Comments on earnings

EBITA gained 27%, compared with the corresponding period in 2020. Acquisition-related costs had an impact of SEK 2.5 million on earnings, compared with SEK 5 million in 2020. We continue to estimate that about 1 percentage point of the improved margin represents temporary positive effects from factors such as reduced travel, canceled trade fairs and other customer-related activities. During the second quarter of 2020 we received government aid, primarily as a reduction of employer contributions, as well as compensation for sick pay, totaling about SEK 6 million. The impact of IFRS 16 on leases amounts to SEK 13.0 million (11.0) in operating profit, and to SEK -12.3 million (-9.5) in depreciation. The net of capitalized development costs and amortization and impairment losses on intangible fixed assets had a positive effect on operating profit of SEK 0.7 million, compared with negative SEK 4.5 million the corresponding period last year.

	2021 Apr–Jun	2020 Apr–Jun	Change	2021 Jan–Jun	2020 Jan–Jun	Change
Net sales, SEK million	396	321	24%	769	630	22%
Recurring share of net sales, %	82%	83%		83%	82%
EBITA, SEK million	121	96	27%	218	161	35%
EBITA margin, %	31%	30%		28%	26%
Operating profit/loss, SEK million	86	64	34%	142	97	47%
Operating margin, %	22%	20%		18%	15%
Net profit/loss for the period, SEK million	61	49	23%	101	71	42%
Earnings per share, SEK	1.85	1.52		3.06	2.19

Diagrams on Group trends

Sales by quarter EBITA and EBITA margin by quarter

Sales by market, January–June 2021 Breakdown of revenue, January–June 2021

Sales broken down by business unit and customer

Because we operate in a number of niche markets in the Nordic region, we have good diversification of revenue in terms of both geography and area of operation. Although we operate in several niche markets, we still engage in essentially the same business. We develop and deliver standardized software to meet the various needs of our customers. Some of our software products comprise complete enterprise systems, while

others provide support for specific aspects of our customers' operations. We serve a large number of customers with our products. No individual customer accounts for more than 1.6% of the Group's total revenues. As we continue to acquire profitable vertical software companies in the Nordic region, we expect the distribution of risk to continue in a positive direction.

BREAKDOWN OF SALES

Our sales are evenly spread across our 30 business units. No individual business unit accounts for more than 13% of consolidated sales.

CUSTOMERS

We have about 24,000 customers. The Group's ten largest customers account for approximately 7% of sales. The single largest customer accounts for approximately 1.6% of sales.

Our business units

We conduct our operations through our 30 independent business units. Vitec develops and delivers software aimed at various functions in society. They can be found at the heart of a variety of businesses and activities, including pharmacies, banks, car repair shops, property management, health care and education. Our products enable us to help our customers achieve greater efficiency and to generate societal benefit. The diagram of the city on the right illustrates where our business units can be found and how we contribute to developments in society.

			Acquisi	Sales
			tion	2020,	Recurring,
Business unit	Software for:	Domicile	year	SEKm	2020
Vitec Actor Smartbook	Municipal culture and recreation administration offices, as well as other visitor facilities in Norway and Sweden.	SE	2018	25	79%
Vitec Acute	Healthcare companies in Finland	FI	2013	66	89%
Vitec Agrando	Church activities in Norway.	NO	2018	25	88%
Vitec Aloc	Banking and finance industry in the Nordic countries and western Europe.	DK, NO	2014	109	89%
Vitec ALMA	Information management within the process industry and energy companies in Finland.	FI	2020	35	38%
Vitec Appva	Healthcare and social services sector in Sweden.	SE	2020	30	95%
Vitec Autosystemer	Automotive, transportation and machinery industry in Norway.	NO	2015	52	93%
Vitec Avoine	Local associations and national organizations in Finland.	FI	2019	30	83%
Vitec Bygg & Fastighet	Construction and property management industry in Sweden	SE	1985	196	69%
Vitec Capitex Finanssystem	Banking and finance industry, primarily in Sweden and with some establishment in Norway and Finland.	SE	2010	24	91%
Vitec Cito	Pharmacy market in Denmark.	DK	2018	42	67%
Vitec Datamann	Car dealers and auto repair shops in Denmark.	DK	2015	48	76%
Vitec Energy	Electricity traders and owners of electricity and district heat ing grids in 25 different countries.	SE	1998	30	81%
Vitec Fixit	Hair and beauty salons in Norway.	NO	2019	59	97%
Vitec Futursoft	Automotive industry and machinery sector in Finland and Sweden.	FI	2016	82	91%

			Acquisi	Sales
			tion	2020,	Recurring,
Business unit	Software for:	Domicile	year	SEKm	2020
Vitec HK data	Health and welfare sector in Norway.	NO	2019	17	84%
Vitec Katrina	Church-related administration in Finland.	FI	2019	20	77%
Vitec Megler	Real estate agents in Norway.	NO	2012	82	93%
Vitec MV	Education sector in Denmark, Norway and Sweden.	DK, NO, SE	2017	56	84%
Vitec Mäklarsystem	Real estate agents in Sweden.	SE	2010	79	96%
Vitec Nexgolf	Golf courses in Finland.	FI	2020	13	77%
Vitec Nice	Liability insurance companies in Norway and Sweden.	NO	2015	15	68%
Vitec Nordman	Food and grocery retail industry in Sweden	SE	2021	20	88%
Vitec Plania	Building and facility management in Norway.	NO	2016	33	66%
Vitec Samfundssystem	Church-related administration and preschools in Sweden.	SE	2018	44	77%
Vitec Tietomitta	Private and municipal waste-and-resource processing in Finland.	FI	2016	54	85%
Vitec Travelize	Travel agencies, primarily in Scandinavia.	SE	2021	17	78%
Vitec Unikum	Retail trade and manufacturing industry in Sweden.	SE	2021	103	77%
Vitec Visiolink	Media companies in Europe.	DK	2020	65	72%
Vitec WIMS	Insurance companies in Norway.	NO	2019	28	73%

Balance sheets and cash flow

CASH AND CASH EQUIVALENTS

The Group's cash and cash equivalents at the end of the period totaled SEK 210.7 million (139.9). In addition to cash and cash equivalents, Vitec has overdraft facilities of SEK 125.0 million and SEK 515.0 million in unutilized portions of the credit facility.

FINANCIAL LIABILITIES

At June 30, 2021, interest-bearing liabilities totaled SEK 1,060.7 million (578.8) and comprised SEK 1,057.9 million (554.8) in non-current interest-bearing liabilities and SEK 2.8 million (24.1) in current interest-bearing liabilities.

Non-current interest-bearing liabilities comprised bank loans of SEK 992.2 million, as well as convertible debentures totaling SEK 65.7 million. Current interest-bearing liabilities comprised bank loans of SEK 2.8 million. During the period, convertible loan 1906 was converted to class B shares, which reduced financial liabilities by SEK 31.5 million. The terms and conditions of the company's credit agreement contain restrictions, known as covenants. The Group has fulfilled the terms and conditions in their entirety during the period.

Liabilities relating to finance leases are included in other non-current liabilities of SEK 81.1 million and in other current liabilities of SEK 39.8 million.

CASH FLOW AND INVESTMENTS

During the period, financing was arranged by using SEK 500 million from the credit facility and by taking out four convertible loans of SEK 32.0 million. A new loan was signed with Nordea and SEB amounting to SEK 500 million. Repayment of the facility totaled SEK 0 million, amortization of bank loans amounted to SEK 1.4 million, and amortization related to leases was SEK 20.4 million. Cash flow from operating activities was SEK 340.1 million (301.8). Investments totaled SEK 108.8 million in capitalized work, SEK 0.2 million in other intangible assets and SEK 9.5 million in property, plant and equipment. Investments in right-of-use assets not affecting cash flow totaled SEK 84.5 million. Through the acquisitions of Unikum datasystem AB, Travelize International AB and Nordman & Co AB, SEK 655.0 million was invested in product rights, brands, customer agreements and goodwill.

The previously contingent consideration for WIMS AS was adjusted downward by SEK 1.0 million. Pursuant to IFRS 3:58, the adjustment was recognized as Other operating revenues, while an impairment of intangible assets was recognized simultaneously. The adjustment has had no impact on net profit/loss. During the period contingent considerations for the acquisitions of WIMS AS, M&V Software Oy and NexGolf Oy were settled. A total of SEK 45.8 million was paid. Partial payments related to contingent considerations for ALMA Consulting Oy and Appva AB have been paid amounting to a total of SEK 13.1 million.

Proceeds for investments in associate companies were paid amounting to SEK 12.4 million.

The fourth and final payment of the dividend for financial year 2019 was made on March 30, 2021, when SEK 10.9 million was paid. The first payment of the dividend for financial year 2020 was made on June 30, 2021, when SEK 13.5 million was paid.

CONVERTIBLE DEBENTURES

Convertible debentures are included under non-current interest-bearing liabilities and total SEK 65.7 million.

Upon full conversion of all convertible debentures, the share capital may increase by a maximum of SEK 22.0 million. Dilution cannot exceed a maximum of 0.7% of capital and 0.3% of votes.

INCENTIVE PROGRAM

There are two ongoing warrant incentive programs aimed at 45 people in Sweden, Finland, Norway and Denmark.

Share capital can increase by a maximum of SEK 51.4 thousand upon conversion. When fully exercised, this corresponds to a dilutive effect of 1.6% on share capital and 0.8% of voting rights.

SHAREHOLDERS' EQUITY

Equity attributable to Vitec's shareholders totaled SEK 947.9 million (786.6). The equity/assets ratio is 32% (37). On April 28, the Annual General Meeting resolved to pay a dividend of SEK 1.64 per share, totaling SEK 58.4 million. The dividend will be divided up and paid on four payment dates: June 30, September 30, December 30 and March 30, 2022.

During the period, convertible loan 1906 was converted to class B shares. As a result of the conversion, the number of class B shares in Vitec increased by 260,480 and share capital in Vitec increased by SEK 26,048. The number of shares in Vitec after the conversion is 33,033,902 shares, including 3,050,000 class A shares.

Participants in the TO 2021:1 incentive program were subsidized equivalent to net 50% of the option premiums, which had a negative impact on profit for the period of SEK 3.0 million. The fair value of the option premiums totals SEK 5.8 million and has been recognized in equity.

TAXES

Current tax for the period amounted to SEK 27.2 million (25.0). Deferred tax totaled SEK 3 million (-6.7).

Outstanding warrant programs:

Warrants	Number of options	Grant date	Maturity date	Exercise price, SEK	Dilution capital	Dilution votes
TO 2020:1	251,000	Sep 16, 2020	Sep 1, 2023– Sep 15, 2023	333	0.8%	0.4%
TO 2021:1	263,000	June 15, 2021	June 3, 2024– June 14, 2024	463	0.8%	0.4%
Number of options	514,000				1.6%	0.8%

Convertible debentures:

Convertible debentures	Carrying amount, SEK million	Duration	Conversion period	Conversion price, SEK	Dilution capital	Dilution votes
Loan 2001 Acquisition Visiolink Management ApS	13.3	Jan 30, 2020– Dec 30, 2022	July 1, 2021– Dec 30, 2022	230	0.2%	0.1%
Loan 2006 Acquisition Appva AB	7.6	June 17, 2020– Dec 30, 2022	Jan 1, 2022– Dec 30, 2022	240	0.1%	0.1%
Loan 2101 Acquisition Unikum datasystem AB	15.0	Jan 4, 2021– Dec 30, 2023	Jan 1, 2023– Dec 30, 2023	373	0.1%	0.1%
Loan 2102 Acquisition Travelize international AB	6.7	Feb 3, 2021– Dec 30, 2023	Jan 1, 2023– Dec 30, 2023	362	0.1%	0.0%
Loan 2104 Acquisition Nordman & Co AB	2.3	Apr 26, 2021– June 30, 2024	Jan 1, 2024– June 30, 2024	468	0.0%	0.0%
Loan 2009 Convertible Employee Program	12.6	Sep 1, 2020– Sep 30, 2023	Sep 1, 2023– Sep 30, 2023	333	0.1%	0.1%
Loan 2021:1 Convertible Employee Program	8.2	June 1, 2021– June 30, 2024	June 1, 2024– June 30, 2024	463	0.1%	0.0%
Total liability	65.7				0.7%	0.3%

Acquisitions during the period

INVESTMENTS IN MINORITY INTERESTS

Our subsidiary Malmkroppen AB aims to invest in Nordic software companies that are in an earlier phase than the software companies that are usually acquired. Investments during the period:

Voxo AB

On June 24 an investment was made in the Swedish software company Voxo AB. Voxo is a Swedish voice technology company specializing in conversation-based AI solutions. The company's platform of proprietary models processes, analyzes and visualizes voice conversation data. Customers are found in several industries, ranging from banking to retail. Vitec holds a 6% stake in the company after the investment.

COMPLETED ACQUISITIONS

Three acquisitions occurred during the period: Unikum datasystem AB, Travelize International AB and Nordman & Co AB. From the acquisition date up to and including June 30, revenues in the acquired companies totaled SEK 63.9 million in sales and SEK 19.0 million in profit before tax. If consolidation had occurred at the beginning of the year, the companies would have provided the Group with an additional approximately SEK 8.6 million in sales and SEK 1.3 million in profit before tax. The acquisition-related expenses are recognized in operating profit and total SEK 3.1 million.

Acquisition Unikum datasystem AB

On January 4, Vitec acquired all shares in the Swedish software company Unikum Datasystem AB.

Unikum offers the Pyramid Business Studio software, a complete business and enterprise management system for small and medium enterprises. The product offers functions such as project management, accounting, customer care and e-commerce. The company reported sales of SEK 103.1 million, with an adjusted EBITDA of SEK 42.9 million for the 2020 financial year. Vitec welcomes 90 new employees as part of the acquisition.

Payment was in cash and with a convertible, with deviation from shareholders' preferential rights in accordance with the authorization from the Annual General Meeting on June 23, 2020. The convertible matures in 36 months and at full conversion will have a dilutive effect on capital of 0.1%. The acquisition is expected to yield an immediate increase in earnings per share for Vitec. Consolidation will commence as of the acquisition date.

The goodwill item is not tax deductible and is deemed to be attributable to anticipated profitability and complementary expertise requirements, as well as anticipated synergy effects, in the form of the joint development of our products.

The acquisition of Unikum added SEK 63.4 million in product rights, SEK 5.2 million in brands, SEK 87.9 million in customer agreements and SEK 392.3 million in goodwill. The expensed convertible totals SEK 15.6 million.

Acquisition Travelize International AB

On February 3, Vitec acquired all shares in the Swedish software company Travelize International AB, with subsidiaries. Travelize reported sales of SEK 17.1 million, with an adjusted EBITDA of SEK 4.1 million for the 2020 financial year.

Travelize develops and provides a complete enterprise management system for small and medium-sized travel agencies, primarily in Scandinavia. The web-based software enables travel reservations, web publishing and administration. The system offers an array of functions for customer and payment management, as well as marketing. The company's approximately 300 customers are mainly located in Sweden, Denmark and Norway. Vitec welcomes eight new employees as part of the acquisition.

Payment was in cash and with a convertible, with deviation from shareholders' preferential rights in accordance with the authorization from the Annual General Meeting on June 23, 2020. The convertible matures in 36 months and at full conversion will have a dilutive effect on capital of 0.1%. The acquisition is expected to yield an immediate increase in earnings per share for Vitec. Consolidation will commence as of the acquisition date.

The goodwill item is not tax deductible and is deemed to be attributable to anticipated profitability and complementary expertise requirements, as well as anticipated synergy effects, in the form of the joint development of our products.

The acquisition of Travelize added SEK 8.7 million in product rights, SEK 0.5 million in brands, SEK 19.2 million in customer agreements and SEK 42.0 million in goodwill. The expensed convertible totals SEK 7.0 million. The expensed portion of the contingent consideration amounts to SEK 33.0 million and is subject to EBITDA improvements at December 31, 2021 and December 31, 2022. The contingent consideration is valued at maximum outcome.

Acquisition Nordman & Co AB

On April 26, Vitec acquired all shares in the Swedish software company Nordman & Co AB. The company reported sales of SEK 20.2 million, with an EBIT of SEK 3.8 million for the 2019/ 2020 financial year.

Nordman & Co AB develops and provides the software Argus CRM, a complete sales support system for food and grocery retail industry, service outlets, pharmacies, supermarkets and the construction market, primarily in the Nordic countries. The system, with several add-on modules, enables salespeople to plan and manage tasks such as store visits, orders, marketing activities, item information and presentations. The approximately 130 customers are mainly companies in Sweden and the rest of the Nordic region. Vitec welcomes 12 new employees as part of the acquisition.

Payment was in cash and with a convertible, with deviation from shareholders' preferential rights in accordance with the authorization from the Annual General Meeting on June 23, 2020. The convertible matures in 38 months and at full conversion will have a dilutive effect on capital of 0.02%. The acquisition is expected to yield an immediate increase in earnings per share for Vitec. Consolidation will commence as of the acquisition date.

The goodwill item is not tax deductible and is deemed to be attributable to anticipated profitability and complementary expertise requirements, as well as anticipated synergy effects, in the form of the joint development of our products.

The acquisition of Nordman added SEK 9.0 million in product rights, SEK 0.7 million in brands, SEK 4.4 million in customer agreements and SEK 21.8 million in goodwill. The expensed convertible totals SEK 2.4 million. The expensed portion of the contingent consideration amounts to SEK 11.0 million and is subject to EBITDA improvements at June 30, 2021. The contingent consideration is valued at maximum outcome.

Acquisition-driven growth

Vitec has an explicit acquisitions-based growth strategy with a sharp focus on profitability and stable cash flows. Our focus on strong cash flows through a high proportion of recurring revenues creates the financial foundation for continued acquisition-driven growth.

Acquired revenue

Each block illustrates an acquired company.

Effect of acquired units on sales

SEK million	Rolling 12, Jul 20–Jun 21	Rolling 12, Jul 19–Jun 20	Growth	2021 Jan–Jun	2020 Jan–Jun	Growth
Reported net sales	1,453	1,216	19%	769	630	22%
of which recurring revenues	1,200	992	21%	639	519	23%
Effect of acquired units	82	259		9	102
of which recurring revenues	66	195		7	80
Proforma net sales	1,535	1,475	4%	778	731	6%
Proforma recurring revenues (ARR)	1,266	1,186	7%	646	599	8%

Other significant events during the period

APRIL 28: BULLETIN FROM THE ANNUAL GENERAL MEETING

In view of the corona pandemic and in order to reduce the risk of contagion, the Annual General Meeting was conducted by advance voting only, under temporary legislation and without the physical presence of shareholders, proxies or third parties. Shareholder rights were met and the meeting complied with all formal requirements.

The Annual General Meeting resolved, in accordance with the Nomination Committee proposal, to appoint the following ordinary members of the Board of Directors for the period until the end of the next Annual General Meeting: Anna Valtonen (reelection), Birgitta Johansson-Hedberg (reelection), Jan Friedman (reelection), Kaj Sandart (reelection), and Crister Stjernfelt (reelection), and to elect Lars Stenlund (election) to serve as Chairman of the Board.

APRIL 29: SARA NILSSON APPOINTED AS CFO

Sara Nilsson has been appointed Chief Financial Officer (CFO). She succeeds Olle Backman, who took over as CEO. Sara Nilsson has extensive experience at Vitec and has until now been responsible for the Group´s central accounting function.

JUNE 15: ALLOCATION OF EMPLOYEE CONVERTIBLES AND WARRANT INCENTIVE PROGRAM

On April 28, 2021, the Annual General Meeting of Vitec Software Group AB (publ) resolved to carry out a convertible program 2021 for all employees in Sweden, Finland, Norway and Denmark. Subscription and allocation of employee convertibles has now ended. The total subscription amount was SEK 8.7 million. The loan can be converted into shares in 2024 at a price of SEK 463 per share. On full conversion, this corresponds to a dilutive effect of 0.06% on share capital and 0.03% of voting rights.

The Annual General Meeting also resolved on a warrant incentive program 2021. The program is aimed at a maximum of 45 people in Sweden, Finland, Norway and Denmark. The warrants entitle the holder to subscribe for one share and can be exercised during the period June 3-14, 2024, at a price of SEK 463 per share. When fully exercised, this corresponds to a dilutive effect of 0.80% on share capital and 0.43% of voting rights.

Events after the balance-sheet date

INVESTMENTS IN PREDGE AB

On July 9, Malmkroppen AB invested in the Swedish software company Predge AB. Predge offers decision support for preventive maintenance based on advanced data analysis. The company is primarily aimed at railways. Vitec's ownership share after the investment amounts to 7%.

INVESTMENT IN TEMPUS INFORMATION SYSTEMS AB

On July 13, Malmkroppen AB invested in the Swedish software company Tempus Information Systems AB. Tempus develops software for resource planning and scheduling for preschools in Sweden. Vitec's ownership after the investment amounts to 11%.

Risks and uncertainties

Material risks and uncertainties are described in the administration report of the of the 2020 Annual Report under "Risks and uncertainties" on pages 48–50, in Note 1, under the section, Assessments and estimates on pages 76–77, and in Note 11 "Financial risks and the management of such risks" on pages 111–113. No material changes have occurred since then.

CORONAVIRUS PANDEMIC

In March 2020, the World Health Organization (WHO) declared the spread of the coronavirus and COVID-19 to be a pandemic. Shortly thereafter, Group Management appointed a work group that is responsible for organization, coordination and communication at the Group level. Most decisions involving operations, however, are taken by each business unit according to our decentralized governance model. The Group's decisions and communication are based on:

• Trust and respect for government and local authorities, as well as their appointed experts.
• Care for all employees and their health.
• Our responsibility in society is to maintain functionality our products support important societal functions.

Our focus continues to be on helping to reduce the risk of spreading the virus and protecting the health of our employees and customers, at the same time that we are working to minimize the impact on our business.

Early last spring we changed how we work and most employees still work from home. During this situation, we greatly benefited from our well-developed IT infrastructure, which enabled us to transition to a distributed workplace essentially overnight. Software development is carried out through our usual development environments, which can be accessed remotely and securely by our developers. In addition, our leaders have switched to lead their business units through collaboration and meeting platforms such as Teams. We have largely replaced physical trainings, gatherings and strategic meetings with equivalent digital solutions.

Depending on how long we continue to be in a situation where it is difficult to travel and meet our customers in person, we may see an impact on our service revenues and sales, which will also inhibit the organic growth of our recurring revenues in the short term. We have good risk diversification by being active in a variety of niche markets.

Parent Company

Net sales totaled SEK 64.9 million (56.4) and essentially comprised invoicing to subsidiaries for services rendered. Profit after tax was SEK -8.9 million (25.0). Parent Company earnings were charged with unrealized foreign-exchange

losses totaling SEK -10.3 million (29.9). The Parent Company is generally exposed to the same risks and uncertainties as the Group; refer to the above section, Risks and uncertainties.

Related-party transactions

No significant transactions with related parties occurred in the Group or Parent Company during the period.

Accounting and measurement policies

This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU, and the Swedish Annual Accounts Act. The Parent Company's accounts were prepared in accordance with the Annual Accounts Act and recommendation RFR 2 Accounting for Legal Entities. No new or amended standards entered into force as of 2021 that are expected to affect the Group's accounts.

OPERATING SEGMENTS

Operating segments are defined as business units, of which there were 30 as at the balance-sheet date, each generating revenue and incurring costs. Their operating profit/loss is regularly followed up by the highest executive decision-maker, the CEO and group chief executive. Separate financial information is available for each unit. The operating segments form the operational structure for internal governance, follow-ups, and reporting. Based on the character of the services offered with their high proportion of recurring revenues, similar range of products, and similar financial characteristics, all of the group's operating segments/business units were aggregated into one operating segment in the financial reports as of 1 January 2020 in accordance with the rules of IFRS 8.

FINANCIAL INSTRUMENTS

Classification and measurement

Financial instruments are recognized initially at cost corresponding to the instrument's fair value plus transaction costs. A financial instrument is classified at initial recognition based on, among other factors, the purpose for which the instrument was acquired. Vitec has financial instruments under the categories loans and accounts receivable, financial liabilities at fair value and financial liabilities measured at amortized cost.

Financial liabilities measured at fair value

In accordance with IFRS 7, the fair value of each financial asset and financial liability must be disclosed, regardless of whether they are recognized in the balance sheet. Vitec deems the fair value of the financial assets/liabilities to be close to the recognized carrying amount.

All of company's financial instruments that are subject to measurement at fair value are classified as level 3 and pertain to contingent considerations in conjunction with acquisitions.

Recurring measurements at fair value, at June 30, 2021, SEK thousands

	Level 1	Level 2	Level 3	Book value
Contingent consideration, ALMA Consulting Oy			7,087	7,087
Contingent consideration Appva AB			45,000	45,000
Contingent consideration Travelize International AB			32,195	33,000
Contingent consideration Nordman & Co AB			11,000	11,000
Total			95,282	96,087

Signatures

AFFIRMATION OF THE BOARD OF DIRECTORS

The Board of Directors and the CEO hereby certify that this interim report provides a fair view of the Group's and the Parent Company's operations, position and performance and describes the material risks and uncertainties facing the Parent Company and the companies included in the Group.

Umeå, July 15, 2021

Lars Stenlund Chairman of the Board

Anna Valtonen Board member Birgitta Johansson-Hedberg Board member

Crister Stjernfelt Board member

Jan Friedman Board member

Kaj Sandart Board member

Olle Backman Chief Executive Officer

Condensed consolidated statement of comprehensive income

SEK THOUSANDS	2021 Apr–Jun	2020 Apr–Jun	2021 Jan–Jun	2020 Jan–Jun	2020 Jan–Dec
OPERATING REVENUES
Recurring revenues	325,245	265,644	638,719	518,979	1,080,421
License revenues	8,397	1,775	15,346	4,457	14,682
Service revenues	53,489	45,718	101,313	90,356	189,238
Other revenues	9,001	7,455	14,119	15,930	28,449
NET SALES	396,131	320,592	769,497	629,722	1,312,789
Capitalized development costs	53,956	42,114	108,802	82,935	161,909
Reversal of supplementary purchase consideration	-	-	1,095	-	-
TOTAL	450,087	362,706	879,394	712,657	1,474,697
OPERATING EXPENSES
Goods for resale	-6,978	-6,718	-11,562	-13,848	-24,761
Subcontractors and subscriptions	-46,264	-33,578	-90,098	-72,010	-146,993
Other external expenses	-38,917	-34,023	-80,019	-70,743	-138,325
Personnel expenses	-199,434	-159,231	-408,333	-333,581	-694,690
Depreciation of property, plant and equipment	-16,001	-12,676	-30,582	-23,702	-49,768
Amortization and impairment of intangible fixed assets	-20,509	-19,864	-39,993	-38,319	-75,420
Impairment of intangible assets	-	-	-1,095	-	-
Unrealized exchange-rate gains/losses (net)	-559	-785	-188	198	46
TOTAL EXPENSES	-328,661	-266,876	-661,870	-552,006	-1,129,912
EBITA	121,426	95,830	217,524	160,651	344,786
Acquisition-related costs	-2,534	-4,919	-10,705	-11,073	-12,933
Acquisition-related amortization	-32,761	-26,707	-64,944	-53,063	-109,419
OPERATING PROFIT/LOSS	86,130	64,204	141,875	96,515	222,434
Financial income	176	433	192	658	313
Financial expenses	-5,637	-3,823	-10,843	-7,737	-15,115
TOTAL FINANCIAL ITEMS	-5,461	-3,391	-10,651	-7,080	-14,802
PROFIT AFTER FINANCIAL ITEMS	80,669	60,814	131,224	89,436	207,632
Tax	-19,631	-11,364	-30,176	-18,254	-46,922
NET PROFIT FOR THE PERIOD	61,038	49,449	101,048	71,181	160,710
OTHER COMPREHENSIVE INCOME, ITEMS THAT MAY BE RECLASSIFIED AS PROFIT/LOSS FOR THE YEAR
Restatement of net investments in foreign operations and hedge	-25,160	-29,694	22,127	-34,639	-63,970
accounting of the same
OTHER COMPREHENSIVE INCOME FOR THE PERIOD	-25,160	-29,694	22,127	-34,639	-63,970
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	35,879	19,756	123,175	36,542	96,741
PROFIT FOR THE PERIOD ATTRIBUTABLE TO
– Parent Company shareholders	61,038	49,449	101,048	71,181	160,710
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO
– Parent Company shareholders	35,879	19,756	123,175	36,542	96,741

Condensed consolidated statement of financial position

SEK THOUSANDS	Jun 30, 2021	Jun 30, 2020	Dec 31, 2020
ASSETS
FIXED ASSETS
Goodwill	1,220,192	770,797	769,988
Other intangible fixed assets	1,163,138	934,982	917,372
Tangible property, plant and equipment	166,775	124,176	104,189
Financial fixed assets	15,755	1,712	1,325
Deferred tax assets	5,055	6,961	4,517
TOTAL FIXED ASSETS	2,570,915	1,838,628	1,797,391
CURRENT ASSETS
Inventories	2,604	2,678	2,958
Current receivables	196,185	173,001	271,731
Cash and cash equivalents	210,713	139,880	134,695
TOTAL CURRENT ASSETS	409,502	315,558	409,384
TOTAL ASSETS	2,980,417	2,154,186	2,206,775
SHAREHOLDERS' EQUITY AND LIABILITIES
Equity attributable to Parent Company shareholders	947,844	786,620	843,350
Non-current interest-bearing liabilities	1,057,882	554,763	555,327
Deferred tax	235,019	188,423	185,799
Other non-current liabilities	164,414	113,627	91,868
TOTAL NON-CURRENT LIABILITIES	1,457,315	856,812	832,994
Accounts payable	30,737	27,487	35,094
Current portion of interest-bearing liabilities	2,775	24,068	2,763
Other current liabilities	221,760	192,918	231,442
Accrued expenses	129,042	100,734	92,819
Prepaid recurring revenues	190,944	165,547	168,313
TOTAL CURRENT LIABILITIES	575,258	510,755	530,431
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	2,980,417	2,154,186	2,206,775

Condensed consolidated statement of changes in equity

SEK THOUSANDS	2021 Apr–Jun	2020 Apr–Jun	2021 Jan–Jun	2020 Jan–Jun	2020 Jan–Dec
EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS
Opening balance	962,985	777,316	843,350	759,432	759,432
Convertible debenture with stock options	535	623	1,624	-	2,658
Debenture conversion	-	-	31,468	1,721	21,213
Paid option premiums	5,104	-	5,786	-	7,279
Option premiums measured at fair value	682	-	-	-	-
Dividends paid	-57,340	-11,075	-57,560	-11,075	-43,974
Total comprehensive income	35,879	19,756	123,175	36,542	96,741
CLOSING BALANCE	947,844	786,620	947,844	786,620	843,350

Condensed consolidated statement of cash flow

SEK THOUSANDS	2021 Apr–Jun	2020 Apr–Jun	2021 Jan–Jun	2020 Jan–Jun	2020 Jan–Dec
OPERATING ACTIVITIES
Operating profit	86,130	64,204	141,875	96,515	222,434
Adjustments for non-cash items
Other operating revenues	-	-	-1,095	-	-
Loss on decommissioning of equipment, fixtures and fittings	-	-	-	-	189
Depreciation/amortization and impairment losses	69,270	59,247	136,612	115,085	234,607
Unrealized foreign exchange gains/losses	559	785	188	-198	-46
Option premiums	682	-	682	-	1,044
	156,641	124,236	278,262	211,402	458,228
Interest received	175	433	192	658	313
Interest paid	-4,768	-2,724	-9,254	-5,812	-11,709
Income tax paid	-14,146	-8,955	-31,176	-12,327	-17,539
CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL	137,902	112,990	238,024	193,921	429,293
Changes in working capital
Increase/Decrease in inventories	665	983	371	1,104	823
Increase/Decrease in accounts receivable	-4,128	4,762	116,377	125,983	6,396
Increase/Decrease in operating receivables	-8,521	16,861	-24,445	817	22,416
Increase/Decrease in accounts payable	2,426	-1,751	-6,077	-10,645	-3,280
Increase/Decrease in operating liabilities	-98,677	-65,307	15,816	-9,426	-19,314
CASH FLOW FROM OPERATING ACTIVITIES	29,667	68,538	340,066	301,754	436,334
INVESTING ACTIVITIES Acquisition of subsidiaries, net*	-21,598	-39,249	-589,440	-148,252	-167,238
Acquisition of shares and participations	-2,417	-	-12,417	-	-
Purchase of intangible fixed assets and capitalized development	-53,998	-42,160	-108,972	-83,080	-163,242
costs
Purchase of property, plant and equipment	-3,256	-1,811	-9,482	-3,091	-9,648
CASH FLOW FROM INVESTING ACTIVITIES	-81,269	-83,220	-720,311	-234,423	-340,128
FINANCING ACTIVITIES
Dividends to Parent Company shareholders	-13,544	-11,075	-24,445	-11,075	-33,293
Borrowings	8,650	66,400	508,650	144,310	157,820
Repayment of loans	-13,743	-11,740	-21,782	-60,709	-92,269
Paid option premiums	5,104	-	5,104	-	6,235
CASH FLOW FROM FINANCING ACTIVITIES	-13,533	43,585	467,527	72,525	38,493
CASH FLOW FOR THE PERIOD	-65,135	28,903	87,282	139,856	134,699
OPENING CASH AND CASH EQUIVALENTS, INCLUDING CURRENT INVESTMENTS	278,810	110,216	134,695	16,658	16,659
Exchange-rate differences in cash and cash equivalents	-2,962	760	-11,264	-16,635	-16,662
CASH AND CASH EQUIVALENTS INCLUDING CURRENT INVESTMENTS AT THE END OF THE PERIOD**	210,713	139,880	210,713	139,880	134,695

*Payment for the acquisition of subsidiaries during the period consisted of cash for Unikum datasystem AB, Travelize International AB and Nordman & Co AB. Net cash flow was SEK 530.6 million. The acquisitions pertained to all shares outstanding in their entirety and entailed the gain of controlling influence. During the period contingent considerations were paid for the acquisitions of WIMS AS, M&V Software Oy, ALMA Consulting Oy, Appva AB and NexGolf Oy, totaling SEK 58.9 million. The payments did not entail any changes to controlling influence or the total number of shares held. *Payment for the acquisition of subsidiaries during 2020 was in cash for Visiolink ApS, ALMA Consulting Oy, LJ System AB and Appva AB. The net

cash outflow was SEK 142.7 million. The acquisitions pertained to all shares outstanding in their entirety and entailed the gain of controlling influence. In addition, the final settlement of contingent consideration for Avoine Oy was paid SEK 5.5 million. The payment did not entail any changes to controlling influence or the total number of shares.

**Cash and cash equivalents are defined as funds exposed to an insignificant risk of fluctuations in value, and which are easily convertible to cash at a known amount. Current investments comprise funds that are convertible to cash at a known amount within one bank day.

Parent company income statement, condensed

SEK THOUSANDS	2021 Apr–Jun	2020 Apr–Jun	2021 Jan–Jun	2020 Jan–Jun	2020 Jan–Dec
Operating revenues	35,133	29,546	64,930	56,384	110,618
Operating expenses	-27,356	-25,420	-56,278	-50,925	-100,218
Unrealized exchange-rate gains/losses (net)	7,898	32,455	-10,335	29,863	46,709
OPERATING PROFIT/LOSS	15,676	36,581	-1,682	35,322	57,109
Income from participation in Group companies	-	-		-	177,692
Interest income	128	132	238	318	381
Interest expenses	-5,001	-3,000	-9,614	-6,395	-12,485
PROFIT AFTER FINANCIAL ITEMS	10,803	33,713	-11,058	29,244	222,697
Appropriations	-	-		-	364
PROFIT/LOSS BEFORE TAX	10,803	33,713	-11,058	29,244	223,061
Tax	-2,458	-5,095	2,185	-4,285	-11,818
NET PROFIT FOR THE PERIOD	8,345	28,618	-8,873	24,959	211,243

Profit/Loss for the period corresponds to total comprehensive income.

Condensed balance sheet, Parent Company

	Jun 30,	Jun 30,	Dec 31,
SEK THOUSANDS	2021	2020	2020
ASSETS
FIXED ASSETS
Intangible fixed assets	907	1,253	1,036
Tangible property, plant and equipment	10,390	11,247	10,741
Financial fixed assets	2,517,225	1,814,743	1,852,355
TOTAL FIXED ASSETS	2,528,522	1,827,243	1,864,131
CURRENT ASSETS
Current receivables	32,575	50,388	213,310
Cash and cash equivalents	195,257	116,890	123,743
TOTAL CURRENT ASSETS	227,832	167,278	337,053
TOTAL ASSETS	2,756,354	1,994,521	2,201,185
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	870,448	717,297	900,187
Untaxed reserves	1,677	2,042	1,677
Non-current liabilities	1,133,382	599,763	600,327
Current liabilities	750,847	675,418	698,994
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	2,756,354	1,994,521	2,201,185

Acquired assets and liabilities 2021

PRELIMINARY ACQUISITION CALCULATIONS

Three acquisitions occurred during the period: Unikum datasystem AB, Travelize International AB and Nordman & Co AB. Some items in the acquisition plans may be remeasured, due to our brief ownership of the companies. These comprise brands, product rights, customer agreements and goodwill. For this reason, the acquisition plans remain preliminary, until 12 months after the acquisition date.

Acquired assets and liabilities, SEK thousands	Book value	Fair value adjustment	Fair value recognized in the Group
Goodwill	-	456,063	456,063
Intangible fixed assets	5,920	198,941	204,861
Tangible property, plant and equipment	2,050	-	2,050
Financial fixed assets	4,209	-	4,209
Inventories	17	-	17
Current receivables	14,181	-	14,181
Cash and cash equivalents	61,369	-	61,369
Deferred tax liabilities	-	-40,982	-40,982
Accounts payable	-1,699	-	-1,699
Other current liabilities	-37,292	-	-37,292
Other non-current liabilities	-1,825	-	-1,825
Total	46,930	614,022	660,953

Effect of acquisitions on cash flow, SEK thousands
Group's purchase costs	-660,953
Expensed portion of purchase considerations	44,000
Convertible debentures	25,000
Acquired cash and cash equivalents	61,369
Net cash outflow	-530,584

Allocation of revenues and date of revenue recognition

Allocation of revenues and date of revenue recognition, SEK million	2021 Apr–Jun	2020 Apr–Jun	2021 Jan–Jun	2020 Jan–Jun	2020 Jan–Dec
Recurring revenues	325.2	265.6	638.7	519.0	1,080.4
Other revenues	70.9	54.9	130.8	110.7	232.4
Net sales	396.1	320.6	769.5	629.7	1,312.8
Date of revenue recognition
Services transferred to customers over time, flat distribution	281,4	232,7	551,6	452,5	939.4
Services transferred to customers over time, in pace with use	97,3	78.7	188,4	156,8	330.3
Services transferred to customers at a given time	17,4	9.2	29,5	20,4	43.1
	396,1	320.6	769,5	629,7	1,312.8

Shareholder information

PUBLICATION

This information is such information that Vitec Software Group AB (publ) is required to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact persons set out below, at 8:00 a.m. (CET) on Thursday, July 15, 2021.

This English version of the report is a translation of the original Swedish version; in the event of variances, the Swedish version shall take precedence over the English translation.

This report has not been subject to review by the company's auditors.

FINANCIAL CALENDAR

Interim report January–September Oct. 14, 2021 8:00 a.m. Year-end report January–December Feb 11, 2022 8:00 a.m.

FINANCIAL INFORMATION

Our website vitecsoftware.com is our primary channel for IR information, where we publish financial information immediately upon release.

We can also be contacted through the following channels: By e-mail: ir@vitecsoftware.com By post: Investor Relations, Tvistevägen 47 A, SE-907 29 Umeå, Sweden By telephone: +46 90 15 49 00

Vitec's 2020 annual report is available at vitecsoftware.com

CORPORATE REGISTRATION NUMBER

Vitec Software Group AB (publ), corp. reg. no. 556258-4804.

Olle Backman CEO +46 70 632 89 93 olle.backman@vitecsoftware.com

Sara Nilsson

CFO +46 70 966 00 71 sara.nilsson@vitecsoftware.com

Patrik Fransson Investor Relations +46 76 942 85 97 patrik.fransson@vitecsoftware.com

Definitions of key indicators

This interim report refers to several financial measurements that are not defined under IFRS, known as alternative performance measures, in accordance with ESMA's is called alternative. These measurements provide senior management and investors with significant information for analyzing trends in the company's business operations. Alternative performance

measures are not always comparable with measurements used by other companies. They are intended to complement, not replace, financial measurements presented in accordance with IFRS. The key indicators presented on the last page of this report are defined as follows:

Non-IFRS key indicators	Definition	Description of usage
Recurring revenues	Recurring contractual revenues with no direct relationship between our work efforts and the contracted price. The contractual amount is usually billed in advance and the revenues are recognized during the contract's term.	A key indicator for the management of operational activities.
Percentage of recurring revenues	Recurring revenues in relation to net sales.	A key indicator for the management of operational activities.
Growth	The trend of the company's net sales in relation to corre sponding year-earlier period.	Used to monitor the compa ny's sales trend.
Growth in recurring revenues	Trend in recurring revenues in relation to the previous corresponding year.	Used to monitor the compa ny's sales trend.
Organic growth in recurring revenues	Development of the company's recurring revenues, including annual data for companies acquired during the period, in relation to the corresponding year-earlier period.	Used to monitor the compa ny's sales trend.
Proforma net sales, rolling 12 months	Net sales the past four quarters with addition of sales from acquired units for the time prior to the acquisition date.	Used to monitor the compa ny's sales trend.
ARR, Proforma recurring reve nues, rolling 12	ARR, Annual Recurring Revenues. Recurring revenues the past four quarters with addition of recurring revenues from acquired units for the time prior to the acquisition date.	Used to monitor the compa ny's sales trend.
Gross profit	The company's sales less the cost of goods purchased for resale and subcontractors and subscriptions.	Used to monitor the compa ny's dependence on external direct costs
Gross margin	Gross profit in relation to net sales.	Used to monitor the compa ny's dependence on external direct costs
EBITA	Net profit/loss for the period before acquisition-related costs, acquisition-related amortization, net financial items and tax.	Indicates the company's net profit/loss for the period be fore acquisition-related costs, acquisition-related amortiza tion.
EBITDA	Earnings before interest, tax, depreciation and amortiza tion for the period.	Indicates the company's operating profit/loss before depreciation/amortization.
Acquisition-related costs	Costs such as broker fees, legal fees and stamp tax (tax on single property purchases).	Used to disclose items affect ing comparability.
Acquisition-related amortization	Amortization regarding product rights and customer agreements.	Used to disclose items affect ing comparability.
EBITA margin	Operating profit before acquisition-related costs in rela tion to net sales.	Used to monitor the compa ny's earnings trend.

Operating margin	Operating profit in relation to net sales.	Used to monitor the compa ny's earnings trend.
Profit margin	Profit after tax for the period, in relation to net sales.	Used to monitor the compa ny's earnings trend.
Equity/assets ratio	Shareholders' equity, including equity attributable to non-controlling interests as a percentage of total assets.	This measurement is an indicator of the company's financial stability.
Equity/assets ratio after full conversion	Shareholders' equity and convertible debentures as a percentage of total assets.	This measurement is an indicator of the company's financial stability.
Debt/equity ratio	Average debt in relation to average shareholders' equity and non-controlling interests.	This measurement is an indicator of the company's financial stability.
Average shareholders' equity	The average between shareholders' equity for the period attributable to Parent Company shareholders and share holders' equity for the preceding period attributable to Parent Company shareholders.	An underlying measurement on which the calculation of other key indicators is based.
Return on capital employed	Profit after net financial items plus interest expenses, as a percentage of average capital employed. Capital employed is defined as total assets less interest-free liabilities and deferred tax.	This measurement is an indicator of the company's profitability in relation to externally financed capital and shareholders' equity.
Return on equity	Reported profit/loss after tax in relation to average equity attributable to Parent Company shareholders.	This measurement is an indi cator of the company's profit ability and gauges the return on shareholders' equity.
Sales per employee	Net sales in relation to the average number of employees.	This metric is used to assess the company's efficiency.
Added value per employee	Operating profit/loss plus depreciation/amortization and personnel expenses in relation to average number of employees.	This metric is used to assess the company's efficiency.
Personnel expenses per employee	Personnel expenses in relation to average number of employees.	A key indicator used to mea sure operational efficiency.
Average no. of employees	The average number of employees in the Group during the period.	An underlying measurement on which the calculation of other key indicators is based.
AES (Adjusted equity per share)	Shareholders' equity attributable to Parent Company shareholders, in relation to the number of shares issued at the balance-sheet date.	This measurement indicates the equity per share at the balance-sheet date
Cash flow per share	Cash flow from operating activities before changes in working capital, in relation to the average number of shares.	Used to monitor the compa ny's trend in cash flow per share.
Number of shares after dilution	The average number of shares during the period plus the number of shares added following the full conversion of convertibles.	An underlying measurement on which the calculation of other key indicators is based.
IFRS key indicators	Definition	Description of usage
Earnings per share	Profit after tax attributable to Parent Company sharehold ers, in relation to the average number of shares during the period.	IFRS key indicators
Earnings per share after dilution	Profit after tax attributable to Parent Company share holders, plus interest expenses pertaining to convertible debentures, in relation to the average number of shares after dilution.	IFRS key indicators

Key indicators

		2021 Jan–Jun	2020 Jan–Jun	2020 Jan–Dec
Net sales	SEK 000s	769,497	629,722	1,312,789
Recurring revenues	SEK 000s	638,719	518,979	1,080,421
Recurring share of net sales	(%)	83	82	82
Growth net sales	(%)	22	11	14
ARR	SEK 000s	1,265,982	1,186,431	1,107,759
EBITA	SEK 000s	217,524	160,651	344,786
EBITA margin	(%)	28	26	26
Growth EBITA	(%)	35	28	39
Operating profit/loss (EBIT)	SEK 000s	141,875	96,515	222,434
Operating margin	(%)	18	15	17
Profit after financial items	SEK 000s	131,224	89,436	207,632
Profit after tax	SEK 000s	101,048	71,181	160,710
Profit margin	(%)	13	11	12
Balance-sheet total	SEK 000s	2,980,417	2,154,186	2,206,775
Equity/assets ratio	(%)	32	37	38
Equity/assets ratio after full conversion	(%)	34	40	41
Debt/equity ratio	(multiple)	1.96	1.67	1.56
Return on capital employed	(%)	16	13	17
Return on equity	(%)	22	17	20
Sales per employee	SEK 000s	788	803	1,593
Added value per employee	SEK 000s	713	710	1,413
Personnel expenses per employee	SEK 000s	418	426	843
Average no. of employees	(persons)	977	784	824
Adjusted equity per share (AES)	(SEK)	28.69	24.15	25.73
Earnings per share	(SEK)	3.06	2.19	4.93
Earnings per share after dilution	(SEK)	3.03	2.18	4.91
Resolved dividend per share	(SEK)	1.64	1.35	1.35
Cash flow per share	(SEK)	7.21	5.95	13.18
Basis of computation:
Earnings from calculation of earnings per share	SEK 000s	101,048	71,181	160,710
Cash flow from calculation of cash flow per share	SEK 000s	238,024	193,921	429,293
Weighted average number of shares (weighted average)	(thousands)	33,008	32,573	32,574
Number of shares after dilution	(thousands)	33,478	33,088	32,994
Number of shares issued at balance-sheet date	(thousands)	33,034	32,573	32,773
Share price at close of the respective period	(SEK)	354.00	210.50	341.00