Vitec Software Group B — Interim / Quarterly Report 2023

Oct 19, 2023

Interim report January–September 2023

This is Vitec

Vitec is the market leader for vertical software and has its origin and headquarters in Umeå Sweden 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 expertise of our employees combined with our shared corporate culture and business model enable continuous improvement and innovation Vitec is listed on the Nasdaq Stockholm Large Cap list

GROWTH – DEVELOP AND ACQUIRE

Vitec is an industry player with a longterm outlook Our growth mainly occurs through corporate acquisitions but also organically Our strong cash flow enables us to both reinvest in products and make acquisitions Continual development of our products is crucial to ensure that our offering will remain relevant in the future

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

Brief facts

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

OUR VISION

Shaping a wiser and more sustainable future

OUR VALUES

Our products – our foundation Vertical Market Software

Keep it simple Simple solutions succeed

Trust and transparency Collaboration and responsibility create success

VITEC'S BRAND PROMISE

To rely on — today and tomorrow

VITEC'S BUSINESS CONCEPT

To contribute to the success of our customers by developing and providing standardized and niche business-critical software

SUSTAINABILITY

Sustainability is integral to our business model and culture To structure our work we have defined four focus areas Responsible growth Enabling products Empowered people and Reduced footprint They are specified based on where and how our business has the greatest impact on the world around us as well as areas where we believe we can make the greatest difference Read more in the annual report's sustainability report

customers

% proforma recurring revenues, ARR

employees

MSEK proforma net sales

countries Business units

Vitec Software Group has its origin and headquarters in Umeå Sweden A forum for networking and knowledge sharing within the Group is provided here SUMMARY OF INTERIM PERIOD, JULY–SEPTEMBER 2023

• Net sales SEK 701 million (505), an increase of 39%
• Recurring revenues SEK 614 million (417), an increase of 47%
• EBITA SEK 240 million (161), an increase of 49%
• EBITA margin 34% (32)
• Operating profit SEK 158 million (92), an increase of 71%
• Operating margin 22% (18)
• Earnings per share before dilution SEK 2.26 (1.76)
• Cash flow from operating activities SEK 158 million (87)
• Acquisition of Neagen Oy

SUMMARY OF INTERIM PERIOD, JANUARY–SEPTEMBER 2023

• Net sales SEK 2,037 million (1,400), an increase of 46%
• Recurring revenues SEK 1,735 million (1,180), an increase of 47%
• EBITA SEK 652 million (411), an increase of 59%
• EBITA margin 32% (29)
• Operating profit SEK 444 million (250), an increase of 78%
• Operating margin 22% (18)
• Earnings per share before dilution SEK 6.94 (5.05)
• Cash flow from operating activities SEK 727 million (489)

3

"We have both the organizational and the financial resources to continue our growth journey"

4

Message from the CEO

Strong quarter demonstrates the strength of our business model once again

A strong quarter in a challenging macroeconomic environment demonstrates the strength of our business model in which we deliver business-critical software that is continuously developed to contribute to the success of our customers

In the third quarter revenues rose % to SEK million compared with the same period last year the corresponding figures for the first nine months are % and SEK million Revenues have now exceeded SEK billion for the first time after only nine months Our recurring revenues increased organically by % We are also proud of our sustained margin growth EBITA margin was % compared with % and EBITA rose % to SEK million Net profit was affected by higher interest rates and increased borrowing but noncash remeasurement of supplementary contingent consideration and long-term security holdings also had a negative impact of SEK million for the entire period

During the third quarter the previously announced acquisition of Finnish Neagen was completed and we signed a contract for another Finnish acquisition Codea Codea develops and delivers

critical software for field management of emergency vehicles At the beginning of October we completed our sixth acquisition this year (a new record!): Dutch Memorix which provides software for managing archives digital cultural heritage and collections

Excellent vertical software companies which we evaluate on an ongoing basis are continuously added to our list of acquisition candidates In our assessment company valuations have begun to demonstrate a slight downward trend as the impact of higher interest rates becomes evident and sellers appreciate the simple acquisition process and long-term approach Vitec offers We have used a supplementary contingent consideration approach to address valuation concerns for many years These only apply if the company can report a clear improvement in performance compared to the time of acquisition These payments are therefore a good indicator that the companies are performing well within the Vitec Group

In the past year we have expanded our internal resources for both acquisition activities and for integration into the Group allowing us to handle our new companies well This strategy provides

us with both the organizational and financial resources to continue our growth journey

Recruitment of new employees has been a challenge for us and for many other players in the technology sector In recent months we have begun to see an improvement as more and more qualified candidates apply for our available positions We hope that in Vitec they see exciting work tasks and a stable and growing company

To further align the common interest of shareholders and employees in generating value Vitec has had various share-based incentive programs for over years At the Annual General Meeting shareholders resolved to implement a share savings plan for staff in nine countries We are pleased to announce that as much as % of the employees chose to invest in this long-term share savings plan

Olle Backman CEO Vitec Software Group

Fall day in northern Finland Neagen has its headquarters in Oulu and an office in Helsinki

Group financial information

NET SALES AND EARNINGS

July–September Net sales

Net sales for the period totaled SEK million () and included recurring revenues of SEK million () license revenues of SEK million () service revenues of SEK million () and other revenues of SEK million () Recurring revenues consist of subscription-based revenue of SEK million () and transaction-based revenue of SEK million () The increase in transaction-based revenue is due to acquistions

Comments on sales

Net sales rose a total of % for the period recurring revenues rose % Organic growth in subscription-based recurring revenues calculated on a rolling -month basis is % We estimate that approximately five percentage points of this growth is attributable to currency effects

Other revenues totaled SEK million which is a decrease of % compared with the corresponding period last year Licensing declined % compared with the corresponding period in Service revenues gained % compared with the corresponding period in Recurring revenues accounted for % of net sales compared with % for the corresponding period in During the year acquired companies contributed SEK million in net sales

Earnings

EBITA was SEK million () with an EBITA margin of % () Operating profit was SEK million () with an operating margin of % () Profit after tax for the period amounted to SEK million () Earnings per share before dilution totaled SEK ()

Comments on earnings

EBITA gained % compared with the corresponding period in IFRS related to leases had an impact of to SEK million () on operating profit and SEK - million (-) on depreciation The net of capitalized development costs amortization on ingible fixed assets and aquisition-related amortization had a negative effect on operating profit of SEK million compared with negative SEK million the corresponding period last year Acquisition-related costs are included in operating profit and amount to SEK - million (-) of which transfer tax is SEK - million ()

Net financial items total SEK million (-) The items consist of net interest income of SEK - million (-) and non-cash remeasurement to fair value of supplementary purchase considerations of SEK - million () and long-term security holdings of SEK - million () The increase in net interest income is attributable to higher interest rates and increased borrowing in conjunction with acquisitions

Vitec Software Group develops and provides software for clients such as the education sector in Sweden Norway and Denmark

January–September Net sales

Net sales for the period totaled SEK million () and included recurring revenues of SEK million () license revenues of SEK million () service revenues of SEK million () and other revenues of SEK million () Recurring revenues consist of subscription-based revenue of SEK million () and transaction-based revenue of SEK million () The increase in transaction-based revenue is due to acquistions

Comments on sales

Net sales rose a total of % for the period recurring revenues rose % Organic growth in subscription-based recurring revenues calculated on a rolling -month basis is % We estimate that approximately five percentage points of this growth is attributable to currency effects

Other revenues totaled SEK million which is the same level compared with the corresponding period last year Licensing increased by % and service revenues increased by % compared with the corresponding period in Recurring revenues accounted for % of net sales compared with % for the corresponding period in During the year acquired companies contributed SEK million in net sales

Earnings

EBITA was SEK million () with an EBITA margin of % () Operating profit was SEK million () with an operating margin of % () Profit after tax for the period amounted to SEK million () Earnings per share before dilution totaled SEK ()

Comments on earnings

EBITA gained % compared with the corresponding period in IFRS related to leases had an impact of to SEK million () on operating profit and SEK - million (-) on depreciation The net of capitalized development costs amortization on intangible fixed assets and aquisition-related amortization had a negative effect on operating profit of SEK million compared with negative SEK million the corresponding period last year Acquisition-related costs are included in operating profit and amount to SEK - million (-) of which transfer tax is SEK - million (-)

Net financial items total SEK million (-) The items consist of net interest income of SEK - million (-) and non-cash remeasurement to fair value of supplementary purchase considerations of SEK - million () and long-term security holdings of SEK - million () The increase in net interest income is attributable to higher interest rates and increased borrowing in conjunction with acquisitions

Net sales SEK million January-September

	 Jul-Sep	 Jul-Sep	Change	 Jan–Sep	 Jan–Sep	Change
Net sales SEK million			%			%
Recurring share of net sales %	%	%		%	%
EBITA SEK million			%			%
EBITA margin %	%	%		%	%
Operating profit/loss SEK million			%			%
Operating margin %	%	%		%	%
Net profit/loss for the period SEK million			%			%
Earnings per share SEK					

Diagrams on Group trends

Sales by quarter EBITA and EBITA margin by quarter

Breakdown of revenue January–September

Allocation of recurring revenues Q -Q

%	%	%	%	%	%	%	%	%	%	%	%	%
Subscription-based revenue
%	%	%	%	%	%	%	%	%	%	%	%	%
Total percentage of recurring revenues
%	%	%	%	%	%	%	%	%	%	%	%	%

Sales broken down by business unit and customer

Because we operate in a number of niche markets and countries we have good distribution 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 Some are complete enterprise systems while others provide support for specific aspects of our customers' operations

As we continue to acquire profitable vertical software companies we expect the distribution of risk to continue in a positive direction

Sales by market January–September

BREAKDOWN OF SALES

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

We have about customers The Group's ten largest software customers account for approximately % of sales The single largest software customer accounts for approximately % of sales

Our business units

We conduct our operations through our 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

BUSINESS UNITS

Business unit	Software for	Registered office	Acquisition year	Sales  SEKm	Recurring 
ABS Laundry Business Solutions	The global laundry and textile rental industry	NL			%
Enova	Energy management and grid balancing services in the Netherlands	NL			%
Vabi	Sustainable energy management for the real estate and property management industry in the Netherlands	NL			%
Vitec Actor Smartbook	Municipal culture and recreation administration offices as well as other visitor facilities in Norway and Sweden	SE			%
Vitec Acute	Healthcare companies in Finland	FI			%
Vitec Agrando	Church-related administration in Norway	NO			%
Vitec ALMA	Information management within the process industry and energy companies in Finland	FI			%
Vitec Aloc	Banking and finance industry in the Nordic countries and western Europe	DK			%
Vitec Appva	Healthcare and social services sector in Sweden	SE			%
Vitec Autosystemer	Automotive transportation and machinery industry in Norway	NO			%
Vitec Avoine	Local associations national organizations and golf facilities in Finland	FI			%
Vitec Bygg & Fastighet	Construction and property management industry in Sweden	SE			%
Vitec Capitex Finanssystem	Banking and finance industry primarily in Sweden and with some establishment in Norway and Finland	SE			%
Vitec Cito	Pharmacy market in Denmark	DK			%
Vitec Datamann	Car dealers and auto repair shops in Denmark	DK			%
Vitec DL System	Enterprise-management system for facilities in the tourism sector	SE			%
Vitec DocuBizz	Automotive industry in northern Europe and the US	DK			%
Vitec Energy AB	Electricity traders and owners of electricity and district heating grids in about  different countries	SE			%
Vitec Fixit	Hair and beauty salons in Norway	NO			%

Business unit	Software for	Registered office	Acquisition year	Sales   SEKm	Recurring 
Vitec Futursoft	Automotive industry and machinery sector in Finland and Sweden	FI			%
Vitec HK data	Health and welfare sector in Norway	NO			%
Vitec Hotelinx	Hotels and tourism in Finland	FI			%
Vitec Katrina	Church-related administration in Finland	FI			%
Vitec Megler	Real estate agents in Norway	NO			%
Vitec MV	Education sector in Denmark Norway and Sweden	DK			%
Vitec Mäklarsystem	Real estate agents in Sweden	SE			%
Vitec Neagen	Healthcare sector in Finland	FI			%
Vitec Nice	Liability insurance companies in Norway and Sweden	NO			%
Vitec Nordman	Food and grocery retail industry in Sweden	SE			%
Vitec Plania	Building and facility management in Norway	NO			%
Vitec Raisoft	Healthcare and social services company in Finland and Switzerland	FI			%
Vitec Samfundssystem	Administrative services for churches and preschools in Sweden	SE			%
Vitec Scanrate	Bond market in Denmark	DK			%
Vitec Tietomitta	Private and municipal waste-and-resource processing in Finland	FI			%
Vitec Travelize	Travel agencies primarily in Scandinavia	SE			%
Vitec Unikum	Retail trade and manufacturing industry in Sweden	SE			%
Vitec Visiolink	Media companies in Europe	DK			%
Vitec WIMS	Insurance companies in Norway	NO			%

Balance sheets and cash flow

LIQUIDITY AND FINANCIAL POSITION

The Group's cash and cash equivalents at the end of the period totaled SEK million () In addition to cash and cash equivalents Vitec has an overdraft facility of SEK million and SEK million in unutilized portions of the credit facility which amount to a total of SEK 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

At September interest-bearing liabilities totaled SEK million () and comprised SEK million () in non-current interest-bearing liabilities and SEK million () in current interest-bearing liabilities Non-current interest-bearing liabilities comprised bank loans of SEK million as well as convertible debentures totaling SEK million Current interest-bearing liabilities comprised bank loans of SEK million as well as convertible debentures totaling SEK million Interest-bearing net debt amounts to SEK million ()

The convertible loans consist in part of convertible debentures subscribed for in conjunction with acquisitions and in part of employee convertibles that were approved at the most recent annual general meetings

During the period convertible loans and were converted which reduced financial liabilities by SEK million

Liabilities relating to right-to-use assets in the form of leases for premises are included in other non-current liabilities of SEK million and in other current liabilities of SEK million

The total supplementary contingent purchase consideration as of September was SEK million including a non-current portion of SEK million and a current portion of SEK million

CASH FLOW AND INVESTMENTS

During the period SEK million from the credit facility was used for financing Repayment of the facility totaled SEK million amortization of bank loans amounted to SEK million and amortization related to right-to-use assets was SEK million Cash flow from operating activities was SEK million () Investments totaled SEK million in capitalized work SEK million in other intangible assets and SEK million in property plant and equipment Investments in right-of-use assets not affecting cash flow totaled SEK million As a result of acquisitions SEK million was invested in product rights brands customer agreements and goodwill

The fourth and final payment of the dividend for financial year was made on March when SEK million was paid Payments relating to the financial year were made on June and September in the amount of SEK million on both occasions

SHAREHOLDERS' EQUITY

Equity attributable to Vitec's shareholders totaled SEK million () The equity/assets ratio is % () On April the Annual General Meeting resolved to pay a dividend of SEK per share totaling SEK million The dividend will be divided up and paid on four payment dates June September December and March

During the period convertible loans and were converted As a result of the conversions the number of class B shares in Vitec increased by and share capital increased by SEK The number of shares in Vitec after the conversions is shares including class A shares

On April the Annual General Meeting decided on the introduction of a new long-term share savings program Employee Share Savings Plan "ESSP " The program is aimed at all employees in the Vitec Group and requires own investment in B shares in Vitec

("Saving shares") during a period of twelwe () months ("Savings period") normally through monthly savings The employees are offered the opportunity to obtain allocation of B shares in Vitec free of charge after a lock-in period that begins after the first acquisition of Saving shares until June (the "Lock-in Period") Employees receive an award of B Shares provided that their employment has not been terminated by the employee prior to the end of the Lock-up Period and provided that the participant retains his or her initial investment in Saving shares ("Matching shares") The program was launched during the third quarter of and the value of the matching shares for the period amounts to SEK million which has been reported as a personnel cost and against equity

TAXES

Current tax for the period amounted to SEK million () Deferred tax totaled SEK million () Tax expense for the year corresponds to an average tax rate of % ()

Outstanding warrant program

Warrants	Number of options	Grant date	Maturity date	Exercise price SEK	Max increase share capital	Dilution capital	Dilution votes
TO :		Sep  	Sep  – Sep  			%	%
TO :		Jun  	Jun  – Jun  			%	%
TO :		May  	Jun  – Jun  			%	%
TO :		Jul  	Jun  – Jun  			%	%
Number of options						%	%

Convertible debentures

Convertible debentures	Carrying amount SEK million	Duration	Conversion period	Conversion price SEK	Max increase share capital SEK million	Dilution capital	Dilution votes
Loan 		Jan  – Dec  	Jan  – Dec  			%	%
Loan 		Apr  – Jun  	Jan  – Jun  			%	%
Loan 		Jan  – Jan  	Aug  – Jan  			%	%
Loan / : 		Jul  – Jun  	Jul  – Jun  			%	%
Loan / : 		Sep  – Jun  	Jul  – Jun  			%	%
Loan/ : 		Oc  – Sep  	Oct  – Sep  			%	%
Loan / : 		Jun  – Dec  	July  – Dec  			%	%
Loan / :		Sep  – Sep  	Oct  – Sep 			%	%
Loan  Convertible Employee Program		Sep  – Sep  	Sep  – Sep  			%	%
Loan : Convertible Employee Program		Jun  – Jun  	Jun  – Jun  			%	%
Loan : Convertible Employee Program		Jun  – Jun  	Jun  – Jun  			%	%
Total liability						%	%

Growth – develop and acquire

Vitec is an industry player with a longterm outlook Our growth mainly occurs through corporate acquisitions but also organically Our business model is based on a high percentage of recurring revenues This provides us with stable and predictable cash flows that enable us to pursue a long-term approach where we can both reinvest in products and make acquisitions Continual development of our products is crucial to ensure that our offering will remain relevant in the future

ACQUISITIONS DURING THE PERIOD

During the period four acquisitions were completed Enova Holding BV DL Systems AB Entry Event Sweden AB and Neagen Oy Agreement has also been signed to aquire all shares in Codea Oy From the acquisition date up to and including September revenues in the acquired companies totaled SEK million in sales and SEK million in profit before tax If consolidation had occurred at the beginning of the year the companies would have provided the Group with roughly an additional SEK million in sales and SEK million in profit before tax The acquisition-related expenses are recognized in operating profit and total SEK million The operating profit also includes SEK million in acquisition-related costs related to acquisitions from previous years

The goodwill items are not tax deductible and are 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 acquisitions added SEK million in product rights SEK million in brands SEK million in customer agreements and SEK million in goodwill Expensed portions of contingent considerations amount in total to a discounted value of SEK million and are subject to gross margin improvements and EBIT improvements over the next several years Contingent considerations are valued at discounted value of maximum outcome

Acquisition Enova Holding BV

On September Vitec acquired all shares in the Dutch software company Enova Holding BV Enova specializes in developing delivering and maintaining energy management software for large companies in the Netherlands as well as providing grid balancing services

Enova's sales averaged EUR million in the and financial years The acquisition is expected to yield an immediate increase in earnings per share for Vitec Consolidation takes place from the date of acquisition

Payment was in cash as well as through a contingent consideration arrangement

Acquisition DL System AB

On May Vitec acquired all shares in the Swedish software company DL Systems AB DL Systems develops and delivers a complete reservation system for facilities in the hospitality industry

The company reported sales of SEK million for the / financial year The acquisition is expected to yield an immediate increase in earnings per share for Vitec Consolidation takes place from the date of acquisition

Payment was in cash as well as through a contingent consideration arrangement

Acquisition Entry Event Sweden AB

On June Vitec acquired all shares in the Swedish software company Entry Event Sweden AB Entry Event develops and delivers a complete business system for the hospitality industry

The company reported sales of SEK million for the / financial year The acquisition is expected to yield an immediate increase in earnings per share for Vitec Consolidation takes place from the date of acquisition

During the period companies which provide software to the healthcare sector were acquired

Payment was made in cash less a withheld amount payable on June and June Payment was also made with a convertible with deviation from shareholders' preferential rights in accordance with the authorization from the Annual General Meeting on April The convertible matures in months and at full conversion will have a dilutive effect on capital below %

After the acquisition Entry Event is part of the business unit Vitec Actor Smartbook

Acquisition Neagen Oy

On June an agreement was signed to acquire all shares in the Finnish software company Neagen Oy and the acquisition was completed on September Neagen develops and delivers

medical imaging archiving and viewing solutions and has a market-leading position in Finland

The company reported sales of approximately EUR million for the financial year The acquisition is expected to yield an immediate increase in earnings per share for Vitec Consolidation takes place from the date of 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 April The convertible matures in months and at full conversion will have a dilutive effect on capital of less than %

Acquisition Codea

On September an agreement was signed to acquire all shares in the Finnish software companies Codea Oy and Navicode Oy Software company Codea develops and delivers critical software for field management of emergency vehicles and has a market-leading position in Finland

Codea reported sales of approximately EUR million in the financial year The acquisition is expected to yield an immediate increase in earnings per share for Vitec

Payment will be in cash and with a convertible with deviation from shareholders' preferential rights in accordance with the authorization from the Annual General Meeting on April

Acquired revenue

ORGANIC GROWTH

	R	R
SEK million	-	-	Growth
Reported subscription-based recurring revenues		
Effect of acquired units		
Proforma subscription-based recurring revenues			%
Reported transaction-based recurring revenues		
Effect of acquired units		
Proforma transaction-based recurring revenues			%
Reported recurring revenues		
Effect of acquired units		
Proforma recurring revenues			%
Reported net sales			%
Effect of acquired units		
Proforma net sales			%

The convertible matures in months and at full conversion will have a dilutive effect on capital of less than %

Before the acquisition can be finalized it must be approved by the Finnish Ministry of Employment and the Economy under the Act on the Screening of Foreign Corporate Acquisitions in Finland

INVESTMENTS: PARTNERSHIPS

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

Investment in Precisely AB

On March Malmkroppen invested in the Swedish software company Precisely AB Precisely provides software that enables businesses and organizations to manage contracts more efficiently Vitec holds a % stake in the company after the investment

Vitec was founded in by research colleagues Lars Stenlund and Olov Sandberg The company is a spin-off from Umeå University

Investment in Predge AB

On March Malmkroppen expanded its ownership stake in the Swedish software company Predge AB Predge provides decision support for the transition from reactive to predictive maintenance and long-term sustainable operation Vitec holds a % stake in the company after the investment

Investment in Indico Technologies AB

On March Malmkroppen invested in the Swedish software company Indico Technologies AB Indico delivers forecasting tools that can interpret large amounts of data for businesses where forecast accuracy has a direct impact on margins and profits Vitec holds a % stake in the company after the investment

Investment in Voxo AB

On April Malmkroppen expanded its ownership stake in the Swedish software company Voxo AB Voxo is a Swedish voice technology company specializing in conversation-based AI

solutions Vitec holds a % stake in the company after the investment

Investment in Tempus Information Systems AB

On April Malmkroppen expanded its ownership stake in the Swedish software company Tempus Information Systems AB Tempus develops resource planning and scheduling software for preschools in Sweden Vitec holds a % stake in the company after the investment

Investment in Pinpointest AB

On June Malmkroppen expanded its ownership stake in the Swedish software company Pinpointest AB Pinpointest offers an open independent and free platform that compiles estimates prior to financial statements and interim reports from a large number of investors and offers broad market expectations for listed companies Vitec holds a % stake in the company after the investment

Significant events after the period

VITEC ACQUIRES THE SOFTWARE COMPANY MEMORIX

Vitec Software Group AB (publ) strengthens its position in Vertical Market Software on October by acquiring all shares in the Dutch software company Picturae ICT BV under name change to Vitec Memorix BV (Memorix) Memorix reported sales of € million for the financial year

The software company Memorix develops and delivers collection management software for archives digital heritage and collections The products Memorix Maior and the recently released new version Memorix Nexus are central software for filing and archiving of digitized information and archive management Memorix is one of the leading players within its vertical in the Benelux region

Payment will be in cash The acquisi-

tion is expected to yield an immediate increase in earnings per share for Vitec

Memorix was founded in and is headquartered in Heerhugowaard The Netherlands

At the time of this report's publication there were no financial statements available that could serve as the basis of a more detailed description of the acquisition For this reason no in formation is presented about the fair value of acquired assets and acquired assets and liabilities We expect the future items of a detailed acquisition plan to comprise product rights customer agreements brands and goodwill Goodwill is deemed to be attributable to anticipated profitability and complementary expertise requirements as well as expected synergies in the form of the joint development of our products

Risks and uncertainties

Material risks and uncertainties are described in the administration report of the of the Annual Report under "Risks and uncertainties" on pages - in Note under the section

"Assessments and estimates" on pages and in Note "Financial risks and the management of capital" on pages - No material changes have occurred since then

Parent Company

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

foreign-exchange losses totaling SEK - million (-) 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 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 Accounting for Legal Entities No new or amended standards entered into force as of that are expected to affect the Group's accounts

OPERATING SEGMENTS

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker of the Company In the Vitec Group the CEO and President has been identified as chief executive decision-maker who evaluates the Group's financial position and performance and makes decisions on resource allocation The operating segments form the operational structure for internal governance follow-ups and reporting The CEO analyzes and monitors the sales and earnings of the operation based on the total consolidated operations The assessment is thus that the Group's operations consist of one segment

INCENTIVE PROGRAM

There is an ongoing convertible program aimed at all personnel in the form of convertible debentures The shares were issued on market terms Consequently there are no benefits that can be recognized as share-based remuneration

Warrant incentive programs are also underway in the form of warrants aimed at around people The shares were issued on market terms The fair value of options granted is calculated using a modified version of the Black-Scholes valuation model The value of the option premiums is recognized as share-based remuneration

As of the third quarter of a longterm share savings plan aimed at all staff has been in place If the conditions are met participants receive matching shares The value of the matching shares is recognized as share-based remuneration

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 assets at fair value financial liabilities at fair value and financial liabilities at amortized cost

Financial liabilities measured at fair value

In accordance with IFRS 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 the company's financial instruments that are subject to measurement at fair value are classified as level and pertain to securities held as fixed assets as well as contingent considerations in conjunction with acquisitions

Long-term security holdings are valued at estimated fair value any adjustment go through profit or loss

Significant amounts of supplementary contingent considerations are initially measured at assesed fair value any adjustment go through profit or loss

Recurring measurements at fair value at September   SEK thousands

	Level 	Level 	Level 	Book value
Securities held as fixed assets				
Total assets				
Conditional supplementary contingent considerations due within  year				
Conditional supplementary purchase considerations due in more than  year but within  years				
Conditional supplementary purchase considerations due in more than  years but within  years				
Total liabilities				

Signature

Umeå on October

Olle Backman Chief Executive Officer

Auditor's report

INTRODUCTION

We have reviewed the consolidated financial interim information (interim report) of Vitec Software Group AB (publ) at September and the nine-month period that ended on this date The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim financial information in accordance with IAS and the Annual Accounts Act Our responsibility is to express a conclusion on this interim financial information based on our review

SCOPE AND FOCUS OF THE REVIEW

We have conducted our review in accordance with the Standard on Review Engagements ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity A review consists of making inquiries primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures A review has a different focus and a substantially more limited scope compared with the focus and scope of an audit conducted in accordance with the International Standards on Auditing and other generally accepted auditing practices The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant circumstances that might be identified in an audit Therefore the conclusion expressed on the basis of a review does not provide the same level of assurance as a conclusion expressed on the basis of an audit

CONCLUSIONS

Based on our review nothing has come to our attention that causes us to believe that the interim report has not in all material aspects been compiled in accordance with IAS Interim reporting and the Swedish Annual Accounts Act and for the Parent Company in accordance with the Swedish Annual Accounts Act

Stockholm on October

PricewaterhouseCoopers AB

Aleksander Lyckow Authorized Public Accountant

Condensed consolidated statement of comprehensive income

					
SEK THOUSANDS	Jul-Sep	Jul-Sep	Jan–Sep	Jan–Sep	Jan–Dec
OPERATING REVENUES
Recurring revenues					
License revenues					
Service revenues					
Other revenues					
NET SALES					
Reversal of supplementary purchase consideration	-	-	-		
TOTAL REVENUES					
Capitalized development costs					
OPERATING EXPENSES
Goods for resale	-	-	-	-	-
Subcontractors and subscriptions	-	-	-	-	-
Other external expenses	-	-	-	-	-
Personnel expenses	-	-	-	-	-
Depreciation of property plant and equipment	-	-	-	-	-
Amortization of intangible fixed assets	-	-	-	-	-
Impairment of intangible assets	-	-	-	-	-
Unrealized exchange-rate gains/losses (net)		-	-	-	
TOTAL EXPENSES	-	-	-	-	-
EBITA					
Acquisition-related costs	-	-	-	-	-
Acquisition-related amortization	-	-	-	-	-
OPERATING PROFIT/LOSS					
Financial income					
Financial expenses	-	-	-	-	-
Other financial items (net)	-	-	-	-	-
TOTAL FINANCIAL ITEMS	-	-	-	-	-
PROFIT AFTER FINANCIAL ITEMS					
Tax	-	-	-	-	-
NET PROFIT FOR THE PERIOD					
OTHER COMPREHENSIVE INCOME ITEMS THAT MAY BE RECLASSI FIED AS PROFIT/LOSS FOR THE YEAR
Restatement of net investments in foreign operations and hedge accounting of the same	-				
OTHER COMPREHENSIVE INCOME FOR THE PERIOD	-				
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	-				
PROFIT FOR THE PERIOD ATTRIBUTABLE TO
– Parent Company shareholders					
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO
– Parent Company shareholders	-				

Condensed consolidated statement of financial position

SEK THOUSANDS Sep   Sep   Dec   ASSETS FIXED ASSETS Goodwill    Other intangible fixed assets    Tangible property plant and equipment    Financial fixed assets    Deferred tax assets    TOTAL FIXED ASSETS    CURRENT ASSETS Inventories    Current receivables    Cash and cash equivalents    TOTAL CURRENT ASSETS    TOTAL ASSETS    SHAREHOLDERS' EQUITY AND LIABILITIES Equity attributable to Parent Company shareholders    Non-current interest-bearing liabilities    Deferred tax liabilities   
Other non-current liabilities   
TOTAL NON-CURRENT LIABILITIES   
Accounts payable   
Current portion of interest-bearing liabilities   
Other current liabilities   
Accrued expenses   
Prepaid recurring revenues   
TOTAL CURRENT LIABILITIES    TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES   

Condensed consolidated statement of changes in equity

SEK THOUSANDS	 Jul-Sep	 Jul-Sep	 Jan–Sep	 Jan–Sep	 Jan–Dec
EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS
Opening balance					
Correction of error attributable to previous year	-	-		-	-
Convertible debenture with stock options					
Debenture conversion					
New share issue	-	-	-	-	
Issuing costs	-	-	-	-	-
Paid option premiums	-		-		
Option premiums measured at fair value	-	-	-		
Long-term incentive program		-		-	-
Reserved dividend		-	-	-	-
Paid dividend	-	-	-	-	-
Total comprehensive income	-				
CLOSING BALANCE					

Condensed consolidated statement of cash flow

SEK THOUSANDS	 Jul-Sep	 Jul-Sep	 Jan–Sep	 Jan–Sep	 Jan–Dec
OPERATING ACTIVITIES
Operating profit					
Adjustments for non-cash items
Other operating revenues	-	-	-	-	-
Depreciation amortization and impairment					
Unrealized foreign exchange gains/losses	-				-
Share-based remuneration	-	-	-		
					
Interest received					
Interest paid	-	-	-	-	-
Income tax paid	-	-	-	-	-
CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL					
Changes in working capital
Increase/decrease in inventories	-		-	-	-
Increase/decrease in accounts receivable	-				-
Increase/decrease in other operating receivables		-	-	-	-
Increase/decrease in accounts payable		-	-	-	-
Increase/decrease in other operating liabilities	-	-	-	-	-
CASH FLOW FROM OPERATING ACTIVITIES					
INVESTING ACTIVITIES
Acquisition of shares and participations	-	-	-	-	-
Acquisition of subsidiaries (net impact on liquidity)	-	-	-	-	-
Supplementary purchase considerations paid	-	-	-	-	-
Purchase of intangible fixed assets and capitalized development costs	-	-	-	-	-
Purchase of property plant and equipment	- 	-	-	-	-
CASH FLOW FROM INVESTING ACTIVITIES	-	-	-	-	-
FINANCING ACTIVITIES
Dividends to Parent Company shareholders	-	-	-	-	-
Borrowings					
Repayment of loans	-	-	-	-	-
Repayment of lease liabilities	-	-	-	-	-
New share issue	-	-	-	-	
Issuing costs	-	-	-	-	-
Long-term incentive program		-		-	-
Paid option premiums	-		-		
CASH FLOW FROM FINANCING ACTIVITIES					
CASH FLOW FOR THE PERIOD			-		
CASH AND CASH EQUIVALENTS INCLUDING CURRENT INVESTMENTS AT THE BEGINNING OF THE PERIOD					
Exchange-rate differences in cash and cash equivalents	-		-		
CASH AND CASH EQUIVALENTS INCLUDING CURRENT INVESTMENTS AT THE END OF THE PERIOD					

Parent company income statement condensed

SEK THOUSANDS	 Jul-Sep	 Jul-Sep	 Jan–Sep	 Jan–Sep	 Jan–Dec
Operating revenues					
Operating expenses	-	-	-	-	-
Unrealized exchange-rate gains/losses (net)		-	-	-	-
OPERATING PROFIT/LOSS		-	-	-	-
Income from participation in Group companies	-	-	-		
Interest income					
Interest expenses	-	-		-	-	-
PROFIT AFTER FINANCIAL ITEMS		-	-	-	
Appropriations	-	-	-	-	
PROFIT/LOSS BEFORE TAX		-	-	-	
Tax	-				-
NET PROFIT FOR THE PERIOD		-	-	-	

Profit/Loss for the period corresponds to total comprehensive income

Condensed balance sheet Parent Company

SEK THOUSANDS	Sep  	Sep  	Dec  
ASSETS
FIXED ASSETS
Intangible fixed assets			
Tangible property plant and equipment			
Financial fixed assets			
TOTAL FIXED ASSETS			
CURRENT ASSETS
Current receivables			
Cash and cash equivalents			
TOTAL CURRENT ASSETS			
TOTAL ASSETS			
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity			
Untaxed reserves			
Other provisions		-	-
Non-current liabilities			
Current liabilities			
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES			

Acquired assets and liabilities

Four acquisitions were completed during the period Enova DL Systems AB Entry Event Sweden AB and Neagen Oy

Some items in the acquisition plans may be remeasured due to our brief ownership of the companies This applies to all assets and liabilities in the acquisition balances but mainly brands product rights customer agreements and goodwill For this reason the acquisition plans remain preliminary until months after the acquisition date

Acquired assets and liabilities acquisitions for the year SEK thousands	Book value	Fair value adjustment	Fair value recognized in the Group
Goodwill	-		
Intangible fixed assets	-		
Tangible property plant and equipment		-	
Financial fixed assets		-	
Inventories		-	
Current receivables		-	
Cash and cash equivalents		-	
Deferred tax liabilities	-	-	-
Accounts payable	-	-	-
Other current liabilities	-	-	-
Total			

Effect of acquisitions on cash flow SEK thousands
Group's purchase costs	-
Expensed portion of purchase considerations	
Convertible debentures	
Acquired cash and cash equivalents	
Net cash outflow	-

Remeasurement of previously acquired assets and liabilities

Final acquisition plan ABS Laundry Business Solutions

On July % of shares in the software group ABS Laundry Business

Solutions were acquired Final valuation of acquired assets and liabilities has taken place The value of product rights was measured higher and goodwill was

reduced correspondingly Final valuation of acquisition analyses for DocuBizz Hotellinx Scanrate and Raisoft has also taken place

Remeasurement acquisition plan ABS	Initial valuation	Remeasurement	Final valuation
Goodwill		-	
Intangible assets			
Deferred tax liabilities	-	-	-
Other net assets		-	
Total			

Remeasurement acquisition plan other acquisitions	Initial valuation	Remeasurement	Final valuation
Goodwill		-	
Intangible assets			
Deferred tax liabilities	-	-	-
Other net assets		-	
Total			

Allocation of revenues and date of revenue recognition

Allocation of revenues and date of revenue recognition SEK million	 Jul-Sep	 Jul-Sep	 Jan–Sep	 Jan–Sep	 Jan–Dec
Subscription-based revenue					
Transaction-based revenue					
Other revenues					
Net sales					
Date of revenue recognition
Services transferred to customers over time flat distribution					
Services transferred to customers over time in pace with use					
Services transferred to customers at a given time					
					

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 The information was submitted for publication through the agency of the contact person set out below at : am (CET) on October

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

FINANCIAL INFORMATION

Our website vitecsoftwarecom 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 post Vitec Software Group Vitec Investor Relations Tvistevägen A SE- Umeå Sweden By telephone +

Vitec's annual report is available at vitecsoftwarecom

CORPORATE REGISTRATION NUMBER

Vitec Software Group AB (publ) corp reg no -

FINANCIAL CALENDAR

Year-end report January–December 	Feb   : am
Interim report January–March 	Apr   : am
Annual General Meeting	Apr   : pm
Interim report January–June 	Jul   : am
Interim report January–September 	Oct   : am
Year-end report January–December 	Feb   : am

Olle Backman CEO + ollebackman@vitecsoftwarecom

Sara Nilsson CFO + saranilsson@vitecsoftwarecom

Patrik Fransson Investor Relations + patrikfransson@vitecsoftwarecom

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	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 rev enues are recognized during the contract's term.	A key indicator for the manage ment of operational activities.
Subscription-based recurring revenues	Recurring, contractual recurring revenue for all types of sub scriptions and cloud services. Revenue is evenly distributed over the contract period.	Used to track the company's recurring revenues.
Transaction-based recur ring revenues	Recurring, contractual recurring transaction-based revenue. Revenue is strongly linked to volume and varies by volume.	Used to track the company's recurring revenues.
Percentage of recurring revenues	Recurring revenues in relation to net sales.	A key indicator for the manage ment of operational activities.
Growth	The trend of the company's net sales in relation to corre sponding year-earlier period.	Used to monitor the company's sales trend.
Growth in recurring reve nues	Trend in recurring revenues in relation to the previous corre sponding year.	Used to monitor the company's sales trend.
Organic growth in recurring revenues	Development of the company's recurring revenue over the last 12 months, including data for acquired companies, in relation to corresponding year-earlier period.	Used to monitor the company's sales trend.
Proforma net sales rolling  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 company's sales trend.
ARR Proforma recurring revenues rolling 	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 company'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 company's dependence on external direct costs
Gross margin	Gross profit in relation to net sales.	Used to monitor the company'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 before acquisition-related costs, acqui sition-related amortization.
EBITDA	Earnings before interest, tax, depreciation and amortization for the period.	Indicates the company's operat ing profit/loss before deprecia tion/amortization.
Acquisition-related costs	Costs such as broker fees, legal fees and stamp tax (tax on single property purchases).	Used to disclose items affecting comparability.
Acquisition-related amor tization	Amortization regarding product rights and customer agree ments.	Used to disclose items affecting comparability.
EBITA margin	Operating profit before acquisition-related costs in relation to net sales.	Used to monitor the company's earnings trend.
Operating margin	Operating profit in relation to net sales.	Used to monitor the company's earnings trend.

NON-IFRS KEY INDICATORS	DEFINITION	USAGE
Profit margin	Profit after tax for the period, in relation to net sales.	Used to monitor the company'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 indica tor of the company's financial stability.
Equity/assets ratio after full conversion	Shareholders' equity and convertible debentures as a per centage of total assets.	This measurement is an indica tor of the company's financial stability.
Interest-bearing net debt	Non-current interest-bearing liabilities and the current portion of interest-bearing liabilities, less cash and cash equivalents.	This measurement is an indica tor 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 indica tor of the company's financial stability.
Average shareholders' equity	The average between shareholders' equity for the period at tributable to Parent Company shareholders and sharehold ers' 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 indicator of the company's profitability and gauges the return on sharehold ers' 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 em ployees.	This metric is used to assess the company's efficiency.
Personnel expenses per employee	Personnel expenses in relation to average number of em ployees.	A key indicator used to measure 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 share holders, in relation to the number of shares issued at the balance-sheet date.	This measurement indicates the equity per share at the bal ance-sheet date
Cash flow per share	Cash flow from operating activities before changes in work ing capital, in relation to the average number of shares.	Used to monitor the company's trend in cash flow per share.
Number of shares after dilution	Average number of shares during the period plus the num ber of shares added following full conversion of convertibles and warrants.	An underlying measurement on which the calculation of other key indicators is based.
IFRS KEY INDICATORS	DEFINITION	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 shareholders, plus interest expenses pertaining to convertible debentures, in relation to the average number of shares after dilution.	IFRS key indicators

Key indicators

		 Jan–Sep	 Jan–Sep	 Jan–Dec
Net sales	SEK s			
Recurring revenues	SEK s			
Recurring share of net sales	(%)	%	%	%
Growth net sales	(%)	%	%	%
EBITA	SEK s			
EBITA margin	(%)	%	%	%
Growth EBITA	(%)	%	%	%
Operating profit/loss (EBIT)	SEK s			
Operating margin	(%)	%	%	%
Profit after financial items	SEK s			
Profit after tax	SEK s			
Profit margin	(%)	%	%	%
Balance-sheet total	SEK s			
Equity/assets ratio	(%)	%	%	%
Equity/assets ratio after full conversion	(%)	%	%	%
Interest-bearing net debt	SEK s			
Debt/equity ratio	(multiple)			
Return on capital employed	(%)	%	%	%
Return on equity	(%)	%	%	%
Sales per employee	SEK s			
Added value per employee	SEK s			
Personnel expenses per employee	SEK s			
Average no of employees	(persons)			
Adjusted equity per share (AES)	(SEK)			
Earnings per share	(SEK)			
Earnings per share after dilution	(SEK)			
Resolved dividend per share	(SEK)			
Cash flow per share	(SEK)			
Basis of computation
Earnings from calculation of earnings per share	SEK s			
Cash flow from calculation of cash flow per share	SEK s			
Weighted average number of shares (weighted average)	(thousands)			
Number of shares after dilution	(thousands)			
Number of shares issued at balance-sheet date	(thousands)			
Share price at close of the respective period	(SEK)			

Vitec Software Group develops and provides software for clients such as finance and insurance companies in Sweden Norway Denmark Switzerland the UK Japan and the US

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