Webstep

Earnings Release • May 22, 2019

Webstep Q1 2019: All-time high revenues

Webstep Q1 2019: All-time high revenues

Webstep reports 5.5 per cent revenue growth in the first quarter of 2019, with

9.4 per cent growth in the Norwegian market alone. The order book remains strong

and recruitment remains a number-one priority to meet the continued high demand

for IT expertise.

"Webstep's employees have delivered an impressive first quarter with record high

revenues. I have just joined a great company with a strong market position and

exciting opportunities ahead. We are privileged to operate in a growth market

and will strive to satisfy our customers' increasing demands by attracting and

retaining experienced technology experts", says CEO Arne Norheim.

Webstep ASA ("the Group" or "Webstep") recorded consolidated all-time high

revenues in the first quarter of 2019, amounting to NOK 184.4 million, up 5.5

per cent from the same quarter last year. Revenues grew by 9.4 per cent in the

Norwe­gian market.

EBITDA for the first quarter amounted to NOK 22.3 million, down 6.6 per cent

from NOK 23.9 million in the corresponding quarter of 2018. Main reasons for the

reduced EBITDA are increased use of subcon­tractors and CEO recruitment costs.

The EBITDA-margin ended at 12.1 per cent, compared to 13.7 per cent in the first

quarter of 2018.

The new reporting standard IFRS 16 Leases was implemented on 1 January 2019 and

had a positive EBITDA effect of NOK 1.2 million. Such effects will be recurring

effects, as lease costs have been reclassified from operating expenses to

depreciation and finance costs following the new reporting standard.

Net profit for the first quarter was NOK 15.4 million, down from NOK 17.7

million in the same quarter last year.

The financial position remains strong, with cash and short-term deposits of NOK

25.6 million (NOK 7.5 million), no interest bearing debt and total equity at 31

March of NOK 389.1 million (NOK 371.1 million), corresponding to an equity ratio

of 66 per cent (69 per cent) before the provision for dividend of NOK 1.60 per

share, which was approved by the Annual General Meeting 8 May 2019.

Cash flow from operations in the first quarter was NOK -6.4 million, compared to

NOK 23.9 million last year. The reduction is mainly explained by calendar

effects related to which weekday receivables are falling due.

The market growth continues, with generally high demand for Webstep's core

digitalisation offering. Sales of New Ser­vices, such as IoT, analytics and

machine learning are also growing, in part due to the Group's strong emphasis on

sharing knowl­edge and expertise across the organisation, which is also

strengthening the offering to existing and new clients in all Webstep locations.

On 31 January 2019, Webstep announced that Arne Norheim was appointed new CEO of

the Webstep Group, assuming the position on 2 May 2019.

The Group's great work environment and internal culture has once again been

confirmed by the feedback from the employees in the Great Place to Work® survey.

Webstep enjoyed high rankings in both Norway and Sweden in the 2019 awards.

Webstep aims to maintain a position among the preferred employers for IT

professionals in all its geographical locations. This focus is key in order to

succeed with the organic growth and recruitment strate­gies in 2019.

The geographical expansion continued in the first quarter, with the opening of a

new Webstep office in Sundsvall, Sweden.

The general outlook for 2019 is positive. Webstep has a strong market position,

a solid financial position and a very robust order book. Demand is high and

hourly rates are increasing, but growth capacity in 2019 will be challenged by

an already high utilisation and the continuously challenging market conditions

for recruitment of IT experts.

"Although our growth capacity is limited in the short term, there should be no

doubt that our overall and long-term goals remain the same; to outperform the

market in both growth and profitability", says Norheim.

Webstep has identified several measures to re-establish growth capacity,

hereunder new measures to retain employees, strengthen recruitment capacity, and

leverage new geographic expansions. The company also intends to pursue inorganic

growth opportunities and continue strength­ening the partnerships with world

-leading technology platforms. These initiatives are expected to contribute to

building a new and robust platform for future growth, which supports Webstep's

long-term ambitions.

Contact details for further information:

Arne Norheim CEO / Liv Annike Kverneland CFO

Cell IR/CFO: +47 911 51 110

Email: ir@webstep.com

Website: www.webstep.com

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.

Webstep ASA is a provider of consultancy services to the private and public

sector, with the IT expertise necessary to deliver the most demanding

digitalisation and IT services.The Webstep Group employs approximately 400

employees in Norway and Sweden, of which more than 360 are expert consultants.

Since its establishment in 2000, Webstep has delivered profitable growth. The

company offers its services to more than 200 customers annually and has been

recognised for its work environment.