Webstep — Investor Presentation 2018

May 9, 2018

Q1 2018

PRESENTATION

Webstep ASA

OSLO, 9 MAY 2018

Kjetil Eriksen, CEO Anders Løken, CFO

1. Highlights

• 1. Business review
• 1. Financial review
• 1. Outlook
• 1. Q&A

Q1 HIGHLIGHTS

• Revenue of NOK 175m (NOK 161m), growth of 8.6% YOY
• EBITDA of NOK 24m (NOK 25m), margin of 13.7%
• Net profit of NOK 17.7m (15.8m), up 12%
• Easter effect on top line and EBITDA
• Increased revenue capacity YoY (410 FTEs vs 386 FTEs)

CAPACITY AND SEASONALITY KEY VALUE DRIVERS

Highlights Q1

• Proven increase of growth capacity
• Continued high utilization
• Increased hourly rates

Other comments:

• Less working days due to Easter

• 1. Highlights
• 2. Business review
• 1. Financial review
• 1. Outlook
• 1. Q&A

ENABLING FUTURE GROWTH MEETING TODAY'S DEMAND

BUSINESS REVIEW MARKET AND CUSTOMERS

• The digitalisation wave drives market growth
• Delivering services to clients with strategic focus on digitalisation
• Continued strong demand for Core Services
• Improved sales of New Services
• Ability to move consultants between new and core services improves flexibility and utilisation
• Continued long-lasting customer relations

BUSINESS REVIEW EMPLOYEES AND ORGANISATION

• Added capacity in Q1 to meet client demand
• Still recruiting solely experienced experts
• A highly competitive market for IT experts
• Continued high employee satisfaction
• Ranked as one of the best workplaces in Norway and Sweden by GPTW *
• 11 consecutive years in Norway, 8 years on top 3

• 3 consecutive years in Sweden

• 1. Highlights
• 1. Business review
• 3. Financial review
• 1. Outlook
• 1. Q&A

FINANCIAL REVIEW | PROFITABLE REVENUE GROWTH

(Amounts in NOK million)	Q1	Q1	%
	2018	2017	Change
Total revenues	174.9	161.0	8.6%
Cost of services and goods	17.3	10.6
Salaries and personell cost	124.6	117.7
Other operating expenses	9.0	8.2
EBITDA	23.9	24.5	$-2.5%$
EBITDA margin	13.7%	15.2%
Depreciation and amortisation	0.6	2.1
EBIT	23.3	22.5	3.7%
EBIT margin	13.3%	14.0%
Net financial items	$-0.4$	$-1.8$
Profit before tax	22.9	20.7	10.5%
Income tax expenses	5.2	5.0
Profit for the period	17.7	15.8	12.0%
Earnings per share (NOK)	0.67	0.76	$-12.2%$
Earnings per share, fully diluted (NOK)	0.67	0.76

Comments:

• Reduced depreciation and amortisation compared to Q1-17 as customer relationships (intangible asset) arisen from acquisitions are fully amortised
• Higher profit and lower earnings per share (EPS) in Q1-18 than Q1-17, as EPS for Q1-17 is calculated on a lower number of shares, pre capital issue in the IPO.

FINANCIAL REVIEW | NORWAY

Revenue growth and Easter effects

• Revenue growth above expectations
• EBITDA impacted by calendar effects (Easter)
• Continued strong utilisation within Core Services
• Improved sales of New Services

1) IPO costs and other non-recurring items of NOK 14 million recorded in Q4 2017

FINANCIAL REVIEW | SWEDEN

Continued revenue growth and positive client development

• Strong revenue growth (+15.2% YoY) enabled by strategic use of subcontractors
• Slightly lower margins due to subcontractors, yet enables new client relations and increases long term growth potential
• Still a highly competitive market for recruitment of experienced experts

Revenues by quarter EBITDA by quarter1)

FINANCIAL REVIEW | A CAPITAL EFFICIENT BUSINESS

		• Stronger financial position post IPO
		• Capital issue and repayment of long term loan
		• Negative calendar effect in cash and receivables:
		• Receivables falling due on Saturday 31 March (Easter) paid in April
		• NOK 46.3 million paid by 5 April • Leaving trade receivables at appx. NOK 86.1 million and cash at appx. NOK
		53.8 million after this date

FINANCIAL REVIEW | CASH FLOW

			Restated
(Amounts in NOK million)	Q1 YTD	Q1 YTD	Q1 YTD
	2018	2017	2017
Operating activities			o
Profit/(loss) before tax	22.9	20.7	20.7
Adjustments for:
Depreciation of property, plant and equipment	0.6	2.1	2.1
Net change in trade and other receivables	$-10.3$	$-21.1$	$-21.1$
Net change in other liabilities	17.7	19.0	19.0
Net foreign exchange differences	$-0.1$	$-0.1$	$-0.1$
Income tax expenses	$-7.0$	$-5.2$	$-5.2$
Net cash flow from operating activities	23.9	15.4	15.4
Investing activities
Payments for R&D initiative	$-1.0$	$-1.0$	$-1.0$
Purchase of property and equipment	$-0.7$	$-0.9$	$-0.9$
Net cash flow from investing activities	$-1.7$	$-1.9$	$-1.9$
Financing activities
Proceeds from borrowings
Repayment of borrowings		$-7.5$	$-7.5$
Change in bank overdraft	$-21.3$	$-28.7$
Net proceeds from equity
Payment of dividends
Net cash flows from financing activities	$-21.3$	$-36.2$	$-7.5$
Net increase/(decrease) in cash and cash equivaler	1.0	$-22.7$	6.0
Cash and cash equivalents at 1 January	6.6	80.3	51.6
Cash and cash equivalents at end of period	7.5	57.6	57.6

• Restated cash flow for Q1 2017 to ease comparison

• Q1 2017 cash flow impacted by change in reporting practice for cash, short term deposits and bank overdraft
• Balance date 31 December 2016 (audited FY figures): Gross assets and debt figures reported
• Balance date 31 March 2017 (unaudited Q figures): Net asset or debt figure reported
• Restate is based on both balance dates being reported as net asset/debt

• Negative calendar effect on receivables:

• NOK 46.3 million of receivables falling due on Saturday 31 March (Easter) were not recorded as paid until early April

• 1. Highlights
• 1. Business review
• 1. Financial review
• 4. Outlook
• 1. Q&A

OUTLOOK STRONG MARKET FUNDAMENTALS

• Continued robust market outlook, driven by high digitalisation investment activity
• New Services expected to be important growth areas, yet still in early phase
• Continued very high demand for Core Services

OUTLOOK STRONG MARKET POSITION

• Continued strong order backlog
• Confirms good momentum
• Higher level of revenue capacity established
• High FTE growth last quarters, likely to stabilise
• Strong focus on employee retention and recruitment
• Will be further strengthened going forward
• Positive calendar effects in Q2 2018

• Over all ambition unchanged; profitable growth and EBITDA margin above the average market levels

• 1. Highlights
• 1. Business review
• 1. Financial review
• 1. Outlook
• 5. Q&A

APPENDIX

FINANCIAL REVIEW SEGMENTS

	Q1 2018		Q1 2017 YTD 2018	YTD 2017	FY 2017
Sales revenues	147.7	137.4	147.7	137.4	495.3
EBITDA 1	21.9	22.4	21.9	22.4	51.4
EBITDA margin 1)	14.8%	16.3%	14.8%	16.3%	10.4%
EBITDA excl. non-recurring costs 1)	21.9	22.4	21.9	22.4	65.4
EBITDA margin excl. non-recurring costs 1)	14.8%	16.3%	14.8%	16.3%	13.2 %
Number of employees, average (FTE)	349	324	349	324	331
Number of employees, end of period	351	328	351	328	342
Number of work days, Norway (excl. vacation)	62	65	62	65	251
EBITDA per average employee 1) (tNOK)	62.8	69.2	62.8	69.2	155.4
EBITDA per average employee excl. non-recurring costs 1) (tl	62.8	69.2	62.8	69.2	197.5

1) Adjusted for IPO costs and other non-recurring items of NOK 14.0 million in Q4 2017. See note 12 for alternative performance measures.

FINANCIAL REVIEW SEGMENTS

	Q1 2018	2017 Q1	YTD 2018	YTD 2017	FY 2017
Sales revenues	27.2	23.6	27.2	23.6	101.2
EBITDA 1	2.0	2.2	2.0	2.2	5.7
EBITDA margin 1)	7.4%	9.1%	7.4 %	9.1%	5.6%
EBITDA excl. non-recurring costs 1)	2.0	2.2	2.0	2.2	5.7
EBITDA margin excl. non-recurring costs 1)	7.4%	9.1%	7.4%	9.1%	5.6%
Number of employees, average (FTE)	61	63	61	63	63
Number of employees, end of period	58	64	58	64	60
Number of work days, Sweden (excl. vacation)	63	64	63	64	251
EBITDA per average employee 1) (tNOK)	32.9	34.3	32.9	34.3	89.7
EBITDA per average employee excl. non-recurring costs 1) (tl	32.9	34.3	32.9	34.3	89.7

1) Adjusted for IPO costs and other non-recurring items of NOK 14.0 million in Q4 2017. See note 12 for alternative performance measures.

FINANCIAL REVIEW EQUITY CHANGES

(Amounts in NOK million)	Issued capital	Treasury shares	Share premium	Foreign currency translation reserve	Retained earnings	Total attributable to equity owners parents	Total equity
At 1 January 2016	21.3	$-0.6$	32.1	8.8	135.3	196.9	196.9
Profit for the period Other comprehensive income/(loss) Net purchase of treasury shares Restructuring of sub-group Dividends to NCI Dividends At 31 December 2017	۰ ٠ ۰ 5.7 ٠ ٠ 27.0	٠ ٠ ٠ ٠ ٠ $-0.6$	٠ 117.5 $\overline{\phantom{a}}$ 0.2 149.8	3.5 ٠ ٠ $\overline{\phantom{a}}$ ٠ 12.4	33.9 ٠ ۰ ٠ ٠ ٠ 169.2	33.9 3.5 $\overline{\phantom{0}}$ 123.2 $\overline{\phantom{a}}$ 0.2 357.7	33.9 3.5 123.2 0.2 357.7
Profit for the period Shares issued Other comprehensive income/(loss) Share incentive program At 31 March 2018	٠ ۰ ۰ 27.0	۰ $-0.6$	۰ ٠ 149.8	٠ -4.6 0.3 8.1	17.7 ٠ ٠ ٠ 186.8	17.7 ٠ $-4.6$ 0.3 371.1	17.7 $-4.6$ 0.3 371.1

FINANCIAL REVIEW | CASH & RECEIVABLES WHEN QUARTER END FALLS ON A SUNDAY

• Monthly invoicing and 30 days net. Mont end therefore due date for most payments
• When due date falls on Saturday/Sunday, delayed customers normally pay on Monday
• NOK 46.3 million falling due on Saturday 31 Mar recorded as cash on Friday 5 April (after Easter holidays)

FINANCIAL POSITION INTANGIBLE ASSETS

• Goodwill arisen from acquisitions of Webstep AS in 2011 and Webstep AB in 2012/13.
• Customer relationships fully depreciated at 31 Dec 17
• R&D added at 31 Dec 17 and reclassified for 31 Mar 17

TOP 20 SHAREHOLDERS AT 7 MAY 2018

#	√ Shareholder name	$\overline{\phantom{a}}$ Shares	$-$ %	▼ Type $\overline{\phantom{a}}$ Country $\overline{\mathbf{v}}$
	1 GLOBAL DIGITAL HOLDI	3 844 255	14.3	NOR
	2 Virtus KAR Internati The Bank of New York	3 831 491	14.2	USA
	3 VERDIPAPIRFONDET ALF SEB Investor World G	1532037	5.7	NOR
	4 JPMorgan Chase Bank, JPMCB RE HB SWED FUN	1 141 788		4.2 Nominee SWE
	5 COLINA INVEST AS	839080	3.1	NOR
	6 PARK LANE FAMILY OFF	703 414	2.6	NOR
	7 VPF NORDEA NORGE VER C/O JPMORGAN EUROPE	685 000	2.5	NOR
	8 AZURE HOLDING AS	610 301	2.3	NOR
	9 Goldman Sachs Intern SECURITY CLIENT SEGR	600 000		2.2 Nominee GBR
	10 Taaleri Nordic Value	540 000	2.0	FIN
	11 XERXES AS	540 000	2.0	NOR
	11 Citibank, N.A. S/A MUT FD EQ NORDIC	438 491		1.6 Nominee FIN
	13 SOLE ACTIVE AS	401 046	1.5	NOR
	14 SEB PRIME SOLUTIONS SKANDINAVISKA ENSKIL	400 000	1.5	LUX
	15 NWT MEDIA AS c/o Thommessen AS	390 000	1.5	NOR
	16 ILLARI AS	387268	1.4	NOR
	17 NORDEA NORDIC SMALL	355 130	1.3	FIN
	18 DnB NOR Bank ASA EGENHANDELSKONTO DnB NOR Marl	349 000	1.3	NOR
	19 Danske Invest Norge	342 000	1.3	NOR
	20 Danske Bank A/S 3993 NORDIC SETTLEME	340 576		1.3 Nominee DNK
	Total top 20 shareholders	18 270 877	67.8
	Other	7977514	32.3
	Total shares outstanding	26 248 391	100.0

TOP 20 SHAREHOLDERS SHARE OF TOTAL AND BY GEOGRAPHY AT 7 MAY 2018