Webstep

Quarterly Report • Feb 13, 2025

WEBSTEP | INTERIM REPORT Q1 2023

0

-

Highlights

October to December 2024¹

• Revenues of NOK 225.6 million (225.6)
• ● EBIT ² of NOK 15.5 million (-26.8), corresponding to an EBIT² margin of 6.9 per cent (-11.9)
• ● Earnings after tax of NOK 12.5 million (-26.9)
• ● Earnings per share of NOK 0.48 (-0.97); fully diluted of NOK 0.48 (-0.97)
• Net operating cash flow of NOK 44.8 million (82.3)
• Number of FTEs end of period 446 (471)

January to December 2024¹

• Revenues of NOK 874.1 million (861.6)
• EBIT² of NOK 66.7 million (17.1), corresponding to an EBIT² margin of 7.6 per cent (2.0)
• Earnings after tax of NOK 49.2 million (4.4)
• Earnings per share of NOK 1.80 (0.16); fully diluted of NOK 1.79 (0.16)
• Net operating cash flow of NOK 28.1 million (77.7)

Significant events during and after the period

• Significant improvement in EBIT margin despite a continued soft market
• Solid growth in the regional offices, supported by high activity in the energy sector
• NOK 25.2 million share buyback in October
• The board of directors proposes the Annual General Meeting a dividend of NOK 2.30 per share, total NOK 62.3 million

Group NOK million	04 2024	Q4 2023	FY 2024	FY 2023
Revenues	225.6	225.6	874.1	861.6
Change	(0.0%)	6.9%	1.5%	12.7%
EBITDA2	19.5	2.7	85.1	59.8
EBITDA2 margin	8.6%	1.2%	9.7%	6.9%
EBIT 2	15.5	(26.8)	66.7	17.0
EBIT2 margin	6.9%	(11.9%)	7.6%	2.0%
Net profit	12.5	(26.9)	49.2	4.4
Net free cash flow2	43.7	85.0	22.2	72.2
Cash flow from operations	44.8	86.0	25.7	66.9
Equity ratio2	55.6%	50.1%	56.6%	50.7%
Earnings per share (NOK)	0.48	(0.97)	1.80	0.16
Earnings per share, fully diluted (NOK)	0.48	(0.97)	1.79	0.16
Number of FTEs, average	447	471	448	459
Number of FTEs, end of period	446	471	446	471
Revenue per FTE (TNOK)	504.1	479.3	1,950.8	1,875.4
EBIT per FTE (TNOK)	34.7	(57.0)	149.6	36.2

¹ All reported figures only include continued operations from Webstep ASA and Webstep AS. See

note 5 for further details about discontinued operations.

² Alternative performance measure

Wrapping up the fourth quarter of 2024, I am happy to conclude that Webstep is developing well, with significant profit improvement.

The positive development follows a series of improvement initiatives taken last year. We started 2024 with the implementation of a cost reduction program from which we now see the full effect. The divestment of our Swedish business in the first half-year was important to sharpen focus on the core Norwegian business, and during the second half we have made a range of changes in order to renew our organisation and management team. We ended an eventful year with the conclusion of our strategy process in December, laying a foundation for continued profitable growth.

Looking at the fourth quarter in more detail, total revenues were unchanged compared to the same period last year, while revenues from our own consultants increased by 2 per cent, despite a reduced number of active consultants. The

improvement is primarily observed in our regional offices, where revenues from own consultants grew by 8 per cent.

The teams have delivered really well in terms of both sales and customer work, and at the same the regions have been supported by high activity in the energy sector, including oil and gas. The market in the Oslo region remains muted, with a revenue decline of 5 per cent. Overall, our growth in the fourth quarter was primarily driven by increased hourly rates.

The EBIT margin in the fourth quarter came in at 6.9 per cent, while the margin adjusted for one-off costs was 8.4 per cent, 4.7 percentage points better than EBIT adjusted for one-off costs in the same quarter in 2023. The most important driver for the improvement is a significant reduction in personnel cost following the cost reduction program. While the rolling 12 months EBIT margin is the highest since the second quarter 2022, our ambitions are higher, and we are only at the early innings of Webstep's change journey.

As we have embarked on 2025, I would like to reiterate the two most important strategic priorities for the coming years. Most importantly we will prioritise customer focus by collaborating more closely with our clients. This will allow us to leverage our expertise to become an optimal business development partner. We have already established a national sales organisation with a dedicated manager, a specialised sales team for prioritised industries and a solid industry network across the regions.

During the fourth quarter, Webstep has secured a new contract with Farmalogg, a joint product register portal for the pharmaceutical industry in Norway. This project is an example that shows that the effects of including more business development in our sales process is already giving results.

Secondly, we will operate under the principle of "One Webstep". This slogan encapsulates our ambition to enhance collaboration across regional offices and leverage the benefits of a strong local presence in key areas, while also being an integral part of a large organisation.

In pursuit of our strategic objectives, we are implementing a comprehensive internal alignment initiative. This process, already well underway, aims to foster a shared vision across all levels of the organisation. The positive reception from our consultants, administrative staff, and leadership team is encouraging and indicates our collective commitment to this new direction.

Culture remains essential for Webstep, and our ambition remains to be the most attractive employer for experienced consultants. The opportunity to work hands-on with strategic customer projects is a success factor to retain and attract the most skilled and valuable consultants in the market.

We still experience certain reluctance among customers. The Oslo office faces more uncertain market conditions than our regional offices which are more exposed to the energy sector. In the short term, closer collaboration with other regions is expected to help improve the total utilisation of our consultants. It is important for me to highlight that we have already taken the necessary steps to change our organisation. Webstep is in a good shape with regards to the cost level and going forward we will continue to strive for finding the right balance between growth measure and cost control.

After nine months onboard, I remain fully convinced about the potential in Webstep and our fantastic team. With continued tight cost focus, a more flexible and agile organisation as well as moving closer to our customers' strategic agenda I am certain that we will deliver on our goal of more than 10 per cent EBIT margin combined with healthy top-line growth.

Kristine Lund Webstep ASA CEO

Financial review

After divesting the Swedish operation in the third quarter (see note 5) , the Norwegian operation remains the sole reporting segment for the Group, and is considered a continuing operation. Following sections in this report, including Appendix, are commented for the continuing operation only.

Operating revenues

Fourth quarter revenues were NOK 225.6 million (225.6), at the same level as the corresponding quarter last year. Revenues from own consultants increased by 1.9 per cent compared to the corresponding quarter last year and amounted to NOK 209.0 million (205.2). Webstep's revenue model is primarily based on hourly rates, number of consultants and number of workdays. The development is primarily driven by increased hourly rates and one more working day in the quarter, however offset by a slightly lower utilisation and fewer consultants compared to the same period last year.

Revenue breakdown NOK million	Q4 2024	Q4 2023	FY 2024	FY 2023
Oslo	96.4	101.1	390.9	372.7
Regional offices	112.6	104.0	418.8	414.8
Subcontractors	12.9	16.1	52.9	57.6
Resale of licenses	3.7	4.2	11.5	16.4
Other	0.0	0.2	0.0	0.2
Total	225.6	225.6	874.1	861.6

Total revenues for the full year were NOK 874.1 million (861.6), an increase of 1.5 per cent compared to 2023. Revenue from own consultants increased by 2.8 per cent and amounted to NOK 809.8 million (787.5). Revenue growth is mainly driven by higher hourly rates and one more working day compared to last year, offset by lower utilisation and fewer consultants compared to the same period last year.

Revenues from subcontractors for the quarter and for the full year amounted to NOK 12.9 million (16.1) and NOK 52.9 million (57.6) respectively. The use of subcontractors is related to services outside Webstep consultants core competencies.

Rolling 12 month operating revenues

Operating costs

Cost of services and goods sold, primarily related to use of subcontractors, amounted to NOK 15.6 million (19.5) for the fourth quarter, and NOK 61.4 million (69.7) for the full year.

Salaries and personnel costs include salaries and benefits, pension, tax, vacation pay and other items like social gatherings for employees. A high proportion of salary is variable and correlates with revenues.

Salaries and personnel costs for the fourth quarter amounted to NOK 175.5 million (190.0) and NOK 682.0 million (686.7) for the full year. Salary expenses have declined both in the quarter and full year mainly as a result of the cost reduction programme initiated at the end of 2023. The cost reduction programme caused one-off costs amounting to NOK 10.0 million in the fourth quarter 2023 which mainly explains the positive development. Due to strategic organisational changes in 2024, the Group had one-off costs in the fourth quarter and full year amounting to NOK 3.4 million and NOK 6.4 million respectively. The fourth quarter had NOK 1.7 million (4.8) in costs related to increased employer's contributions. For the full year the additional employer contribution amounted to NOK 5.0 million (9.0).

Other operating expenses amounted to NOK 15.0 million (13.3) for the fourth quarter and NOK 45.6 million (45.4) for the full year. The continued cost focus has reduced expenses related to travel and conference activities.

However, this decrease is offset by increased costs related to external services due to organisational restructuring.

Depreciation and impairment for the quarter amounted to NOK 4.0 million (29.6) and NOK 18.3 million (42.8) for the full year. The reduction in impairment costs compared to last year, is primarily explained by an extraordinary impairment of goodwill related to Webstep AB in 2023, amounting to NOK 25.0 million.

Operating profit

Total consolidated EBITDA for the quarter amounted to NOK 19.5 million (2.8) and NOK 85.1 million (59.8) for the full year. Total consolidated EBIT for the quarter amounted to NOK 15.5 million (-26.8) and NOK 66.7 million (17.0) for the full year.

EBIT margin for the quarter was 6.9 per cent (-11.9) and 7.6 per cent (2.0) for the full year. Excluding one-off costs, EBIT margin for the quarter was 8.4 per cent (3.6) and 8.4 per cent (6.0) for the full year.

Rolling 12-month operating profit (EBIT) and EBIT margin

*One-off costs of NOK 3.4 million (35.0) in the quarter and NOK 6.4 million (35.0) for the full year excluded in adjusted figures.

Net financial income for the quarter was NOK 0.4 million (negative 0.6) and tax expense amounted to NOK 3.5 million (negative 0.5). Net profit for the quarter was NOK 12.5 million (negative 27.0).

For the full year net financial costs were NOK 3.7 million (4.3) and tax expense amounted to NOK 13.9 million (8.3). Net profit for the full year was NOK 49.2 million (4.4).

The board of directors proposes for the Annual General Meeting a dividend of NOK 2.3 per share, in total NOK 62.3 million. The proposed dividend includes 50% of the proceeds from the sales of Webstep AB, amounting to NOK 25.0 million, equal to NOK 0.9 per share.

Financial position

In general, changes in the balance sheet compared to last year are impacted by the sales of Webstep AB in FY 2024. Balance sheet values per end of December 2023 include Webstep AB, whereas values per end of December 2024 include the Norwegian business only.

Total assets at 31 December amounted to NOK 632.7 million (708.2).

Non-current assets were NOK 388.5 million (471.3) and consisted mainly of goodwill that amounted to NOK 313.6 million (358.2) right-of-use assets amounted to NOK 63.2 million (97.9). The reduction in goodwill is primarily explained by the impairment of acquisition-related goodwill of Webstep Sweden AB which was sold in July 2024.

Total current assets of NOK 244.2 million (236.9) consisted of trade receivables, other short-term receivables and cash and short-term deposits. Trade receivables amounted to NOK 131.3 million (156.0). Other current receivables were NOK 30.6 million (5.4). The increase reflects a seller's credit of approximately NOK 25 million related to the sales of Webstep AB. Cash and short-term deposits amounted to NOK 82.4 million (75.5).

Total equity on 31 December was NOK 351.6 million (359.2). The Group conducted the purchase of treasury shares in the fourth quarter of 2024 amounting to NOK 25.2 million.

Non-current liabilities amounted to NOK 52.8 million (81.6). Current liabilities of NOK 228.3 million (267.4) consisted of other short-term liabilities, current leasing liabilities, trade payables, social taxes and VAT.

Cash Flow

Cash flow from operations was NOK 44.8 million (82.3) for the quarter, and NOK 28.1 million (77.7) for the full year.

Changes in cash flow from operating activities for the quarter are mainly explained by decreased trade receivables and an increase in other short-term debt.

Cash flow from investing activities amounted to negative NOK 1.1 million in the quarter (negative 0.8), and NOK 35.0 million (negative 5.5) for the full year. The annual change mainly relates to the proceeds from sales of Webstep AB. Cash flow from financing activities is negative by NOK 26.2 million (negative 22.9) for the quarter and negative NOK 56.3 million (negative 59.1) for the full year. The change in the quarter is related to buyback of shares of NOK 25.2 million (0).

Webstep has a facility agreement with SpareBank1 SR-Bank of NOK 110 million, of which NOK 0.0 million was utilised as of 31 December 2024.

Employees

Webstep Norway is headquartered in Oslo and has offices in Bergen, Stavanger, Trondheim, Kristiansand and Haugesund. The Group provides high-end IT consultancy services to public and private clients across the country.

Webstep had 446 FTEs at the end of the quarter, a decrease of 3 FTEs since the last quarter and a decrease of 25 FTEs in the last twelve months, as a consequence of sharpening and streamlining the organisation. The FTEs are distributed across the regional offices in Norway. Webstep believes in the power of local business and the decentralised model is based on strong local presence. The regional offices provide expertise and capacity to local clients, while leveraging the full organisational capacity.

Webstep's consultants have on average more than 10 years of relevant experience. This creates a solid foundation for a strong professional environment and high-quality deliveries. The Webstep work culture is driven by the values of being skilled, innovative, generous and uncomplicated.

Webstep strives to assign its consultants interesting and challenging projects that ensure personal development and contentment. By constantly developing the consultants' skill sets, the quality of Webstep's services are also improved. The incentive model for consultants is designed to attract and motivate experienced expert consultants. The salary model for consultants has been a pillar in Webstep ever since its inception in 2000.

Number of FTEs (end of quarter)

Sustainability

As a result of the sale of Webstep AB the Group is not obliged to report according to the Corporate Sustainability reporting Directive (CSRD) for 2024. The Group has therefore decided to postpone reporting according to CSRD to 2025, but will continue the process of preparing for the reporting. A double materiality analysis has been conducted to identify which sustainability matters that are most material to Webstep and the Group's stakeholders. The materiality is determined by evaluating Webstep's impact on people and society, while also considering the financial impact ESG-matters have on Webstep. This creates the scope for Webstep's CSRD reporting, and forms the basis for Webstep's sustainability strategy and day-to-day operations going forward. Throughout the process, the Group will develop and share information regarding KPIs to measure progress towards the Group's defined sustainability objectives.

In the 2023 Annual Report the Group's statement of EU-taxonomy for sustainable activities can be found, in addition to the double materiality analysis according to CSRD. The 2023 Annual Report and the Transparency Act Report can be found on the Group's webpage www.webstep.no

Market update

Webstep now operates exclusively in Norway, and during the fourth quarter, the Group worked on further sharpening focus on enhancing delivery capabilities and exploring new opportunities within the Norwegian market. We have made organisational changes to ensure that Webstep's offices work more closely together to enhance delivery capabilities and to absorb market fluctuations in regions and industries.

The enduring, long-term trends of digitalisation remain stable both in the private and public sectors. The Norwegian Government's digitalisation strategy for 2024-2030 underpins both public and private sector's ambitions and efforts for digitalisation and green transition, and Webstep has a solid foothold in the public sector, and is in position to support the sector's many transformation initiatives.

At the same time, when we look at the market in the fourth quarter, many customers in the private sector remain reluctant, as the macro uncertainty has persisted. The development that emerged in the consulting market during the late summer, with positive development along the coast has continued. Webstep has been successful in leveraging this, attracting new customers and experiencing increased utilisation. On the other hand, the slower development in the Oslo region has persisted, leading to increased competition in this region.

However, taking a step back, the Oslo market bears enormous potential with both large public and private entities. Webstep's sales operations will now be consolidated into a national sales function based in Oslo. This reorganisation aims to enhance our competitiveness for securing these contracts, while at the same time maintaining our local advantages.

Going forward, new policies instated by the new US president may increase market uncertainty. Similarly to the rest of the Norwegian economy, a significant share of our customers are exposed to the export markets. At the same time, the energy sector, which represents 34 per cent of our revenue, might be less affected. Additionally, the public sector represents 17 per cent.

During the fourth quarter, besides securing the before mentioned contract with Farmalogg, the Group has also signed a contract with Nysnø Climate Investments. Nysnø is the Norwegian state's climate investment company, and Webstep will support the customer in further improving their AI solution for screening potential deal flow and investment opportunities.

Webstep's focus on the energy sector, where digitalisation brings enormous potential, continues. Our partnership with the reference data and services organisation Posc Caesar Association (PCA) is thriving. PCA is supported by major industry players such as Equinor, Aker BP, Aker Solutions, and Aibel, forming the DISC collaboration (Digitalisation, Industrialisation, Standardisation, and Collaboration), where Webstep acts as PCA's digitalisation partner.

In the fourth quarter, Webstep has continued to focus on internal competence development and social events, as well as building visibility and collaboration at customers' events. For example, a competence development weekend seminar was held at the Oslo office and a competence development day was arranged at the Stavanger office. With regards to external initiative, Webstep's consultants shared insights and experiences at Equinor's annual "Showcase my initiative" event in Stavanger.

-

-

-

Outlook

The overall long-term trend of digitalisation continues across businesses and the public sector. Energy transition and increased focus on leveraging AI are currently particularly strong drivers.

The present activity level in the market is mixed. The energy sector is vibrant, while customers in other sectors remain cautious with regards to investments. Overall, the market is characterised by moderate demand.

Webstep's multilocal approach allows Webstep to utilise resources more effectively, tap into local growth opportunities and capitalise on regional variations. This is particularly important in a period with slow demand. During 2025 we will continue to develop this capability.

During 2024 Webstep divested its Swedish operation, and is now fully focused on Norway. This was an important move in our efforts to strengthen the Group's growth engine. Sharpened focus and reduced complexity is expected to improve Webstep's ability to continue to attract top talent, optimise sales processes, enhance operational efficiency and reinforce its performance culture.

Webstep's highly experienced staff makes us capable of shifting focus from short-term, operational tasks to more long-term and strategic assignments. This will enable higher value creation and better profitability for Webstep.

While actively working to enhance the market positioning and sales function, cost control remains in focus. The previously announced cost reduction programme was concluded according to plan, with an effect of at least NOK 18 million in 2024³ . Going forward we work to develop a more dynamic organisation that is able to continuously adapt to changes in the market.

While several changes are already executed, like appointments of a new CEO, new CFO and several new regional managers, cost reductions and the divestment of Sweden, the journey has just begun. Webstep's strategy process was concluded in the fourth quarter of 2024. The most important strategic priorities are to further develop the "One Webstep" approach, enhancing collaboration across regional offices, and enhance customer focus, aiming to incorporate a higher degree of strategic business development into our sales processes and deliveries

All in all, with continued cost focus, a more flexible and agile organisation as while moving closer to our customers' strategic agenda, Webstep is well positioned to develop towards and achieve its long-term goal of exceeding a 10 per cent EBIT margin, combined with healthy top-line growth.

³ Effects on NOK ¹⁸ million includes continued business only

Statement by the Board of directors

and the CEO

We confirm to the best of our knowledge that: the consolidated financial statements for the period ended 31 December 2024 have been prepared in accordance with IAS as adopted by the EU, as well as additional information requirements in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the Group's assets, liabilities, financial position and results for the period viewed in their entirety, and that the board of directors' report gives a true and fair view of the development, performance and financial position of the Group, and includes a description of the material risks that the board of directors, at the time of this report, deem might have a significant impact on the financial performance of the Group.

The Board of directors and CEO WEBSTEP ASA

Oslo, 12 February 2025

Sign.	Sign.	Sign.
Kjell Magne Leirgulen	Siw Ødegaard	Bendik Nicolai Blindheim
Chair of the board	Board member	Board member
Sign.	Sign.	Sign.
Anna Söderblom	David Bjerkeli	Kristine Lund
Board member	Board member	Chief Executive Officer

Financial statements

Consolidated statement of comprehensive income

	Unaudited Q4	Unaudited Q4	Unaudited FY	Audited* FY
NOK'000	2024	2023	2024	2023
Revenues	225,566	225,599	874,131	861,611
Total revenues	225,566	225,599	874,131	861,611
Cost of services and goods	15,591	19,487	61,441	69,692
Salaries and personnel cost	175,458	190,037	681,992	686,690
Depreciation and impairment	4,027	29,590	18,343	42,758
Other operating expenses	15,027	13,328	45,630	45,424
Total operating expenses	210,103	252,441	807,405	844,563
Operating profit(loss)	15,463	(26,842)	66,726	17,048
Net financial items	432	(563)	(3,680)	(4,273)
Profit/(loss) before tax from continuing operations	15,895	(27,405)	63,046	12,775
Tax expense (income)	3,445	(505)	13,856	8,335
Profit/(loss) from continuing operations	12,450	(26,900)	49,190	4,440
Profit/(loss) before tax from discontinuing operations
Profit/(loss) from discontinued operations	-	(447)	325	4
Profit/(loss) from total operations	12,450	(27,348)	49,514	4,444
Earnings per share (NOK) from continuing operations	0.48	(0.97)	1.80	0.16
Earnings per share, fully diluted (NOK) from continuing operations	0.48	(0.97)	1.79	0.16
Earnings per share (NOK) from discontinuing operations	0.00	(0.02)	0.01	0.00
Earnings per share, fully diluted (NOK) from discontinuing operations	0.00	(0.02)	0.01	0.00
Total Earnings per share (NOK)	0.48	(0.99)	1.81	0.16
Total Earnings per share, fully diluted (NOK)	0.48	(0.98)	1.80	0.16
Other comprehensive income:
Presentation currency effects	-	3,470	(905)	6,280
Recycling of currency translation differences	-	-	(13,070)	-
Other comprehensive income for the period, net of tax	0	3,470	(13,975)	6,280
Total comprehensive income for the year, net of tax	12,450	(23,877)	35,539	10,724

Profit/(loss) is attributable to: Equity holders of the parent company	12,450	(27,348)	49,514	4,444
Total comprehensive income for the year, net of tax attributable to
Equity holders of the parent company	12,450	(23,877)	35,539	10,724

*The figures are based on the audited 2023 figures, but have been adjusted to reflect continuing/discontinuing business. The adjusted figures have not been audited.

Consolidated statement of financial position

	Unaudited	Audited*
	31-Dec	31-Dec
NOK'000	2024	2023
ASSETS
Deferred tax asset	3,487	2,888
Goodwill	313,575	358,192
Fixed assets	8,274	12,309
Right-of-use-assets	63,164	97,910
Non-current financial assets	-	2
Total non-current assets	388,500	471,300
Trade receivables	131,276	156,015
Other current receivables	30,592	5,348
Cash and short-term deposits	82,369	75,509
Total current assets	244,237	236,872
Total assets	632,738	708,172
EQUITY
Share capital	28,188	27,671
Treasury shares	(1,091)	(30)
Share premium	187,953	179,938
Retained earnings	136,563	151,599
Total equity	351,612	359,178
LIABILITIES
Deferred tax	-	1,271
Non-current leasing liabilities	52,751	80,322
Total non-current liabilities	52,751	81,594
Current leasing liabilities	10,413	17,693
Trade and other payables	8,555	19,813
Tax payable	14,496	8,854
Social taxes and VAT	84,046	91,873
Other short-term debt	110,865	129,167
Total current liabilities	228,375	267,401
Total liabilities	281,126	348,994
Total liabilities and equity	632,738	708,172

*The figures are based on the audited 2023 figures, but have been adjusted to reflect continuing/discontinuing business. The adjusted figures have not been audited.

Consolidated statement of change in equity

Unaudited

				Foreign
NOK'000	Issued capital	Treasury shares	Share premium	currency translation	Retained earnings	Total earned equity
				reserve
1 January 2023	27,628	-30	179,192	7,695	178,914	393,400
Profit for the period					4,444	4,444
Sales of treasury shares				6,280		6,280
Other comprehensive income/(loss)						0
Share incentive program					1,234	1,234
Dividends	42		746			789
Share issue					(46,968)	(46,968)
31 December 2023	27,671	(30)	179,938	13,975	137,624	359,178
Profit for the period					49,514	49,514
Recyling of currency translation differences on disposal of subsidiary				(13,975)		(13,975)
Share incentive program					900	900
Dividends					(27,789)	(27,789)
Purchase of treasury shares		(1,087)			(24,095)	(25,182)
Sale of treasury shares		26			409	435
Share issue	517		8,014			8,531
31 December 2024	28,188	(1,091)	187,953	0	136,562	351,612

Consolidated statement of cash flows

	Unaudited Q4	Unaudited Q4	Unaudited FY	Audited* FY
NOK'000	2024	2023	2024	2023
Operating activities
Profit/(loss) before tax from continuing operations	15,895	(27,405)	63,046	12,775
Profit/(loss) before taxes from discontinuing operations	-	(317)	325	254
Profit/(loss) before taxes from total operations	15,895	(27,721)	63,371	13,029
Adjustments for:
Taxes paid for the period	2,021	(333)	(10,163)	(12,549)
Depreciation of property, plant and equipment	4,027	30,849	20,864	47,184
Share-based payment expense	198	(304)	900	1,234
Net gain/loss sale of subsidiary	-	-	(169)	-
Net change in trade and other receivables	16,655	50,730	(26,306)	(7,121)
Net change in other liabilities	6,001	28,020	(19,964)	34,186
Net foreign exchange differences	-	1,081	(396)	1,755
Net cash flow from operating activities	44,798	82,322	28,136	77,717
Investing activities
Proceeds from sale of discontinued operations net of cash disposed	-	-	38,620	-
Purchase of property and equipment	(1,146)	(829)	(3,630)	(5,482)
Net cash flow from investing activities	(1,146)	(829)	34,989	(5,482)
Financing activities
Change in bank overdraft	-	(19,522)	-	-
Purchase of treasury shares	(25,182)	-	(25,182)	-
Sale of treasury shares	435	-	435	-
Payment of principal portion of lease liabilities	(1,416)	(3,361)	(12,261)	(12,887)
Net proceeds from equity	-	-	8,531	789
Payment of dividends	-	-	(27,789)	(46,968)
Net cash flows from financing activities	(26,164)	(22,883)	(56,266)	(59,067)
Net increase/(decrease) in cash and cash equivalents	17,489	58,610	6,860	13,169
Cash and cash equivalents at the beginning of the period	64,879	16,899	75,509	62,340
Cash and cash equivalents at the end of the period	82,369	75,509	82,369	75,509
Of which cash and cash equivalents in discontinued operations	-	12,443	0	12,443
Cash and cash equivalents excluding discontinuing operations	82,369	63,066	82,369	63,066

*The figures are based on the audited 2023 figures, but have been adjusted to reflect continuing/discontinuing business. The adjusted figures have not been audited.

Notes to the consolidated financial statements

Note 1 Significant accounting principles

Basis for preparation

The financial statements are presented in NOK, rounded to the nearest thousand, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements and notes may not add up to the total of that row or column.

Statements

These condensed consolidated interim financial statements for the fourth quarter have been prepared in accordance with IAS 34 as approved by the EU (IAS 34). They have not been audited or subject to a review by the auditor. They do not include all the information required for full annual financial statements of the Group and should consequently be read in conjunction with the consolidated financial statements for 2023. The accounting policies applied are consistent with those applied and described in the consolidated annual financial statements for 2023, which are available on www.webstep.com and upon request from the Group's registered office at Universitetsgata 2, 0164 Oslo, Norway.

These condensed consolidated interim financial statements for the fourth quarter 2024 were approved by the Board of Directors and the CEO 12 February 2025.

Note 2 Estimates, judgments and assumptions

The preparation of condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements for 2023 and as described in note 3 to the 2023 statements.

Note 3 Seasonality or cyclicality of interim operations

The Group's net operating revenues are affected by the number of workdays within each reporting period while employee expenses are recognised for full calendar days. The number of workdays in a month is affected by public holidays and vacations. The timing of public holidays' during quarters and whether they fall on weekdays or not impact revenues. Both the fourth quarter and the full year of 2024 had one more working day than the same period in 2023.

Note 4 Earnings per share

	Q4	Q4	FY	FY
NOK'000 (except number of shares in thousand)	2024	2023	2024	2023
Profit for the period from continued operations	12,450	(26,900)	49,190	4,440
Profit for the period from discontinued operations	-	(447)	325	4
Total profit for the period	12,450	(27,348)	49,514	4,444
Average number of shares (excl. treasury shares)	25,988	27,641	27,374	27,634
Average number of shares, fully diluted (excl. treasury shares)	26,018	27,773	27,463	27,842
Earnings per share (NOK) from continuing operations	0.48	(0.97)	1.80	0.16
Earnings per share, fully diluted (NOK) from continuing operations	0.48	(0.97)	1.79	0.16
Earnings per share (NOK) from discontinuing operations	-	(0.02)	0.01	0.00
Earnings per share, fully diluted (NOK) from discontinuing operations	-	(0.02)	0.01	0.00
Total Earnings per share (NOK)	0.48	(0.99)	1.81	0.16
Total Earnings per share, fully diluted (NOK)	0.48	(0.98)	1.80	0.16

Based on the number of share options outstanding, the strike price of the options, the average share price during the quarter, and the remaining vesting period of the options, the dilution effect of the long-term incentive program accounts for 29,451 shares for the quarter and 89,118 shares for the full year.

Note 5 Discontinued operations

On 23 May 2024, Webstep ASA publicly announced that the Company had entered into an agreement to sell the subsidiary Webstep AB. The sale of Webstep AB was completed in the third quarter, on 9 July 2024, and the financials related to the sale were recorded in the third quarter. The total net effect from the sale of Webstep AB is NOK 0.2 million, and includes NOK 13.1 million currency translation differences recycled from the equity.

Operating profit before tax excluding net effect from the sale, amounts to NOK 155 million for the full year.

The consideration for the sale of the Swedish business is SEK 51 million, corresponding to an enterprise value of SEK 38, including the dividend of SEK 10.0 million. The dividend was exercised from Webstep AB to Webstep ASA in the second quarter of 2024.

From the second quarter of 2024, Webstep AB is classified as a discontinued operation:

Statement of comprehensive income, discontinuing operations	Q4	Q4		YTD	YTD
NOK'000	2024	2023		2024	2023
Revenues	-	37,735		62,887	142,302
Total revenues	-	37,735		62,887	142,302
Cost of services and goods	-	8,040		12,081	27,929
Salaries and personnel cost	-	25,483		43,878	97,013
Depreciation and impairment	-	1,259		2,521	4,426
Other operating expenses	-	2,828		3,684	11,515
Net gain (-)/loss sale of subsidiary (+)		-		(169)	-
Operating profit(loss)	0	125		892	1,419
Net financial items	-	(442)	(568)		(1,165)
Profit before tax	0	(317)	325		254
Income tax expenses	-	131	-		250
Profit for the period	0	(447)		325	4
Earnings per share (NOK) from discontinuing operations	-	(0.02)	0.01	0.00	0.00
Earnings per share, fully diluted (NOK) from discontinuing operations	-	(0.02)	0.01	0.00	0.00
Cash flow from discontinuing operations	Q4	Q4	YTD		YTD
NOK'000	2024	2023		2024	2023
Net cash flow from operating activities	-	(3,640)	5,074		(4,464)
Net cash flow from investing activities	-	124		(48)	36
Net cash flow from financing activities	-	(382)		(9,887)	(3,409)
Total cashflow from discontinuing operations	0	(3,898)	(4,861)		(7,837)

	9 July
Assets	2024
Goodwill	43,868
Non-current tangible assets	361
Right-of-use assets	11,914
Total non-current assets	56,143
Trade receivables	23,238
Other receivables	2,561
Cash and cash equivalents	12,249
Total current assets	38,048
TOTAL ASSETS	94,191
Liabilities
Deferred tax liability	1,196
Non-current leasing liabilities	6,422
Total non-current liabilities	7,618
Current leasing liabilities	5,203
Other current liabilities	20,596
Total current liabilities	25,799
TOTAL LIABILITIES	33,416

Note 6 Events after the balance sheet date

There have been no events after the balance sheet date significantly affecting the Group's financial position.

19

Appendix

Profit measures - EBITDA

	Q4	Q4	FY	FY
NOK'000	2024	2023	2024	2023
EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation)
Operating profit/(loss)	15,463	-26,842	66,726	17,048
Depreciation	4,027	29,590	18,343	42,758
EBITDA	19,490	2,748	85,069	59,805
Net Interest Bearing Debt (NIBD) NOK'000				31 Dec 2024	31 Dec 2023
NIBD (Net Interest Bearing Debt)
Cash and cash equivalents (minus indicates positive amount)				(82,369)	(75,509)
Restricted cash				544	1,922
Leasing liabilities (non-current and current)				63,164	98,016
NIBD				(18,661)	24,429
Group equity ratio				31 Dec	31 Dec
NOK'000				2024	2023
Total equity				351,612	359,178
Total assets				632,700	708,172
Group equity ratio				0.56	0.51
NIBD/EBITDA				31 Dec	31 Dec
NOK'000				2024	2023
EBITDA rolling 12 months				75,413	65,651
NIBD				(18,661)	24,429
NIBD/EBITDA (rolling 12 months)				(0.25)	0.37
NIBD/EBITDA (rolling 12 months)*				(1.09)	(1.12)

*Effects related to IFRS 16 (leasing) are excluded.

Key figures by quarter

Continuing operations	Q4	Q3	Q2	Q1	Q4
NOK million	2024	2024	2024	2024	2023
Revenues	225.6	189.4	229.5	229.7	225.6
EBITDA	19.5	15.7	23.7	26.2	2.7
EBITDA margin	8.6%	8.3%	10.3%	11.4%	1.2%
EBIT	15.5	10.9	19.0	21.4	(26.8)
EBIT margin	6.9%	5.7%	8.3%	9.3%	(11.9%)
Net profit	12.5	7.0	14.1	15.6	(26.9)
Net free cash flow	43.7	(19.2)	30.9	(33.1)	85.0
Equity ratio	55.6%	56.6%	51.1%	48.5%	47.7%
Earnings per share (NOK)	0.48	0.25	0.51	0.56	(0.97)
Earnings per share. fully diluted (NOK)	0.48	0.25	0.50	0.56	(0.97)
Number of FTEs, average	447	448	448	449	471
Number of FTEs end of period	446	449	451	448	471
Revenue per FTE (TNOK)	504.1	423	513	512	479
EBIT per FTE (TNOK)	34.6	24	42	48	(57)

CONSOLIDATED INCOME STATEMENT

Continuing operations	Q4	Q3	Q2	Q1	Q4
NOK'000	2024	2024	2024	2024	2023
Revenues	225,566	189,402	229,501	229,662	225,599
Total revenues	225,566	189,402	229,501	229,662	225,599
Cost of services and goods	15,591	12,659	16,419	16,772	19,487
Salaries and personnel cost	175,458	152,029	178,185	176,320	190,037
Depreciation and impairment	4,027	4,809	4,744	4,763	29,590
Other operating expenses	15,027	9,032	11,199	10,371	13,328
Total operating expenses	210,103	178,530	210,547	208,226	252,441
Operating profit(loss)	15,463	10,872	18,954	21,436	(26,842)
Net financial items	432	(1,823)	(888)	(1,401)	(563)
Profit before tax from continuing operations	15,895	9,049	18,066	20,036	(27,405)
Income tax expenses	3,445	2,029	3,975	4,408	(505)
Profit for the period from continuing operations	12,450	7,020	14,091	15,628	(26,900)

Consolidated statement of financial position

Continuing operations	31-Dec	30-Sep	30-Jun	31-Mar	31-Dec
NOK'000	2024	2024	2024	2024	2023
Assets
Deferred tax asset	3,487	2,888	2,888	2,888	2,888
Goodwill	313,575	313,575	313,575	313,575	313,575
Fixed assets	8,274	8,679	9,793	10,871	11,935
Right-of-use-assets	63,164	74,514	77,471	80,333	83125
Non-current financial assets	-	2	2	2	2
Total non-current assets	388,500	399,657	403,729	407,669	411,524
Trade receivables	131,276	145,212	150,370	185,428	127,771
Other current receivables	30,592	33,310	14,662	11,811	5,161
Cash and short-term deposits	82,369	64,879	32,799	30,139	63,066
Total current assets	244,237	243,401	197,830	227,378	195,998
Total assets	632,738	643,058	601,559	635,046	607,523
Equity
Shareholders' equity	351,612	363,710	307,181	308,261	289,654
Liabilities
Non-current leasing liabilities	52,751	64,299	61,184	64,318	66,169
Total non-current liabilities	52,751	64,299	61,184	64,318	66,169
Current leasing liabilities	10,413	10,193	16,487	16,487	17,693
Trade and other payables	8,555	7,999	12,111	25,261	12,409
Tax payable	14,496	8,399	6,402	2,428	9,270
Social taxes and VAT	84,046	75,179	75,134	85,042	86,395
Other short-term liabilities	110,865	113,280	123,059	133,250	125,932
Total current liabilities	228,375	215,049	233,193	262,468	251,700
Total liabilities	281,126	279,348	294,377	326,786	317,869
Total equity and liabilities	632,738	643,058	601,559	635,046	607,523

Consolidated statement of cash flows

Continuing operations	Q4	Q3	Q2	Q1	Q4
NOK'000	2024	2024	2024	2024	2023
Operating activities
Profit/(loss) before tax from continuing operations	15,895	9,049	18,066	20,036	(27,405)
Taxes paid for the period	2,021	-	-	(11,010)	-
Depreciation of property, plant and equipment	4,027	4,809	4,744	4,763	29,590
Share-based payment expense*	198	257	304	141	(304)
Net change in trade and other receivables	16,655	(42,053)	58,033	(63,024)	50,850
Net change in other liabilities	6,001	9,386	(49,447)	16,909	33,056
Net foreign exchange differences	-	86	(51)	(49)	174
Net cash flow from operating activities	44,797	(18,465)	31,648	(32,234)	85,962
Investing activities
Proceeds from sale of discontinued operations net of cash
disposed
Purchase of property and equipment	(1,146)	(739)	(790)	(908)	(953)
Net cash flow from investing activities	(1,146)	(739)	(790)	(908)	(953)
Financing activities
Change in bank overdraft	-	-	-	-	(19,522)
Purchase of treasury shares	(25,182)
Sale of treasury shares	435
Payment of principal portion of lease liabilities	(1,416)	(3,071)	(2,858)	(2,383)	(2,979)
Net proceeds from equity	-	3,486	2,447	2,598	-
Payment of dividends	-	-	(27,789)	-	-
Net cash flows from financing activities	(26,163)	415	(28,200)	215	(22,501)
Net increase/(decrease) in cash and cash equivalents	17,489	(18,789)	2,658	(32,927)	62,508
Net consideration from sale of subsidiary		50,869	-	-	-
Cash and cash equivalents at the beginning of the period	64,879	32,797	30,139	63,066	558
Cash and cash equivalents at the end of the period	82,370	64,879	32,797	30,139	63,066

Alternative performance measures

Webstep discloses alternative performance measures as a supplement to the financial statements prepared in accordance with IFRS. Webstep believes that the alternative performance measures provide useful supplemental information to management, investors, equity analysts and other stakeholders. These measures are commonly used and are meant to provide an enhanced insight into the financial development of Webstep's business operations and to improve comparability between periods.

• EBITDA is short for Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation and is a term commonly used by equity analysts and investors.
• EBIT is short for Earnings before Interest and other financial items and Taxes and is a term commonly used by equity analysts and investors.
• ● Net free cash flow is calculated as net cash flow from operating activities plus net cash flow from investing activities.
• NIBD is short for Net Interest Bearing Debt and is defined as interest bearing debt minus unrestricted cash and cash equivalents.
• ● NIBD/EBITDA is calculated as Net Interest Bearing Debt divided by Earnings before Interest and other financial items, Taxes, Depreciation and Amortisation (EBITDA). The ratio is one of the debt covenants of the Group and it is based on the rolling twelve months EBITDA. If the Group has more cash than debt, the ratio can be negative. The covenant requires a Group NIBD/EBITDA ratio of maximum 3.
• Equity ratio is defined as the total consolidated equity of the Group divided by total assets. The covenant requires a Group equity ratio of minimum 0.3.

Group departments

Webstep has 6 regional offices in major cities in Norway. Webstep believes in the power of local business and the decentralised model is based on strong local presence. The regional offices provide expertise and capacity to local clients, while leveraging the full organisational capacity.

Oslo c/o Rebel, Universitetsgata 2 NO-0164 Oslo

Bergen Dampgårdsveien 14, 5058 Bergen

Stavanger Verksgata 1a NO-4013 Stavanger

Trondheim Kongens gate 16 NO-7011 Trondheim

Sørlandet Skippergata 19 NO-4611 Kristiansand S

Haugalandet

Kvaløygata 3, NO-5537 Haugesund

WEBSTEP | INTERIM REPORT Q4 2024

• 27
  -