Webstep — Regulatory Filings 2017

Sep 7, 2017

Webstep intends to apply for a listing on Oslo Børs

Webstep intends to apply for a listing on Oslo Børs

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Webstep intends to apply for a listing on Oslo Børs

Oslo, 7th September 2017: Webstep ASA1 (the "Company" and

together with its subsidiaries, the "Group" or "Webstep")

today announces its intention to launch an Initial Public

Offering (the "IPO") of its ordinary shares, and to apply

for a listing on Oslo Børs.

Webstep provides high-end IT consultancy services to a broad

range of companies in both the private and the public

sector. Webstep's IT consultants assist when businesses

decide to make changes to their IT systems, create new value-

adding IT solutions, enhance old ones or improve the

interaction between different IT applications. Since its

establishment in 2000, the Group has offered IT services

designed to address its customers' software needs by

creating functional custom-made digital tools and

applications optimizing the customers' business strategies.

Webstep offers a wide range of services and solutions with a

particular focus on digitalisation, including a broad range

of development services designed to bring clients and their

business processes into the digital world. Webstep's core

digitalisation offering consists of digitisation, cloud

implementation, migration and integration. In addition, the

Group is well positioned to take advantage of key fast

growing markets with other core focus areas including

Internet of Things ("IoT"), machine learning and analytics.

Webstep's key strength is its close to 400 enthusiastic and

highly skilled employees. The Group has consistently been

top-ranked in the Norwegian "Great Place to Work" award the

last 10 years. As part of its business strategy, the Group

only hires experienced consultants, and the 350 consultants

have 11 years of experience on average. A consultant's

salary is a direct result of the revenue generated, which

creates a strong incentive for employees while reducing

earnings volatility for the Group.

As of 30 June 2017, Webstep employed 393 people, of which

350 were IT consultants. The Group is headquartered in Oslo

with presence and offices in Bergen, Trondheim, Stavanger

and Kristiansand, Stockholm and Malmö.

Group highlights

350 high-end IT consultants that are experts at identifying

how technology can add value to a customer's business

Core offering consists of digitisation, cloud

implementation, migration and integration in addition to

cutting-edge expertise within IoT, machine learning and

analytics

1 The Company is currently named Azure Holding AS and is a

Norwegian private limited liability company. The Company

will be renamed Webstep ASA and converted into a Norwegian

public limited liability company prior to the IPO.

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Variable salary model attracts the most talented IT

consultants and aligns employee and shareholder interests

Strategic positions in key Nordic IT markets, which ensure

local empowerment and influence

Operational excellence leading to strong financial

performance, with industry leading margins and strong cash

conversion

"Since its inception in 2000, Webstep has consistently

delivered profitable growth, and under the current ownership

the Group has developed a robust infrastructure and

operating model, and has also demonstrated an ability to

nurture excellent customer relations and attract highly

regarded consultants", says Webstep CEO Kjetil Eriksen.

"By opening up for a broader ownership and inviting all

consultants to become shareholders, we are preparing the

Group for further growth. Through the IPO and listing on

Oslo Børs, other investors will also have the opportunity to

become part of this", Eriksen adds.

Since 2011, a fund managed by Reiten & Co AS ("RCP") has

been the controlling owner of Webstep, and the Group has

delivered remarkable results.

"We invested in Webstep back in 2011, and since then the

Group has had significant growth both in terms of revenue

and profitability. Webstep's ability to take on new

geographical markets and service offerings by always being

at the forefront of customer needs have been vital to this

success. The Group is also a very attractive employer for

experienced consultants, considering the financial benefits,

the culture and the professional development of the

consultant. We are very pleased with the cooperation we have

had with the Webstep management team and the job done by the

consultants. We believe that listing the Company will

further enhance the superior structure of the Webstep model

by enabling the share to become liquid and invite the

employees onboard to take a bigger part in the value

creation going forward," comments Terje Bakken, Partner at

Reiten & Co.

Financial highlights

Webstep delivered the Company's strongest result in 2016,

and continued the trend of growth and profitability,

reaching NOK 562.5 million in revenues driven by growth in

new services, hourly rates and improved utilisation. Growth

in profitability was even stronger, with EBITDA reaching NOK

72.7 million, representing an increase in EBITDA margin from

12.4% in 2015 to 12.9% in 2016. In the first half of 2017,

the Company has experienced strong demand in both Norway and

Sweden and revenue growth was 4% compared to first half of

2016 driven by strong utilization, increased hourly rates

and boosted by increased demand within IoT, machine learning

and analytics.

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THE PEOPLE'S REPUBLIC OF CHINA, SOUTH AFRICA OR JAPAN.

NOKm 2014A 2015A 2016A 1H 2016 1H 2017

Revenue 533.8 549.1 562.5 293.6 305.7

Growth (%) n.a. 2.9% 2.4% n.a. 4.1%

EBITDA 62.9 68.2 72.7 42.6 44.4

Margin (%) 11.8% 12.4% 12.9% 14.5% 14.5%

EBITA 61.3 66.6 71.1 41.8 43.5

Margin (%) 11.5% 12.1% 12.6% 14.2% 14.2%

Operating profit 46.4 51.3 62.2 36.1 40.2

Margin (%) 8.7% 9.4% 11.0% 12.3% 13.1%

Profit for the period 27.2 36.5 40.5 24.1 27.3

Margin (%) 5.1% 6.7% 7.2% 8.2% 8.9%

Offering highlights

The IPO will comprise a public offering to institutional and

retail investors in Norway, a private placement to certain

institutional investors internationally and an offering to

the Group's eligible employees. In connection with the IPO,

the Company may raise primary proceeds to reduce leverage.

Further, the current shareholders, including the Company's

majority owner, Reiten & Co Capital Partners VII LP, a fund

advised by RCP, may reduce their ownership through a sale of

secondary shares. It is expected that RCP and the employees

will remain significant shareholders after the IPO. Subject

to approval of the listing application and successful

completion of the offering, the Company expects to be

admitted to listing and commence trading on Oslo Børs during

Q4 2017, depending inter alia on prevailing market

conditions.

Arctic Securities AS, SpareBank 1 Markets AS and SpareBank 1

SR-Bank ASA are acting as joint global coordinators and

joint bookrunners in the IPO.

Further announcements relating to the process will be made

in due course.

Enquiries

Kjetil Eriksen, CEO Webstep, +47 982 98 008

Anders Løken, CFO Webstep, +47 977 69 200

About Webstep ASA

Webstep is a high-end provider of IT consultancy services in

Norway and Sweden. Since its establishment in 2000, the

Group has offered IT services designed to address its

customers' software needs by creating functional custom-made

digital tools and applications optimizing the customers'

business strategies. Webstep aims to be at the forefront of

the technological development and to

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AUSTRALIA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF

THE PEOPLE'S REPUBLIC OF CHINA, SOUTH AFRICA OR JAPAN.

assist its customers in their digitalisation through the

offering of cutting-edge IT expertise. The Group's core

digitalisation offering consists of digitisation, cloud

implementation, migration and integration, in addition to

its other core focus areas Internet of Things (IoT), machine

learning and analytics. An important part of the Group's

strategy is to employ and offer only senior IT consultants

with significant experience. As of 30 June 2017, the Group

employed 393 employees, of which 350 were IT consultants.

For more information visit www.webstep.com

Important Notice

This announcement is not and does not form a part of any

offer to sell, or a solicitation of an offer to purchase,

any securities of the Company in the United States, Norway

or any other jurisdiction.

Copies of this announcement are not being made and may not

be distributed or sent into the United States, Australia,

Hong Kong, Canada, Japan, South Africa or any other

jurisdiction in which such distribution would be unlawful or

would require registration or other measures.

The securities referred to in this announcement have not

been and will not be registered under the U.S. Securities

Act of 1933, as amended (the "Securities Act"), and

accordingly may not be offered or sold in the United States

absent registration or an applicable exemption from the

registration requirements of the Securities Act and in

accordance with applicable U.S. state securities laws. The

Company does not intend to register any part of the offering

in the United States or to conduct a public offering of

securities in the United States. Any sale in the United

States of the securities mentioned in this announcement will

be made solely to "qualified institutional buyers" as

defined in Rule 144A under the Securities Act.

Any offering of securities will be made by means of a

prospectus that will contain detailed information about the

Company and its management, as well as financial statements.

These materials are an advertisement and not a prospectus

for the purposes of Directive 2003/71/EC, as amended

(together with any applicable implementing measures in any

Member State, the "Prospectus Directive"). Investors should

not subscribe for any securities referred to in these

materials except on the basis of information contained in

the prospectus.

In any EEA Member State other than Norway that has

implemented the Prospectus Directive, this communication is

only addressed to and is only directed at "qualified

investors" in that Member State within the meaning of

Article 2(1)(e) of the Prospectus Directive ("Qualified

Investors"), i.e., only to investors to whom an offer of

securities may be made without the requirement for the

Company to publish a prospectus pursuant to Article 3 of the

Prospectus Directive in such EEA Member State.

This communication is only being distributed to and is only

directed at persons in the United Kingdom that are (i)

investment professionals falling within Article 19(5) of the

Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005, as amended (the "Order") or (ii) high

net worth entities, and other persons to whom this

announcement may lawfully be communicated, falling within

Article 49(2)(a) to (d) of the Order (all such persons

together being referred to as "relevant persons"). This

communication must not be acted on or relied on by persons

who are not relevant persons. Any investment or investment

activity to which this communication relates is available

only for relevant persons and will be engaged in only with

relevant persons. Persons distributing this communication

must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute

forward-looking statements. Forward-looking statements are

statements that are not historical facts and may be

identified by words such

as "believe", "expect", "anticipate", "strategy", "intends",

"estimate", "will", "may", "continue", "should" and similar

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expressions. The forward-looking statements in this release

are based upon various assumptions, many of which are based,

in turn, upon further assumptions. Although the Company

believes that these assumptions were reasonable when made,

these assumptions are inherently subject to significant

known and unknown risks, uncertainties, contingencies and

other important factors which are difficult or impossible to

predict and are beyond its control. Actual events may differ

significantly from any anticipated development due to a

number of factors, including without limitation, changes in

public sector investment levels, changes in the general

economic, political and market conditions in the Norwegian

market, the Company's ability to attract, retain and

motivate qualified personnel, changes in the Company's

ability to engage in commercially acceptable acquisitions

and strategic investments, and changes in laws and

regulation and the potential impact of legal proceedings and

actions. Such risks, uncertainties, contingencies and other

important factors could cause actual events to differ

materially from the expectations expressed or implied in

this release by such forward-looking statements. The Company

does not guarantee that the assumptions underlying the

forward-looking statements in this presentation are free from

errors nor does it accept any responsibility for the future

accuracy of the opinions expressed in this presentation or

any obligation to update or revise the statements in this

presentation to reflect subsequent events. You should not

place undue reliance on the forward-looking statements in

this document.

The information, opinions and forward-looking statements

contained in this announcement speak only as at its date,

and are subject to change without notice. The Company does

not undertake any obligation to review, update, confirm, or

to release publicly any revisions to any forward-looking

statements to reflect events that occur or circumstances

that arise in relation to the content of this announcement.

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA,

AUSTRALIA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF

THE PEOPLE'S REPUBLIC OF CHINA, SOUTH AFRICA OR JAPAN.