Formpipe Software : Year end report

Q4 2021.

Fourth quarter and full year 2021 results

Formpipe Software

Net sales of SEK	122 m	(103 m)
Recurring revenues of SEK	73 m	(67 m)	ACV SEK 11 m (9 m)
which corresponds to % of net sales	60 %	(65 %)
EBITDA SEK	28 m	(26 m)
EBITDA margin	23 %	(25 %)
EBIT	16 m	(13 m)	ARR SEK 304 m (260 m)
EBIT margin	13 %	(12 %)
Net profit SEK	11 m	(12 m)
Net profit margin	9 %	(12 %)
EPS before dilution SEK	0.21	(0.22)
Cash flow from operating activities SEK	52 m	(50 m)
ACV SEK	11.2 m	(8.9 m)
ARR SEK	304 m	(260 m)

Net sales of SEK	473 m	(403 m)
Recurring revenues of SEK	278 m	(254 m)
which corresponds to % of net sales	59 %	(63 %)
EBITDA SEK	135 m	(104 m)
EBITDA margin	29 %	(26 %)
EBIT	69 m	(53 m)	The Board of Directors
EBIT margin	14 %	(13 %)
proposes a dividend of
Net profit SEK	50 m	(41 m)
SEK 0.70 (SEK 0.66)
Net profit margin	11 %	(10 %)
per share.
EPS before dilution SEK	0.94	(0.78)
Cash flow from operating activities SEK	99 m	(115 m)
ACV SEK	36.9 m	(22.2 m)
ARR SEK	304 m	(260 m)
The board proposes a dividend of SEK per share	0,70	(0,66)

	Oct-Dec			Jan-Dec
(SEK Million)	2021	2020	2021	2020
Net sales	122,3	103,4	473,2	403,1
whereof recurring revenue	73,4	67,2	278,4	253,5
EBITDA	28,1	25,9	135,1	104,3
Margin, %	23,0%	25,1%	28,6%	25,9%
EBIT	16,0	12,7	68,5	53,3
Margin, %	13,1%	12,3%	14,5%	13,2%

This is a translation of the original Swedish version. In the event of any discrepancies between

the two versions, the original Swedish version shall take precedence. The information was submitted for publication, at 08.45 CET, 16 February 2022

Comment from the Group´s CEO

Accelerated growth.

We started off 2021 by presenting a new strategic direction in which growth where at the top of the agenda. When we now sum up the year, we do it with pride.

In line with our growth strategy, we place great focus on increasing our recurring revenues. Thus, ACV (Annual Contract Value, i.e. the net of won and lost contracts for recurring income) is our most important growth figure. For the fourth quarter, ACV amounts to SEK 11 million (9) and for the full year ACV amounts to SEK 37 million (22), i.e. an increase of 66% compared to the previous year.

At the end of the year, ARR (Annual Recurring Revenue) totals SEK 304 million, which is an increase of 17%, largely driven by increased SaaS business, which increased by 55% to SEK 85 million.

We can thus state that we are successfully executing our growth strategy.

In light of this, the Board proposes an increase in the dividend to SEK 0.70 (SEK 0.66) per share.

Business area Private

Within business area Private, we show growth of 18%. We have more than doubled our ACV regarding SaaS from SEK 11 to 24 million.

We continue to drive a rapid transition to SaaS. Through our collaborations with Microsoft and Temenos, we see a clear growth journey for sales of our product Lasernet. We were recently named Solution Provider of the Year 2021 by Temenos and we see great potential in further strengthening our collaboration in the future.

The cloud-based ERP system Microsoft Dynamics 365 grew by 45% in the second quarter of Microsoft's fiscal year 20221. Temenos grew its SaaS business by 30% in the third quarter of 2021 with the largest ACV contribution coming from Europe and the US.2

The growth strategy is based on penetrating more and more of Microsoft's and Temenos' business and offering Lasernet and Autoform DM as SaaS. In the Dynamics market, this is done through a globally certified partner network and for Temenos through a strengthened partner relationship.

In line with our strategy, we will continue to invest in additional capacity and expertise to leverage the international growth potential we see in Microsoft Dynamics and Temenos. The increased costs continue to put pressure on earnings for 2021 and will continue to do so in 2022. The scalability of the business model with a high proportion of SaaS revenues will thereafter gradually lead to ever better margins.

Within business area Private, we show growth of 18%. We have more than doubled our ACV regarding SaaS from SEK 11 to 24 million.

Business area Public sector

We see a strong development in Denmark in terms of recurring revenues and profitability. We have strengthened our position as market leader in Grants Management and we are noticing ever better market conditions in Case and Document Management, where we are seeing more and more authorities entering into procurement.

In Sweden, the transition from a business model to becoming a comprehensive supplier, which we are already in Denmark, has been more challenging than we initially anticipated. We end the year with a strong fourth quarter where 47 won deals give an ACV of just over SEK 3 million. Through the acquisition of Alkemit AB at the beginning of the year, we create even better opportunities for a successful 2022.

1 https://www.microsoft.com/en-us/investor/earnings/fy-2022-q2/press-	2 https://www.temenos.com/wp-content/uploads/2021/10/Temenos-Q3-2021-
release-webcast	Results-Presentation-xk7mx4cmr.pdf

Quarterly Report Q4 2021

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Comment from the group's CEO

Differentiated growth strategies

There are good conditions for both Private and Public to grow both organically and through acquisitions. As part of a strategic review, a more active acquisition agenda has been adopted and the growth strategies for Formpipe's business in Private and Public have been more clearly differentiated.

In light of this assessment that Private and Public will grow in different ways, work is underway to investigate whether the business areas will continue to be jointly owned or whether other value-creating measures should be implemented.

The company has therefore hired an external advisor to analyze various possibilities to further accelerate these alternatives.

Acknowledgements

In conclusion, I would like to extend a warm thank you to our employees for extraordinary efforts during a year in which we successfully implemented major changes under difficult conditions. I look forward to another year where we continue to grow in all areas and create even greater value for our customers, partners and shareholders.

Christian Sundin,

CEO Formpipe

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Financial Information

October - December 2021

Net sales for the period increased by 18 % compared to previous year and totalled to SEK 122.3 million (103.4 million). Software revenue increased by 10 % from the previous year and totalled to SEK 83.3 million (76.1 million). Total recurring revenue for the period increased by 9 % from the previous year and totalled to SEK 73.4 million (67.2 million), which is equivalent to 60 % of net sales (65 %). Exchange rate effects have affected net sales negatively by SEK 2.1 million in comparison with the previous year.

January - December 2021

Net sales for the period increased by 17 % compared to previous year and totalled to SEK 473.2 million (403.1 million). Software revenue increased by 22 % from the previous year and totalled to SEK 347.7 million (286.1 million). Total recurring revenue for the period increased by 10 % from the previous year and totalled to SEK 278.4 million (253.5 million), which is equivalent to 59 % of net sales (63 %). The deal with Landbrugsstyrelsen is included in net sales and software revenues and amounts to SEK 40.9 million. Exchange rate effects have affected net sales negatively by SEK 8.9 million in comparison with the previous year.

Revenue split, Jan-Dec 2021

Recurring revenue, rolling 12 m, mSEK

285

280

275

270

265

260

255

250

245

240

2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4

Annual recurring revenue (ARR), mSEK

License 15% (8%)

SaaS 14% (14%)

Support & Maintenance 45% (49%)

Delivery 27% (29%)

October - December 2021

The operating costs for the period totalled to SEK

106.2 million (90.7 million). Personnel costs totalled to SEK 65.5 million (58.8 million). Selling expenses totalled to SEK 15.2 million (10.1 million). Other costs totalled to SEK 26.9 million (20.4 million).

January - December 2021

The operating costs for the period totalled to SEK

404.7 million (349.9 million). Personnel costs totalled to SEK 248.2 million (220.1 million). Selling expenses totalled to SEK 50.9 million (41.3 million). Other costs totalled to SEK 91.4 million (77.6 million). The deal

Quarterly Report Q4 2021

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Financial Information

with Landbrugsstyrelsen is included in operating costs and amounts to SEK 15.1 million.

Recurring revenues in relation to fixed operating costs, rolling 12 m, mSEK

400				90%
350
300				85%
250
200				80%
150
100				75%
50
0	2021 Q1	2021 Q2	2021 Q3	70%
2020 Q4	2021 Q4
Fixed operating costs, R12
Recurring revenue, R12
Recurring revenue / fixed operating costs, R12 %

October - December 2021

Operating profit before depreciation and amortization and items affecting comparability (EBITDA) totalled to SEK 28.1 million (25.9 million) with an EBITDA margin of 23.0 % (25.1 %). Operating profit (EBIT) totalled to SEK 16.0 million (12.7 million) with an operating margin of 13.1 % (12.3 %). Net profit totalled to SEK 11.1 million (12.0 million). Exchange rate effects have affected EBITDA negatively by SEK 1.3 million in comparison with the previous year.

January - December 2021

Operating profit before depreciation and amortization and items affecting comparability (EBITDA) totalled to SEK 135.1 million (104.3 million) with an EBITDA margin of 28.6 % (25.9 %). Operating profit (EBIT) totalled to SEK 68.5 million (53.3 million) with an operating margin of 14.5 % (13.2 %). Net profit totalled to SEK 50.4 million (41.4 million). The deal with Landbrugsstyrelsen affect the operating profit positively with SEK 25.8 million. Exchange rate effects have affected EBITDA negatively by SEK 6.0 million in comparison with the previous year.

Sales and EBITDA margin, mSEK

160				25%
140
120				20%
100				15%
80
60				10%
40				5%
20
0	2021 Q1	2021 Q2	2021 Q3	0%
2020 Q4	2021 Q4
Support & Maintenance	SaaS
License			Delivery
EBIT margin

Cash equivalents

Cash and cash equivalents at the end of the period amounted to SEK 18.1 million (58.6 million). The company had interest-bearing debt at the end of the period totalling to SEK 13.7 million (64.2 million), whereof SEK 13.7 million (20.5 million) refers to lease debts according to IFRS 16. The company's total bank overdraft limit amounts to SEK 50.0 million, at the end of the period it was utilized with SEK - million (- million).

The company's net debt position thereby totalled to SEK 34.7 million (42.4 million), which corresponds to a net debt position of SEK 18.9 million (19.6 million) excluding IFRS 16-related debt.

During the period, dividends were paid amounting to SEK 35.3 million (32.1 million).

Deferred tax asset

By the end of the period the company's deferred tax assets attributable to accumulated losses amounted to SEK 4.2 million (SEK 3.6 million).

Equity

Equity at the end of the period amounted to SEK

429.6 million (398.9 million), which was equivalent to SEK 7.96 (7.46) per outstanding share at the end of the period. Changes in the value of the Swedish krona compared to other currencies have changed

the value of the group's net assets in foreign

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