Fortnox : Interim report presentation

Interim report

January-June

2022

INTERIM REPORT JANUARY - JUNE 2022

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Interim report

January-June 2022

(Figures in parentheses refer to outcomes in the year-earlier period.)

Second quarter of 2022

• Net sales amounted to SEK 307.8 million (230.1), up SEK 77.7 million or 33.8 percent. Acquisitions accounted for SEK 12.3 million or 5.4 percentage points of the increase.

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Operating profit totaled SEK 103.3 million (70.2), up SEK 33.1 million. Adjusted for acquisitions, operating profit amounted to SEK 115.5 million.

Operating margin was 33.5 (30.5) percent. Adjusted for acquisitions, the operating margin was 39.1 percent.

Profit after tax was SEK 74.4 million (54.3).

Earnings per share before dilution amounted to SEK 0.12 (0.09) and earnings per share after dilution amounted to SEK 0.12 (0.09).

January - June 2022

• Net sales amounted to SEK 586.9 million (428.6), up SEK 158.3 million or 36.9 percent. Acquisitions accounted for SEK 45.3 million or 10.6 percentage points of the increase.
• Operating profit totaled SEK 192.8 million (129.9), up SEK 63.0 million. Adjusted for acquisitions, operating profit amounted to SEK 216.6 million.

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Operating margin was 32.9 (30.3) percent. Adjusted for acquisitions, the operating margin was 40.0 percent.

Profit after tax was SEK 141.1 million (100.2).

Earnings per share before dilution amounted to SEK 0.23 (0.17) and earnings per share after dilution amounted to SEK 0.23 (0.17).

Significant events in the second quarter

• Like the first quarter, the second quarter was impacted by Russia's invasion of Ukraine. At present, the Group cannot see any major long-term repercussions for Fortnox's financial position and performance. Since there are no operations, customers nor employees in the countries concerned (Belarus, Russia and Ukraine) the group does not see any change in the ability of Fortnox to provide products and services as planned. The company's management is following developments and continuously assessing the situation.

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On April 13, 2022, Fortnox switched listing from NGM Nordic SME to Nasdaq Stockholm's main market. This represents a natural step for Fortnox on its journey to become the obvious enterprise hub for Sweden.

In the second quarter, Fortnox entered partnerships with the fintech companies Mynt AB and Zaver AB as well as with the marketplace Bokadirekt AB, among others.

• Through the partnership agreement with Mynt AB, Fortnox received 310,394 warrants in Mynt AB with the right to subscribe for a corresponding number of new shares in Mynt AB at a subscription price of SEK 142 per share during the period from February 1, 2025, to May 2, 2025. The value of the warrants impacted Fortnox's financial position during the second quarter and increased its financial non-current assets and current liabilities by SEK 27.7 million.
• In the second quarter, Fortnox presented the other shareholders of AgoyIT AB ("Agoy") an offer to acquire the remaining shares in the company for a purchase consideration of SEK 34.1 million. As of June 30, 2022, Fortnox holds 31.89 percent of the total number of shares in Agoy and the offer pertains to the remaining 68.11 percent. The product Accounts closing & Tax is ready to be launched to a wider audience and together with Agoy's owners and management, the group agree that the work to be carried out in the next phase will be conducted most efficiently with Fortnox as a clear owner. The offer has resulted in an impairment of existing participations in associated companies and impacted profit before tax in the second quarter by SEK 3.6 million.

Fortnox is an enterprise platform with products for accounting, invoicing, financing, payroll and more. Customers can also access other business services, and hundreds of external systems, through partnership collaborations. Fortnox was founded in 2001 and is headquartered in Växjö. The company's share is listed on Nasdaq Stockholm's main market. For more information, visit www.fortnox.se.

Fortnox AB (publ), Box 472, SE-351 06 Växjö, Sweden | Comp. Reg. No. 556469-6291 | Phone: [phone] | [e-mail]

www.fortnox.se

INTERIM REPORT JANUARY - JUNE 2022

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Continued increase in organic growth for Fortnox

Net sales for the second quarter were SEK 307.8 million, and we achieved growth of 33.8 percent. The operating margin was 33.5 percent. Accordingly, growth together with the operating margin for the period was 67.3 percent. Organic growth for the quarter was 28.4 percent, compared with 19.9 percent in the year-earlier period. With several important product releases, investments in our six business areas and many significant partnerships, we continue to provide solid value to an increasing amount of customers.

The number of customers continued to grow, reaching 456,000 at the end of the quarter, an increase of 15,000 customers since the preceding quarter. Customer usage of our products and services is also increasing, resulting in higher revenue per customer. Average monthly revenue per customer amounted to SEK 212 at the end of the second quarter.

Strong performance for Pengar

Financial services are becoming an increasingly important part of Fortnox's offering. I am proud of all of the work that is taking place in this area and of everything that we are doing to help so many business owners. An important product in Pengar is Factoring, which has been further automated through real-time credit assessment and is being offered to more Fortnox customers.

With the click of a button, customers are able to convert their invoices into capital and maintain liquidity during, for example, a phase of intense growth. With an automated real- time credit assessment, customers are able to increase their cash flow based on current invoices and creditworthiness. This improves the process and makes it more efficient, providing greater flexibility to everyone involved.

Fortnox is growing together with others

Fortnox is continuing to grow together with others. This is nothing new, but it was particularly apparent during the second quarter of the year. Through important partnerships, we can achieve synergies and deliver more customer value.

In April, Fortnox entered into a partnership with Mynt AB, which offers cards and solutions within spend management. At the end of the year, Fortnox plans to launch the Fortnox card, a company card that will automate the majority of receipt reporting for customers. During the same month Fortnox launched a solution for property owners together with Atlas Nest, our second industry-specific solution. This partnership has simplified administration for property owners and residents.

In May, we entered into a partnership with the fintech company Zaver, which offers flexible and efficient payment solutions. The new payment methods now allow private individuals to pay invoices with Swish, partial payments, direct bank transfers or by paying at a later date. This provides end customers with more options and simpler ways to pay - and enables Fortnox's customers to be paid more quickly.

In June, a partnership with Bokadirekt began. The collaboration with Bokadirekt means that Fortnox will be integrated into Bokadirekt, Sweden's leading app and

marketplace for booking services primarily in beauty and health. This will give the companies in the industry direct access to Fortnox's smart functions that can assist them with their business processes.

Another partner is Agoy It AB. Fortnox first invested in Agoy back in 2021, and we have maintained a close collaboration concerning the product Accounts closing & Tax, which makes the task of period and year-ends reporting easier for Sweden's accounting firms. After the end of the quarter, Fortnox acquired all of the shares of the other shareholders, and Agoy became a wholly owned subsidiary of Fortnox on 1 July. The Accounts closing & Tax product is now ready to be launched to a wider audience, interest in the product is growing and the acquisition is a natural step forward.

Product releases that are strengthening customer business Several important products were released during the quarter. One such product is ByråInsikter, which provides automated insight on deviations to accounting consultants. The product makes it easier for accounting firms to provide customers with advice and support based on professional expertise. With the new Private individuals function in Accounts closing & Tax, accounting firms are now able to assist private individuals with such tasks as income declarations.

Regulations is a new function in Bookkeeping from bank statements that makes the product even smarter. Bookkeeping from bank statements automatically matches cash payments and receipts. With Regulations, the customer has the opportunity to add additional matching stipulations for bank transactions that include multiple activities. This could, for example, pertain to cash payments or receipts from the Swedish Tax Agency or bank expenses.

Our Pengar business area has released a product that will be decisive for creditors of corporate loans and invoice financing. During the quarter, Connect was launched, an API that allows companies to provide creditors with access to their business systems through loan applications or corporate credits. With insight into the business's balance sheet and invoicing, creditors are able to make faster and better credit decisions. Connect is primarily aimed at companies that offer corporate credits and initially encompasses data from Fortnox. The service is set to expand to include integrations with other ERP systems.

It is also great to see so many people using the Fortnox app. In May, we had 200,000 unique users in the Fortnox app. This is the result of more customers, but also of smarter in-app functionality.

Employees build Fortnox

Our strong growth, all of our new partnerships and our important product launches would have been impossible without Fortnox's fantastic employees. At the end of the quarter, there were 628 people working at Fortnox. I'm glad that so many talented people have chosen to work together with us to help more business owners realize their dreams!

Best regards,

CEO, Tommy Eklund.

Fortnox AB (publ), Box 472, SE-351 06 Växjö, Sweden | Comp. Reg. No. 556469-6291 | Phone: [phone] | [e-mail]

www.fortnox.se

INTERIM REPORT JANUARY - JUNE 2022

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Financial information

SEK million unless otherwise indicated

Key performance indicators (KPIs)		Apr-Jun		Apr-Jun	Jan-Jun	Jan-Jun
(Group)		2022		2021	2022	2021
Net sales		307.8		230.1	586.9	428.6
EBIT		103.3		70.2	192.8	129.9
EBIT-margin, (%)		33.5		30.5	32.9	30.3
Earnings per share, after dilution (SEK)		0.12		0.09	0.23	0.17
Cash flow from operating activities		144.4		50.5	235.1	137.2
Working capital at the end of the period		277.8		251.3	277.8	251.3

Key performance indicators (KPIs)		Apr-Jun		Apr-Jun		Jan-Jun		Jan-Jun
(The Group's operating segments)		2022		2021		2022		2021
Företagande
Revenues		46.4		32.6		88.2		61.5
Operational segment result		33.0		22.5		63.3		42.9
Byrån
Revenues		82.4		66.8		156.7		130.6
Operational segment result		50.8		38.4		100.5		76.7
Entreprenören1)
Revenues		121.3		90.1		231.5		170.7
Operational segment result		75.9		49.9		142.4		93.9
Pengar
Revenues
	36.4		22.5		67.7		45.5
Operational segment result
Marknadsplatsen2)		-10.5		-2.0		-21.0		-1.5
Revenues		29.8		25.5		58.4		33.9
Operational segment result		7.5		3.5		12.3		4.1

Revenue distribution	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun
(Group)	2022	2021	2022	2021
Subscription-based	222.3	173.8	425.2	323.0
Transaction-based	67.2	47.4	128.5	88.9
Lending-based	18.1	8.8	33.0	16.4
Others	4.7	4.9	7.7	9.1
Revenue from agreements with customers	312.3	235.0	594.4	437.5

1. From January 1, 2022, Entreprenörens former product area Integrera was changed to Marknadsplatsen, for more information regarding the financial effects this has entailed, see page 10.
2. From January 1, 2022, the name of the Offerta business area was changed to Marknadsplatsen and expanded with Entreprenören's former product area of Integrera, fore more information regarding the financial effects this has entailed, see page 10.

Fortnox AB (publ), Box 472, SE-351 06 Växjö, Sweden | Comp. Reg. No. 556469-6291 | Phone: [phone] | [e-mail]

www.fortnox.se

INTERIM REPORT JANUARY - JUNE 2022

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Group Development

Group - Net sales and results in the second quarter

Net sales amounted to SEK 307.8 million (230.1), up SEK 77.7 million or 33.8 percent. Acquisitions accounted for SEK 12.3 million or 5.4 percentage points of this increase. Revenue per subscription customer has increased, as a result of increased revenue per existing customer, new customers and products as well as further development of existing products. Accordingly, organic growth in the second quarter increased year on year and amounted to 28.4 percent (19.9).

During the quarter, efforts to develop new and further develop existing products continued, bringing own work capitalized to SEK 20.1 million (10.3) for the second quarter.

Operating expenses amounted to SEK 209.0 million (164.8). Expenses rose SEK 44.2 million or 26.9 percent, primarily attributable to increased personnel costs and other external costs as a result of organic growth and acquisitions made in 2021. Expanded marketing campaigns and premises costs were the underlying drivers for the rise in other external costs.

Operating profit totaled SEK 103.3 million (70.2), up SEK 33.1 million or 47.2 percent. Adjusted for acquisitions, operating profit totaled SEK 115.5 million. Capcito contributed with SEK -12.9 million and planned investments in Capcito and the Monto platform will have a negative impact on consolidated profit throughout 2022.

The operating margin was 33.5 percent (30.5). Adjusted for acquisitions, the operating margin was 39.1 percent. The operating margin increased year on year, primarily because of the scalability of personnel costs as well as reduced costs for purchased services as costs attributable to supplier invoice interpretation declined due to the use of proprietary products.

Profit before tax amounted to SEK 74.4 million (54.3), up SEK 20.2 million or 37.2 percent, and was negatively impacted by interest expenses attributable to the revolving credit facility signed in December 2021 and by earnings from participations in associated companies. In conjunction with Fortnox's offer to the other shareholders of Agoy, the value of existing participations was impaired to the same level as the consideration offered. This resulted in the existing participations being impaired by SEK 3.6 million, with the remaining cost attributable to participations in associated companies amounting to SEK 0.7 million and pertaining to the second quarter's profit participation from Agoy.

At the end of the period, the number of subscription customers was 456,000 (400,000), up 14 (17) percent.

Annual Recurring Revenue (ARR3)) amounted to SEK 887 million (608).

Average Revenue Per Customer (ARPC3)) amounted to SEK 212 (178).

3) For a definition of the alternative performance measures ARR and ARPC, refer to page 30.

Fortnox AB (publ), Box 472, SE-351 06 Växjö, Sweden | Comp. Reg. No. 556469-6291 | Phone: [phone] | [e-mail]

www.fortnox.se