Getech : Financial and Operational Results 2020

Getech Group plc

("Getech" or "the Company" and with its subsidiaries "the Group")

Final Results for the 12 months ended 31 December 2020

The Getech Group (AIM; GTC) announces its Final Results for the 12 months ended 31 December 2020.

Highlights

Accelerating progress to global net-zero by supporting customers in the optimisation of existing, and delivery of new, energy assets and strategic mineral resources.

Covid-19 and customer activity update

• In 2020 Getech balanced risk management with business development in zero-carbon energy.
• Covid-19has created a challenging business environment, 2020 customer budgets reduced by c35%.
• Getech's orderbook, annualised recurring revenue and customer relationships remained robust, but revenue declined as customers cut back project work, which also impacted data sales.
• The move to home working was smooth; projects continue to be delivered on time and to cost.
• Actions implemented from 1 May 2020 reduced monthly Group costs by c26%.
• Getech retains further cost flexibility and has maintained the capacity to deliver its orderbook and the resources needed to maximise the impact of its sales conversations and new business activities.

2020 financial highlights

• Revenue £3.6 million (2019: £6.1 million)
• Gross margin 53%, protected by cost management initiatives (2019: 58%, adjusted)
• Orderbook remained strong £2.7 million at 31 December 2020 (31 December 2019: £3.1 million)
• Annualised Recurring Revenue £2.1 million at 31 December 2020 (31 December 2019: £2.3 million)
• Total cost base 20% below 2019 (2020: £5.1 million; 2019: £6.4 million)
• Adjusted* EBITDA £0.5 million loss (2019: £0.9 million profit)
• Net cash at 31 December 2020 £1.4 million (31 December 2019: £2.7 million)

Beyond 2020 - delivering diversified growth

• Getech is using its earth science and geospatial expertise to accelerate progress to global net-zero, by supporting its customers in the optimisation of existing, and delivery of new, energy assets and strategic mineral resources.
• For existing customers this means helping identify the highest value/lowest carbon-impact petroleum assets, whilst also utilising Getech's skills and technologies to support their net-zero asset investment.
• This work connects Getech with a wider group of net zero customers, with whom the Company is beginning to build a more diversified baseline of product and service sales.
• Getech's commitment to this path is underlined by the Company joining the United Nations' Race to
  Zero campaign - Getech's pledge is to be carbon-neutral by 2030.
• Getech will deliver this through the application of its products and skills, and by direct decarbonisation steps - taking targeted equity exposures in emergent carbon neutral value chains.
• In April 2021 Getech raised £6.25 million through a Placing, Subscription and Open Offer of shares.
• This will be used to grow and diversify Getech's activities across the zero-carbon economy, with particular focus on the green hydrogen, carbon capture, geothermal and strategic minerals sectors.
• Our focus is on activities that are essential, repeatable and strongly scalable.
• We will measure success through our carbon-neutral goal, our profit and the creation of asset value.
• In March 2021 Getech completed its first project investment - acquiring H2 Green, a data-led business that is using Getech's location analytics to establish a national network of green hydrogen hubs.

• Adjusted for exceptional items as detailed in the financial review

• Getech is also aligning its Board to these areas of focus - appointing a new Chairman and new NEDs. This brings expertise in clean technologies, zero-carbon investment, ESG and business scale up.
• Getech's Board is excited by the opportunities ahead and values the continued support of the Company's shareholders, customers and business partners.

For further information, please contact:

Getech Group plc	Tel: [phone]
Jonathan Copus, Chief Executive
Cenkos Securities plc	Tel: [phone]
Neil McDonald / Pete Lynch (Corporate Finance)
Michael Johnson / Julian Morse (Sales)
Camarco	Tel: [phone]
Georgia Edmonds / James Crothers / Ollie Head

Chairman and CEO statement

Getech provides data, knowledge, software and analytical products and services to help governments and investors locate and manage new energy and mineral resources and to optimise their development. Our mission is to accelerate progress to global net zero by supporting our customers in the optimisation of existing, and the delivery of new, energy assets. We do this through the application of our extensive earth science and geospatial skills to the transitioning primary energy sector, in particular targeting growth across green hydrogen, carbon capture, geothermal energy and the mining of strategic minerals.

Our market

In the 15 years since joining AIM, Getech has continually provided products and services to many international oil and gas companies and governments. We have developed a reputation for technical excellence, which is built on Getech's unique product Intellectual Property. From this we have built a strong financial and operational platform, underpinned by a robust orderbook and annualised recurring revenues.

As the world is transitioning towards net zero, petroleum exploration activity has declined and demand for alternative sources of energy has increased. These trends have been accelerated by the Covid-19 pandemic and provide numerous growth opportunities for the Group.

Getech's role in the path to net zero

The transition to a net zero economy is an unprecedented challenge. As the world seeks to decarbonise, this will require the replacement of more than 50% of the world's energy infrastructure and new supplies of rare earths and other metals. We see the global energy mix of our future as being built with many different renewable energy technologies, delivered through a distributed architecture. This presents a huge opportunity for Getech and our overarching goal is to build a portfolio of products, services and assets under management that build value and provide long-term sustainable cash flows.

Our commitment to this cause is demonstrated by our membership of the United Nations' Race to Zero campaign - Getech's pledge being to be carbon neutral by 2030.

Our existing energy customers

In the near-term, our business plan is to continue to service our existing energy customers. We will do this by optimising the value and sustainability of their petroleum portfolios, whilst also supporting their diversification into zero carbon assets and technologies.

While customer sentiment remains relatively subdued in comparison with the pre-Covid-19 environment, it is encouraging to see some momentum returning. In Q1 2021, this was evidenced by new data sales and service work, both of which were largely absent in H2 2020. Existing customers are also renewing their software licences, all of which is helping to build the orderbook and increase recurring revenues.

Through our current work, we also naturally engage with a wider group of new zero carbon customers, from whom we are already beginning to secure product sales, and winning service work.

Across all customers we deploy our skills in ways similar to how our earth scientists and geospatial experts have traditionally worked with oil and gas assets, namely:

• Where in the world will we find the resources required for the energy transition?
• Who can help us develop these resources?
• How do we optimise development and production?
• How do we operate these new projects?

Sector focus

We concentrate our business development work on activities that we consider to be essential, repeatable and strongly scalable. Sectorally, our knowledge and geospatial skills are best suited identifying economically privileged and environmentally sustainable locations for:

• Geothermal assets - baseload energy that can be utilised to produce heat and power.
• Strategic minerals - deposits of rare earth and battery metals such copper and lithium.
• Carbon capture and storage - the conditions required to deliver safe long-term storage.
• Green hydrogen - utilising excess renewable energy to create hydrogen hubs.

We are excited to have already won new business in geothermal and have continued this momentum in announcing business collaborations in geothermal and hydrogen.

Investing for growth

To progress these sector focus areas, in April 2021 Getech successfully raised £6.25 million through a share Placing, Subscription and Open Offer. Since the completion of this fundraise, our priority has been to reorganise and focus our team on these exciting developing sectors, as we resource and commence our expanded program of investment.

Domain experts are being appointed to lead business development and product and service delivery in these new sector groupings. We are focused on identifying people who share our passion for a zero carbon future, who are established experts in their fields, with both a track record in business scale up and the delivery of commercial success in the green economy.

We are also reshaping the Non-Executive skills of our Board. Since the appointment of a new Board Chair, we have recruited a new Audit Chair designate who brings in-depth knowledge of clean technologies, renewable energy finance, strategic minerals, and environmental, social and governance (ESG).

Our ongoing program of investment focuses on repurposing our existing products and services to address further opportunities in the energy transition. We are also building partnerships and broadening our offering to include assistance in the technical and financial development of zero carbon assets.

By providing our customers with an integrated technical and commercial overview of their development portfolios and by expanding our work into emergent energy value chains, Getech can capture direct exposure to the value that our skills and technologies create at the asset level. This asset exposure brings our shareholders transformative potential, which can be delivered at low incremental capital costs.

We took our first step on this path in March 2021, when we exercised our option to purchase H2 Green Limited. H2 Green is a UK developer of hydrogen hubs, which we intend to use as a foundation to develop a portfolio of hydrogen projects. The Company is focused on establishing its first cash producing hydrogen assets, and has already entered into a notable agreement with UK gas distributor SGN Commercial Services with the aim of developing hydrogen hubs utilising their land portfolio. The company has also notably signed a Letter of Intent with Element 2, a Hydrogen fuel retailer, to supply green hydrogen to its refuelling stations.

As part of our ambitious, long-term growth strategy, we are focussed on identifying further value- enhancing partnerships and initiatives over the months and years ahead.

Our role in the energy transition

Getech's role in the Energy Transition is not to compete with industry mega projects that are currently being announced. Instead, we intend to use our earth science and geospatial expertise to identify and help develop economic zero carbon projects that will become part of a distributed energy system.

In addition, our strategy is not only to help our customers identify and develop zero carbon energy assets, but also to participate in the projects and become wherever possible co-owners, managers and/or service providers. We believe that such a portfolio of assets will increase the net asset value of the company and, with the recurring profits that result, substantially increase shareholder value. In aggregate, this could become a substantial energy business.

Outlook

With clear strategic focus, strong balance sheet, and new team members aligned with our vision, we are very excited about the outlook and growth prospects for Getech. 2021 will be about continuing to service our current petroleum customers whilst building on our foundations for growth in the green hydrogen, carbon capture, strategic minerals and geothermal sectors. Similar to our early steps into the hydrogen sector, we also see the potential for acquisitions within geothermal and strategic minerals as a path to both accelerate the build-out of our offering and to provide access to operating projects. We also expect to announce further product developments as we expand our offering further into these areas.

We look forward to keeping our shareholders abreast of developments as we identify further growth opportunities within the energy transition.

We would like to thank our employees and fellow board members for their continued dedication to the Company, helping Getech perform robustly in what has been a very challenging period.

Richard Bennett: "It is a pleasure to become chairman of Getech at this inflection point in the development of the Group, as we apply our core geoscience skills and geospatial services to the energy transition and contribute to the decarbonisation of the world's energy systems."

Richard Bennett	Jonathan Copus
Chairman	CEO

Operations review

Getech's core value proposition combines our Geoscience and Geospatial expertise to provide unique insight for our energy sector customers.

In an energy market that is transitioning to deliver a decarbonised and decentralised primary energy system, the application of Getech's combination of skills and technologies opens a wide front of commercial opportunity to the Group. In 2020 we embraced these changes by continuing to evolve our solutions for our core petroleum markets, whilst also accelerating our plans to diversify into other energy and natural resource markets - including Mining, Geothermal and Hydrogen.

One of the foundations of our Petroleum offerings is our market leading Gravity and Magnetic (G&M) expertise. Through 2020, sales of data and related services declined as our customers reduced their levels of project-based work. Getech responded to this by focusing our staff's time on enhancing and broadening our offering. In 2020, we completed and released 'Multi-Sat 2020' - a major new gravity data product that integrates information from the latest satellites with innovative processing methods to create the most accurate, reliable and coherent gravity data for all offshore areas, providing resolution comparable to regional 2D shipborne solutions.

We also further enhanced our flagship earth modelling product, Globe, with the release of 'Globe 2020', which delivered new information, analytic tools and additional usability features, including an initial version for ArcGIS Pro, Esri's latest desktop GIS application. Our work to re-position Globe for the evolving petroleum market were further rewarded in 2020 when we secured a new super-major customer and high renewal rates for existing subscribers and those on multi-year licence agreements.

Elsewhere in petroleum, our GIS Software team completed releases that delivered significant enhancements to our software's data integration, exploration prospectivity analysis and onshore shale gas/oil well pad & lateral planning capabilities. As with Globe, software renewal rates through 2020 remained high and we were able to add several new customers through the year.

In addition, we continued to successfully deliver on a wide variety of oil and gas GIS services contracts, including the completion of our first significant GIS implementation project in the pipeline sector. That these products and services projects were delivered to customers on time and within budget was a notable achievement given the migration to home working caused by Covid-19 from March 2020.

Alongside our work in petroleum, through 2020 we focussed on better understanding how our core products were being used in the Mining sector. As a result of this, we were able to leverage both our G&M expertise and Globe to help customers deliver Copper and Lithium exploration projects - both essential strategic minerals for the Energy Transition. As a result of these project successes, we commenced planning additional workstreams for further expansion into the Mining market, and work is now well underway in 2021.

Our innovation and market diversification work also identified Geothermal as a potentially untapped market for Getech. Through a combination of our G&M, geoscience and GIS expertise we developed the concept of the 'Heat Seeker' solution - a tool for locating potential geothermal resource sites within reach of readily available customer markets for heat or power. As we planned the work likely to be necessary for developing a Heat Seeker prototype, we also built a network of contacts within the Geothermal market and established strategic relationships to assist our work - one result of which was Getech becoming a member of the International Geothermal Association (IGA) in March 2021, an organisation that we continue to work in partnership with through 2021.