Knowit : Interim Report Knowit Q1 2022 (PDF)

Interim Report

Strong growth and increasing margins start 2022 off

JANUARY - MARCH 2022

NET SALES INCREASED BY 67.6 PERCENT TO SEK 1,695.3 (1,011.4) MILLION

THE OPERATING PROFIT (EBITA) INCREASED BY 86.0 PERCENT TO SEK 192.1 (103.3) MILLION

THE ADJUSTED OPERATING PROFIT (EBITA) INCREASED BY 88.0 PERCENT

TO SEK 194.2 (103.3) MILLION 1)

THE OPERATING MARGIN (EBITA) INCREASED TO 11.3 (10.2) PERCENT

THE ADJUSTED OPERATING MARGIN (EBITA) INCREASED TO 11.5 (10.2) PERCENT 1) RESULTS AFTER TAX INCREASED TO SEK 121.7 (72.4) MILLION

EARNINGS PER SHARE INCREASED TO SEK 4.34 (3.49) 2)

CASH FLOW FROM OPERATING ACTIVITIES WAS SEK 5.2 (54.5) MILLION

• 1) EBITA is adjusted for items that affect comparability between periods, to improve understanding of the Group's underlying operative activities. For more information, see definitions on page 27.

• 2) Before and after dilution.

The information contained herein is such as shall be made public by Knowit AB (publ) in accordance with the EU Market Abuse Regulation. The information was made public through the agency of CEO and President Per Wallentin, at 07.30 CEST on May 2, 2022.

COMMENTS FROM THE CEO

Strong development in all business areas

We are proud to start 2022 off with strong growth and growing margins, despite the uncertainty we are experiencing in the world. The high demand we saw at the end of 2021 has continued into the first quarter.

We are succeeding well in our deliveries to clients and partners and we can see that all four business areas are growing with high profitability.

DURING THE FIRST quarter of the year, we have increased net sales by 67 percent, which is gratifying. We continue to improve our EBITA margin, thanks to the acquisitions inte-grated during 2021 and early 2022 and positive organic development.

We see a continued strong demand for our four busi-ness areas, with a gradual shift towards more complex client assignments, where we can use our broad platform with competencies from several parts of Knowit. Thus, we serve as an important source of support for our clients throughout the digital transformation.

KNOWIT CONTRIBUTES

TO A SUSTAINABLE WORLD

Participating in the shift to a sustainable society has been a top priority on Knowit's agenda for many years, through both strong commitment to our climate and a focus on social sustainability. During the quarter, we have publis-hed our new sustainability targets, ensuring that we at Knowit - together with our clients and partners - actively contribute to the UN Agenda 2030 through positive envi- ronmental and climate impact and increased inclusion. The new targets supplement our financial targets and are an important steering tool on the journey towards reali-zing our vision of a sustainable and humane society.

SUCCESSFUL ACQUISITIONS

We are succeeding well in our ambition to combine orga- nic growth with strategic acquisitions. In January, the

acquisition of the Danish design and strategy agencies 1508 and Strømlin was finalized, further reinforcing our presence in the Copenhagen region. This also streng- thens our deliveries at the intersection between techno- logy and design, which is growing more and more cru- cial in the transition to a digital society.

AN ATTRACTIVE EMPLOYER

We see continued high demand for Knowit's compe- tence and ability to deliver solutions that help Nordic companies and organizations drive their development. The key to our continued success consists of being an attractive workplace that offers the best possibilities of varied, educational, and developing assignments to our consultants. Recruiting to meet the high demand remains one of our main challenges and improving our strong employer brand is a top priority. This makes it very gratifying that we have been lauded for our emp- loyer branding work during the quarter, thanks to the campaign Makers of a sustainable future, which has

been active in social channels on all of Knowit's mar-kets. During the first quarter, we have succeeded in adding new competence, which creates the conditions for continued positive development in 2022.

THE WAR IN UKRAINE

It would be difficult to describe the first quarter of the year without mentioning the tragedy occurring in Ukraine as a result of Russia's invasion. At an operational level, we are currently only marginally impacted, as we have a limited number of subconsultants in Ukraine. However, we are following the development.. As humans, we are all affected, and I am proud of the fundraiser we initiated together with UNHCR in March, which generated more than SEK 800,000 in support to those affected by the war. As a partner of UNHCR, we support the work for peaceful, equal, and inclusive societies.

PER WALLENTIN

CEO and President

EVENTS DURING THE PERIOD

JANUARY - MARCH 2022

In January, the acquisition of the DANISH TECH AND DESIGN AGENCIES, 1508.dk and Strømlin, which significantly strengthens our position on the Danish market.

Knowit becomes a MEMBER OF THE UN GLOBAL COMPACT (UNGC), the world's largest sustainability initiative, serving to strengthen the social responsibility of companies. The membership means that the company commits to actively working on sustainability matters and to report to the UN annually.

Knowit opens a fundraiser in COLLABORATION WITH UNHCR, to support Ukraine, with colleagues, clients, and partners having donated more than SEK 800,000 during the month of March.

Knowit wins GOLD AT THE MAGNET AWARDS for the campaign "Dick - Digital quality." The award is given to the best employer branding campaigns of the year.

NEW OPERATIONS are established in the business area Insight in Oslo, with a strong offer in business processes and cloud-based ERP solutions. The new operations supplement existing services in management consulting.

Knowit launches an updated client offer for cloud services SUSTAINABLE CLOUD in all Nordic countries and Poland. The new framework ensures that all cloud solu- tions from Knowit include measurable indicators that contribute to the long-term sustainability targets of clients.

Knowit's Board establishes UPDATED SUSTAINABILITY TARGETS which, combined with the financial targets, serve to ensure that the Company is aiming for a long-term profitable and sustainable growth.

Knowit becomes a "Supporting partner" of WOMEN IN TECH and contributes to inspiring women to discover and stay in the tech industry. The annual conference Women in Tech gathers more than 3,000 women in the tech sector in Stockholm in May 2022.

A Nordic branding campaign with the theme MAKERS OF A SUSTAINABLE FUTURE is launched in social channels in all Nordic countries and Poland.

Sustainable growth

JANUARY - MARCH 2022

Strong and profitable growth

Knowit begins the year with strong and profitable growth, thanks to increased sales volume through acquired operations and positive growth in existing opera- tions. In January, the acquisition of the Danish tech and design agencies 1508 and Strømlin, with around 40 employees, was finalized, creating a much stronger position on the Danish market. During the quarter, the integration of Cybercom has also been finalized and continued initiatives will hereafter be performed within the framework of the Group's existing operative areas.

In February, Knowit's Board made the decision to adopt updated sustainability targets. The new targets will, in combination with the financial targets, serve to safeguard the Company's goals of sustainable and profitable growth. For more information on the new sustainability targets, see page 6.

XXX

3,454 3,398

639

429 166 858

69

801 95 533337

301

181 501 89

491

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

NET SALES, SEK, MILLIONS

ADJUSTED EBITA PROFIT, SEK, MILLIONS

SALES PER COUNTRY JANUARY - MARCH 2022

Net sales, quarterly dataRolling 12 months

Adjusted EBITA, quarterly dataRolling 12 months

Sweden

Norway Finland Denmark Poland Other

49% (52) 32% (39)

9% 7% 3% 0%

(4) (4) (-) (0)

5,496

579

314

343

JANUARY - MARCH 2022

Financial development

The net sales for the period increased to SEK 1,695.3 (1,011.4), affected by the acquisitions of Cybercom, Capacent, 1508.dk A/S, and Strømlin ApS. Profit before amortization of intangible assets (EBITA) increased to SEK 192.1 (103.3) million.

The adjusted EBITA profit increased to SEK 194.2 (103.3) million, adjusted for acquisition and integration costs of SEK 2.1 million.

Compared with the corresponding period last year, exchange rate developments had a positive effect on EBITA totaling SEK 4.8 million. Cash flow from operating activities was SEK 5.2 (54.5) million, where the change in operating capital had an impact of SEK -104.8 (-53.0) million.

The table below shows financial history that includes the acquisitions of Cybercom, Capacent, 1508.dk A/S, and Strømlin ApS for comparable periods, to facilitate for the reader to follow the development. See more information on page 25 in this report.

SEK, MILLIONS

JAN-MAR 2022

JAN-MAR 2021

Sales	1,695.3	1,011.4
Sales, acquisitions	483.3 1)
Sales, including acquisitions	1,695.3	1,494.7
Sales, change, %	13.4
of which is exchange rate effect, %	3.3

1) Adjustments relate to addition of net sales in Cybercom, Capacent, 1508.dk A/S, and Strømlin ApS for the period January - March 2021.

In the below table, EBITA is adjusted for items that impair comparability between different periods, to enable increased understanding for the Group's underlying operations.

SEK, MILLIONS

JAN-MAR 2022

JAN-MAR 2021

EBITA	192,1	103.3
Adjusted EBITA profit	194,2	103.3
EBITA margin, %	11.3	10.2
Adjusted EBITA margin, %	11.5	10.2
Cash flow from operating activities	5.2	54.5
Intangible assets	3,986.2	1,412.7
Number of employees at the end of the period	3,871	2,534

• 1) EBITA is adjusted for items that impair comparability between different periods, to improve the understanding of the Group's underlying operations. Comparison-impairing items include costs connected to acquisitions and sales and costs for restructuring and integration programs.

• 2) Adjusted EBITA profit in relation to the net sales of the period.