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COMMENTS FROM THE CEO

Continued success with acquisitions

We are increasing our net sales and profit, with a good margin for both the quarter and the full year. This is a show of strength, given that the period has been affected by large acquisitions and intense efforts to integrate them into the operations. A continued strong demand, combined with our position as an attractive partner for our clients and a developing workplace for our employees, creates the conditions for a continued growth journey.

THE MARKET AND demand remain positive. We have a high activity in sales and deliveries of client projects. Our business areas are also continuing to deliver in line with expectations, both separately and in joint projects. Our largest business area Solutions has grown during the quarter, with a retained profit and margin, which is impressive as this is the business area most affected by the integration of the operations in Cybercom.

SUCCESSFUL ACQUISITIONS

The fourth quarter was shaped by the continued integration of Cybercom and the establishment of the new business area Connectivity. During the quarter, integration of Capacent into the business area Insight also began.

We have a strong focus on the margins in the acquired operations. That we have succeeded there is proof that we have the ability to nurture our acquisitions. I expect a clear positive effect on profit and margin when the integration is finalized.

OUR GROWTH CONTINUES

Through our strategy of growing both organically and through acquisitions, we have strengthened our offer and increased our capacity to take on larger and more complex assignments with our clients. The latest acqui- sitions, of the Danish design and strategy agencies 1508 and Strømlin, were announced in December and have been finalized in January 2022.

During the quarter, we have seen slightly increased staff turnover, which has been offset by a higher pace of recruitment. New recruitment and retaining Knowit's attractiveness as an employer are top priorities in early 2022.

COMMITTED EMPLOYEES

The combination of Cybercom's climate commitment and Knowit's focus on social sustainability means that our sustainability efforts have become more rounded. We have taken the next step towards a clearer framework for our sustainability efforts. This provides us with better conditions for contributing to a more sustainable and humane society, in line with our vision. The commitment to sustainability efforts is high among our employees, which we also see tangible proof of in several client deliveries.

It is with pride that I conclude that we have succeeded with both acquisitions, integration, and retaining a focus on business and deliveries during 2021. We have a strong year behind us and it is gratifying that the Board is suggesting a dividend of SEK 7.00 per share to the AGM. In 2022, it is time to take the next step in Knowit's success journey, to benefit both shareholders, clients, and employees.

PER WALLENTIN

CEO and President

2 KNOWIT AB YEAR - END REPORT JANUARY - DECEMBER 2021

EVENTS DURING THE PERIOD

OCTOBER - DECEMBER 2021

The acquisition of the management consultancy operations CAPACENT was finalized as of October 1. The operations were integrated into the business area Insight, which thereby grew by around 50 employees and gained a stronger position in Stockholm and Helsinki.

Knowit joined DIGITAL WITH PURPOSE, an international initiative of digitalization consultancy firms working to increase the contributions of digitalization to sustai- nability.

At TECHARENAN SUMMIT, Knowit participated in two panel talks. The first panel focused on the matter of competence provision in the future and the second on different routes to achieving climate goals.

Knowit was named PARTNER OF THE YEAR, Nordic region, by Amazon Web Services (AWS).

On commission from MICROSOFT SVERIGE AB, Knowit has drafted guidance to support public operations in implementation of cloud services. The report contains a method for risk analysis and a basis for assessment. A team of cybersecuri- ty experts, legal experts, and cloud architects from Knowit are behind the report MSMD AIR (Microsoft Cloud Design Analysis of Implementation and Risk).

On December 30, Knowit was accepted as a MEMBER OF THE UN GLOBAL COMPACT (UNGC). As a member, we commit to actively working with sustainability matters and to annually report our progress in our sustainability efforts to the UN.

At the extraordinary general meeting of TECHSVERIGE (formerly IT&Telefonföre- tagen, the Swedish IT and Telecom Industries) in November, our President PER

WALLENTIN WAS ELECTED AS THE NEW CHAIRMAN OF THE BOARD.

Knowit again performed a CHRISTMAS FUNDRAISER FOR UNHCR'S EDUCATION

PROGRAM for young refugees. The fundraiser was open throughout December and performed in collaboration with Knowit's employees and partners. Knowit donated double the contribution of each individual contributor.

In December, Knowit announced the acquisition of the Danish design and strategy agencies 1508 AND STRØMLIN. The companies will be part of the business area Knowit Experience and the deal was finalized in January 2022.

3 KNOWIT AB YEAR - END REPORT JANUARY - DECEMBER 2021

THE PERIOD IN BRIEF

A good finish

to an eventful year

JANUARY - DECEMBER 2021

A stronger Knowit

In December, Knowit announced the acquisitions of the Danish design agency 1508.dk and the tech agency Strømlin ApS. The new operations, combined with the business area Knowit Experience's existing operations in Copenhagen and Aarhus, will become a strong platform for continued growth on the Danish market.

During the third quarter, Knowit announced the acquisition of the subsidiaries within Capacent conducting operations in management consultancy. In July, Knowit finalized the acquisition of Cybercom, creating a Nordic powerhouse for the digital solutions of the future.

During 2021, large efforts have been made to integrate the earlier acquisition Creuna as well as Cybercom and Capacent. The acquisitions contribute to the development of the Group and create the conditions for continued growth and a positive development of profitability.

4,812

488

3,335

3,379

319

335

908

936

858

661

924

1,011

1,034

1,191

1,576

97

96

73

59

108

103

98

105

181

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2019

2020

2020

2020

2020

2021

2021

2021

2021

2019

2020

2020

2020

2020

2021

2021

2021

2021

NET SALES, SEK, MILLIONS

ADJUSTED EBITA PROFIT,

Net sales, quarterly data

SEK, MILLIONS

Adjusted EBITA profit, quarterly data

Rolling 12 months

Rolling 12 months

7 9

48

34

SALES PER COUNTRY

JANUARY - DECEMBER 2021

Sweden

48%

(54)

Norway

34%

(39)

Finland

9%

(5)

Denmark

7%

(2)

Poland

2%

(-)

Other

0%

(0)

4 KNOWIT AB YEAR - END REPORT JANUARY - DECEMBER 2021

THE PERIOD IN BRIEF

JANUARY - DECEMBER 2021

Increased net sales

The net sales for the period increased to SEK 4,811.8 (3,379.1), affected by the acquisitions of Cybercom, Creuna, and Capacent. Profit before amortization of intangible assets (EBITA) increased to SEK 438.5 (335.0) million. The adjusted EBITA profit increased to SEK 487.9 (335.0) million, adjusted for acquisition and integration costs of SEK 49.4 million. Compared with the corresponding period last year, exchange rate developments had a positive effect on EBITA totaling SEK

2.3 million. In the previous year, Knowit received support in the form of reduced employer contributions of SEK 26 million and furlough support of SEK 14 million. In total, this meant reduced personnel costs of SEK 40 million at the end of the fourth quarter. Knowit has not received any support during 2021.

Cash flow from operating activities increased to SEK 462.8 (441.3) million, where the change in operating capital had an impact of SEK -49.8 (128.3) million.

The below table shows financial history that includes the acquisitions of Cybercom, Creuna, and Capacent for comparable periods, to facilitate for the reader to follow the development. See more information on page 27 in this report.

SEK, MILLIONS

OCT-DEC 2021

OCT-DEC 2020

JAN-DEC 2021

JAN-DEC 2020

Sales

1,575.9

923.8

4,811.8

3,379.1

Sales, acquisitions

-

570.0 1)

-

1,217.3 2)

Sales, including acquisitions

1,575.9

1,493.8

4,811.8

4,596.4

Sales, change, %

5.5

4.7

of which is exchange rate effect, %

1.3

0.3

  1. Adjustments relate to addition of net sales in Cybercom and Capacent for the period October-December 2020 and Creuna for the period October- November 2020.
  2. Adjustments relate to addition of net sales in Cybercom for the period July-December 2020, Creuna for the period January-November 2020, and Capacent for the period October-December 2020.

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

OCT-DEC 2021

OCT-DEC 2020

JAN-DEC 2021

JAN-DEC 2020

EBITA

168.2

108.3

438.5

335.0

Adjusted EBITA profit

181.11)

487.91)

EBITA margin, %

10.7

11.7

9.1

9.9

Adjusted EBITA margin, %

11.5

2)

10.12)

Cash flow from operating activities

267.3

176.9

462,8

441.3

Intangible assets

3,839.5

1,380.7

3,839.5

1,380.7

Number of employees

at the end of the period

3,849

2,578

3,849

2,578

  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.

5 KNOWIT AB YEAR - END REPORT JANUARY - DECEMBER 2021

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Knowit AB published this content on 04 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 February 2022 06:35:09 UTC.