Silverlake Axis : releases Q2 FY2022 financial results on 14 Feb 2022.

SILVERLAKE AXIS LTD.

(Company Registration No. 202133173M)

(Registered in Singapore)

PRESS RELEASE - FOR IMMEDIATE RELEASE

Silverlake's Q2 FY2022 revenue increased by 29% to RM206.5 million and 1H FY2022 revenue increased 16% to RM358.5 million compared to 1H FY2021, with strong growth in project related revenue segments.

Q2 FY2022 project related revenue segments increased 110% to RM56.6 million where software licensing revenue increased 145% to RM34.9 million and software project services revenue increased 71% to RM21.7 million. For 1H FY2022, software project services revenue increased 40% to RM41.9 million and software licensing revenue increased 81% to RM40.3 million.

Q2 FY2022 Profit Before Tax ("PBT") increased by 55% to RM83.0 million and 1H FY2022 PBT increased by 31% to RM131.1 million compared to 1H FY2021.

Q2 FY2022 Profit After Tax ("PAT") increased by 72% to RM59.6 million and 1H FY2022 PAT increased by 40% to RM94.8 million compared to 1H FY2021.

Q2 FY2022 Earnings Before Interest, Taxes, Depreciation and Amortisation ("EBITDA") increased by 39% to RM92.1 million and 1H FY2022 EBITDA increased by 15% to RM149.5 million compared to 1H FY2021, as revenue grew significantly and gross profit margin maintained.

Continued robust growth momentum in recurring revenue segments, consistently representing above 75% of total Group revenue in 1H FY2022. Maintenance and enhancement services grew 9% to RM134.2 million in the quarter and 7% to RM252.2 million for the first half of FY2022.

Our delivery of revenue through cloud-based services and solutions grew to 13% of total Group revenue from 6% in 1H FY2021 and our Software-as-a-Service ("SaaS") revenue remains stable at 5% of Group revenue.

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Our deals pipeline is healthy at RM1.3 billion with Q2 FY2022 contract wins of RM176.1 million and total wins for 1H FY2022 at RM300 million; which is 43% higher compared to Q2 FY2021 and an increase of 80% over 1H FY2021. We currently have RM181 million deals in categories that have a high probability of closure and our secured FY2022 revenue/secured backlog is currently above 80%.

Singapore, 14 February 2022 - Singapore Exchange Mainboard listed Silverlake Axis Ltd. ("SAL" or the "Group"), a leading enterprise technology, software and services company largely focused on financial services and serving 40% of the top 20 largest banks in South East Asia, today announced its results for the six months ended 31 December 2021.

Q2 FY2022 Results Review

Group revenue of RM206.5 million in Q2 FY2022 was 29% higher compared with RM160.5 million recorded in Q2 FY2021 and this was mainly due to higher contributions from project related revenue segments as well as stable SaaS for insurance processing. The closure and delivery of 2 large contracts in Thailand and Indonesia contributed to this result and projects are ongoing with additional revenue to be recognised in the second half of the financial year.

Recurring revenue segments comprising maintenance and enhancement services, insurance ecosystem transactions and services, and retail transactions processing rose 9% to RM144.5 million, and account for 70% of Group revenue in Q2 FY2022. Revenue from maintenance and enhancement services grew 9% to RM134.2 million for the quarter, with additional contribution coming from new maintenance contracts secured in several ASEAN countries. Revenue from insurance ecosystem transactions and services increased by 9% from RM9.0 million in Q2 FY2021 to RM9.8 million in Q2 FY2022. Insurance processing activities and volumes are staging a rebound to pre-COVID levels and we are optimistic of the outlook for the remainder of the year.

Project related revenue comprising software licensing and software project services increased 110% to RM56.6 million in Q2 FY2022 from RM26.9 million in Q2 FY2021. Higher progressive revenue recognised from major ongoing licensing and implementation contracts secured in Indonesia and Thailand led to the overall increase in project related revenue in Q2 FY2022 as compared with Q2 FY2021. The outlook of the full year for this revenue segment is to achieve good growth.

The higher revenue recorded led the Group's gross profit to increase 31% to RM128.7 million in Q2 FY2022. The gross profit margin increased marginally to 62% in Q2 FY2022 compared with 61% in Q2 FY2021.

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Overall expenses decreased by 1% to RM47.2 million from RM47.7 million in Q2 FY2021. The decrease was mainly due to the end of the unwinding of discount on contingent consideration payable for the acquisition of Silverlake Investment (SG) Pte. Ltd. Group ("SISG Group"), partially offset with higher expenses incurred for marketing, corporate social responsibility activities, branding initiatives for FERMION - The Insurance Ecosystem, and business development activities in Q2 FY2022.

As a result of the above, the Group's PBT increased from RM53.7 million to RM83.0 million in Q2 FY2022 with an increase in EBITDA from RM66.4 million to RM92.1 million in Q2 FY2022. As a consequence of the above, the Group reported a PAT of RM59.6 million, an increase of 72% from RM34.6 million in Q2 FY2021.

1H FY2022 Results Review

1H FY2022 Group revenue increased by 16% compared with 1H FY2021 and recorded an EBITDA of RM149.5 million, 15% higher than the RM130.5 million achieved in 1H FY2021. The Group recorded a net profit attributable to shareholders of RM94.8 million in 1H FY2022, an increase of 40% over 1H FY2021.

Recurring revenue segments comprising maintenance and enhancement services, insurance ecosystem transactions and services, and retail transactions processing rose 6% to RM270.4 million in 1H FY2022. A key strength of the Group, the continuing growth of these recurring segments has lifted their share to 75% of Group revenue in 1H FY2022.

Software project services revenue increased 40% from RM29.9 million in 1H FY2021 to RM41.9 million in 1H FY2022 while software licensing revenue increased by 81% to RM40.3 million in 1H FY2022 as we delivered on key contracts in Indonesia and Thailand.

The Group recorded a gross profit of RM216.5 million in 1H FY2022, 16% higher compared with RM186.3 million in 1H FY2021. The Group's gross profit margin of 60% remained stable compared to 1H FY2021.

Selling and distribution costs increased by 13% from RM15.7 million in 1H FY2021 to RM17.8 million in 1H FY2022 mainly due to higher expenses incurred for marketing, corporate social responsibility activities, branding initiatives for FERMION - The Insurance Ecosystem, and business development activities in 1H FY2022.

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Administrative expenses increased by 3% from RM67.1 million to RM69.1 million in 1H FY2022 due mainly to higher cost of Silverlake Axis Ltd. Performance Share Plan award accrued in 1H FY2022, and group initiatives cost incurred for internal improvement projects as well as human resource management. Finance costs decreased by 87% from RM12.2 million to RM1.5 million in 1H FY2022 following the end of the unwinding of discount on contingent consideration payable for the acquisition of Silverlake Investment (SG) Pte. Ltd. Group as well as the full repayment of revolving credit facility in FY2021.

As a result of the above, the Group's PBT increased from RM100.2 million to RM131.1 million in 1H FY2022 with a proportionate increase in EBITDA from RM130.5 million to RM149.5 million in 1H FY2022.

Income tax expense of RM36.4 million in 1H FY2022 was 11% higher than the RM32.7 million recorded in 1H FY2021. The increase was mainly attributable to the reversal of deferred tax assets from the utilisation of carried forward tax losses and written-down allowance of intellectual property rights.

As a result of the above, the Group reported a PAT of RM94.8 million, an increase of 40% from RM67.5 million in 1H FY2021.

Prospects

The prospects for the next half of FY2022 and beyond are encouraging as we have weathered the crises that was the COVID-19 pandemic and we have proven that our business model is resilient and our strategy is focused and operating to plan. The momentum is accelerating and we are experiencing increased activity from our customers. Market activity is showing signs of approaching pre-pandemic levels and much uncertainty surrounding the pandemic has now been factored in and our customers are moving their transformation ahead as we enter the endemic phase of COVID-19. Customer sentiments are positive going into the second half of FY2022 and FY2023 both for large transformation projects and incremental enhancements.

A total of over RM300 million of new contracts were closed in FY2022, far exceeding the same comparative period in FY2020 and FY2021 and the momentum remains. Large deals are beginning to come through however the timing of closure of these transactions are inevitably longer due to cost and complexity of the engagement. The Group continues to achieve continued success in closing smaller incremental projects and believe that this trend will continue through FY2023.

"We have now reached an inflection point in our key markets, the pandemic has reached an endemic phase and we are cautiously optimistic of the Group's prospects over the medium to long term with a robust pipeline of opportunities being evaluated and the conversion has been encouraging." said Mr.

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Andrew Tan, SAL's Group Managing Director. "We have also continued to be relentlessly focused on our internal transformation initiatives that are tracking to plan; we have pivoted quickly where necessary to address gaps and take advantage of opportunities to ensure the resilience of the Group." added Mr. Andrew Tan.

The Group has enhanced its customer proposition by launching its digital suite MÖBIUS, as well as embarking on a five-yearmulti-pronged strategy to retain and protect the Group's existing customer base, to extend the Group's business/services to new and existing markets through both new products and new partnerships.

In the past 10 years, the Group has undertaken several acquisitions to broaden its suite of business enterprise software solutions and service offerings and strengthen its market position in new markets. As this remains an effective strategy for expansion, the Group will continue to evaluate suitable business opportunities.

This press release should be read in conjunction with SAL's condensed interim consolidated financial statements for the six months ended 31 December 2021 released on 14 February 2022 to the Singapore Exchange.

About Silverlake Axis

Silverlake Axis Ltd. (SAL) is a leading enterprise technology, software and services company largely focused on financial services and serving 40% of the top 20 largest banks in South East Asia. Founded in 1989, SAL has an impeccable track record of successful delivery of innovative and transformative solutions to its enterprise customers and their ecosystems. The Group has more than 370 enterprise customers in over 80 countries across Asia, Europe, Middle East, Africa, and Americas.

Under Axis Systems Holdings Limited, SAL was listed on the SGX-SESDAQ on 12 March 2003. It was renamed Silverlake Axis Ltd in 2006 following the acquisition of SAACIS, the company that owns the Silverlake Integrated Banking Solution (SIBS) and the listing was transferred to the Mainboard of the Singapore Exchange on 22 June 2011. For more information about SAL, please visit www.silverlakeaxis.com.

Contact

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Mr. Anil Singh Gill - Senior EVP, Strategic Finance; Head of Investor Relations Mr. Lee Teong Sang - Principal Consultant