Techstep : ASA Q3 2022 Presentation

Q3 2022 Presentation

9. November 2022

Techstep at a glance

	8 offices
	across the
A mobile technology company enabling your organisation to utilise software & hardware to	Nordics &
Poland

strengthen performance

• We enable remote and frontline workers to perform smartly, securely, and sustainably
• We combine software, mobile devices, and services to meet your business and ESG goals

• Our experts proactively ensure that your mobile ecosystem is optimised for success

KPIs LTM, per Q3 2022

NOK 1 338m	NOK 295m	NOK 104m
Total revenue	Recurring revenue	ARR on Own Software2
	annualised1

Selected clients

NOK 362m	NOK -30m
Net gross profit3	EBITA adj.4

1. Recurring revenue includes contracts of 24 months or more excluding mobile expenses management (MEM) white label (with three months notice before year-end). The figures are based on the recognized recurring revenue isolated each quarter, annualized
2. ARR is defined as Annual Recurring Revenue from Techstep's Own Software portfolio and is calculated by multiplying the monthly recurring revenue with twelve. Techstep only includes contracts where invoicing to customers has started.
3. Net gross profit is defined as Total revenue less Cost of goods sold and depreciation from Hardware-as-a-Service
4. Adjusted earnings before interest, tax, amortisation and impairment (EBITA) is based on EBITA but adjusted for transactions of a non-recurring nature

Highlights Q3 2022

Highlights		Key financials

Stable commercial momentum in Q3, launch of new standardised product portfolio

ARR on Own Software1	Net gross profit2
NOK million	NOK million

EBITA adjusted3

NOK million

• Flat development of total revenue, while recurring revenue annualised grew 5% q/q to NOK 295 million
• Launched Techstep Lifecycle and Techstep Managed, parts of the new simplified product portfolio

NOK 90-100 mill cost optimisation program approved, which will strengthen profitability and cash generation

• NOK 90-100 million in annualised cost optimisation announced, helping to secure profitable development medium and long term
• Cost optimisation is filtering through, with salaries and personnel cost declining 14% y/y in Q3 improving profitability

New financial targets - goal to double ARR on Own Software by 2025

•	New financial targets launched in Q3, with ambition to double

98

63

377 362

325

104

8

-30

-39

ARR on Own Software to at least NOK 225 million by 2025

Successfully raised NOK 103 million in private placement

• In Q3, with financial effect in Q4, NOK 103 million was raised to fund the final phase of the transformation process, as well as to strengthen the balance sheet

FY 2020 FY 2021 Q3 2022	FY 2020 FY 2021 LTM Q3
	2022

FY 2020 FY 2021 LTM Q3 2022

1. ARR is defined as Annual Recurring Revenue from Techstep's Own Software portfolio and is calculated by multiplying the monthly recurring revenue with twelve. Techstep only includes contracts where invoicing to customers has started.
2. Net gross profit is defined as Total revenue less Cost of goods sold and depreciation from Hardware-as-a-Service
3. Adjusted earnings before interest, tax, amortisation and impairment (EBITA) is based on EBITA but adjusted for transactions of a non-recurring nature. Such non-recurring transactions include, but are not limited to restructuring costs, gains or losses related to sale of subsidiaries, acquisition-related costs and other non-recurring income and expenses

Techstep is making a giant leap

1	2	3
Transformational journey	Streamlining costs	New financial targets

New management	Extracting synergies from	Establishing new
	acquisitions	company targets for 2023 &
From hardware led to		2025
software led sales	Launching new product
From transactional to	portfolio	2025 net gross profit: >540m
recurring revenue	Reducing cost base by	2025 software ARR: >NOK 225m
From 47 to 7 product	NOK 90-100m annualised	2025 EBITA adj.: >NOK 150m
solutions

Strong trends supporting +20% annual market growth

Efficiency

Employees to adapt ready-to-usedevices without setting things up manually, enabling cost savings

Mobile

Technology

Managed Mobility

Services (MMS) Market1

CAGR '22-27

~24%

Cyber-security

Capability

Users and enterprises looking to harvest the benefits of mobile technology

Sustainability

Rapid increase in smartphone, data usage, and remote work

Increased focus on data privacy and security

Focus on sustainability and careful life-cyclehandling of devices

1. Mordor Intelligence | Global Managed Mobility Service Market (MMS) (2022-2027). The global managed mobility service market (henceforth, referred to as the market studied) was valued at USD 3462.1 million in 2021, and it is expected to reach USD 12427.1 million by 2027, registering a CAGR of 24.27% (henceforth, referred to as the forecast period)