Correction to 2022 annual report

Company Announcement No. 03-2023

Copenhagen, 28 February 2023

Penneo releases financial report for the period 1 January 2022 - 31 December 2022

Correction: EBITDA total for 2022-Q4 on page 43 was positive 3,219,304 DKK instead of negative 3,319,304 DKK. An updated version of the 2022 annual report is attached here.

Penneo achieves ARR growth of 28% in 2022

2022 Performance highlights

• ARR amounted to 71.0M DKK at the end of 2022 compared to 55.5M DKK at the end of 2021 which corresponds to a YoY growth rate of 28%
• YoY ARR newbiz amounted to 15% 
• YoY ARR uplift amounted to 16%
• YoY ARR churn rate amounted to 4%
• YoY net ARR retention rate amounted to 113%
• ARR from foreign markets amounted to 19.6M DKK at the end of 2022 compared to 14.4M DKK at the end of 2021 (36% YoY growth)
• EBITDA amounted to negative 11.1M DKK compared to negative 14.1M DKK in 2021

Guidance

ARR

Penneo expects continued growth in ARR and guides ARR at the level of 87-95M DKK at the end of 2023 corresponding to an ARR growth rate of 23%-34%.

EBITDA

Penneo expects an EBITDA at a level of negative 10M DKK to negative 15M DKK.

The outlook is based on currency exchange rates per end of 2022.

Business summary

In the past year, Penneo has made solid progress scaling its business for growth, serving more customers than ever before and expanding our geographical footprint in Europe. 

Despite this progress, 2022 has also been an extraordinary year with a volatile macroeconomic environment that has negatively impacted our customers’ buying behavior and also led to somewhat longer sales cycles for some of our larger deals, particularly in the second half of 2022.

Penneo achieved an ARR of 71.0M DKK in 2022 which is in line with the adjusted guidance of 70-75M DKK we provided in Q3 2022. This corresponds to a YoY growth rate of 28%, which is lower than our initial expectation of a 40%-49% yearly growth rate. 

However, we do not believe the current economy has changed the long term growth potential of Penneo. We remain a company with a solid subscription based business model with growing ARR from both existing and new customers, low yearly ARR churn, and a relatively high contribution margin. Moreover, we continue to see strong underlying market trends that translate into attractive possibilities in both our existing markets and new markets. 

2022 was also a year characterized by a number of other key milestones. These include: 

• In March, while still listed on Nasdaq First North, Penneo issued new shares in a private placement directed at a group of institutional investors that led to gross proceeds of 59M DKK. This capital raise was a major milestone since it boosted the overall cash position we can leverage to accelerate and scale our organization for growth.
• In April, Penneo migrated from Nasdaq First North Growth Market to the Copenhagen Main Market, marking another historic milestone. This move was a natural next step for us and also a clear indicator that Penneo has now reached a new level of maturity in the way we operate our business.
   
• In November, Penneo announced that it has expanded an existing strategic agreement with Bankdata, a major Danish financial IT provider, extending the usage of Penneo Sign to the private customers of Bankdata’s member institutions that include eight major banks in Denmark with more than 1.6 million private customers.
   
• During 2022, Penneo upgraded its Penneo Sign technology platform to offer the highest level of electronic signature in the eIDAS regulation: Qualified Electronic Signatures (QES). In early 2023, this led to the acceptance of Penneo on the EU Trust List, a public list of providers that are accredited to deliver the highest levels of compliance with the EU signature regulation. This approval is important, since it will serve both as a door opener and competitive differentiator in our ongoing effort to penetrate the audit and accounting vertical and related anti-money laundering (AML) regulated industries in EU countries outside Scandinavia. 

ESG report and remuneration report
In addition to the 2022 annual report, Penneo has today published its first ever ESG report that accounts for the company’s targets, results and initiatives in 2022, covering three important sustainability areas: Environment, social and governance. For more details, please see the ESG report attached. 

Furthermore, Penneo has also published its 2022 remuneration report today that provides an overview of the  total  remuneration  received  by  each  member  of the  Board  of  Directors  and  Executive  Management  of Penneo for the financial year 2022. For more details, please see the remuneration  report attached.

Presentation
The 2022 Annual Report will be presented at an online conference hosted by Penneo today, 28 February 2022 at 10:00 CET and a webinar hosted by HC Andersen Capital at 13.00 CET.

The conference call hosted by Penneo will be conducted in English and can be attended live here. Participants are also able to dial in via phone ‪(DK) +45 70 71 49 26 and enter PIN: 408 284 190#. Prior to the event, investors and interested parties can also submit and upvote questions to Penneo’s management team via Stokk.io, a QA platform that can be found here. During the live event, Penneo will answer questions posted on this platform after responding to questions from analysts.
 

The webinar hosted by HC Andersen Capital can be attended live by registering here.

For more details, please see the 2022 Annual Report attached.