Half-year Interim Report 1 January – 30 June 2022

Risk Intelligence A/S (“Risk Intelligence” or "Company") hereby publishes the Half-year Interim Report for the period January - June 2022. The report is available on the Company's investor website (investor.riskintelligence.eu).

Highlights:

• Strong continued growth in recurring revenue by 32% in Q2 and by 20% in 1H
• Net Retention Rate 111%
• Revenue increased by 7% in Q2
• EBITDA Q2 decreased by 42%
• Net profit Q2 decreased by 29%
• Full year guidance for 2022 intact

Reporting period 1H: January 2022 – June 2022
DKK ‘000 (2021)

Revenue:	6,947	(7,062)	-2%
Costs:	12,106	(10,210)	-19%
EBITDA:	-5,159	(-3,148)	-64%
EBT:	-7,333	(-4,940)	-48%
Profit/loss for the period:	-5,751	(-3,853)	-49%
Earnings per share:	-0.52	(-0.36)	-42%

Reporting period Q2: April 2022 – June 2022
DKK ‘000 (2021)

Revenue:	3,022	(2,822)	7%
Costs:	6,499	(5,273)	-23%
EBITDA:	-3,477	(-2,450)	-42%
EBT:	-4,524	(-3,380)	-34%
Profit/loss for the period:	-3,535	(-2,736)	-29%
Earnings per share:	-0.32	(-0.26)	-23%

Metrics 1H 2022:         
DKK ‘000 (2021)                                          

ARR total	16,871	(14,073)
ARR Net increase	2,798	(2,683)
ARR Growth	20%	(24%)
System ARR	15,491	(12,544)
System ARR Net increase	2,947	(1,162)
System ARR Growth	23%	(10%)
ARPU	142	(123)
Renewal Ratio	98.7%	(98.2%)
Churn	1.3%	(1.8%)
NRR	111%	(106%)

Metrics Q2 2022:         
DKK ‘000 (2021)                                          

ARR total	2,482	(1,875)
ARR Net increase	607	(333)
ARR Growth	32%	(22%)
System ARR	2,301	(1,638)
System ARR Net increase	663	(231)
System ARR Growth	40%	(16%)
Renewal Ratio	96.6%	(92.9%)
Churn	3.4%	(7.1%)

Guidance 2022:

Unchanged

• Growth: 15 - 25%                     
• Revenue: 21.5M - 23.5M DKK             
• EBITDA: Negative                    
• Net result: Negative
• Net cash-flow: Positive

CEO Hans Tino Hansen

“There are many factors in the global market today that can make it difficult to create sustained growth and progress. The wake of a global COVID pandemic, supply chain problems, the ongoing war in Ukraine, and as a result, rising inflation, higher interest rates and volatile energy prices. Yet there is no doubt in my mind that Risk Intelligence is heading in the right direction. And it is with pride I can announce that Risk Intelligence has seen significant growth in our core business in the past quarter, from both existing and new clients.

During the first half of 2022, the ARR (Annual Recurring Revenue) from the Risk Intelligence System increased by 20%, with a Q2 increase of 32%. In addition, the net retention rate (NRR) increased from 105% in Q1 to 111% in Q2, which means that the same client base in Q2 2021 accounted for a 11% increase in revenue from the Risk Intelligence System in Q2 this year to, after subtraction of churn (one license, or 3.4%).

Total revenue increased by 7% during Q2, while the first half year saw a marginal decrease of 2%. This is mainly due to a decrease in revenue from Advisory Services, which, as we communicated in the Q1 report is predominantly due to the timing of large consultancy projects during the year. Also, revenues from the core business are unevenly distributed between quarters every year with Q2 and Q3 having the lowest level of recurring revenue and Q4 the highest.

With the pandemic coming to an end this year, Risk Intelligence's cost levels are back to normal with regards to operating expenses. We have also seen some periodisation of costs, which had a negative effect in Q2, but will have a positive effect during Q3, and we have invested further into the commercial side - primarily in marketing and lead generation on both the maritime and the landside business.

As a direct consequence of getting back to normal business activities and investing in future growth, EBITDA decreased by -42% to -3,477 MDKK in Q2 and by -64 percent in the first half of the year. All in all, this has meant that the result for the first half of the year amounted to MDKK -5.7.

Regardless of business climate, our model shows resilience with our clients and an advantage vis a vis our competitors. I say this because our main revenue continues to be dominated by recurring revenue with 86% of the total revenue. A license-based revenue for 12 months and paid in advance. This business model gives us a predictability in the revenue and cash flow related to the core business.

In addition, we are proving how our business model is scalable on several levels. First, our costs do not increase significantly when we get new clients. Secondly, we have a potential upside to sell more to existing clients, which is supported by the NRR figures for the System, as well as other products, and thirdly, we have proven that we can apply our expertise and knowledge to the development of new products and services. Something the launch of LandRisk Logistics is a tangible proof of.

Despite the macro challenges, the future looks promising. Based on a positive outlook for Q3 and Q4, which historically accounts for 65+% of our annual revenue, we expect revenue growth between 15-25% for the full year 2022, corresponding to total sales of between DKK 21.5 to 23.5 million as per our guidance. As for 2023, I expect revenue growth to continue whereas the growth in costs, even considering inflation, will be at a lower growth level, leading to a positive cash flow.

Video presentation:
Presentation (in English) with NyhetsByrån Direkt will be available from about 15.00, 17 August, on our Investor presentations page.                         

For more information on services and the System:
Please watch our corporate video: Knowing Risk