Techstep ASA: Q3 2022 results

Highlights from the third quarter:

Stable commercial momentum in Q3, launch of new standardised product portfolio will secure scale and growth going forward

• Flat development of total revenue, while recurring revenue annualised grew 5% q/q to NOK 295 million, in line with the strategy of converting the business model to recurring revenue
• Launched Techstep Lifecycle and Techstep Managed, parts of the new simplified product portfolio which is designed to solve customer challenges and improve scalability and growth

Profitability improving as cost optimisation filters through

• Improved profitability, with EBITA adj. up NOK 10 million from Q3 2021
• Cost optimisation efforts are filtering through, with salaries and personnel cost declining 14% y/y in the quarter

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

• New financial targets launched in Q3, with ambition to double ARR on Own Software to at least NOK 225 million by 2025
• NOK 90-100 million in annualised cost optimisation announced, helping to secure profitable development medium and long term
• Targeting an EBITA adj. of NOK 50 million in 2023, set to triple and reach at least NOK 150 million by 2025 as scalability and synergies have full effect

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
• NOK 25 million in sellers' credit converted to shares (included in the NOK 103 million) and bank loans renegotiated, significantly improving debt and liquidity position

“We have changed our business model from transactional to scalable recurring revenue. We will lead with software in our value-based proposition, with a positive tag-along effect on Hardware and Advisory & Services. To be able to execute and unleash the potential, and deliver great value to our customers and shareholders, we have also restructured and optimised the organisation to become One Techstep. Through this, we have achieved a unique position and product offering that gives us a competitive advantage in the managed mobility market”, said Techstep CEO Børge Astrup.

“The transformation has been lengthy and costly, and we are now in the final phase of the process. In this phase, we are focusing on optimising the cost base and aligning the company to the simplified product portfolio. This includes extracting synergies from the acquired companies, further automating the business processes, ensuring that we have the right capabilities and adjusted cost base. This is possible because we have come to the end of a long investment cycle, with investments in new products, the organisation and in people, as well as standardisation of both processes and technology. With funds from the private placement, we will complete the transformation process and ensure that our organisation has the right expertise and size to capitalise on the growth prospects of our new product portfolio”, Astrup concluded.

Material

Please find the report and presentation for Q3 2022 enclosed.

Presentation and Q&A:

CEO Børge Astrup and CFO Anita Huun presents the results in a pre-recorded webcast, can be accessed by clicking here

A live Q&A session will take place today at 8:00 am CEST and can be accessed by clicking here

Questions for the Q&A session may be submitted in advance to [email protected], or live during the session itself. A recording of the Q&A-session will be made available on techstep.io after the live event has concluded.

For more information:

Børge Astrup, CEO, Techstep ASA: +47 928 27 676

Anita Huun, CFO, Techstep ASA: +47 924 11 563

About Techstep ASA

Techstep is a complete mobile technology enabler, making positive changes to the world of work; freeing people to work more effectively, securely and sustainably. We help customers who want to work smarter, while also delivering on their ESG commitments. With around 300 employees based in Norway, Sweden, Denmark and Poland, we serve more than 2 000 enterprise customers in Europe. Techstep had NOK 1.3 billion in full year 2021 revenues, and is listed on the Oslo Stock Exchange under the ticker TECH. To learn more, please visit techstep.io/investor.

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Marie Christophersen, Financial Analyst / Investor Relations, Techstep ASA, on 9 November 2022 at 07:00 CEST.