EDGEWARE YEAR-END REPORT JANUARY-DECEMBER 2016

FOURTH QUARTER 2016: (OCTOBER-DECEMBER)
• Net sales amounted to SEK 84.6 million (64.8), up 30.6 percent.
• Gross income was SEK 59.8 million (45.5), or a gross margin of 70.7 percent (70.2).
• Operating income (EBIT) was SEK 10.0 million (4.6), or an operating margin of 11.8 percent (7.0).
• Adjusted operating income (adjusted EBIT) was SEK 17.9 million (4.6), or an operating margin of 21.1 percent (7.0).
• Profit for the period amounted to SEK 7.4 million (5.5).
• Cash flow from operating activities before changes in working capital was SEK 12.8 million (8.0).
• Profit for the period, before dilution was SEK 0.3 per share (0.2).
• Profit for the period, after dilution was SEK 0.3 per share (0.2).

JANUARY-DECEMBER 2016:
• Net sales amounted to SEK 252.3 million (203.6), up 23.9 percent.
• Gross income was SEK 175.6 million (140.9), or a gross margin of 69.6 percent (69.2).
• Operating income (EBIT) was SEK 19.1 million (13.3), or an operating margin of 7.6 percent (6.5).
• Adjusted operating income (adjusted EBIT) was SEK 34,3 million (13.3), or an operating margin of 13.6 percent (6.5).
• Profit for the year amounted to SEK 15.7 million (10.8).
• Cash flow from operating activities before changes in working capital was SEK 30.8 million (18.5).
• Profit for the period, before dilution was SEK 0.6 per share (0.5).
• Profit for the period, before dilution was SEK 0.6 per share (0.4).

SIGNIFICANT EVENTS IN THE FOURTH QUARTER AND AFTER THE REPORTING PERIOD
• Board of Directors decided on long-term financial targets at a Board meeting 26 October 2016.
• On 9 December, Edgeware was listed on main list NASDAQ Stockholm at SEK 29 per share. Ahead of the listing a share split of 1:20 was carried out, a bonus issue of 11 093 855 shares with a par value of 0.05 increasing share capital by SEK 554 692.75, a new issue of 5 172 413 shares with a par value of 0.05 increasing share capital by SEK 258 620.65.
• On 17th of February the appointment of the nomination committee in Edgeware was announced, which consists of representatives of the three largest shareholders as of 31 January, Amadeus Capital Partners (23.1%), Creandum (18.8%) and Swedbank Robur Fonder (8.7%). The owners are represented by Kent Sander, Daniel Blomquist and Annika Andersson.

CEO COMMENTS:

2016 was a historic year for Edgeware. Strong growth, international customer successes, important product launches, a stronger organisation and a listing on Nasdaq Stockholm. The listing gave us new shareholders and provides us with valuable support in our continued growth journey, in a TV industry undergoing rapid transformation.
Thanks to the Internet, viewers not only have much more content to choose from, they also have an opportunity to choose how and when they want to watch this content. From traditional linear TV viewing based on TV schedules to the TV of the future. In pace with this market transformation, Edgeware has grown ever stronger internationally. With a better and more complete product range, we offer attractive products and services that are in demand among telco and cable operators, as well as content providers. All with the aim of supplying an amazing TV experience to consumers worldwide.

366 eventful days
2016 started with large-scale orders from customers in Central America. This was followed in the second and third quarter by smaller and larger orders from international customers. For example, solutions were supplied to TVB of Hong Kong that enabled this company to broadcast the Olympic Games over the Internet. This was an initiative that subsequently will lead to TVB abandoning its licence to broadcast traditionally TV in favour of focusing solely on high- resolution Internet-based TV. A similar trend within OTT/Broadcasters is continuing at a rapid pace, and represents a development that should benefit Edgeware’s streaming technology. During 2016, our technological know-how and products attracted considerable attention at several trade fairs. We received a number of industry awards for our innovativeness and we were contacted by multiple potential partners and customers.

A strong fourth quarter
The fourth quarter was strong in many ways. Sales and profitability grew powerfully at all levels, but it is even more important that this is not down to just one or two customers. We noted a distinct reduction in our customer concentration during the year, whereby we now have several major customers and the numbers are increasing as we grow, thus providing stability and security. It is also invigorating to note that a number of our multi-year customers are returning to us to upgrade their capacity, install new functions and request more services. Existing customers account for two thirds of our business. This provides stability. It is also positive that our Service business is continuing to grow in pace with the company’s total sales. During the fourth quarter, we also presented a new transaction in Australia, the first in that country. While not being a particularly large transaction, it marked an important step into a new and significant market. The transaction could also lead to future orders, since the operator is part of a larger corporate constellation in the region.

Historical date - IPO on 9 December
Our listing on NASDAQ Stockholm was a milestone for the company and the employees. The ownership spread provides us with key resources for continued growth and valuable room for manoeuvre. Being able to create our own future as a listed company makes us attractive for the skilled employees that we are now recruiting. We have already made considerable progress in a number of highly important recruitments. Although the IPO entailed intensive effort, the listing was implemented smoothly thanks to my skilled co-workers, the Board, the owners, banks and advisors. As a direct result of the market listing, the company has honed the efficiency of all internal functions, while also ensuring that the Board and corporate governance are stronger and more professional. I also want to take the opportunity to welcome all new shareholders.

We look forward to 2017 with confidence
We believe strongly in the financial targets we have set for Edgeware in connection with our IPO and we see every day that the estimated market growth becomes a reality. I personally am very proud of our company and all of our employees. Although we are still a small company, we have a diversity and global direction that is fascinating and generates considerable energy. I look forward with confidence to 2017, which will be an exciting year with new advances in the development of the TV of the future for the company, the employees and our customers.

Joachim Roos
CEO, Edgeware

For further information, please contact:
Joachim Roos, CEO
Telephone: +46 73 612 68 40
Steeve Führ, CFO
Telephone: +46 73 612 68 40
Gunilla Wikman, IR Manager
Telephone: +46 70 763 81 25 gunilla.wikman@edgeware.tv

This information is such information that Edgeware AB is required to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication by the above mentioned contact person on 20 February 2017 at 7:30 a.m. CET.