TECHSTEP ASA: Q4 AND FULL-YEAR 2017 RESULTS

Highlights fourth quarter and full-year 2017

• Q4 2017 revenue was NOK 281.5 million (NOK 162.3 million); growth was driven by acquisitions and solutions sales, slightly offset by a decrease in hardware sales
• Q4 2017 solutions revenue was NOK 62.8 million, including an organic growth of 52% year-over-year*
• EBITDA adjusted amounted to NOK 12.8 million (NOK 2.4 million); growth attributed to acquisitions and increased solutions sales. The adjusted EBITDA margin was 4.5% (1.5%)
• Full-year 2017 reported revenue was NOK 789.8 million (NOK 573.5 million). EBITDA adjusted amounted to NOK 29.5 million
• The end-user base comprised ~620,000 at the end of 2017, providing a substantial platform for growth in 2018
• Entered into direct distributor agreement with Telenor Norge AS (replacing agreement with Kjedehuset) regarding sale of Telenor business-to-business products in Norway
• Jens Haviken, with experience from Dustin, Microsoft and Accenture, was appointed new CEO, and will assume the position in Q2 2018

“New technology is transforming the way we live and work. Habits and behaviours are changing. That’s why we founded Techstep six quarters ago. The increasingly digital workspace emerging in the Nordic private and public sectors represents a tremendous market opportunity. People and employees need and want access to tools and services across devices. And they want this access everywhere. Work is becoming truly mobile.

When we started on this journey back in 2016, we wanted to create a one-stop shop solution provider that could let enterprises offer employees the opportunity to work on any device, whether a smartphone, tablet, or laptop – with a high degree of operational stability, simplicity and security. So, to make it easy for our customers to buy and deploy this solution, we embarked on our mission, and started building Techstep’s one-stop shop “Mobile as a Service” (MaaS) solution, combining hardware, subscription & connectivity, mobile device management, managed services and related software in a single solution that our customers could subscribe to and deploy.

We also wanted to create a streamlined offering, which we would be able to deliver at scale, creating the business model scalability needed to take a leading market position in a growing market.

Since the start in 2016, we have acquired eight companies and established one, with a total of more than 220 employees, hired technology and sales people, and established a growth platform in Norway and Sweden comprising more than 6,000 customers and around 620,000 end-users. We have established a clear position in the Nordics as the vendor of the digital workplace, and according to our customers, ahead of the competition. Initially we targeted larger enterprises, but as we scale up, we will also offer our services to medium-sizes and smaller businesses.

We spent a considerable time on M&A, integration, and service product development in 2017, and went from being a hardware re-seller to becoming a provider of business-critical solutions. During the fourth quarter, Techstep established a direct agreement with Telenor, vendors and key partners.

During a year of hard work to transform the organisation, solution sales increased in the fourth quarter. We managed to deliver 54% organic growth in solutions revenue from 2016 to 2017, up from NOK 132 million to NOK 203 million. At the start of 2017, our growth target was 27%. With solutions sales comprising only 22% of Techstep’s total group revenue in 2017, we appreciate the growth opportunity this segment still represents.

EBIT for 2017 is not at the level we want it to be going forward. We have invested for growth during 2017, and the time and cost involved to successfully acquire companies and integrate the entities, people and customer offers. The feedback we get from our customers and partners is encouraging and we have achieved a strong market position, which we will leverage further in 2018.

On a positive note, solutions sales are increasing above plan, and the underlying profitability trend is positive. Our operational cash flow is positive in the fourth quarter, and we have a strong balance sheet to support further growth.

Moving further into 2018, we expect our investments and efforts over the last six quarters to yield results. We continue to pursue our firm ambitions of revenue growth and profitability improvements on a solid base of customers and end-users in Norway and Sweden. Techstep is well-aligned to meet future demand”, said CEO Gaute Engbakk.

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Material:

Please find the report and presentation for Q4 2017 enclosed.

Techstep Q4 2017 Report
Techstep Q4 2017 Presentation

Presentation and audio webcast:

Techstep will present its Q4 2017 results at 10.00 am CET, at the offices of Arctic Securities, Haakon VII’s gate 5, in Oslo, Norway. A live webcast with audio and slide share will be available at: http://webtv.hegnar.no/presentation.php?webcastId=77799760

Further information from:

Gaute Engbakk, CEO, Techstep ASA: +47 916 33 281
Marius Drefvelin, CFO, Techstep ASA: +47 958 95 690

About Techstep ASA

Techstep is positioning itself as a leading Nordic enabler of the digital workplace. Techstep’s “Mobile as a Service” (MaaS) offering is a one-stop-shop solution, which combines hardware, subscription & connectivity, mobile device management, managed services and related software, in addition to financing. The MaaS solution enables enterprises to let employees do their work across mobile devices and locations, with a high degree of security and operational stability. Techstep has approximately 220 employees based in Norway and Sweden, serving close to 6,000 customers and 620,000 end users across various industries in the private and public sectors. The company is listed on the Oslo Stock Exchange. For more information, please visit http://techstepasa.no/.