Second cond Quar uarter er 20 2020 20 R Results sults Torgrim im Takle le Jon on Birge rger r Syv yver ertse sen Hilde de Thom omasse sen AUGUS UGUST T 11, 2020
Q2 2020 Busin iness ess Upda date CEO Torgr rgrim m Takle
Q2 2020 High ighli light hts 1 Best-Ever r Quarterly rly Financial Results 2 Covid-19: 19: Conti tinued Su Surg rge e Demand 3 Strategic gic AWS Partn tnersh rship Agreeme ment “ Crayon went above and beyond to ensure the project was completed in a challenging timeframe, and came 4 M&A Strength ngthen Position in A Australia up with creative ways to beat the financial targets that we had established for this initiative ” Mano S., Vice Presi side dent t IT, Cambi bium m (US) June ne, 2020 2020 5 Crayon no 1 in Gartner’s Magic Quadrant
Q2 2020 20 HIGHL GHLIGH IGHTS TS Be Best-Ever er Quarterl erly Fin inanci ncial al Result lts 1 Compared to corresponding period last year +44% +35% MNOK K +47 Revenu nue Gro ross Pr Prof ofit it EBITD TDA 1 MNOK 6,095 MNOK 666 MNOK 171 MNOK 17,035 MNOK 2,101 MNOK 344 LAST 12 MONTHS NTHS 1 Adjusted EBITDA – EBITDA adjusted for share based compensation and other one-off income and expenses
Q2 2020 20 HIGHL GHLIGH IGHTS TS The Nordi ordics cs Con onti tinued nued To O o Outperf perfor orm 2 Compared to corresponding period last year EBITDA improvem emen ent t NOK millions Gro ross profi rofit: t: +23% 50 Size = Q2 2020 gross profit EBITD TDA: A: MNOK +34 40 Nordics 30 20 APAC & MEA 10 0 Europe US -10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Gross ss profi fit growth th %
Q2 2020 20 HIGHL GHLIGH IGHTS TS Stron St ong g Perform ormanc ance e Acr Acros oss s Bu Busin iness ess Areas 2 YoY change ge SOFTWARE SERVICE CES Software & Cloud Software & Cloud Software & Cloud Consulting Channel Economics Direct Gross profit growth 1 +52% +29% +43% +27% EBITDA margin 2 56% -4pp 38% 6% 18% +2pp +2pp Significant client wins • Digital collaboration • Continued surge • Strong market • Continued surge & remote operations demand for demand for in Cloud demand for “remote Economics & of everything” productivity offerings • Product and optimization services • Stable market program mix shifts • Growth on new Q2 drivers and outlook growth, utilization (cloud, new vendors, technology platforms • 80% YoY growth in and hourly rates shift to subscription (AWS) and partner recurring contracts models) segments (ISVs) • Capacity increase, particularly for AI/ML • Capacity increase practice 1 Gross profit growth Year over Year (“YoY”) 2 EBITDA as a percentage of gross profit
Q2 2020 20 HIGHL GHLIGH IGHTS TS Glo lobal l Partnershi tnership p Agreem eement ent wit ith AWS P S Provid ides es 3 New St Strategic egic Growth Pla Platf tfor orm m Crayon on globa obal x marke ket share, 2019 Worldw ldwid ide e public blic clou oud d infr frastr struct cture e market et 1 Strategic tegic growth th plat atfor orm • Multi lti-yea ear strategic gic partn tner ersh ship ip ag agree eemen ent with 100% % = $95bn bn Amazon on Web Services vices If reachi hing ng same market t (“AWS”) share as for Microsoft ft ~$1bn bn rev even enue e 33 33% ~0% • Leveraging Crayon’s oppor ortunit ity y fo for Crayon on capabilitie abilities s & IP to to accele elerat ate e digital ital tran ansf sfor ormation tion bas ased d on AWS’ technology platform 18% 18 ~3% Cl Close ser collabor laboration tion with AWS WS • Co Co-in investmen estments ts in dedic icat ated acros oss markets ts: : reso sources ces and d servi vices ces • Lead generation, co-marketing • Crayon on chos osen en as as one e of ve very y & project delivery 49% 49 Other er fe few strategic tegic gl global al AWS WS • AWS certifications (DevOps, partn tner ers s (only y one in the e Migration & AI/Data analytics) Nordics) dics) 2019 1 Infrastructure-as-a-service (Iaas) and Platform-as-a-service (PaaS) Source: Gartner (July 2020); Synergy Research Group
Q2 2020 20 HIGHL GHLIGH IGHTS TS Two o M&A Deals als Stren engthen gthen Strategic gic Position sition in Austra ralia lia 4 M&As accomplish plished ed in Austr strali alia • Microsoft authorized licensing partner (1 of 6 in total) • Revenue of MNOK ~200 Asset Purch chase Agreement (signed June 2020) • ~250 customers • Oracle software & cloud economics M&A in Crayon on: expert • Global scope with strong M&A pipeline • Consulting & licensing services • Increased valuation spread expected Sales Purch chase Agreement (closed June 2020) • Revenue of MNOK ~15 during next quarters (Covid-19) • Internal resources & financial flexibility to execute on accretive M&A opportunities
Q2 2020 20 HIGHL GHLIGH IGHTS TS Crayon Named no 1 in Gartner’s Magic Quadrant 5 Mag agic ic Quadr adran ant t fo for Softwar are e Asse set Man anage agemen ent t Man anage aged d Servi vices ces “ Crayon is a Leader in this Magic Quadrant…. ” “ ….praised by reference clients for ” service methodology and execution “ Just st relea lease sed d …demonstrated benefit delivery th August! 6 th st! ” beyond its peers assessed…. “ …instrumental in developing vision, progressing SAM maturity and driving “ continuous improvement.…. “ …. introducing capability from Crayon’s AI practice to enable entitlement and use rights management through contract analysis “ Source: Gartner (August 2020)
Financ nancial ial Revie iew Q2 2020 CFO Jon Birger Syvertsen
Q2 2020 FINANCIAL REVIEW Q2 2020 - Summary ry Gross Profit Adjusted ted EBITDA Su Sustained GP a and EBITDA 1 NOK millions NOK millions gro rowth 2 200 400 2 000 350 LTM Gross profit 1 800 21% CAGR last 3 years 300 1 600 1 400 250 2 Strong cash ash flow perform rman ance 1 200 200 LTM Adj EBITDA 1 000 36% CAGR last 3 years 150 800 600 100 400 50 200 Updat ated outlook – 3 0 0 accellerati ating 2020 0 gro rowth Q4 Q2 Q4 Q2 Q4 Q2 17 18 18 19 19 20
Q2 2020 FINANCIAL REVIEW Strong ng GP growth h across ss markets ts YoY gross profit growth by business area Gross profit YoY gross profit growth by market cluster NOK million NOK million NOK million SW & Cloud Nordics 65 63 +35% / NOK 172m + 23% 27% Direct 666 SW & Cloud Europe 42 29 + 42% 52% Channel APAC & SW & Cloud 494 42 25 + 79% + 29% MEA Economics US 23 Consulting 52 + 40% + 43% HQ/Elim -1 Admin/Elim -3 Total Total 172 172 Q2 2019 Q2 2020
Q2 2020 FINANCIAL REVIEW EBIT ITDA A growth h driv iven n by Nordics ics and APAC& C&MEA MEA YoY Adj EBITDA growth by business area Adjusted EBITDA YoY Adj EBITDA growth by market cluster NOK million NOK million NOK million SW & Cloud NOK 47m Nordics 34 28 Direct 171 SW & Cloud Europe -1 11 Channel 124 APAC & SW & Cloud 24 3 MEA Economics US -4 Consulting 12 HQ -6 Admin -7 Total 47 Total 47 Q2 2019 Q2 2020
Q2 2020 Interna national tional exp xpansion ansion moment mentum um continue tinues Gross ss profi fit NOK million 2 101 Nordic 1 809 1 486 International 2 1 216 955 1 128 23 774 HQ/Elim. 13 558 17 439 349 1 160 1 036 905 762 763 -2 -15 2016 2017 2018 2019 LTM Continued gross profit • growth in international International 31% 36% 38% 43% 45% GP share markets – more than doubled since 2017 Adj djust sted ed EBITDA 1 344 NOK million 292 EBITDA contribution from • 188 International markets 105 131 394 329 continue to improve 266 205 180 46 36 -14 -22 -28 -72 -82 -64 -96 -17 2016 2017 2018 2019 LTM 1 Adjusted EBITDA is reported EBITDA less other income & expenses items netted under HQ, hence not reflected on Market Cluster / Business Area level 2 International includes market clusters Growth Markets, Start-Ups and USA
Q2 2020 FINANCIAL REVIEW Workin ing g capit ital l driv iven n by seasona nalit lity Net working capital over time 2020 Q2 net working capital NOK million NOK million Accounts 4 031 -25 -65 -81 receivable -182 -338 -343 -395 -718 19 Inventory -1 363 Accounts -4 703 payable Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Trade working -653 Q2 2020 net working capital is 645 MNOK more negative than Q2 2019, driven by a • capital decrease of trade working capital of 455 MNOK and other working capital of 190 MNOK Other working As a reminder, Q2 2019 was a strong comparable driven by favorable timing of payment • -710 capital 1 flows, indicating a very solid improvement in Q2 2020 Improvement driven by a combination of improved collection processes and renegotiated • Net working -1 363 payment terms in light of Covid-19 – vendor payment terms expected to return to normal capital during 2020 1 Other working capital includes other recievables, income tax payable, public duties payable and other short-term liabilities
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