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We make the work life mobile Investor presentation February 2017 T - - PowerPoint PPT Presentation

We make the work life mobile Investor presentation February 2017 T E C H S T E P 1 Disclaimer This presentation (the Presentation) has been prepared by Techstep ASA ( Techstep or the Company and together with its


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“We make the work life mobile” Investor presentation February 2017

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Disclaimer

This presentation (the “Presentation”) has been prepared by Techstep ASA (“Techstep” or the “Company” and together with its subsidiaries the "Techstep Group"). The Presentation has been prepared and is delivered for information purposes only. It has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The contents of the Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. Each recipient should consult with its own professional advisors for any such matter and advice. The Company makes no representation or warranty (whether express or implied) as to the correctness or completeness of the information contained herein, and neither the Company nor any of its subsidiaries, directors, employees or advisors assume any liability connected to the Presentation and/or the statements set out herein. This Presentation is not and does not purport to be complete in any way. By receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the Company, its financial position and prospects and that you will conduct your own analysis and be solely responsible for forming your own view of any refinancing and the potential future performance of the Company’s business. The information included in this Presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Techstep Group and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely views and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any other company in the Techstep Group, or any of its advisors or any of their parent or subsidiary undertakings or any such person’s affiliates, officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual

  • ccurrence of the forecasted developments. The Company and its advisors assume no obligation to update any forward-looking statements or to conform these forward-looking statements to the Techstep Group's

actual results. Investors are advised, however, to inform themselves about any further public disclosures made by the Company, such as filings made with Oslo Børs or press releases. This Presentation does not constitute any solicitation for any offer to purchase or subscribe any securities and is not an offer or invitation to sell or issue securities for sale in any jurisdiction, including the United States. Distribution of the Presentation in or into any jurisdiction where such distribution may be unlawful, is prohibited. The Company and its advisors require persons in possession of this Presentation to inform themselves about, and to observe, any such restrictions. This Presentation speaks as of the date set out on the front page, and there may have been changes in matters which affect the Techstep Group subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the Techstep Group have not since changed, and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo City Court as exclusive venue. By receiving this Presentation, you accept to be bound by the terms above.

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Introduction

Techstep business case News of the day

  • Agreement to acquire Mytos AS – a software as

a service (SaaS) company with growth potential

  • Agreement in principle to acquire Apro Tele
  • g Data AS – a telecom mobility hardware

specialist with a strong market position in the public sector

  • Fully underwritten private placement of NOK

100 million, priced at NOK 5.70/share – to support the acquisitions and further growth

Structurally attractive enterprise mobility market with strong growth and demand Ability to execute on strategy, financially strong long term investors Fragmented market with ample opportunities for consolidation Capabilities and customer base make T echstep the preferred provider of the digital workplace

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Techstep is a B2B solutions and services provider offering mobile hardware & subscriptions and solutions

  • B2B solution and services provider
  • Hardware & subscriptions and solutions
  • Telenor’s largest distribution partner (60% of total Telenor

volume)

  • Presence in Norway and Sweden
  • Customer base of ~3,600 companies with ~220,000 end users2)
  • Revenues of ~MNOK 612 in 20162)
  • Significantly strengthens offering through acquisition of:
  • Mytos AS
  • Apro Tele Data AS (agreement in principle)

About Techstep Simplified (future) company structure

Teki Solutions AS

TECHSTEP

Teki Nordialog

Hardware organization3)

SmartWorks

Solutions organization

~100 FTEs

Accounts for ~60% of Nordialog distribution volume in Norway

Note: 1) Currently 78.16%, remaining shares to reach 100% secured through Teki transaction. 2) Techstep as is. 3) Techstep also has an 8.25% stake in Kjedehuset (Hardware partnership)

Hardware and subscriptions Solutions

Mytos AS

100%1) 100% 100%

Apro ~30 FTEs ~20 FTEs ~10 FTEs

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Techstep has a strong market position with 3,600 customers with around 220,000 end users – both large enterprises and SMBs

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Techstep strengthens its position through acquisitions and MNOK 100 fully underwritten equity issue

Transactions Pro forma share count

As per 31 Dec 2016, there will be a provision of MNOK 9.2 (maximum exposure) related to tax claim in Netconnect AS from 2013 and 2014. The claim is partly guaranteed for by Teki Gruppen.

  • Agreement to acquire Mytos AS for an aggregated purchase

price of MNOK 120. MNOK 50 to be settled in cash, MNOK 70 to be settled in shares.

  • Agreement in principle to acquire Apro Tele og Data AS for

an aggregate purchase price of MNOK 15.5 (plus an earnout). MNOK 7.5 to be settled in cash and seller credit, and MNOK 8 in shares.

  • In connection with these transactions and to finance further

acquisitions, the company intends to complete a private placement of MNOK 100 at NOK 5.70 per share, fully underwritten by Datum AS, Middelborg Invest AS, Cipriano AS and other institutional and private investors

  • Following the transactions as mentioned above, Techstep

expects to issue a prospectus by late March/April

  • The company will also acquire the remaining 21.84% of Teki

Solutions AS, as well as the remaining 50% share of Nordialog Asker AS

Post transaction 140.5 Contemplated NOK 100m equity issue 17.5 Apro share payment 1.3 Mytos share payment 11.7 Settlement of minorities 7.5 Current 102.5

Net cash 31 December 2016 (MNOK)

Apro cash payment 7 Pro forma net cash 60 Contemplated NOK 100m equity issue 100 Mytos cash payment 50 Current debt 65 Current cash 82

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Note: *) Authentication, authorization and accounting

Design & integration

  • Solution design
  • Advisory services

Implementation

  • Project management
  • Communication
  • Training
  • Effectiveness tracking

Operations & support

  • Operation
  • Device & app mgmt.
  • Support
  • Customer center

Established hardware and subscriptions business provide the basis for a growing Solutions business

Hardware and subscriptions Solutions

Revenue (MNOK) Revenue (MNOK)

FY 2016 (preliminary) 538 2015 586 2014 532 2013 436 Nordialog Asker Commission & bonus Hardware Solutions Nordialog Asker FY 2016 (preliminary) 96 70 5 22 Mytos 2015 48 2014 37 2013 20

Offering Offering

Hardware

  • Mobile phones
  • Tablets
  • Related hardware

Subscriptions

  • Mobile subscriptions

Solutions

  • Security & mobility |applications
  • AAA*
  • Call center solutions
  • Video communication
  • Office 365 and hosted Lync
  • Servers & networks

Solid bars: Techstep ASA 2016 preliminary figures Dashed bars: Preliminary 2016 figures for acquired entities Solid bars: Techstep ASA 2016 preliminary figures Dashed bars: Preliminary revenue estimates acquired entities

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Hardware provides the entry point for selling high margin solutions

Hardware and subscriptions Solutions and services

Hardware Commision & bonus Mobility solutions Other solutions (ICT) Mytos MaaS / HaaS

$

Revenues source Share of sales (2016) Description Benefits to customer

~85% ~15%

Sales and leasing of mobile phones, tablets and related hardware Software that enables employees to work remotely and on other devices than fixed computers Enterprise software related to e.g. operations and support, IT, cost control and security Full range of telecom expense management modules (e.g. cost control, use policy, tax reports, internal cost allocation, asset mgmt) Packaging of both hardware and services into one unified product with monthly payment Bonuses from vendors for selling selected products, provisions from Telenor from selling mobile subs Best-in-class logistical distribution of hardware, providing customers with modern devices when they need them Providing employees with flexibility about how they work, when they work and where they work Pooling a variety of business solutions from

  • ne provider

Full range of TEM modules (e.g. cost control, use policy, tax reports, internal cost allocation, asset mgmt) Monthly payment, OPEX instead of CAPEX. Flexibility in up and downscaling

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Acquisition of Mytos adds to the house of products and a solid foundation for recurring revenue

Business introduction Key financials (MNOK) Flow of payments

2015

  • 16%

7

  • 59%

~22 1 41% +52% 2013 18% 2014 2011 +30% ~44%* 2016E 28% 2012 3 12 17 EBITDA Revenues

Value chain Mytos T elenor

Nordialog (Techstep)

Customer

TEM modules

Expense manage- ment User policy Tax reports Internal cost allocation Asset mgmt

Note: *) Adjusted for 2016 company restructuring

Big Data One click upsale Current T

  • gether with T

echstep MaaS Framework

  • Mytos offers a full range of TEM modules, all with proprietary

(unique) software and highly user friendly implementation and

  • peration
  • Monthly license fee per user builds recurring revenue.

Revenue split with Telenor and Kjedehuset dealerships

  • Service and support fees, and start up fee for establishing

solution for new customers

  • Active end user base of ~122 000 and 600 customers per

year end 2016

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Apro transaction provides additional foothold in the public sector and increased mobility capabilities

Business introduction Key financials (MNOK)

2016 E ~71 ~6% 2015 75 5% 2014 60 4% EBITDA% Revenue Mobile communication ~90% Other ~10%

Product and customer mix

Other 23% Oslo Kommune 26% BTV Innkjøp ~26% NSB ~26%

Products Customers

  • Company established in 1973. Delivers communication

solutions with focus on mobile communications

  • Hardware
  • Sales of Telenor subscription/data (with Office 365)
  • Consulting services for larges clients
  • Customer support / maintenance and repair “in-house”
  • Franchiser within the Telering brand (Telia & Telenor as
  • perators)
  • Telering is one of Telenor and Telia’s largest distribution

channel

  • ~400 people employed by the Telering brand. Telering is

present all around Norway through ~115 centers/shops

  • HQ in Sandefjord, ~20 employees
  • Geographical focus in Buskerud, Telemark and Vestfold, and

with 3 public customers representing more than ¾ of the revenue

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Run rate ambitions out of 2017

EBITDA (MNOK)

100 80 60 40 20 Run rate out of 2017* Combined 2016* 37 4 9 24 612 609 97 71 200 400 600 800 1 000 Run rate out of 2017 Segment 705 Company 705 22 Margin drivers

  • Sales growth predominantly expected from solutions segment, which has

considerable margins compared to HW HW Solutions Techstep Mytos Apro Techstep Mytos Apro Combined 2016*

Revenues (MNOK)

Note (*): Including Nordialog Asker on 100% basis. EBITDA adjusted for one-offs and annualized effect of restructuring initiatives.

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Users bring their digital personal lives to work

...and expect their workplace to give the same flexibility and ease of use and allow them to do their work anywhere

  • --This is the era of digitization of the business

Mobility is a faster, less risky way to digitization of the business

Source: IDC

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Although majority of workforce is mobile in nature, mobility solutions mostly present in ‘stationary’ jobs

Source: Statistics Norway (SSB); Employed persons 15-74 years by sector and industrial division (2015)

80%

“More than 80% of the Norwegian workforce requires some mobility or higher”

= high mobility = some mobility = little mobility

419,000 491,000 1,678,000

“People do not put their phone down then go find a desktop to do something. They use their phone.”

–Paul Cousineau, director of mobile shopping at Amazon.com

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Consumers accustomed to advanced mobile solutions; businesses to follow suit

Consumer solutions Business solutions

‘Work is the place I go to use old technology’

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Techstep will bring to market all the offerings neccessary to make work life mobile, realizing digitization in companies

Integrated enterprise mobility solutions.

Mobility Service & Support Hardware Subscriptions & connectivity Software IT & Security

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Example of solution delivered to SAS: Digitization of the value chain

Background Solution delivered by Techstep

Physical instruction manuals of ~42-60 kg Improve customer experience / service awareness related to the Eurobonus program Plan and improve efficiency before, during and after a flight Perform calculations on iPad (e.g. fuel

  • ptimization just before take off)

A complete Mobile Workspace Concept iPads for cabin and pilots leased over two years 3rd party apps (incl. MobileFirst WeFly) Platinum SLA with 4 hour response time Nordialog / Smartworks service SAS’ applications and Volume Purchase Program

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Strong growth expected for enterprise mobility services

Norway Sweden

220 276 361 462 584 736 558 602 687 782 887 2018E 1,471 1,000 2019E 1,736 +19% +13% 2017E 1,244 2015 879 2014 778 1,047 2016 Consulting & Integration mobility services Managed mobility services

NOKm

504 664 847 391 990 2018E 2,683 1,065 1,619 2017E 2,280 1,433 2016 1,927 1,263 2015 1,605 1,101 2014 1,381 +18% 1,330 1,807 +16% 3,136 2019E

NOKm

12.4% 27.3 %

CAGR15-19

12.8% 27.7 %

CAGR15-19

Source: Technavio (2015) Global Enterprise Mobility Services Market 2014-2019 ; Gartner (2016) Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2013-2019 Estimations: (Global EMS market size) x (Norwegian share of global market based on Gartner (2016) NOK/USD = 7.5. Managed mobility services includes: MDM services, hosted unified communications. Consulting and integration mobility services: Services related to adopting a new infrastructure or integrating with the existing model, to improve mobility in the workforce such as email and voicemail

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Hardware as a service (HaaS) Platform as a service (PaaS) Solution as a service (SaaS) Support and

  • peration (mobile

managed service) Project Management and Integration

Industry specific apps

Generic applications, e.g. invoice control, asset management, file sharing, MBN, cloud storage (e.g. Dropbox) Business applications, e.g.: SAP Hana, Outlook, O365, Facebook @Workplace, Expense management CYOD Leasing Aftermarket/buyback Procurement, asset management and logistics EMM, SSO, security, provisioning, proximity/IoT, app mgmt.

Retail Health care Logistics & Transport Banking Public/ School Manufacturing

Examples of industries

Techstep offer a combination of mobile and IT hardware and solutions to create the next generation communication provider

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Techstep’s offering is well positioned in the market

T echstep has the capabilities needed to capture a unique market position in the Nordics

HW is a part HW is not a part Generic IT knowledge Specialist

Ability to deliver hardware and support in service offering Depth of managed mobility service capabilities Consultancies IT infrastructure Operators Software resellers Hardware providers

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All focused units shall serve as channels for the product house

Future organization and synergies

■ Customer portal, self service on operational ■ Large accounts and larger SMB ■ House of products: Concepts for industry verticals

SMB specialist Large Accounts

■ Self service, full automation ■ SMB ■ House of products: Out of the box services

House of Products

M&A Opportunities

Techstep Finance

Sweden Norway Technical staff Finance Support Human Resources CRM IT Marketing

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Strategic priorities

 ()  () () 

Small and medium businesses Large accounts Ultra large accounts Norway Sweden

Maintenance and support Hardware and distribution Finance/Leasing/MaaS

Segments Offering Countries

Solutions for large accounts House of Products

 

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Summary

Structurally attractive enterprise mobility market with strong growth and demand Ability to execute on strategy, financially strong long term investors Fragmented market with ample opportunities for consolidation Capabilities and customer base make T echstep the preferred provider of the digital workplace

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Appendix

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Management team and board of directors

Management Board of directors

Gaute Engbakk – CEO

  • Mr. Engbakk is an experienced change leader from working many

years in Accenture with large international companies. He joined Techstep in November 2016. In Accenture, he worked in a variety

  • f markets and industries and built up a division within analytics

and information management. Mr. Engbakk led Creuna AS, a significant Nordic player within digital solutions, branding and advertising during 2010-2014, and during 2014-2016 he was the CEO of Gambit Hill & Knowlton Strategies.

Marius Drefvelin – CFO

  • Mr. Drefvelin joined Techstep in January 2017 and was previously

the Group CFO of Creuna, a leading Nordic technology and communications consultancy firm with 350 employees. He has been with Creuna since 2012. During 2010-2012, he was a financial advisor at Deloitte, working with mergers, acquisitions and IPOs. Before this, he worked at Jebsen Asset Management from 2007-

  • 2009. During 2001-2007, Mr. Drefvelin worked at KPMG, also

working with transactions.

Einar J. Greve – Chairman of the board

  • Mr. Greve has served on the Board in Techstep since November 2016. Mr.

Greve works as a strategic advisor at Cipriano AS. Mr. Greve has previously worked as partner of Wikborg Rein & Co and as Partner of Arctic Securities

  • ASA. Mr. Greve has held and holds various positions in listed and unlisted

companies, including but not limited to Weifa ASA (chairman), Solon Eiendom ASA (Vice chairman), Vistin Pharma ASA (board member), Elliptic Labs AS (board member), Future Group (board member) and Hæhre and Isachsen Holding AS (board member). He holds a degree in law (cand.jur) from the University of Oslo

Kristian Lundkvist – Board member

  • Mr. Lundkvist has served on the Board of Techstep since November 2016. Mr.

Lundkvist is the CEO and founder of Middelborg AS, a corporation with roots from the retail business in the telecom industry, which has grown into a diversified holding company including investments in real estate, equities, and

  • shipping. Middelborg AS is a long term industrial owner who actively

participates in the value creation of the companies in the portfolio, especially business development, optimization of capital structures and networking. His directorships are including but not limited to NRC Group ASA (board member), Middelborg AS (chairman), Folksom (board member) and Kjedehuset AS (board member)

Mads Vårdal – Chief Innovation Officer

  • Mr. Vårdal has been with companies within the Techstep sphere for

more than eleven years. He came from a central position in Teki Solutions AS and has been a leading figure for the development of

  • Smartworks. He has previously had a leading position in Nordialog

Skøyen AS and CEO in Buskerud Tele AS

Ingrid I. Leisner Board member Stein Erik Moe Board member Camilla Magnus Board member Kristin Hellebust Board member Svein Ove Brekke Board member

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Shareholder overview Techstep

Investor % share1) 1 ZONO HOLDING AS 61.19% 2 SKARESTRAND INVEST AS 7.33% 3 JYSK INVEST AS 7.33% 4 TINDE INDUSTRIER AS 7.33% 5 DOVRAN INVEST AS 7.33% 6 INTELCO CONCEPT AS 1.46% 7 VINTERSTUA AS 1.08% 8 MP PENSJON PK 0.48% 9 PETROLEUM INVEST 0.47% 10 STRØMLAND SIVERT NØTSUND 0.39% 11 SO INVEST AS 0.31% 12 FRES AS 0.26% 13 TVENGE TORSTEIN INGVALD 0.24% 14 SJAP AS 0.21% 15 NORDNET LIVSFORSIKRING AS 0.19% OTHERS 0.15% OUTSTANDING SHARES 102,473,663 TREASURY SHARES 1,914 TOTAL SHARES 102,475,577

Source: Oslo Børs as of 31 January 2017, Techstep Note: 1) Excluding consideration shares to Teki, currently estimated to 7.5m shares

Datum AS, Middelborg, Invest AS, Cipriano AS, Antares Group AS and additional 13 investors