Formpipe Software : Interim report Q2

Q2 2023.

Second quarter 2023 results

Formpipe Software

	2023	2022	Δ
Net sales of SEK	137 m	(120 m)	15%
Recurring revenues of SEK	94m	(78 m)	21%
which corresponds to % of net sales	69 %	(66 %)
EBITDA SEK	29 m	(15 m)	98%
EBITDA margin	21 %	(12 %)
EBIT	13 m	(0 m)	n/a
EBIT margin	9 %	(0 %)
Net profit SEK	5 m	(-1 m)	n/a
Net profit margin	3 %	(-1 %)
EPS before dilution SEK	0,09	(-0.01)	n/a
Cash flow from operating activities SEK	1 m	(-5 m)	n/a
ACV SEK	11 m	(10 m)	8%
ARR SEK	406 m	(333 m)	22%

	2023	2022	Δ
Net sales of SEK	265 m	(240 m)	11%
Recurring revenues of SEK	183 m	(155 m)	18%
which corresponds to % of net sales	69 %	(65 %)
EBITDA SEK	52 m	(32 m)	65%
EBITDA margin	20 %	(13 %)
EBIT	20 m	(4 m)	411%
EBIT margin	8 %	(2 %)
Net profit SEK	11 m	(0 m)	n/a
Net profit margin	4 %	(0 %)
EPS before dilution SEK	0,17	(0.01)	n/a
Cash flow from operating activities SEK	16 m	(8 m)	114%
ACV SEK	22 m	(19 m)	14%
ARR SEK	406 m	(333 m)	22%

ACV	SEK 11 m (10 m)
ARR	SEK 406 m (333 m)

"Continued"Growth inpositiveboth profitabilityandtrendARR" "

Christian Sundin,

CEO Formpipe

	Apr-Jun			Jan-Jun			Full year
(SEK Million)	2023	2022	2023	2022		R12	2022
Net sales	137,5	119,6	265,1	239,9	510,3	485,1
whereof recurring revenue	94,5	78,4	182,7	154,9	348,1	320,3
EBITDA	29,1	14,7	52,4	31,7	93,1	72,4
Margin, %	21,2%	12,3%	19,8%	13,2%	18,2%	14,9%
EBIT	12,9	0,4	20,0	3,9	31,8	15,7
Margin, %	9,4%	0,3%	7,5%	1,6%	6,2%	3,2%

This is a translation of the original Swedish version. In the event of any discrepancies between

the two versions, the original Swedish version shall take precedence. The information was submitted for publication, at 08.15 CET, 14 July 2023.

Comment from the Group´s CEO

Continued strengthened profitability and growth in ARR.

As we previously communicated, we are past the phase of major cost increases in our growth plan. All of our business areas execute in line with our plans and contribute to the positive profitability development. The profit improvement is mainly achieved through continued strong growth in recurring revenue of 21%, while our costs only increased by 4%.

For the quarter, ACV amounts to SEK 11 million. Thus continue to generate strong growth in ARR. Compared to the previous year, ARR has increased by 22%, corresponding to SEK 73 million, from SEK 333 million to SEK 406 million.

Within Public in both Denmark and Sweden, we made considerable new sales in the quarter. For Sweden, however, we terminated an unprofitable agreement, of SEK 3 million, which of course lowers the ACV. In Denmark, we have now successfully assumed full responsibility for the commitments included in the new agreement with Landbrugsstyrelsen.

Within the Private business area, we and our partners are experiencing a market situation with somewhat longer lead times in sales. Microsoft's ERP offering consists of two different systems, Dynamics 365 Finance and Operations and Dynamics 365 Business Central, respectively. While we have historically won more business with Dynamics 365 Finance and Operations, we are now seeing increased interest in Dynamics 365 Business Central. Also here, Lasernet is a good complement, and we work together with our partners to expand their offer. This affects our ACV within Lasernet in the short term, but will lead to an overall larger addressable market and reach.

We are pleased that our investement in the important US market is starting to have an effect. Our partner

network is growing and we have won a handful of new Dynamics customers in the US this quarter.

In summary, we made a good quarter, completely in line with our plans and we continue towards our long- term financial goals. The strong growth in ARR combined with good cost control provides continuous profitability improvement.

I would like to thank all employees, customers and partners and wish you all a really nice summer. As this is my last quarterly report, I also want to take the opportunity to thank you for my 16 years with Formpipe. It is with pride that I hand over a company that is on the right track in all aspects. As a shareholder, I will continue to follow the company's success going forward and feel comfort with now handing over the helm to Magnus. Thanks to all friends for fantastic years!

Christian Sundin,

CEO Formpipe

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Financial information

April - June 2023

Net sales for the period increased by 15 % compared to previous year and totalled to SEK 137.5 million (119.6 million). Software revenue increased by 27 % from the previous year and totalled to SEK 102.4 million (80.8 million).

Total recurring revenue for the period increased by

21 % from the previous year and totalled to SEK 94.5 million (78.4 million), which is equivalent to 69 % of net sales (66 %). Exchange rate effects have affected net sales favourably by SEK 6.2 million in comparison with the previous year.

Revenue split, Jan - Jun 2023

Recurring revenue, rolling 12 m, mSEK

360
350
340
330
320
310
300
290
280
270	2022 Q3	2022 Q4	2023 Q1	2023 Q2
2022 Q2

Annual recurring revenue (ARR), mSEK

License 4% (3%)

SaaS 23% (18%)

Support & Maintenance 46% (47%)

Delivery 27% (33%)

January - June 2023

Net sales for the period increased by 11 % compared to previous year and totalled to SEK 265.1 million (239.9 million). Software revenue increased by 20 % from the previous year and totalled to SEK 193.5 million (161.0 million).

Total recurring revenue for the period increased by 18 % from the previous year and totalled to SEK

182.7 million (154.9 million), which is equivalent to 69 % of net sales (65 %). Exchange rate effects have affected net sales favourably by SEK 11.9 million in comparison with the previous year.

April - June 2023

The operating costs for the period totalled to SEK

124.5 million (119.2 million). Personnel costs totalled to SEK 75.3 million (71.5 million). Selling expenses totalled to SEK 16.3 million (15.8 million). Other costs totalled to SEK 30.5 million (30.7 million). Exchange rate effects have increased expenses by SEK 5.9 million in comparison with the previous year.

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Financial information

January - July 2023

The operating costs for the period totalled to SEK

245.1 million (236.0 million). Personnel costs totalled to SEK 148.7 million (143.7 million). Selling expenses totalled to SEK 32.3 million (31.8 million). Other costs totalled to SEK 58.1 million (57.7 million). Exchange rate effects have increased expenses by SEK 11.3 million in comparison with the previous year.

Recurring revenues in relation to fixed operating costs, rolling 12 m, mSEK

450				90%
400
350				85%
300
250				80%
200
150
100				75%
50
0	2022 Q3	2022 Q4	2023 Q1	70%
2022 Q2	2023 Q2
Fixed operating costs, R12
Recurring revenue, R12
Recurring revenue / fixed operating costs, R12 %

April - June 2023

Operating profit before depreciation and amortization and items affecting comparability (EBITDA) totalled to SEK 29.1 million (14.7 million) with an EBITDA margin of 21.2 % (12.3 %). Operating profit (EBIT) totalled to SEK 12.9 million (0.4 million) with an operating margin of 9.4 % (0.3 %). Net profit totalled to SEK 4.6 million (-0.8 million). Exchange rate effects have affected EBIT favourably by SEK 0.3 million in comparison with the previous year.

January - June 2023

Operating profit before depreciation and amortization and items affecting comparability (EBITDA) totalled to SEK 52.4 million (31.7 million) with an EBITDA margin of 19.8 % (13.2 %). Operating profit (EBIT) totalled to SEK 20.0 million (3.9 million) with an operating margin of 7.5 % (1.6 %). Net profit totalled

to SEK 9.5 million (0.3 million). Exchange rate effects have affected EBIT favourably by SEK 0.7 million in comparison with the previous year.

Sales and EBITDA margin, mSEK

160				10%
140				9%
120				8%
			7%
100				6%
80				5%
60				4%
40				3%
			2%
20				1%
0	2022 Q3	2022 Q4	2023 Q1	0%
2022 Q2	2023 Q2
Support & Maintenance	SaaS
License			Delivery
EBIT margin

Cash equivalents

Cash and cash equivalents at the end of the period amounted to SEK 0.0 million (0.0 million). The company's total bank overdraft facility amounts to SEK 50.0 million. At the end of the period it was utilized with SEK 5.0 million (19.5 million). The total accessible funds therefore amounts to SEK 45.0 million (30.5 million).

The company had interest-bearing debt at the end of the period totalling to SEK 40.8 million (68.4 million), whereof SEK 8.2 million (11.4 million) refers to lease debts according to IFRS 16.

The company's net debt position thereby totalled to SEK 40.8 million (68.4 million), which corresponds to a net debt position of SEK 32.5 million (57.0 million) excluding IFRS 16-related debt.

Deferred tax asset

By the end of the period the company's deferred tax assets attributable to accumulated losses amounted to SEK 3.9 million (SEK 7.5 million).

Equity

Equity at the end of the period amounted to SEK 479.1 million (420.2 million), which was equivalent to SEK 8.84 (7.75) per outstanding share at the end of

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Financial information

the period. Changes in the value of the Swedish krona compared to other currencies have changed the value of the group's net assets in foreign currencies by SEK 27.6 million (13.3 million) from the end of the year.

Equity ratio

The equity ratio at the end of the period was 59 % (57 %).

Cash flow from operating activities

Cash flow from operating activities for the period January - June totalled to SEK 16.4 million (7.7 million).

Investments and acquisitions

Total investments for the period January - June amounted to SEK 27.0 million (60.3 million).

Investments in intangible assets totalled to SEK 27.0 million (26.1 million) and refer to capitalized product development costs.

• Investments in tangible and financial assets totalled to SEK 1.3 million (1.3 million).
• Acquisitions of subsidiaries amounted to SEK 0.0 million (32.9 million).

Financing

During the period January - June the company amortized SEK 5.0 million (2.5 million).

The existing bank overdraft facility totalling to SEK

1. million was utilized at the end of the period with

1. million (19.5 million). Leasing related liabilities amounted to SEK 8.2 million (11.4 million) at the end of the period. The company's interest-bearing debt at the end of the period was thereby SEK 40.8 million (68.4 million).

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