ABAX GROUP AS 2020 - Q2 Report FROM THE DESK OF THE CEO Q2 2020 - PowerPoint PPT Presentation

ABAX GROUP AS 2020 - Q2 Report

FROM THE DESK OF THE CEO ▪ Q2 2020 will likely be an historic quarter in the world economy. The quarter has seen a ▪ Q2 2020 will likely be an historic quarter in the world economy. The quarter massive shutdown across many geographies, and hit our part of the world with what looks has seen a massive shutdown across many geographies, and hit our part of like a GDP reduction of between 6-10% over 2019. In light of these events, we are happy the world with what looks like a GDP reduction of between 6-10% over 2019. In to announce our strong financial performance, where we have executed well, managed light of these events, we are happy to announce our strong financial cost, and maintained a growth momentum in an uncertain world. June alone gave us a 12% increase in new subscriptions sold, and we have continued to see positive trends into performance, where we have executed well, managed cost, and maintained a Q3. Our engineering team has been workin uninterrupted with the release of our next growth momentum in an uncertain world. June alone gave us a 22% increase generation Telematics IOT platform, which is on schedule for a Q3 release. in new subscriptions sold YoY, and we have continued to see positive trends ▪ into Q3. Our engineering team has been working uninterrupted with the ▪ We have also, as previously presented, been working hard at our acquisition target list, release of our next generation Telematics IOT platform, which is on schedule and through Q2 we initated a final negotiation to sign our first acquisition in 2020 in early for a Q3 release. August. The financials of this transaction will be part of our Q3 reported results. ▪ ▪ We have also, as previously presented, been working hard at our acquisition ▪ Overall, our performance, the market improvements, and the growth initatives we have are target list, and through Q2 we initated a final negotiation to sign our first showing positive results, and we expect a continued strong H2 performance. acquisition in 2020 in early August. The financials of this transaction will be part of our Q3 reported results. ▪ Overall, our performance, the market improvements, and the growth initatives we have are showing positive results, and we expect a continued strong H2 performance. 2

Some of many organisational achievements in Q2 2020 ABAX + WeForest launched Successful certification of ISO Standards Won Fleet Derby 2020 in Poland with ABAX Triplog ▪ ISO 9001 – General Quality Management ▪ ISO 27001 – Information Security ▪ ISO 14001 – Environmental ▪ In the Fleet Derby 2020 fleet plebiscite, specialists and managers from the fleet industry recognized ABAX Triplog as the best product, fleet service in the telematics category. ▪ ABAX Triplog received the award for the best product, fleet service in the telematics category ▪ In this year’s poll, a total of 170,000 votes were cast 3

Financial Results Q2 2020 Financial Highlights Adj. EBITDA Adj. Operating Net Sales Adj. EBITDA Cash Flow Gross Margin adj Margin Percentage NOK millions NOK millions NOK millions Percentage 145.7 71.2 26.9 92% 49% ▪ Net sales increased by 1% from Q1 despite the impact of Covid 19 ▪ Adj. EBITDA of 71.2 MNOK. Holiday pay increased EBITDA in Q2 with 17 MNOK. Normalized EBITDA would be 54.2 MNOK, 1 MNOK above Q1 ▪ Cash Flow from operations adjusted at 26.9 MNOK slightly below last quarter ▪ Gross Margin at 92%, in line with Q1 ▪ Adjusted EBITDA margin of 49%. Normalized for holiday pay in Q2, EBITDA margin would be 37%, in line with last quarter ▪ New sales 22% higher in June 2020 compared to same month last year, despite the effect of COVID-19. ▪ Strong performance in the Netherlands as a result of the successful strategic agreement with Hitachi ▪ Number of subscriptions in our portfolio increased by nearly 15k (+6%) from last year 4

Income Statement Pro-forma financials under NGAAP and SaaS revenue recognition Commentary 2019A 1 2020 – Q1 2020 – Q2 NOKm 2019 IP Delta ▪ Sales increased by 1 MNOK from 2020-Q1 Sales 558 - 558 145 146 towards 2020-Q2 despite COVID 19 COGS (31) - (31) (11) (11) impacting new sales Gross profit 528 - 528 134 134 ▪ Payroll cost in Q2 include seasonality Personnel cost sales (89) 2 (92) (27) (20) effects from holiday pay in June resulting in lower payroll costs and hence increased Other sales fixed cost (21) - (21) (6) (4) EBITDA compared to the other quarters of Personnel cost marketing (15) - (15) (2) (1) the year Other marketing fixed cost (12) - (12) (3) (2) ▪ Adj. PF EBITDA Q2 2020 vs 2019: +10% Other administrative personnel cost (107) - (107) (25) (16) ▪ E/O items consists of legal costs treated as Other administrative fixed cost (80) (2) (78) (19) (20) exceptionals, as they do not relate to the Total operating expenses (323) - (323) (81) (63) general operation of ABAX Group AS on a day to day basis Adjusted pro-forma EBITDA 204 - 204 53 71 E/O items (19) (11) (30) (8) (7) ▪ See page 10-11 for further details around E/O items Depreciation (4) - (4) (1) (1) Organisation transition expenses (28) 28 - - - ▪ Organisational transition expenses of 28 MNOK reclassified to a reduction of equity in EBITA 154 17 171 45 64 audit 2019 Amortisation (249) - (249) (55) (59) ▪ Tax calculations finalised in audit 2019 EBIT (96) 17 (78) (11) 5 Financial net (40) - (40) 21 (41) ▪ In 2020-Q1 financial net was positive due to large fluctuations in FX Income before tax (135) 17 (118) 11 (36) Tax - 31 31 - - Net Income (135) (49) (86) 11 (36) 1) 2019 Prof-Forma Financial statement post finalised audit under NGAAP and SaaS revenue recognition 5

Balance Sheet Pro-forma financials under NGAAP and SaaS revenue recognition Commentary 2019A 1 2020 – Q1 2020 – Q2 NOKm 2019 IP Delta ▪ The 2020-Q2 balance sheet is mainly Intangible assets 1 918 - 1 918 1 906 1 870 affected by the Nordic bond transactions Tangible assets 134 - 134 131 119 which increased cash from 114 MNOK to Financial assets 1 1 2 1 2 476 MNOK and increased long term liabilities from 649 MNOK to 1017 MNOK. Total fixed assets 2 053 1 2 054 2 039 1 990 ▪ Equity Ratio of 37% 2Q 2020 compared to Inventory 9 - 9 8 9 41% 1Q 2020. Accounts receivables 61 (1) 60 65 56 ▪ Leverage ratio of Q2-LTM: 2.4x Other receivables 90 14 104 83 88 − Prepaid expenses and accrued income 217 (115) 102 75 61 Debt: NOK 1 000m (Interest bearing debt) − Cash 47 - 47 114 476 Cash: NOK 476m − Total current assets 423 (101) 322 345 690 2020-Q2 LTM EBITDA: NOK 223m Total assets 2 476 (101) 2 375 2 384 2 680 ▪ In conjunction of the audit process, ABAX recategorize “accrued not invoiced” and Total equity 978 9 987 987 981 “invoiced not accrued” amounts. As both items are built up during the year, both items are then reduced and hence explains the Deferred tax liabilities 317 (32) 284 287 286 difference between the IP and actual Long term liabilities 584 8 591 649 1 017 financials. The recategorization is only Total non-current liabilities 900 (24) 876 936 1 303 conducted once a year in conjunction with the audit process Advance payments - - - - - ▪ The change in “Deferred tax liabilities” is Accounts payable 39 - 39 27 37 derived to the tax calculation, finalised in the Tax payable (5) 6 1 (2) (4) audit 2019 Other current liabilities 379 (91) 288 283 267 Deferred income and accrued expenses 184 - 184 154 96 Total current liabilities 597 (85) 597 461 397 Total equity and liabilities 2 476 (101) 2 375 2 384 2 680 1) 2019 Prof-Forma Financial statement post finalised audit under NGAAP and SaaS revenue recognition 6