Q4 2017 Gaute Engbakk, CEO “Making work mobile” Marius Drefvelin, CFO T E C H S T E P 1
Highlights Highlights Q4-2017 • Organic growth in end-users of 14% in 2017 to ~620,000 Transformation to solution selling, new products and services and improve • efficiency in delivery has been focus in 2017 Operations • Won double digit material, public tenders with new customers (reported four) • Positive cash flow Q4-2017 NOK 7.9 million • Revenue growth of 73% to NOK 281 million (NOK 162 million) • EBITDA adjusted NOK 12.8 million (NOK 2.4 million) Financials – Revenue and EBITDA growth driven by acquisitions and solutions growth Organic growth in solutions of 54% vs. target of 27% in full year 2017 • – Relative share of solutions increased from 14% in 2016 to 22% in full year 2017 • New technical solutions for management of devices expected to have an impact on managed services revenue Outlook Market forces driving the need for mobility and solutions • Expect improved margins as solutions revenues increase further • T E C H S T E P 2
Work is changing «Mobile first» - 60% of all internet traffic comes from mobile devices Enterprises want and employees expect a digital workplace Capability of mobile technology now surpass desktop Barriers around security, device management, user experience and regulatory T E C H S T E P 3
Digitization deep dive Digitization is happening everywhere both in public and private sector What we see happening Digitization in the news Strong Employees, owners and consumers expect organizations to adopt expectations digital tools The consequence of this is that digitization is an important part of the Management agenda for top management focus Focus on improving work processes This puts pressure on organizations especially IT-departments to change much faster than before, and since everything is digitizing, the Pressure on scope of IT’s activities is increasing but budgets aren’t necessarily doing the same because of focus on costs IT -department Lack of competency in the new technologies Therefore new IT-systems and IT-operating models are required Rise of new Enterprises are continuously adapting cloud services; in 2017 48% of enterprises were using cloud services compared with 29% in 2013 1 solutions New solutions (UEM 2 ) is the new trend to manage several types of devices and operating systems Source: SSB T E C H S T E P Note 1) Enterprises non-financial and above 10 employees. 2) Unified Endpoint Management 4
Mobile workforce Although majority of workforce is mobile in nature, mobility solutions currently mostly present in ‘stationary’ jobs = high mobility = some mobility = little mobility 80% “More than 80% of the Norwegian workforce requires some mobility or higher” 1,678,000 491,000 419,000 Source: Statistics Norway (SSB); Employed persons 15-74 years by sector and industrial division (2015) T E C H S T E P 5
Market potential Significant market opening up in the Nordics – driven by digitization agenda 2016: 2016: Addressable market 2020 1 : Addressable market 2020 1 : ~2m users ~ 5m users In addition: Highly attractive Nordic multinationals (win at home, follow abroad) Note: 1) CAGR 10% T E C H S T E P 6
T echstep positioning Techstep is built to serve the expanding market for digital workplace and mobile solutions in the Nordics A mobile native company… launching Mobile-as-a- Service… to a large-scale customer base 6,000+ Nordic customers 600,000+ end-users Acquired 8 and established 1 company A mobile native solutions provider Built Mobile-as-a-Service solution consisting since Q3’16 | Built high quality tailored for expanding Nordic market of hardware and value adding software and customer and large scale end-user base market for digital workplace and mobile services for private and public enterprises – | Listed on Oslo stock exchange solutions financing/subscription (OPEX) based T E C H S T E P 7
Customer value proposition – “one stop shop” Mobile as a Service Techstep delivers a complete stack of solutions that provides an improved total-cost-of-ownership (TCO) and lower risk to the customer Traditional Mobile as a Service Buy hardware, software, connectivity, platform, support separate Techstep provides complete MaaS solutions – one stop shop Illustration Service & Mobility Support Connectivity Applications Asset mgmt. Hardware and Hardware connectivity Mobility MaaS IT & Security Support Operations Video Software and applications Technological enablers IoT Big data Dere gir oss en IT and Sensors problemfri mobil hverdag Procurement - Procurement at DNB × Higher total cost of ownership Lower total cost of ownership for customers ✓ × Higher operational risk ✓ Single point of contact, reduces operational risk × Mainly competing on price ✓ Inherent focus on quality and functionality rather than price T E C H S T E P 8
Market adoption The proliferation of mobile devices is still relatively immature compared to the PC’s - managing mobile devices professionally is still due Enterprise market adoption of devices Embryonic Growth Mature Aging Market adoption within enterprise AR & VR Smartphones & tablets Laptops Desktops Time The usage of smartphones and tablets is still relatively new in organizations <10 years Lack professional platform to manage devices Old school way of managing PC’s Shadow IT T E C H S T E P 9
Unified Endpoint Management Techstep will be able to deliver management of all devices including Mac and PC at a lower cost, improved quality and better user experience Market size Unified Endpoint Management Market definition Norway & Sweden Unified Endpoint Management NOKm 434.6 Unified Endpoint Management is an approach to securing and controlling desktop computers, laptops, smartphones, tablets and IoT in a from a single console. Can be deployed via the cloud, on premise +43% or hybrid. Unified endpoint management typically relies on the mobile 304.1 device management (MDM) application program interfaces (APIs) in desktop and mobile operating systems 212.8 Managed from a single console 148.9 104.2 2016 2017 2018 2019 2020 UEM T E C H S T E P Source: Markets & Markets: Unified Endpoint Management Market by Deployment Mode (Cloud, On-Premise, Hybrid), Vertical, Region - Global Forecast to 2020 10
Summary market trends To conclude; the digitization and mobility trend is well documented, and the companies with mobile DNA are best suited to ride the wave Digitalization Mobility Combining these trends will accelerate growth in Techstep’s core markets Mobile DNA T echnological and societal thresholds T E C H S T E P 11
Building T echstep T E C H S T E P 12
T echstep organization Techstep has acquired key companies with hardware and solutions business TECH STEP Hardware and subscriptions Financing Mobile device management & managed services Software 100% 100% 50% 1 100% 100% 51% 2 100% 100% TECH STEP FINANCE Oslo Apro Feb 2016 June Apr 2016 March Aug. Feb Telenor Swedish Provider of Enterprise Mobility advisory Swedish Software as a Distributor of distributor of distributor of finance and mobility, IT and in Sweden Enterprise Service. Telecom hardware and hardware and hardware and leasing products communications Mobility expense subscriptions subscriptions subscriptions solutions, service Management management and support (EMM) provider ~80 FTEs ~40 FTEs ~5 FTEs ~30 FTEs ~10 FTEs ~5 FTEs ~10 FTEs ~20 FTEs T E C H S T E P Note: 1) Techstep has an option to acquire the remaining shares in Techstep Finance on certain conditions 13 2) Techstep has an option to acquire the remaining shares in Conneqted on certain conditions
2017 - Building a foundation for growth and taking a leading market position 2017: Company transformation and integration – lead to poor EBITDA performance in 2017, but will have positive effects long term People Processes Products Customers Hiring and training More efficient Scalable product Growth in new and for the transition to product delivery - portfolio and new existing customers solution selling automation products Team and recruitment Established IT transformation Developed standardized Developing existing customers; improvements: Enterprise sales program to lower costs and portfolio and solutions that can enterprise customers lead on in team in Sweden, shared services improve customer quality roll-out globally «mobile first» in B2B, SME will (hub), technical resources and related to ERP, procurement, follow Created new products for administration order processing, distribution verticals, managed services and Developing new customers; and customer service Training of sales force to sell MaaS. Moving towards bundling 4 large contracts reported to solutions. Building culture of hardware and software the stock exchange, double digit revenues number of new customers signed Creating a platform for transitioning to more solution selling, that will drive long-term EBITDA growth T E C H S T E P 14
MaaS Techstep has launched MaaS to customers in both Norway and Sweden T E C H S T E P 15
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