Slide 1: Fourth quarter and full-year 2023 presentation
Fourth quarter and full-year 2023 presentation CEO Per Jørgen Weisethaunet CFO Per Kristian Reppe 15 February 2024
Slide 2: Disclaimer
Disclaimer These materials, prepared by NORBIT ASA (the "Company"), may contain statements about future events and expectations that are forward- looking statements. Any statement in these materials that is not a statement of historical fact including, without limitation, those regarding the Company
Slide 3: Solid progress in both revenues and profitability year-over-year
Solid progress in both revenues and profitability year-over-year Revenues and EBITDA NOK million Fourth quarter 2023 418 396 ▪ 14 per cent revenue growth from the fourth 377 347 quarter of 2022 329 315 270 30% 249 235 28% ▪ Underlying growth in all business segments 27% 25% 190 200 23% 21% 162 19% 1
Slide 4: Solid operational performance in 2023
Solid operational performance in 2023 Revenues and EBITDA NOK million Full year 2023 1 519 ▪ 30 per cent revenue growth from 2022 CAGR +23% 1 167 ▪ Increased profitability driven by higher revenue base, improved gross margins and operational leverage 788 668 ▪ Earnings per share of NOK 3.10, 71 per
Slide 5: Oceans
Slide 6: Oceans – Continues on a growth trajectory
Oceans – Continues on a growth trajectory Revenues and EBITDA NOK million Fourth quarter 2023 177 ▪ Revenues of NOK 177 million, up 39 per cent from Q4-22 152 ▪ 33 per cent increase in sonar sales 131 136 134 ▪ Strong sales in EMEA and Americas 127 44% 117 ▪ EBITDA of NOK 65 million, representing ma
Slide 7: Growth by innovating new products and solutions into new applications
Growth by innovating new products and solutions into new applications Oceans’ revenue mix NOK million Subsea 599 sonars 31 29 29 Security 443 22 181 379 37 20 23 53 Connect 267 122 14 71 48 13 328 Aqua 235 239 192 Environmental monitoring 2020 2021 2022 2023 Sonars (excl. Winghead) Winghead sonar Se
Slide 8: Broadening the product offering in Oceans through complementary acquisition
Broadening the product offering in Oceans through complementary acquisition ▪ Completed the acquisition of the Canadian maritime technology company Ping Digital Signal Processing Inc ▪ Renowned worldwide for producing some of the world’s most advanced interferometric side scan sonars Bytte bilde og
Slide 9: Connectivity
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Slide 10: Connectivity – Continued solid progress
Connectivity – Continued solid progress Revenues and EBITDA NOK million Fourth quarter 2023 172 ▪ Revenues of NOK 116 million in the quarter, representing an increase of 44 per cent from Q4-22. 136 ▪ Revenue growth driven by increased sales of 116 116 enforcement modules for tachographs and satellit
Slide 11: Strong increase in demand across the business verticals in 2023
Strong increase in demand across the business verticals in 2023 Connectivity revenue mix NOK million On-Board 540 Units 13 92 Enforcement modules for 60 tachographs 308 80 Satellite- 11 based tolling 77 48 145 146 Subscription 7 5 37 296 33 and e-toll 53 22 24 34 136 60 52 Other 2020 2021 2022 2023
Slide 12: PIR
Slide 13: Product Innovation & Realization – Underlying revenues on par with Q4-22
Product Innovation & Realization – Underlying revenues on par with Q4-22 Revenues and EBITDA NOK million Fourth quarter 2023 150 ▪ Revenues of NOK 112 million, a decrease of 25 per cent from Q4-22. 112 112 112 ▪ Adjusted for customer reimbursements, revenues 99 102 were on par with that of Q4-22 96
Slide 14: Underlying revenue growth driven by contract manufacturing
Underlying revenue growth driven by contract manufacturing PIR revenue mix NOK million 457 412 107 7 Contract manufacturing 86 291 94 39 225 R&D products 23 71 and services 46 319 256 180 Customer Customer reimbursements for extraordinary 155 reimbursements material costs within contract manufacturi
Slide 15: Group financials
Group financials
Slide 16: Financials – P&L
Financials – P&L Amounts in NOK million Q4 2023 Q4 2022 FY 2023 FY 2022 Fourth quarter of 2023 ▪ Revenues of NOK 396.0 million, up 14 per cent from Q4-22 Revenues 396.0 347.3 1 518.9 1 167.5 o Growth adjusted for customer reimbursement in PIR of 28 per cent Raw materials and change in inventories 15
Slide 17: Increase in profitability driven by Oceans and Connectivity
Increase in profitability driven by Oceans and Connectivity Segment EBITDA development Q4 2023 vs. Q4 2022 NOK million Oceans Connectivity PIR (2.0) 16.3 (6.4) (24.2) 38.7 64.7 23.2 32.1 23.9 13.3 40.6 0.2 (0.1) (10.1) 3.3 EBITDA Revenue Gross Expense EBITDA EBITDA Revenue Gross Expense EBITDA EBITD
Slide 18: Financials – Balance sheet
Financials – Balance sheet Amounts in NOK million 31.12.23 30.09.23 31.12.22 ASSETS Fixed and intangible assets Property, plant and equipment 220.3 182.8 187.7 ▪ Land and PPE: An increase of NOK 37.5 million due to Intangible assets 303.2 296.3 258.8 investments and lease additions Goodwill 111.1 84
Slide 19: Financials – Cash Flow
Financials – Cash Flow Cash flow development fourth quarter 2023 NOK million Fourth quarter of 2023 (5.7) ▪ Operating cash flow of positive NOK 161.8 million (7.6) o Net decrease in working capital of NOK 83.1 million, mainly related to advance payments from customers 83.1 (66.5) ▪ Investing activit
Slide 20: Outlook
Outlook
Slide 21: 2024 outlook
2024 outlook Revenue and profitability margins NOK million 1 700 – 1 800 2024 Outlook x% EBITDA margin x% EBIT margin 1 519 ▪ Revenue target of NOK 1.7 - 1.8 billion supported by growth in all three business segments 1 167 ▪ First half revenues expected to be in line with the level reported in the c
Slide 22: Update on ambitions and long-term financial targets 2024-2027
Update on ambitions and long-term financial targets 2024 - 2027
Slide 23: Agenda
Agenda ▪ Strategic priorities and goals ▪ Long-term financial targets
Slide 24: NORBIT has delivered continued growth and profitability
NORBIT has delivered continued growth and profitability Historical revenues and EBITDA margin NOK million EBITDA margin Revenues 1 519 CAGR 1 167 +31% 668 26% 788 22% 619 20% 380 17% 18% 361 15% 13% 14% 350 438 11% 292 10% 310 6% 7% 7% 6% 139 138 44 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 25: Strong track record of delivering on targets set
Strong track record of delivering on targets set IPO IPO plan (2018 – 2021) Update on 2024 plan (2021 – 2024) plan Revenues: Target: > 25%. Revenues: Target: NOK 1.5bn in 2024 Delivered: 22% Delivered in 2023 EBITDA: Target: > 20% EBITDA: Target: > 25% Delivered: Average 19% Delivered: 26% in 2023 E
Slide 26: Successful elements to historical and future results
Successful elements to historical and future results Strong corporate culture “Explore More” Recruiting and refining top talents Opportunity driven with entrepreneurial and commercial spirit Market-driven innovation in carefully selected applications Tailored and dynamic growth strategy Diversified
Slide 27: Strong corporate culture of “explore more”
Strong corporate culture of “explore more” Core purpose Victory awaits him who has everything in Explore more order. Luck people call it... Defeat is certain for him who has neglected to take necessary precaution in time. This is Vision called bad luck” NORBIT is to be recognized as world class, Roa
Slide 28: Selected drivers and mega trends
Selected drivers and mega trends “Technology is part of the solution” Renewable energy The blue economy Geopolitical unrest Safe and green mobility Digitalisation of operations “Made in Norway”
Slide 29: Strategic priorities
Strategic priorities Broaden product offering market driven with tailored technology Going from “niche to notable” Remain diversified and broaden customer base Pursue operational excellence and scalability Prioritise the overall best opportunities Explore value-accretive acquisitions
Slide 30: Target to deliver more than NOK 2.75 billion in revenues in 2027
Target to deliver more than NOK 2.75 billion in revenues in 2027 Ambition level: Organic revenue growth NOK million ▪ Revenue growth of 23 per cent annually since 2019 ▪ ~4 p.p. positive effect by currency ▪ ~2 p.p. positive effect by M&A ▪ Target to deliver organic revenues of CAGR +16% > 2 750 mor
Slide 31: Agenda
Agenda ▪ Strategic priorities and goals ▪ Long-term financial targets
Slide 32: Long-term financial targets towards 2027
Long-term financial targets towards 2027 Revenue CAGR EBIT margin Return on Leverage policy capital employed (NIBD/EBITDA) ~16% ~20% ~30% 1.0 – 2.5x
Slide 33: Target equal revenue growth across the business segments
Target equal revenue growth across the business segments Oceans: Revenue target Connectivity: Revenue target PIR: Revenue target NOK million NOK million NOK million +16% 1 100 +17% 1 000 +16% +25% 750 +31% 599 +12% 540 412 249 260 186 2019 2023 2027 2019 2023 2027 2019 2023 2027
Slide 34: Blended group EBIT-margin ambition of around ~20% in 2027
Blended group EBIT-margin ambition of around ~20% in 2027 Oceans: EBIT margin target Connectivity: EBIT margin target PIR: EBIT margin target Per cent Per cent Per cent 25 – 30% 25 – 30% 28% 26% 26% 13% 8 - 10% 7% 8% 2022 2023 2027 2022 2023 2027 2022 2023 2027
Slide 35: Target to deliver a return on capital employed ~30%
Target to deliver a return on capital employed ~30% Return on capital employed1 12 month rolling 40 ▪ Long-term target to deliver ~30% return on capital employed (pre-tax) 35 o 29% delivered in 2023 Long-term target ~30% 30 29.0% ▪ Stronger focus on capital allocation and 24.5% 24.4%24.0% 27.4% 26.9
Slide 36: Capital allocation priorities
Capital allocation priorities 1 Maintain a solid balance sheet 2 Investments to support organic growth 3 Strategic M&A 4 Shareholder distributions
Slide 37: Maintaining a solid balance sheet
Maintaining a solid balance sheet NIBD/EBITDA EBITDA 12 month rolling 4.5 ▪ Maintaining a strong balance sheet and Covenant loan facilities liquidity position are first priorities for 4.0 capital allocation: 3.5 o Provide for financial flexibility o Prudent risk management 3.0 o Operating well withi
Slide 38: Investments to support organic growth
Investments to support organic growth 1) R&D investments R&D investments to drive organic growth MNOK and per cent of revenues 63 65-75 ▪ Continued high focus on market driven innovation through R&D. More than 95% 59 10.2% 60 60 of investments allocated to Oceans and Connectivity 8.8% 51 6.5% ▪ 2024
Slide 39: Continuing to pursue value-added acquisition
Continuing to pursue value-added acquisition Tailored M&A strategy ▪ A total of ~NOK 250 million in consideration paid over the last three Examples of acquisitions years for selected targets, predominately to broaden product offering, gain market access and/or grow technology base ▪ Continued focus
Slide 40: Strong increase in the dividend and amending the dividend policy
Strong increase in the dividend and amending the dividend policy Dividend declared Amended dividend policy NOK 2.55 NORBIT ASA’s objective is to provide shareholders with a long- Ordinary DPS Extraordinary DPS 1.00 term competitive return through an increase in the share price and payment of dividen
Slide 41: Technology is part of the solution
TECHNOLOGY IS PART OF THE SOLUTION: - expla re