Slide 1: Half-Year 2023 Financial Results
Half-Year 2023 Financial Results Investor presentation August 4, 2023
Slide 2: Today's presenters
Today’s presenters Padma Ravichander Indiresh Vivekananda CEO CFO
Slide 3: Agenda
Agenda 1 H1 operational highlights 2 Strategy overview 3 Financial review 4 Q&A
Slide 4: Tecnotree – Leading Finnish Digitalization Partner for Global CSPs
Tecnotree – Leading Finnish Digitalization Partner for Global CSPs About Tecnotree Key Customers 70+ ~1 bn Countries with Subscribers Product Desployments stc 80+% 90+ Employees TM Service Forum Certified Providers Intellectual Property Awards and recognitions 220+ Prebuilt modules available across
Slide 5: Tecnotree recognized among leading vendors for telco digital transformation
Tecnotree recognized among top 3 leading vendors for telco digital transformation 55 TMF Open APIs conformed with 5 Real W orld 24 Full coverage of the functional scope of OPEN API the component First Digital Platform Company in the World to be Certified for Real-World Open API Implementation 12 Ful
Slide 6: H1 Financial Results, 2023
H1 Financial Results, 2023 OPERATING RESULT SHAREHOLDER EQUITY NET INCOME 9.8ME 81.6ME 5.5ME YOY 37.3% YOY 9.7% YOY 11.1% 28.2% EBIT NET SALES 15.8% Net Margin Margin 34.8ME YOY 10.2% Key Highlights Customer Experience 2023 Revenue Monetization 2023 Convergent Charging and Moments B2B2X
Slide 7: Tecnotree Growth Strategy
TECNOTREE GROWTH STRATEGY
Slide 8: Tecnotree's Growth aligned with Connectivity Market Growth
Tecnotree’s Growth aligned with Connectivity Market Growth High growth industry Demand Drivers 1 Prioritization of 2 AIML enabled 0 3 3 Increase in 4 5 Demand for 6 Growing utilization of Increase in digital platforms for upgrades from legacy through 5G can complexities in innovative digital demand
Slide 9: Tecnotree's portfolio aligned to mega trends in digital economy
Tecnotree’s portfolio aligned to mega trends in digital economy MEGATRENDS IN DIGITAL ECONOMY 5G, IoT & IoS Amalgamation of Real & Lines between ‘Thinking’ and (Internet of Senses) Digital World ‘Doing’ blurred with AI/ML 1 3 5 2 4 6 Data Fabric & Hyper- Everything As a Service in a “You Zero-Trust
Slide 10: Growth through investment in key focus areas
Tecnotree will look to achieve growth through investment in key focus areas New market penetration Customer Business Acquisition Expansion KEY FOCUS Investment in New AI/ML CLOUD AREA Product offerings BSS/OSS HEALTHCARE Corporate and FINTECH OTT Financial Focus Mergers and Acquisitions Consolidatio
Slide 11: Tecnotree's Global Growth Potential
Tecnotree’s Global Growth Potential Expected 2023 Revenue Growth: 7-15% Deal value in Euros - Bubble chart scale BSS – Telco Fintech Moments SaaS Sensa VAS MVNX (Virtual Operators) Low 10,000 94,877 189,753 2,500,000 142,315 15,000 759,013 High 18,609,313 2,700,000 8,371,917 7,400,380 11,385,199 1,8
Slide 12: Diversified revenue streams – investing in market transformation
Diversified revenue streams – investing in market transformation BSS Stack: BSS Stack: Moments and DiWa Sensa License and Delivery Managed Services and Moments and DiWa AI ML Maintenance Contracts B2B2X Ecosystem AI-powered monetization across hyperpersonalisation. End to end Order-to-cash Dev-Ops. C
Slide 13: Diversified revenue mix with stable growth
Diversified revenue mix with stable growth +7 +4 +3 +4 +1 +4 2018 2019 2020 2021 2022 H1 2023 2018 2019 2020 2021 2022 2023 e H1 2023 Legacy customers New customers Licence Third party hardware &software Delivery ARR Customer profile Business view New logos bringing in a steady stream of revenues Stea
Slide 14: Growing influence of AI technology
Growing influence of AI technology Global AI market is on track to total half a trillion dollars by the end of the decade. AI is attracting investment from largest companies than any other technology 79% of companies see Ai innovation as a top-three priority 66% of companies plan to increase innovat
Slide 15: Tecnotree Sensa AI Platform Trained on Industry Vertical Models
Tecnotree Sensa AI (CognitiveScale Acquisition) Platform Trained on Industry Vertical Models Recognized Global Software Leader that operates in 70 countries with over 1 Billion Subscribers Market leading AI Platform with 114+ patents that at the intersection of Telecom, Healthcare, Fintech, delivers
Slide 16: Impact of Tecnotree Sensa – Roadmap for growth
Impact of Tecnotree Sensa – Roadmap for growth AI Revenue Growth Sectors Introducing Sensa Profile of One for Hyper-personalization 5 Me Revenue potential in 2023 Telco Healthcare Fintech Trust New Sensa AI Deals in H1 2023 AI Up/Cross sell opportunities on existing customer base New Project on Cust
Slide 17: January-June 2023 Financials
January-June 2023 Financials August 4, 2023
Slide 18: H1 2023 Financial performance highlights
H1 2023 Financial performance highlights EUR million Q2/2023 Q2/2022 H1/23 H1/22 H1/21 H1/20 ❑ Consistent growth in revenue Net sales 19.3 18.3 34.8 31.6 27.9 24.0 Change YoY% +5% +10% +10% +9% +16% +17% ❑ Strong focus on cash EBIT 6.2 5.1 9.8 7.1 10.6 7.4 collections Change YoY% +20% -39% +37% -33%
Slide 19: Revenues driven by market demand and collections secured
Revenues driven by market demand and collections secured through focused initiatives and backed by increased delivery capabilities Revenue at 34.8 M in H1 2023 Collections at 31.5 M in H1 2023 10% y-o-y growth 21% y-o-y Strong revenue growth driven by new logos and increased demand for Stack stabili
Slide 20: Focus on operational cost optimization along with FX mitigation
Focus on operational cost optimization along with planned mitigation for FX impact to secure net income Operating Result (EBIT) at 9.8 M in H1 2023 Euro mn Net income at 5.5 in H1 2023 Euro mn 37% y-o-y growth +11% y-o-y 27% 46% 39% 33% 28% 25% 30% 32% 21% 32% 29% 22% 17% 16% 19% 15% 23% 30% 8% 12%
Slide 21: Stable current asset ratio driven by strong current assets
Stable current asset ratio driven by strong current assets Current ratio Account receivables ageing 7,4 Total AR 32.5 MEUR (out of which 2.6 MEUR is provided for) 6,3 5,6 5,5 5,2 4,2 4,5 4,1 3,9 3,7 4.9 M, 15 % 9.2 MEUR 2.6 M, 8 % Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 20
Slide 22: Tecnotree Balance Sheet
Tecnotree Balance Sheet Consolidated balance sheet, MEUR H1 2023 H1 2022 DIFFERENCE Non-current assets Intangible assets 28.9 11.3 156% Tangible assets 0.2 0.3 -30% Deferred tax assets 0.6 0.6 -13% Other non-current trade and other 2.1 1.9 10% receivables Current assets Trade receivables 29.9 34 -12
Slide 23: Tecnotree Cash Flow Statement
Tecnotree Cash Flow Statement Consolidated condensed cash flow statement, MEUR Q2 2023 Q2 2022 H1 2023 H1 2022 Cash flow from operating activities Result for the period 3.7 4,0 5.5 5 Adjustments of the result 2.2 2.2 4.7 3.5 Changes in working capital -4.4 -7.2 -3.8 -7.8 Financial income and expense
Slide 24: Key risks
Key risks Cost Pressures Key Investments 1. Geography specific inflation 1. Investment to retire large order book & productization 2. Customer diversification & Geo expansions 2. Investments in AI/ML, Fintech, OTT required for diversification from BSS pure-play Mitigation Mitigation Cost Optimization p
Slide 25: Outlook 2023
Outlook 2023 Revenue to Operating profit Cost rationalization Cash recovery be higher by (EBIT) to be higher by Q4 of 2023 to expected to by the tune of grow by 7% - 15% 10% - 20% 5% - 7% 12% - 18% Assumptions: Continued growth in market demand for our products and solutions Short term impact on EBIT
Slide 26: Key investment highlights
Key investment highlights Headroom Unique Business Cost-effective Proven management Healthy for growth position in the critical offering operating model team and agile Financials emerging markets organization
Slide 27: Q&A
Q&A
Slide 28: Thank you
THANK YOU Investor relation connects: indiresh.vivekananda@tecnotree.com Investor.relations@tecnotree.com