Slide 1: Company Presentation
Company Presentation September/October 2017 1
Slide 2: Disclaimer
Disclaimer This presentation (the Presentation) has been prepared by Webstep ASA (Webstep or the Company) with assistance from Arctic Securities AS, Sparebank 1 Markets AS and Sparebank 1 SR-Bank ASA, Markets (jointly, the Managers) solely for information purposes in connection with the contemplated
Slide 3: Transaction details
Transaction details Issuer • Webstep ASA Selling shareholders • Reiten & Co Capital Partners VII LP (“Reiten”), current and former employees Place of Listing • Oslo Børs, ticker “WSTEP” Indicative Price Range • NOK 23.75 - 27.75 per share, implying pre-money valuation of NOK 505 million to NOK 590 m
Slide 4: Today's presenters
Today’s presenters Kjetil Eriksen - CEO Anders Løken - CFO • Born 1968 • Born 1980 • Started Webstep Oslo in • Various roles in Webstep 2004 from 2008, and CFO from 2014 • CEO since 2006 • Executive Master of • Bachelor degree in IT Management, BI from Norwegian School Norwegian Business of Informat
Slide 5: Webstep at a glance
Webstep at a glance • A high-end IT consultancy • Focused on digitalising the 396 11 customers Employees1 Consultants’ average years • Optimized to attract the most of experience talented IT consultants • Hires only experienced consultants • High utilization and best in class EBITDA per employee 563
Slide 6: High-end IT consultancy
High-end IT consultancy 1 Well educated with internal drive to explore new technologies and techniques 2 Experienced and skilled IT consultants are Strong experience with a crucial for successfully completing strategic natural aptitude for IT projects broadening the skill horizon Surveys show that t
Slide 7: 17 years with revenue growth
17 years with revenue growth IoT is established as a new strategic business unit Establishes its first Reiten & Co technology specific acquires 62.5% and subsidiary based on employees were Cloud offering Microsoft technology invited to invest in the company Offices in Oslo, Stavanger and Trondheim o
Slide 8: Investment highlights
Investment highlights 1 2 3 4 5 Business model Diversified and Track record of Well positioned Webstep is the attracts experts and sticky base of profitable growth as customers outperformer in the provides a strong blue chip clients and cash increase their IT Nordic IT-consulting market offering gen
Slide 9: Business model attracts experts and provides a strong market offering
1 Business model attracts experts and provides a strong market offering Traditional model compared to Webstep’s model Consultant incentive model Traditional model Webstep model Customer Experienced consultants to do the job asks for 40% 35% Usually a mix of senior Only highly experienced consultants
Slide 10: Highly experienced professionals
1 Highly experienced professionals Years of relevant experience for Webstep’s consultants Higher education profile for Webstep’s employees 2% 7% <5 28% Bachelor's 38% 22% 5-9 Master's 10-14 PhD 15+ 70% 33% • More than 70% has at least 10 years of experience • The average consultant has a high level
Slide 11: Highly experienced management team and presence in key cities
1 Highly experienced management team and presence in key cities Management team Webstep’s local presence1 Industry experience (yrs) Kjetil Eriksen Group CEO • Runner-up IT Executive Management Award 2013 22 • Bachelor degree in IT from Norwegian School of Information Technology Anders Løken Group CF
Slide 12: Diversified and sticky base of blue chip clients
2 Diversified and sticky base of blue chip clients1 Well-balanced sector exposure.. ..across a diversified customer base 42% 100% Public 10% 30% 30% 15% 25% 33% Private Private 10 largest 11-20 largest 21-30 largest Other Total 8% 75% 18% 13% Selected customers Telecom, Media and Finance Technology
Slide 13: Track record of profitable growth and cash generation
3 Track record of profitable growth and cash generation Revenue EBITDA and margin NOKm 700 NOKm 75 73 68 600 563 575 549 62 63 534 460 500 50 425 400 14.8 % 86 13.6 % 12.9 % 13.0 % 11.8 % 12.4 % Very strong cash conversion 300 of >100% on average over the period (pre-tax) 200 339 100 0 2012 2013 201
Slide 14: Key trends that are accelerating digitalisation and market growth
4 Key trends that are accelerating digitalisation and market growth i ii Digitisation IoT Cyber security • From paper to digital and related • A connected world of sensors and • Security constantly challenged process improvements devices • New cyber security threats iii The Cloud Analytics Privacy •
Slide 15: Market segments for core Webstep services are growing fast
4 Market segments for core Webstep services are growing fast i Core digitalisation ii IoT iii Analytics iv Machine learning NO/SE digital transformation NO/SE cloud-related NO/SE IoT services market2) NO BI/big data market3) Global AI market consulting market1) consulting market 10% 33% 21% 21% 20%
Slide 16: Robust growth trajectory for the Norwegian and Swedish IT consultancy market
4 Robust growth trajectory for the Norwegian and Swedish IT consultancy market IT consulting market by country (2016) IT consulting market development (EURm) 16-20e CAGR 4,701 4,846 5,029 5,224 5,423 5,617 5,803 3.6% 1,615 3.0 % 1,567 29% 1,520 1,474 1,435 1,408 1,390 EUR 5bn 71% 4,050 4,188 3.9 % 3
Slide 17: Webstep is the outperformer in the Nordic IT consulting environment
5 Webstep is the outperformer in the Nordic IT consulting environment 2016 EBITDA (NOKk) / Average employee 184 Average last 10 years 158 147 >50% above industry 144 average1 128 126 115 113 2016 Revenue (NOKk) / Average employee 1,449 1,424 1,371 Average last 10 years 1,267 1,260 1,258 >20% above i
Slide 18: Webstep will continue to be a growth company focused on high-end IT consultancy
Webstep will continue to be a growth company focused on high-end IT consultancy • Continue serving the core digitalisation market as a premium provider of IT services of strategic importance for customers • Continue with the winning formula in Norway • Enhanced focus on Sweden to capture market shar
Slide 19: Outlook and long term objectives
Outlook and long term objectives • Continued strong customer demand in Norway and Sweden • Webstep aims to grow faster than the market for IT consulting services in the geographies it operates • Continued improvement potential in Sweden • Ambition to maintain EBITDA margin above market as demonstrat
Slide 20: Transaction timeline
Transaction timeline Milestone Date / time Start of bookbuilding period and application period 26 September 2017 Expiry of the application period in the Retail Offering and Employee Offering 9 October 2017, 12:00 (CEST) Expiry of the bookbuilding period in the Institutional Offering 9 October 2017,
Slide 21: Appendix
21 Appendix Wo
Slide 22: New Board of Directors in place
New Board of Directors in place Klaus-Anders Nysteen Chairman • Senior advisor at Nordic Capital • Experience as CEO of Lindorff Group, Entra ASA and Storebrand Bank ASA and as CFO of Statoil Fuel & Retail ASA • Master of Business Administration from the Norwegian School of Economics (NHH) and gradu
Slide 23: Strong development in Norway
Strong development in Norway Summary P&L: Norway1 Revenue and EBITDA per avg. employee (NOKm) 1.46 1.45 1.49 1.41 1.42 NOKm, unless 2014A 2015A 2016A Q2-16 Q2-17 H1-16 H1-17 stated Revenue 428.9 455.8 478.5 126.5 119.4 248.0 256.7 Growth (%) 17.6 % 6.3 % 5.0 % n.a. -5.7 % n.a. 3.5 % Total costs 375.
Slide 24: Sweden has been subject to restructuring – now set for profitable growth
Sweden has been subject to restructuring – now set for profitable growth Summary P&L: Sweden Revenue and EBITDA per avg. employee (NOKm) NOKm, unless 1.33 1.38 2014A 2015A 2016A Q2-16 Q2-17 H1-16 H1-17 1.31 1.28 1.27 stated Revenue 104.8 93.3 84.0 22.1 25.3 45.6 49.0 Growth (%) 10.4 % -11.0 % -9.9 %
Slide 25: P&L and cash flow overview
P&L and cash flow overview P&L Cash flow NOKm, unless stated 2014A 2015A 2016A H1-16A H1-17A NOKm, unless stated 2014A 2015A 2016A H1-16A H1-17A Revenue 533.8 549.1 562.5 293.6 305.7 Profit before tax 38.5 48.7 54.5 31.1 35.9 COGS 51.6 38.9 33.8 17.5 21.7 Depreciation 16.5 16.8 10.6 6.5 4.2 Personne
Slide 26: Balance sheet overview
Balance sheet overview Balance sheet Key observations NOKm, unless stated 2014A 2015A 2016A H1-16A H1-17A Intangible assets 409.6 401.6 385.0 391.1 384.2 • Efficient balance sheet reflecting low capital requirements Tangible assets 3.0 2.7 2.7 3.4 5.0 Financial fixed assets 0.0 0.0 2.7 0.0 3.6 • Int