Slide 1: Second quarter 2021 result presentation
Second quarter 2021 result presentation CEO Per Jørgen Weisethaunet CFO Per Kristian Reppe 13 August 2021, Trondheim, Norway
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: Agenda
Agenda ▪ Second quarter 2021 development and financial review ▪ Update on ambitions and long-term financial targets PAGE 3
Slide 4: Highlights second quarter 2021
Highlights second quarter 2021 ▪ Record revenues and EBITDA ▪ Strong growth in both Oceans and PIR ▪ Acquisition of iData Kft. completed post quarter ▪ Secured milestone On-Board Unit orders in line with strategy to migrate OBU business from public tendering to B2B ▪ Awarded contract for environment
Slide 5: Record results in second quarter driven by Oceans and PIR
Record results in second quarter driven by Oceans and PIR Revenues and EBITDA Second quarter 2021 NOK million ▪ Continued strong growth in both Oceans and PIR 187 190 ▪ ITS with an expected weak financial quarter, but 170 promising outlook driven by the announced 158 162 contracts and strategic M&A
Slide 6: Oceans
epereegiere ar Oceans
Slide 7: Continued strong growth and improved results in Oceans
Continued strong growth and improved results in Oceans Revenues and EBITDA Second quarter 2021 NOK million ▪ All-time high revenues of NOK 102 million, an increase of 73 per cent from Q2-20* 102 ▪ Strong sonar sales across all geographies driving the 83 results 81 74 ▪ EBITDA margin of 44 per cent f
Slide 8: Delivered sonars to more than 50 countries in first half 2021
Delivered sonars to more than 50 countries in first half 2021 Regional sonar sales first half 2021 Sonar revenue split NOK million 139 36 103 84 1H20 1H21 Winghead Other sonar 8
Slide 9: Intelligent Traffic Systems (ITS)
DSRC solutions for satellite- based truck tolling Connectivity devices for smart tachograph On Board Units (OBU) / Toll Tags Intelligent Traffic Systems (ITS)
Slide 10: Second quarter as expected for Intelligent Traffic Systems (ITS)
Second quarter as expected for Intelligent Traffic Systems (ITS) Revenues and EBITDA Second quarter 2021 NOK million ▪ Revenue of NOK 16.4 million, decline of 57 per cent from Q2-20 62 ▪ Decline in EBITDA and margin due to the lower revenue base 47 49% 47% 45 42 46% 43% 42% 43% 40 Main events 38 36
Slide 11: Migrating On-Board Units business from public tendering to B2B
Migrating On-Board Units business from public tendering to B2B Major European insurance company places NOK 50 Secures NOK 27 million On-Board Unit order from million order for On-Board Units scheduled for delivery in second half of 2021 and early 2022 Fremtind Service 11
Slide 12: Acquisition of iData completed post quarter
Acquisition of iData completed post quarter Specialised in GPS tracking with a subscription-based recurring revenue business model Large customer base in its home market, Hungary Vehicle tracking and fleet management services based on own proprietary technology Transaction values iData at an enterpr
Slide 13: Product Innovation & Realization (PIR)
Product Innovation & Realization (PIR)
Slide 14: Product Innovation & Realization delivering profitable growth
Product Innovation & Realization delivering profitable growth Revenues and EBITDA Second quarter 2021 NOK million ▪ Revenues grew by 37 per cent* and reached NOK 78 million 78 76 ▪ Strong growth in both contract manufacturing and 69 67 67 63 R&D services. Activity increase primarily driven by 60 aut
Slide 15: Group financials
Group financials
Slide 16: Financials – P&L
Financials – P&L Amounts in NOK 000's Q2 2021 Q1 2021 Q2 2020 Second quarter of 2021 Revenues 189 950 148 700 155 152 ▪ Revenues of NOK 190 million, up 22% from Q2 2020 and 28% from Q1 2021 Other gains and losses - 1 230 - Raw materials and change in inventories 88 103 72 550 77 298 o Oceans and PIR
Slide 17: Segment EBITDA development
Segment EBITDA development Segment EBITDA development Q2 2021 vs. Q2 2020 NOK million Oceans ITS PIR (3.3) 44.3 31.9 12.5 10.8 15.7 4.6 (11.1) 3.9 2.4 (1.6) EBITDA Contribution Expense EBITDA -0.2 EBITDA Contribution Expense EBITDA Q2 2020 effect effect Q2 2021 EBITDA Contribution Expense EBITDA Q2
Slide 18: Financials – Balance sheet
Financials – Balance sheet Amounts in NOK 000's 30.06.21 31.03.21 31.12.20 Fixed and intangible assets ASSETS ▪ Land and PPE: Increased primarily due to NOK 10.5 million reclassification of demo kits from inventory Property, plant and equipment 156 910 150 024 149 953 Intangible assets 183 391 179 7
Slide 19: Liquidity strengthened following refinancing and new loan established
Liquidity strengthened following refinancing and new loan established Pro-forma available liquidity Refinancing terms and conditions: NOK million ▪ Successful refinancing of revolving credit facility, Cash 105 upsizing to NOK 200 million Overdraft facility 50 RCF facility o NIBOR + 180bps p.a. New t
Slide 20: Financials – Cash Flow
Financials – Cash Flow Cash flow development second quarter 2021 Second quarter of 2021 NOK million ▪ Operating cash flow of NOK 23.4 million o Net increase in working capital of NOK 27.1 million, primarily driven by increase in inventory and trade receivables, partly offset by increase in trade pay
Slide 21: Outlook
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Slide 22: Outlook for second half of 2021
Outlook for second half of 2021 • Positive outlook with continued high activity • Fourth quarter historically the seasonally strongest quarter for Oceans • Uplift in revenues and margins expected, supported by announced B2B OBU contracts • Acquisition of iData to contribute positively to results • E
Slide 23: Agenda
Agenda ▪ Second quarter 2021 development and financial review ▪ Update on ambitions and long-term financial targets 23
Slide 24: NORBIT has delivered continued growth and profitability in the past
NORBIT has delivered continued growth and profitability in the past Historical revenues and EBITDA1 margin NOK million EBITDA margin Revenues 668 652 619 CAGR +29% 438 380 361 350 310 22% 292 17% 18% 14% 15% 139 13% 11% 138 10% 6% 7% 7% 6% 44 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LT
Slide 25: Successful elements to historical results
Successful elements to historical results 1 2 3 Tailored growth strategy for Market-driven innovation in Strong corporate culture each segment carefully selected niches “explore more” 4 5 6 Diversified Recruiting and refining Highly robotized in-house business model top talents production and R&D ca
Slide 26: Ambition level: Organic revenues in excess of NOK 1.5bn and EBITDA margin above 25%
Ambition level: Organic revenues in excess of NOK 1.5bn and EBITDA margin above 25% Ambition level: Organic growth Revenues EBITDA Segment composition PIR ITS Oceans NOK million Per cent of total +142% >1 500 33% 30% 67% 23% 23% +100% 619 >25% 310 19% 43% 47% 15% 6% 14% 2016 2020 2024 2016 2020 2024
Slide 27: Oceans: Ambition level
Oceans: Ambition level Revenues historical figures and organic ambition EBITDA margin historical figures and ambition NOK million Margin >35% 32% 29% 28% 26% 22% CAGR +27% 700 14% CAGR +57% 327 249 267 190 102 44 2016 2017 2018 2019 2020 LTM 2024 2016 2017 2018 2019 2020 LTM 2024 27
Slide 28: Oceans: Basis for growth and strategic priorities
Oceans: Basis for growth and strategic priorities Basis for growth Increased demand for Vast domain knowledge and A global sales and technology to explore and proven ability to innovate distribution platform monitor the oceans domain Strategic priorities 1 2 3 Continue to broaden Expand into new pro
Slide 29: ITS: Ambition level
ITS: Ambition level Revenues historical figures and organic ambition EBITDA margin historical figures and ambition NOK million Margin 45% >35% 29% 29% CAGR +25% 24% 350 CAGR +26% 13% 186 145 97 58 43 39 2016 2017 2018 2019 2020 LTM 2024 -5% 2016 2017 2018 2019 2020 LTM 2024 29
Slide 30: ITS: Basis for growth and strategic priorities
ITS: Basis for growth and strategic priorities Basis for growth Increasing demand for Jump start on asset and Core competence in design tailored IoT hardware and vehicle tracking / and manufacturing of low solutions for digitalisation monitoring with iData power wireless devices Strategic priorities
Slide 31: PIR: Ambition level
PIR: Ambition level Revenues historical figures and organic ambition EBITDA margin historical figures and ambition NOK million Margin 8-10% 9% 9% 8% 6% CAGR +19% 450 CAGR +1% 260 250 216 229 221 225 1% 0% 2016 2017 2018 2019 2020 LTM 2024 2016 2017 2018 2019 2020 LTM 2024 31
Slide 32: PIR: Basis for growth and strategic priorities
PIR: Basis for growth and strategic priorities Basis for growth Broad R&D experience and Increased demand for Production capacity leading edge robotized “Made in Europe / Norway“ significantly increased manufacturing processes Strategic priorities 1 2 3 Exploit synergies between Organic growth throu
Slide 33: Capital allocation framework
Capital allocation framework Capital allocation priorities 1 Maintain a solid balance sheet 2 Working capital and sustaining capital expenditures 3 R&D investments to support organic growth 4 Strategic M&A 5 Shareholder distributions 33
Slide 34: 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 3.0 o Prudent risk management o Operating well withi
Slide 35: Growth will require working capital, but ambition to increase capital efficiency
Growth will require working capital, but ambition to increase capital efficiency Net working capital1 Per cent of annualized quarterly revenues 40% 38% ▪ Net working capital target range between 25 – 30% of revenues 35% 35% 34% ▪ Ambition to lower working capital to 32% 31% lower end of target over
Slide 36: From growth capex to sustaining capex level
From growth capex to sustaining capex level Investments in fixed assets1 NOK million, 12 month rolling % revenues (group) ▪ Investments in property, plant and Investments PPE equipment on downward trajectory, 70 68.3 30 guiding NOK 10 – 20 million for 2021 65.7 61.2 60 56.6 ▪ No significant increase
Slide 37: Prioritizing R&D capex to reach ambition level
Prioritizing R&D capex to reach ambition level Investments in R&D CAPEX1 NOK million, 12 month rolling % revenues (group) ▪ Continued focus on organic R&D % revenues (Oceans and ITS) investments, mainly to grow Oceans R&D capital expenditures and ITS segments (> 95% of R&D 70 67.0 67.0 30 capex hist
Slide 38: Continuing to pursue value-added acquisition
Continuing to pursue value-added acquisition M&A criteria Value accretive to Organization with deep Technology in carefully shareholders market domain knowledge selected niches Cultural fit with target Synergy potential 38
Slide 39: Dividend policy
Dividend policy Dividend policy NORBIT ASA’s dividend policy is to pay out annual dividends between 30 and 50 per cent of the company’s ordinary net profit after tax. When deciding on the annual dividend, the company will take into account the company’s financial position, investment plans as well a
Slide 40: Exploring is finding opportunities where others find limits
EXPLORING IS FINDING OPPORTUNITIES WHERE OTHERS FIND LIMITS
Slide 41: NORBIT is to be recognized as world class, enabling people to explore more
NORBIT is to be recognized as world class, enabling people to explore more • Founded 1995 • HQ in Trondheim, Norway • Manufacturing facilities in Selbu and Røros, Norway • Offices and Subsidiaries in 15 countries • Dedicated workforce of ~400 • Listed on Oslo Børs, ticker NORBIT Victory awaits him w
Slide 42: A global provider of tailored technology to carefully selected niches
A global provider of tailored technology to carefully selected niches Diversified and robust business model Oceans is offering tailored technology Intelligent Traffic Systems (ITS) is offering Product Innovation & Realization (PIR) is solutions to global maritime markets tailored connectivity soluti
Slide 43: Shareholder overview, updated 12 August 2021
Shareholder overview, updated 12 August 2021* # Investor # of shares % 1 VHF INVEST AS - founder Steffen Kirknes 8,686,495 15.17 2 PETORS AS - CEO Per Jørgen Weisethaunet 6,940,695 12.12 3 DRAUPNIR INVEST AS - family of founder Steffen Kirknes 5,702,949 9.96 4 ESMAR AS 3,832,286 6.69 5 EIDCO A/S 3,8