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Results – Q1 2019

Origo's Q1 performance was strong, with revenue increasing by 7% and EBITDA improving substantially. The company's focus on software solutions and streamlining operations continues to yield positive results. The End-User Equipment and Related Services, Operations and Infrastructure, and Software and Related Services segments all showed highlights. The outlook for the company remains positive.

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Results – Q1 2019

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  1. Results – Q1 2019 Presentation, May 8, 2018 Finnur Oddsson, CEO

  2. Schedule Results Operational Highlights Finances Outlook

  3. Key Financial Information

  4. OPERATIONAL HIGHLIGHTS

  5. Viðskiptalausnir Highlights from Origo’s operations • Q1 performance was good and earnings were higher than seen in the past several first quarters • Revenue increased by 7% after taking into account the sale of Tempo • EBITDA improved substantially, with the EBITDA ratio rising from 2.5% last year to 6.7% this year • We are pleased with these results, particularly in view of the uncertainty in the Icelandic economy and labour market that prevailed in the quarter • The change in strategy undertaken last year continues to bear fruit • Merger of companies and streamlining of operations, one company and one name, increased focus on software solutions • Continued structural improvements – new organisation chart in February • Aimed at consolidating units, reducing the number of senior managers, sharper focus on sales and increased automation • Origo was the top ranking IT company in Iceland in the most recent Gallup top-of-mind survey

  6. End-User Equipment and Related Services Operation and Infrastructure Software and Related Services Highlights • Sales of End-User Equipment and Related Services amounted to ISK 1.22 billion in the first quarter • Decent YOY revenue growth. PC and audio-visual. • Strong competition puts pressure on earnings, which was below expectations • Sales through the Origo online store (www.netverslun.is) increased substantially • Continued focus on automation and digital processes aimed at improving usability and delivering better customer service • Global competition in the electronics market keeps us on our toes • The outlook is good

  7. End-User Equipment and Related Services Operation and Infrastructure Software and Related Services Highlights • Operation and Infrastructure delivered revenues of ISK 1.18 billion in the first quarter • Focus on service automation • Good demand for third-party software solutions (IBM, Microsoft, etc.) • Sales of larger hardware solutions declined – due largely to the economic uncertainty • More and more businesses seeing the benefit in outsourcing their IT operations to Origo • Strong demand for security consultants – strategic knowledge creation and marketing has boosted customer interest and demand

  8. End-User Equipment and Related Services Operation and Infrastructure Software and Related Services Highlights • Revenue from Software and Related Services amounted to ISK 1,148 million in the first quarter • Origo’s software units delivered the best results in the period • Strategic focus on development of both new and existing solutions • Greatly enhanced offering of business solutions, which has never been as robust • Demand remains strong for the Kjarni payroll and human resources solution, with subscription revenue rising 50% from the previous year • Continued development of the Saga electronic health record system and related solutions for the healthcare sector • Diverse projects underway for service websites, automation and digital transformation • Increased sales of own software solutions for the travel industry, including car rentals and hotels

  9. Tempo Notendabúnaður og tengd þjónusta Hugbúnaður og tengd þjónusta Highlights • Tempo continues to perform well with Diversis Capital now involved in analysis and strategy formulation • Revenue totalled USD 6.2m in first quarter, up 33% YOY • 8% growth in trials • Close to 13 thousand customers with around 16 thousand licences • Earnings are positive and ahead of schedule • Staff continues to increase, now at 110 employees • Gary Jackson appointed CEO of Tempo in April

  10. FINANCES

  11. Key Financial Information for Q1 2019 Revenue ISK 3,553m EBITDA ISK 237m Gross profit% 25.9% EBITDA% 6.7% Payroll and related costs/revenue 46.1% Operating costs/ revenue 23.2% Profit for the period/ revenue 1.8% DSO 24 Equity ratio 62.1% Working capital ratio 1.73 Inventory turnover 4.2 Cash at end of period ISK 1,187m

  12. Income Statement Q1 2019 EBITDA 242 237 180 102 +554% Q1 2016 Q1 2017 Q1 2018 Q1 2019 Tempo IFRS 16 impact Origo Revenue (in ISK million) 3.996 4.000 3.781 539 3.553 461 3.500 +7% 3.332 393 3.000 3.553 3.457 3.320 2.939 0 Q1 2016 Q1 2017 Q1 2018 Q1 2019

  13. Income Statement Q1 2019 423 EBITDA 369 335 11 259 247 246 242 237 235 229 16 211 180 102 +554% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Tempo IFRS 16 impact Origo Revenue (in ISK million) 4.461 4.500 4.233 359 3.996 3.944 424 4.000 3.794 3.781 3.744 3.731 539 3.608 3.553 621 3.515 389 461 3.429 3.500 +7% 492 577 3.332 469 519 381 393 3.000 4.102 3.809 3.553 3.457 3.404 3.048 3.139 2.996 3.323 3.320 3.239 3.167 2.939 2.500 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

  14. Operations and EBITDA – Main Impacts EBITDA comparison 7 EBITDA Q1 2018 Tempo Q1 2018 EBITDA w/o Tempo Q1 2018 ORIGO EBITDA chg. Applicon AB EBITDA chg. EBITDA Q1 2019 IFRS 16 impact EBITDA Q1 2019 w/IFRS 16

  15. Balance Sheet

  16. Cash Flow Cash from operations (ISK million) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 First quarter cash comparison (ISK million) Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019

  17. Outlook

  18. Operating Outlook • The new collective wage agreements should provide a foundation for stability over the next three years. The circumstances in the Icelandic economy now more likely to remain favourable. • Businesses still under pressure to make their operations more efficient, with IT and digital technology playing ever larger roles. • Origo in a strong position in most areas, including with respect to brand awareness, the solution offering, structural efficiency and capacity for investment. • The outlook for Origo’s operations is therefore generally good.

  19. Questions?

  20. Disclaimer Forward-looking statements contained in this presentation may be based on management’s current estimates and expectations, and not on facts that may be verified after its publication. Such statements are inherently uncertain. We therefore caution the reader that there are a variety of factors that could cause business conditions and results to differ materially from what is contained in our forward-looking statements, and that we do not undertake to update any forward-looking statements. These forward-looking statements speak only as of the date of this presentation and are qualified in their entirety by this cautionary statement.

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