RECORD DEMAND FOR TECNOTREE PRODUCTS, DELIVERS REVENUE GROWTH ABOVE GLOBAL MARKET TRENDS

• Net sales increased 10.4% to EUR 22.2 (20.1) million.
• Operating result increased 29.5% to EUR 7.9 (6.1) million.
• Flat operating cost EUR 14.3 (14.0) million
• Foreign exchange losses increased 161% to EUR 6.0 (2.3) million.
• Result for the period decreased by 26.4% mainly due to higher exchange loss to EUR 2.4 (3.2) million.
• Operating Cash flow EUR 4.7 (0.6) million.
• Earnings per share EUR 0.01 (0.01).
• Order book at the end of the period increased by 16.4% to EUR 80.2 (68.9) million.

• Net sales increased 9.5% to EUR 78.4 (71.6) million.
• Operating result increased 30.2% to EUR 23.8 (18.3) million.
• Flat operating cost EUR 54.7 (53.3) million
• Foreign exchange losses increased 235% to EUR 9.7 (2.9) million.
• Result for the period is EUR 11.2 (11.6) million.
• Operating Cash flow EUR 6.2 (6.0) million.
• Earnings per share EUR 0.04 (0.04).

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Key figures, MEUR 10-12/2023 10-12/2022 1-12/2023 1-12/2022
Net sales 22.2 20.1 78.4 71.6
Operating result 7.9 6.1 23.8 18.3
Result before 2.8 4.7 13.9 17.2
taxes
Result for the 2.4 3.2 11.2 11.6
period

Earnings per 0.01 0.01 0.04 0.04
share, basic, EUR

Order book 80.2 68.9

Operating Cash 4.7 -0.6 6.2 6.0
flow
Change in cash 4.3 -6.3 4.8 -5.3
and cash
equivalents
Cash and cash 20.8 12.3
equivalents

Equity ratio % 67.5 77.1
[#]
Debt Equity ratio 6.6 6.0
% [#]

Personnel at end 883 857
of period

# Equity Ratio - (Equity/ Total Assets) | Debt Equity Ratio - (Debt/ Equity)

Prospects 2024

• Revenue to be higher by 2%-7% compared to 2023
• Operating profit (EBIT) to be higher by 7%-15% compared to 2023

The company will continue its focus on increasing licence revenue while is moving constantly evolving from Projects delivery Licence and Delivery mode into an Annual Recurring Revenue model. This will ensure that the company will have more predictable and stable quarter on quarter revenue.  However, revenue will be impacted in the shorter term. Telecom industry growth is poised at 2.1% annually from 2022-2027 and Tecnotree has been growing above the market. Further given the uncertain global economic scenario, the Company  expects 2%-7% growth in revenue compared to 2023.

In 2024, the company is expecting higher cost optimisation which will result in higher Operating profit of 7%-15% compared to 2023.  

Foreign exchange rates are expected to remain at approximately current levels.

From the CEO's desk 

• The company recorded the highest order intake in its history by 11.3% to EUR 95.4 (85.7) million. The company added 12 new logos including, 3 Tier-1 operators in Scandinavia and North America regions, enjoying an increased demand for digital cloud offerings.  This resulted in the highest order backlog ever recorded for the Company at EUR 80.2 (68.9) million, a 16.4% increase from 2022. The company expanded investment in AIML competitiveness which, contributed to 15.6% of the overall order intake. The AIML revenue stood at EUR 6.2 million. This exceeded our previously estimated growth in the AIML business of EUR 5 million for 2023.

• The company recorded revenue of EUR 107.2 (72.7) million at Constant Currency (exchange rate prevailing at the end of previous year) The reported revenue increased by 9.5% to EUR 78.4 (71.5) million post currency exchange fluctuations.

• Gartner forecasted the BSS market to have 2.1% annual growth from 2022-2027 (CAGR). The high revenue growth for Tecnotree's products and services can be attributed to Tecnotree's competitive product portfolio and its ability to drive outcome based digital transformations. More than 48% of the revenue was realised as Annual Recurring Revenue (ARR). This indicates a growing demand in SaaS, Subscription based business and transactional revenue models. Tecnotree celebrated 14 go-lives globally for some of the largest operator groups across various regions, delivering large-scale Digital BSS transformation for customers through the Tecnotree Digital Suite.
• In 2023, the revenue demographics of Tecnotree strengthened and diversified with 51% of revenue coming from new customers acquired in the last 5 years.
• The full year operating cash inflow at Constant Currency was EUR 84.1 (60.1) million (exchange rate prevailing at the end of previous year).  The reported operating cash inflow was EUR 62.2 (58.8) million an increase of 6% from the previous year post currency exchange fluctuations. The operating cash inflow for Q4 of 2023 was EUR 19.8 (11.2) million.
• The Company's foreign exchange losses in 2023 were EUR 9.7 (2.9) million. Majority of the currency exchange losses were due to devaluation of the Nigerian currency and the hyper-inflationary pressures in the Argentinian market. Tecnotree continues to renegotiate its contracts with these customers to mitigate exchange risks.  In addition, the company is in continuous negotiations with leading global banks for currency hedges and swaps. The company continues to expand its customers into stable markets to bring financial stability and free stable cash flow.
• The Accounts Receivable at the end of 2023 stood at EUR 32.9 (37.8) million a decrease of 13% from the previous year.
• The company has collected EUR 21.1 million in the second half of the year towards Compulsorily Convertible Debentures. The company also received an additional 2 million in CCD investments post year ending in 2023.
• The company efficiently managed its operating expenses (Opex) by cost optimization. The Opex was EUR 54.7 (53.3) million. As a percentage of overall revenue, the Opex fell to 69.8% from 74.5%. The company continues to monitor Opex extremely carefully and intends to maintain the current cost level despite inflationary pressure and continues to grow revenue and profitability.
• Despite the Company recording the highest ever EBIT in 2023 of EUR 23.8 (18.3) million, it was offset due to higher exchange cost driving flat net income of EUR 11.2 (11.6) million and EUR 2.4 (3.2) million in Q4 of 2023, which  resulted in a flat EPS of Euro 0.04 (0.04).
• The shareholders' equity of the Company ended at EUR 86.5 (80.1) million that was an increase of 8.1% from 2022. The translation adjustment loss accounted for 7.3 million Euros.
• In 2023, the Company invested EUR 13.8 (9.5) million in Product Engineering. More than 50% of the investments were targeted towards cloud, AIML and Ecosystem monetisation for 5G on our digital stack.

• The company continued to invest 18% (13%) of its revenue in R&D, specifically with respect to Cloud, GenAI, AIML, 5G and IoT. The Company also makes investments to  ensure its platform is modular, reliable and scalable with high degrees of automation, with self-healing, auto scaling and autopiloting capabilities.
• The company was issued 30 Patents in 2023 including in AGI and Augmented Intelligence supporting emerging technologies, common frameworks, and methodologies for Gen AI, ML Ops, and Data Ops with trust and governance using Sensa Low-Code Tooling & Platform and Co-pilots embedded for FTTX and Mobile and B2B2x Marketplace B/OSS modules.

• In 2023, Gartner has recognized Tecnotree in their Market Guide for Customer Experience Management and another Market Guide for Revenue Monetization and Management.
• Tecnotree has been recognized as a Finalist in the TM Forum Excellence Awards 2023 for Customer Experience for the implementation of the Tecnotree Digital Stack embedded with AIML to drive business outcomes for MTN.
• Tecnotree has been awarded the Diamond Badge for TM Forum Open API Conformance. The certification verifies the successful implementation of Open APIs with conformance to a total of 9 Real world and 59 certified Open APIs. With this landmark achievement, Tecnotree is No. 1 on the TM Forum Open API Conformance table.
• Tecnotree is the Top Vendor for official conformance and certification for TM Forum's Business Process Framework (eTOM).
• Tecnotree has been recognized among the top 4 major vendors globally for Autonomous Ai and Autonomous Agents by Markets and Markets.
• Tecnotree Moments won an award for best Telecom Monetization Platform from the Dubai Government.

• Tecnotree in 2023 has been honoured with two prestigious awards - `Best Innovation in Information Technology' by CMO Asia and 'Best Workplace Diversity Award' by UBS Forums.
• Tecnotree was recognized as a top performing Mid-Cap company by the Nordic Diversity Index, reinforcing our commitment to fostering a diverse and inclusive workplace drives innovation and empowers every individual within Tecnotree.
• Tecnotree launched a carbon neutral office space and green data center facility for all its cloud hosted offerings. The data center runs 100% solar energy and air cooling systems that is able to give back power to the grid. Tecnotree plans to extend this green cloud offering on its digital stack to customers and prospects.