Annual report 2023
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Annual report 2023
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Annual report 2023
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Annual report 2023
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Contents
Techstep at a glance
5
Letter from the CEO
7
Financial highlights
10
Board of Directors Report
11
Executive Management
22
Board of Directors
24
Sustainability
26
Corporate governance report
48
Consolidated financial statements
57
Notes to the financial statements
63
Techstep ASA financial statements
117
Techstep ASA Notes to the financial statements
122
Alternative performance measures
135
Responsibility statement
140
Auditor’s Report
141
Note: Greenhouse Gas reporting
145
Auditor statement Carbon Footprint Report
149
GRI Index
152
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Techstep at a glance
Techstep is a leading mobile technology specialist serving more than
2,100 customers in Scandinavia and parts of Europe led from Poland.
By combining mobile devices with software and expertise, we enable
organisations to perform smarter, securely and sustainably. Our goal is to
become the leading mobile technology company in Europe.
We provide a full suite of managed mobility services, offering all the
essential components necessary for organisations to effectively leverage
mobile technology. Equally important, we have strategic partnerships with
leading mobile devices manufacturers and mobile technology software
providers. Our team of experts help customers with designing,
implementing, and managing their mobile device infrastructure, ensuring
seamless integration and optimal performance.
Based on Techstep’s unique mix of competence and partnerships, our
customers count on us for professional insight on how to do more with
mobile technology. This is why Gartner has recognized Techstep as a
challenger in the global quadrant for Managed Mobility Services.
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Dear shareholders, customers, partners, and colleagues,
I joined Techstep last November in an advisory role, closely engaging with the
management, the board and the organisation. I immediately felt a strong
connection to the company, and I was, and still are, highly impressed by
Techstep’s unique expertise and burning passion for technology and its
customers. In January I was appointed as the new CEO, and I would like to thank
the Board and the organisation for the trust.
As we reflect on the past year, we acknowledge that 2023 was yet another
transformative year for Techstep, not unfolding as anticipated. Despite the
challenges, our unwavering commitment to excellence has propelled us
forward.
A strong leap towards profitability
Despite unforeseen market dynamics, we
achieved a remarkable milestone: a
substantial improvement in our EBITA adjusted
result. Throughout the year, we diligently
transitioned customers to a recurring revenue
model and steadily improved our net gross
profit. Our relentless focus on operational
efficiency, innovation, and cost optimisation
has put us in a stronger position to achieve
profitable and sustainable growth.
Moving towards scalability and
customer/partner-centricity
Our product portfolio underwent a deliberate
shift. We centred around highly scalable
solutions, emphasising innovation, scalability,
and long-term value. These solutions
empower us to meet market demands
efficiently while maintaining our commitment
to quality.
A pivotal moment arrived when we
transitioned from a product-centric mindset to
a customer/partner-first strategy. By deeply
understanding our customers’ needs, we forge
lasting relationships, secure strategic
partnerships, and unlock new growth avenues.
As the mobile technology landscape grows
increasingly complex, our managed mobility
services and Lifecycle offering resonate well
with evolving customer requirements.
Revitalised commercial strategy
and strengthened indirect
channels
In response to evolving market demands,
we embarked on a strategic change at the end
of 2023. Our revamped Go-To-Market (GTM)
strategy emphasises agility, adaptability, and
customer engagement. Focus going forward
includes developing our people to ensure we
have the best mobile tech expertise in the
market and know-how on how to create value
for our customers. Simultaneously, we have
fortified our indirect business model. By
cultivating deeper partnerships with mobile
service providers, distributors, and other
complimentary channel partners, we can bring
standardised solutions to the market at scale.
At the same time, our products and solutions
empower our partners to enhance customer
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mobility across a broader segment of the
value chain. As a result, we recently formalised
strategic partnership agreements with
devicenow and Consafe Logistics, and we are
actively exploring other significant
partnerships and collaboration opportunities.
Optimising and right-sizsng our
organisation
Efficiency remains at the core of our
operations. Throughout 2023, we diligently
optimised processes and streamlined
workflows under a unified management
system, which was successfully validated by
ISO certifications. The right-sizing efforts and
changes in executive management have
though challenged the organisation. Yet, we
need to continue to optimise the organisation
and reduce costs to turn the company
profitable. By aligning resources with strategic
priorities, we position ourselves for sustainable
growth.
Firm ambitions and positive
outlook
Mobile technology moves super-fast and it’s
harder than ever to keep up. At Techstep, we
have the tools and world-class expertise to
handle these complexities. We also have an
attractive customer base and increasing
number of strategic partnerships. Leveraging
this strong foundation, we will continue to
pursue new growth opportunities and make
sure we stay ahead. That’s why we have also
started exploring how we can deploy AI to
increase our own productivity and embed AI
capabilities into our products and services.
Well into 2024, we have a clearer value
proposition and stronger commercial strategy
which resonates so well with customers’ need
and market demand. We have a unique
market opportunity in front of us, and I strongly
believe we are in a great position to create
history and become the market leading mobile
technology company in Europe.
A big thank you to all of you for your dedication,
support, and unwavering efforts throughout
2023. Together, we will make work mobile and
make mobile technology work for you.
Warm regards,
Morten Meier
CEO Techstep ASA
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Financial highlights
(Amounts in NOK 1 000)
FY 2023
FY 2022
Revenues
1
1 089 491
1 273 652
2
312 142
298 101
ARR Own Software
115 348
106 101
Net Gross Profit
3
353 919
367 279
Net Gross Profit Margin
4
32.5 %
28.8 %
EBITDA adjusted
5
137 496
85 466
EBITDA rep.
136 019
115 510
EBITA adjusted
5
29 892
(23 756)
EBIT
(36 498)
(52 205)
Net profit (loss) for the period
(44 546)
(68 614)
EBITDA adj. margin (%)
12.6%
6.7%
EBITDA rep. margin (%)
12.5%
9.1%
EBITA adj. margin (%)
2.7%
(1.9%)
EBIT margin (%)
(3.4%)
(4.1%)
Net profit (loss) for the period (%)
(4.1%)
(5.4%)
Cash flow from operating activites
155 560
123 741
Cash flow from investment activities
(128 514)
(180 376)
Cash flow from financing activities
(12 730)
67 594
Cash and cash equivalents
77 459
61 119
Net interest-bearing debt
101 218
112 868
Capex
33 920
52 250
Employees
267
315
Refer to Alternative performance measures for definitions.
1) Revenues for 2022 and 2023 have been restated due to a reclassification of kick-back and commissions from mobile device
purchases from revenues to cost of goods sold.
2) Annualised recurring revenues includes revenues from Own Software, Device-as-a-service and Advisory and Services.
Reported annualised recurring revenues are based on contracts for 12 or more months and calculated as invoiced contractual
revenues the last month times 12.
3) Net gross profit is defined as total revenue less cost of goods sold and depreciation from Device-as-a-Service.
4) Net gross profit margin is net gross profit of revenues.
5) EBITDA adj. and EBITA adj. YTD 2022 exclude non-recurring items such as M&A and restructuring related costs of NOK 1.6 million
and structural gains from sale of business of NOK 40.5 million.
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Board of Directors’ Report
Techstep is on a comprehensive
transformation journey, going from a
transactional hardware provider to a software-
driven mobile technology enabler with a
recurring services business model.
Over the last couple of years, Techstep has
invested heavily in a new technology platform,
integrated acquired entities and
commercialised the product offering. 2023 has
been about streamlining business operations
and optimising the cost base to extract
synergies and increase profitability from these
investments. At the end of the year, Techstep
developed a refocused commercial strategy
with a new go-to-market approach and
increasing focus on partner sales as an
important channel for highly scalable solutions
such as Own Software and managed services.
Business activities and strategy
Built upon a decade of telecoms and mobile
technology expertise, Techstep was established
in 2016. Through a series of strategic
acquisitions, Techstep has solidified its
presence in Scandinavia and later expanded
into European markets through Poland.
Positioning as a mobile technology specialist,
the company’s overarching business strategy
centres on combining mobile devices with
proprietary and/or licencing software and
expertise, helping organisations to work
smarter and more sustainably. The goal is to be
the leading mobile technology company in
Europe.
Techstep serves more than 2 100 enterprise
customers across different industries and
sectors, helping both office workers and
frontline workers optimise their work. Based on
Techstep’s unique mix of competence and
partnerships, Techstep has been recognised by
Gartner as a challenger in the global quadrant
for Managed Mobility Services.
While the company's primary market remains
Scandinavia, where its full product portfolio is
readily accessible through direct sales and
partnerships with both private enterprises and
the public sector, its strategic go-to-market
focus extends across Europe, led from Poland.
Through partner programmes, Techstep will
offer standardised and scalable solutions,
either as stand-alone offerings or bundled with
partners' solutions, facilitating broader market
penetration and customer reach.
The market opportunity
Mobile technology is one of the fastest growing
technologies in the world, and digitalisation is
leading this transformation, reshaping
industries and work processes. Within the
dynamic landscape of the mobile technology
market, Techstep’s offering answers several key
challenges that organisations face, including
administration and control of the mobile
technology infrastructure, cost reductions,
sustainability and security concerns.
Positioned at the forefront of the Managed
Mobility Services (MMS) market, Techstep aligns
with Gartner’s definition, which characterises
MMS as the integration of mobile devices,
software and services into a unified offering,
streamlining operational capabilities. Techstep
extends the traditional MMS definition to include
strategic advisory and software development
services, leveraging mobile technology to
1
Gartner’s full definition of MMS is “IT and process
management services required to plan, procure, provision,
activate, ship, manage, secure and support mobile devices,
related accessories, network services, mobile management
systems and mobile applications”.
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transform organisational operations and
capabilities.
Gartner’s recognition of Techstep as a global
challenger in the MMS market underscores the
company’s strategic positioning and its
combined managed mobility offering
developed over the past eight years. With more
than 2 200 research and advisory experts doing
rigorous analysis for clients in nearly 90
countries worldwide, Gartner stands as a
thrusted authority within the IT sector. This
acknowledgement reflects Techstep’s ongoing
commitment to changing the world of work and
serves as continued validation towards the
European market.
Research shows strong supporting trends, with
Gartner forecasting annual growth rates of 3%
in the MMS market across Europe and 7-9% in
Norway and Sweden over the next four years,
underscoring the continued expansion and
importance of mobile technology solutions in
Techstep’s key markets
Product offering
Techstep’s product offerings range from
individual device needs to complete
transformative solutions, encompassing
software, mobile devices and advisory services
packaged into cohesive products.
Central to its offering, are strategic partnerships
with top-tier mobile device manufacturers and
mobile technology software providers.
Leveraging this strong foundation, Techstep
adds comprehensive managed services that
encompass the entire device lifecycle. This
includes proactive device management and
robust security services, ensuring optimal
performance and safeguarding against
potential threats.
By integrating its proprietary software with
managed services and expert advisory,
Techstep delivers best-practice outsourced
mobile technology solutions. Whether bundling
the entire stack together or delivering individual
components based on customer requirements
and maturity, everything is offered as-a-
service or transactional for maximum flexibility.
The streamlined approach encompasses
ready-to-go devices, lifecycle management,
and security services, so that customers can
effortlessly scale their mobile technology usage
within an outsourced model, thereby optimising
efficiency and productivity.
Main developments in 2023
2023 was a year marked by the ongoing
transformation, with streamlining business
operations and optimising Techstep’s cost
base while maintaining commercial
momentum, to turn the company profitable.
Despite a downturn in the mobile device sales,
the focus on transferring customers to a
recurring revenue business model and high
margin products and services started to yield
results, and the net gross profit margin
increased from 29% to 32% year over year.
The cost optimisation plan initiated in Q4 2022
has proved successful and resulted in a
substantial lower cost base in 2023 compared
to the year before, both related to operating
expenses as well as investments in internal IT
infrastructure. The work with optimising
Techstep’s cost base and IT infrastructure
continues in 2024.
Sales activity
On the commercial side, 2023 was slower than
anticipated, but momentum accelerated
towards the end of the year. The year has been
marked by high tender activity, where Techstep
2
Gartner IT Services Forecast Q3 2023
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won several large public sector agreements.
The largest wins in Norway were the frame
agreements with Sykehusinnkjøp HF and the
Municipality of Oslo, where the contract value
potential is estimated to NOK 650 million and
NOK 450 million over four years, respectively. In
Sweden, the largest win was with the public
sector purchasing agency Kammarkollegiet,
where Techstep is one of six suppliers qualified
to participate. Techstep has previously had
corresponding agreements for providing
mobile devices, accessories and clients,
whereas the new agreements are better
adapted to Techstep’s complete offering and
with better opportunities for upselling of
products and services. Conversion to revenues
is however taking time, but moving into 2024,
maturity and momentum started progressing
positively.
Revitalised commercial strategy
Techstep launched a revitalised commercial
strategy with a new go-to-market strategy and
increasing focus on partner sales. Part of this
includes a revised indirect business model,
where partner sales is an important channel for
highly scalable solutions such as Own Software
and managed services.
At the end of February 2024, Techstep signed a
strategic partnership agreement with
devicenow, a global provider of subscription-
based IT devices, to introduce Lifecycle Portal to
a wider customer base worldwide. In April 2024,
Techstep signed a partnership agreement with
Consafe Logistics to assume control over their
hardware division specialised in rugged
devices. The collaboration allows Techstep to
broaden its mobile devices solutions and
services, while extending its reach into new and
existing markets. In addition, Techstep is
actively pursuing other significant partnerships
and opportunities, with expectations to finalise
agreements in the upcoming months.
Revenue streams
Techstep continues to focus on upselling and
converting existing customers from
transactional to recurring sales. This will
enhance financial predictability for Techstep,
while at the same time ensuring better value for
customers by providing them with continuous
service rather than one-off transactions. Today,
Techstep has the following three revenue
streams:
Mobile Devices & Other
Revenue from the sale of mobile devices and
related accessories. Sold as transactional, one-
time sales or “as-a-service” with recurring
revenues committed for 24 months or more.
Low margin contribution.
Techstep’s total Mobile devices & Other revenue
came to NOK 775.8 million, a decline of 16% from
2022. Sales were impacted by a general decline
in the global smartphone market, in both
Norway and Sweden. The net gross profit
margin was 16%, slightly up from the year before
due to better margins on transactional
revenues.
Advisory & Services
Revenue from specialised advisory and support
and maintenance services. Sold as one-time
projects based on fixed hourly rates or “as-a-
service” with a minimum 12-month recurring
revenue commitment. Medium to high gross
margin contribution. Also include revenue from
sale of third-party software licences including
related commission.
Revenue from Advisory & Services came to
205.7 million, a decline of 19% from 2022, while
the net gross profit margin increased 12
percentage points to 67%. The change relates to
a larger one-off third-party software
transaction in 2022 with low margin. The
positive trend in Advisory & Services throughout
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the year was affected by declining consulting
revenues, but with improving recurring
revenues at the end of the year.
Own Software
High margin revenue (>85%) from proprietary
software products sold as recurring contracts
with a minimum of 12-month commitment. The
current portfolio consists of four software
products; Lifecycle, Expense, Managed UEM,
and Amplify.
Revenue from Own Software was NOK 107.5
million for the year, up 17% from NOK 91.6 million
in 2022. The growth relates to the increased
number of users and contracts; however,
revenues were negatively affected by some
one-off corrections. Net gross margin on Own
Software was 88%, slightly down from the year
before.
Recurring revenue
Total recurring revenue consists of
contractually recurring revenue within the
revenue segments Own Software, Advisory &
Services and Device-as-a-Service. Reported
recurring revenue represents future
contractual annual revenues. Recurring
revenue from Device-as-a-Service is
measured as contracts with a duration of 24
months or more, with monthly incurred revenue
annualised. Annual recurring revenue from
Advisory & Services is calculated as
contractual monthly revenue from contracts
with a duration of 12 months or more,
annualised. Annual recurring revenue from
Own Software is calculated as contractual
monthly revenue annualised. Techstep
includes only contracts where invoicing to
customers has commenced.
Total recurring revenues annualised grew by 5%
in 2023 to NOK 312 million, mainly driven by 9%
growth in Own Software and 12% growth in
Advisory & Services. The growth in recurring
revenues over the last year has been negatively
impacted by a reduction in Device-as-a-
Service, which may be explained by the general
decline in the global mobile device market.
Financial performance
Techstep prepares consolidated financial
statements have been prepared and
presented in accordance with the IFRS®
Accounting Standards as adopted by the EU,
relevant interpretations, and the Norwegian
Accounting Act. A summary of internal controls
related to the accounting process can be found
in the Corporate Governance section of this
Annual Report.
Note that from 2023, Hardware & Other and
Hardware-as-a-Service has been renamed
Mobile Devices & Other and Device-as-a-
Service (DaaS), respectively.
Profit and loss
Techstep has performed a review of the
accounting principles for accounting for
kickback and commissions received from
vendors. Up until Q4 2023, this payment stream
was accounted for as revenues. The review
conducted in Q4 2023 concluded that the
underlying contracts indicated that this should
be accounted for as a reduction of cost of
goods sold. The revenues and cost of goods
sold reported for 2022 have been restated.
There is no impact or changes to the reported
gross profit.
Techstep had total revenue of NOK 1 089 million
in 2023, a decrease of 14% from 2022. The
decline relates to reduced sales of mobile
devices, and two larger one-off third-party
software and aftermarket transactions in 2022
totalling above NOK 50 million. The main
revenue growth drivers were transactional
device sales and a solid improvement in
revenue contribution from our Own Software
Annual report 2023
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portfolio. The increase in revenue from high
margin products and services resulted in net
gross profit margin growing from 29% to 32%
year over year.
Due to the cost optimalisation efforts in 2023,
Techstep generated positive results from
operations. EBITA adjusted came to NOK 29.9
million, an increase of NOK 54 million from the
year before. Total expenses excluding
depreciation and amortisation decreased by
20% primarily due to the cost optimisation
effects. Additionally, the investment in technical
infrastructure continues, but compared to last
year, the capitalisation rate has decreased as
investments are increasing in SaaS solutions vs.
own developed software, which is not eligible
for capitalisation under IFRS. As such, a higher
rate of the expenditure in IT development is
expensed rather than capitalised in the
balance sheet. Operating loss for the year was
NOK 36.5 million, an improvement of NOK 15.7
million from 2022.
Net financial items were negative at NOK 23.0
million (NOK -12.0 million) for the year.
Financial items include interest expenses, and
currency effects from the fluctuation of NOK
versus EUR and SEK, in addition to changes in
the fair value of the interest rate swap in the
amount of NOK -4.1 million in 2023. Net loss for
the year was NOK 44.5 million (NOK -68.6
million).
Financial position
As at 31 December 2023, total assets were NOK 1
271 million (NOK 1 323 million).
Intangible assets were NOK 785.2 million (NOK
783.4 million), of which goodwill constitutes NOK
624.2 million. Total tangible assets were NOK
191.0 million (NOK 198.1 million) including NOK
159.5 million (NOK 160.7 million) in capitalised
devices under Device-as-a-Service to
customers and NOK 31.5 million (NOK 37.4
million) in other tangible assets, which include
right-of-use assets such as premises and other
capitalised equipment.
Total inventories and receivables were NOK
200.2 million (NOK 271.0 million) at the end of
2023. The decrease was due to accounts
receivables declining about NOK 54 million from
the end of last year partly due to a larger third-
party software transaction at the end of
December 2022.
Total equity was NOK 573.7 million (NOK 571.5
million) at the end of 2023, corresponding to an
equity ratio of 45% (43%).
Total non-current liabilities were NOK 183.9
million (NOK 148.8 million). The increase relates
to the refinancing of bank borrowings executed
in September 2023. The refinancing secured an
increase of NOK 25 million in total loans and
credit facilities, and NOK 50 million constituted
increased long-term loans vs. previous
financing agreements.
Current interest-bearing borrowings of NOK
48.7 million include the short-term part of the
long-term borrowings, in addition to drawn
credit facilities. Current borrowings were
reduced by NOK 34.6 million from 2022, whereof
NOK 14.7 million relates to a conversion of a
seller credit in July 2023. After this transaction,
Techstep has no outstanding seller credits from
previous acquisitions.
Net interest-bearing debt at the end of 2023
was NOK 101.2 million, a decrease of NOK 11.7
million since the end of 2022.
Total current liabilities were NOK 513.2 million
(NOK 603.0 million). The decrease was primarily
caused by the reduction in current interest-
bearing borrowings. Current liabilities related to
Device-as-a-Service of NOK 167.2 million (NOK
168.2 million) include buy-back obligations and
deferred revenues from the Device-as-a-
Service revenue segment. Other current
Annual report 2023
16
liabilities of NOK 98.9 million (NOK 145.8 million)
include public duties and general cost accruals.
Cash flow
The net cash flow from operating activities was
NOK 155.6 million in 2023 (NOK 123.7 million). The
positive change in cash flow from operations is
due to increased EBITDA and improved working
capital in 2023.
Net cash outflow for investment activities was
NOK 128.5 million and consists of capital
expenditures related to Device-as-a-Service of
NOK 112.7 million (NOK 132.5 million) and
investments in Own Software and IT of NOK 34
million (NOK 52 million). The investment pace in
Own Software and IT was significantly reduced
after implementing the cost optimisation
programme which was initiated in the fourth
quarter of 2022.
Net cash flow from financing activities was NOK
12.7 million in 2023 (NOK 67.6 million) and
consists primarily of proceeds from borrowings,
offset by repayment of borrowings of NOK 129.9
million (NOK 29.0 million), interest and lease
repayments. In 2022, Techstep raised NOK 77
million in capital through a private placement,
in addition to increasing loans and drawdowns
on credit facilities in the amount of 55.8 million.
Cash and cash equivalents increased by NOK 14
million during 2023 to NOK 77.5 million at the
end of the year. The positive cash development
relates to the improved results. Techstep also
has additional liquidity available through new
bank facilities. Please see note 15 for further
details.
Allocation of the profit/loss for the parent
company, Techstep ASA
The loss for the year 2023 attributable to owners
of the parent was NOK 10.1 million, compared to
a loss of NOK 47.9 million for 2022. The Board has
proposed that the loss be covered by other
reserves.
Going concern
The Board of Directors confirms that the annual
financial statements for 2023 have been
prepared under the assumption that the Group
is a going concern, in accordance with Section
3-3a of the Norwegian Accounting Act and that
such an assumption is appropriate, based on
the Group’s reported results, business strategy,
financial situation and established budgets.
Risk and risk management
Techstep has in 2023 further strengthened its
risk management framework, including
frequent reporting to the management and
Board. The goal is to support effective execution
and decision-making to reach the company’s
goals and to ensure compliance with legal and
regulatory requirements.
As a mobile technology company, Techstep is
exposed to a range of risks that may affect its
business and financial results. Some key risks
are highlighted below. Reference is also made
to the prospectus dated 29 November 2022,
pages 6-10 for information on potential risk
factors. The prospectus is available from the
company’s website
www.techstep.io/investor
.
Operational risk
Techstep’s operations, revenues and profits are
dependent on its ability to generate sales
through existing and new customers. Techstep
operates in a competitive market segment, and
Annual report 2023
17
the Group’s success depends on its ability to
meet changing customer preferences, to
anticipate and respond to market and
technological changes, and develop effective
and competitive relationships with its
customers and partners. Techstep continues to
focus on improving its product offering,
reducing customer implementation time, and
becoming a software-led growth business,
yielding higher cash flow and profit from
operations, and transforming into a recurring
revenue business model. The operational risk
mainly relates to the ongoing transformation
process, including standardisation of the
product portfolio, aligning and improving ways
of working, as well as keeping key personnel
and necessary competence.
Financial risk
Techstep’s activities involve various types of
financial risk: credit risk, liquidity risk, currency
risk and interest rate risk. The primary focus of
the Group’s capital structure is to ensure
sufficient free liquidity, so that the Group can
service its obligations on an ongoing basis, and
at the same time be able to make strategic
acquisitions.
Credit risk
The credit risk relates to customers being
unable to settle their obligations as they
mature. Techstep has a well-diversified
customer portfolio, mainly comprising
medium-sized and enterprise organisations in
the private and public sectors. The Group has
established mitigating procedures including
credit evaluation of major private customers,
and the credit risk is considered satisfactory.
Liquidity risk
Techstep’s liquidity risk is related to a mismatch
between cash flows from operations and
financial commitments. Techstep is
transforming itself from a transactional
business model to a software-led recurring
revenue model, which leads to postponed cash
inflows, negatively affecting the liquidity of the
Group. Investments in simplification and
standardisation of the company’s product
portfolio and solutions, new organisational
capabilities and acquisitions and integration,
have furthermore increased the company’s
debt over time. The Group's liquidity is closely
monitored by management and the Board of
Directors. The refinancing of loans and credit
facilities in Q3 2023 has given Techstep a more
solid and flexible financial situation. If the need
arises, the Group has access to multiple funding
sources during the transformation process.
Foreign exchange risk
Techstep uses Norwegian krone (NOK) as its
presentation currency but is exposed to
exchange rate fluctuations from operations
abroad, mainly the Swedish krona (SEK), Polish
Zloty (PLN) and Euro (EUR). The company has
exchange rate risks related to the currency
translation of profit generated in its foreign
subsidiaries. In 2023, around 62% of the Group’s
revenue was in NOK, with approximately 35% in
SEK, and the remaining in PLN and EUR. Techstep
does not use any hedging instruments for
exchange rate fluctuations, which may have a
negative effect on the company’s consolidated
financial results and financial position if the NOK
strengthen considerable against the relevant
currencies.
Macroeconomic and geopolitical risk
The global economiy has faced continually
increasing challenges in 2023, with slowing
growth and higher inflation in Techstep’s key
markets, which may impact financial results
and weaken the economic outlook. In addition,
tension in the global political situation
increases the risk of supply chain disruptions,
sanctions, increasing cyber threats and risk of
sabotage of critical infrastructure. The current
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18
conflicts do not impact Techstep directly, and
Techstep has no operating presence in the
affected areas. Indirect effects however, such
as financial market volatility and general
economic market conditions, might have an
impact on financial results and weaken the
economic outlook. Techstep has a large base of
public sector and large corporate customers,
which are less vulnerable to volatile market
conditions.
The global component shortage showed signs
of easing at the end of 2023, while previous
production, logistics and transportation
challenges in the technology supply chain have
been resolved. Tension between China and
Western countries continues to escalate with
increasing pressure and restrictions against
China’s technology industry while China is
trying to increase its influence and operations
worldwide. This may cause new supply chain
disruptions, in which Techstep may experience
delays in mobile device deliveries. At the date of
this report, there are no such indications.
Techstep continues to maintain close
cooperation with key suppliers to ensure timely
deliveries.
Climate change and climate risk
Techstep recognises the urgency of addressing
climate change and its implications on both
society and the environment. In order to reduce
Techstep’s impact on climate change, the
company must first and foremost reduce its
own emissions. Guided by its environmental
policy, Techstep works systematically with
tracking and reducing greenhouse gas
emissions and improving environmental
performance. The company has in 2023 set
near-term reduction targets of reducing Scope
1 and 2 emissions, validated by Science Based
Targets.
To meet changes in regulations, technology
and the market situation in connection with the
transition to a low emission society, Techstep’s
transition risk is associated with changes in
customer preferences to reduce environmental
impact, reduced access to capital and future
talents if the company does not accelerate the
sustainability agenda and measures in line with
market expectations. Meanwhile, mobile
technology solutions also contribute positively
in terms of helping companies and individuals
reduce emissions i.e. through Techstep’s
Lifecycle solutions which can help extend
devices’ lifetime and contribute to the circular
economy.
Physical climate change risk is associated with
extreme weather such as flooding, drought,
storms and heavy precipitation, which may
cause power outages, damages to networks
and buildings, reduced availability and
threaten business continuity. Techstep
considers however this risk to be low since
Techstep operates in low-risk countries, uses
cloud-based data centres and its employees
can easily switch to remote work. The greatest
risk is related to supply chain disruptions in the
form of manufacture or delivery problems, or a
lack of raw materials. Techstep seeks to
mitigate this risk by working with a diversified
number of vendors, including mobile device
brands and distributors.
From 2024, Techstep will report on climate risks
and opportunities annually through Carbon
Disclosure Project (CDP). In addition, the
processes of implementing requirements of the
EU’s new Corporate Sustainability Reporting
Directive (CSRD) will be commenced in 2024,
with reporting from annual report 2025.
Transactions with related parties
See note 24.
Annual report 2023
19
Corporate governance
Techstep’s corporate governance structure is
based on Norwegian legislation and the
Norwegian Corporate Governance Board
(NUES/NCGB), last revised 14 October 2021. A
statement on Techstep’s corporate
governance principles and practices is
provided in a separate section of this annual
report on pages 48 to 55. In the company’s own
assessment, Techstep did not deviate from any
sections of the Code as at year-end 2023.
Techstep has Directors and Officers liability
insurance for the Group. The insurance covers
the Board’s and the management’s legal
personal liability for financial damage caused
by the performance of their duties.
Corporate social responsibility
(ESG)
Techstep’s mission is to make positive changes
to the world of work through mobile
technologies; freeing people to work more
effectively, securely and sustainably. The
company’s sustainability agenda is an
essential part of the company’s mission.
As a signatory to UN Global Compact, Techstep
is committed to responsible business practices
in the areas of human rights, labour, equality,
anti-corruption and the environment. During
2023, Techstep has strengthened its focus on
environmental, social and governance (ESG),
risk and compliance. The organisation has
implemented management practices based
on the ISO-standard, leading to ISO 9001
(quality) and 14001 (environment) certifications
in Q1 2023. In addition, an ongoing process is
expected to achieve ISO 27001 (information
security) certification in H1 2024. Techstep has
further improved its EcoVadis sustainability
rating performance from 66 to 69 points out of
100, corresponding to silver rating and, placing
Techstep among the top 8% of more than 90
000 companies evaluated globally.
Details on Techstep’s material ESG activities are
included in a separate sustainability chapter of
this annual report, which covers what Techstep
does to promote, uphold and recognise human
rights, labour rights, social issues, working
environment, climate and environmental
aspects and anti-corruption measures into the
business strategy, daily operations and the
relationship with stakeholders. The chapter also
includes Techstep’s reporting pursuant to the
Norwegian Transparency Act and the Equality
and Anti-Discrimination Act. The sustainability
chapter is available on pages 26 to 47 in this
annual report.
Shareholder information
As at 31 December 2023, Techstep’s share
capital was NOK 31 629 381, divided into 31 629
381 ordinary shares, compared to a share
capital of NOK 305 131 070, divided into 305 131
070 shares, at the end of 2022. During the year,
Techstep completed a reverse share split of 10:1
and reduced the nominal value of the share
capital accordingly. In addition, the share
capital was increased by NOK 1 116 274 in
connection with conversion of debt to Stobor
Invest to shares as well as the annual employee
share purchase programme.
The total number of shareholders was 3 370
(3 345) at year end, and the company’s largest
shareholder, Datum AS, held 18.45% of the
shares. The 20 largest shareholders held 69.44%
(72.9%) of the shares outstanding, and
Techstep holds 192 treasury shares.
For detailed shareholder information, see note
25 in the consolidated financial statements for
2023.
Annual report 2023
20
Outlook
Techstep serves more than 2 100 customers
across industries in both the private and public
sector in Europe, and is recognised by Gartner
as the only challenger in the Magic Quadrant for
Managed Mobility Services. Techstep’s goal is to
become the leading provider of Managed
Mobility Services in Europe for customers that
want to work smarter and more sustainably.
Techstep believes that the market for managed
mobility services will continue to increase due
to growing complexity and the rapidly evolving
security threat landscape. The company
considers itself well positioned as enterprises
and public sector organisations need help to
manage their mobile device portfolio and keep
their mobile ecosystem up to date.
Techstep signed several frame agreements
with public sector organisations during 2023,
with good opportunities for upselling products
and services. There are indications that the
customers’ readiness is slower than
anticipated, and upsell on these agreements is
a key focus area in 2024 together with the
revised partner strategy.
The cost optimisation programme announced
in late 2022 was successfully implemented
during the previous year, even as inflation came
in above expectations. In the programme,
Techstep’s organisation and cost base was
aligned with a more simplified portfolio and
synergies from acquired companies were
extracted.
Techstep will continue to focus on cost
optimisation, and it is expected that the
underlying cost base will continue to decline. At
the same time, there is a continued need for
investments and upgrades of the IT
infrastructure to increase efficiency and further
reduce costs going forward, and these
investments are expected to continue in 2024.
Techstep did not deliver according to the
ambition for 2023, but expects a faster
acceleration in the second half of 2024 and into
2025. Moving forward, growth will be driven by
the entire product portfolio and the refocused
commercial strategy through upselling more
value-adding products and services across the
product portfolio, as well as increasing sales of
scalable products through new and existing
partner channels. For 2024, Techstep aims at
growing recurring revenues annualised y/y by
+30% and net gross profit by 10-15% and
increasing EBITA conversion to 12-16%.
Techstep’s long-term ambitions remain
unchanged, and by 2025 Techstep aims for a
growth in recurring revenues annualised y/y by
+30%, net gross profit above NOK 540 million
and EBITA adj. conversion of over 25%
Annual report 2023
21
Oslo, 29 April 2024, signatures from the Board of Directors and the CEO of Techstep ASA:
Michael Jacobs
Chairman
Harald Arnet
Board member
Ingrid Leisner
Board member
Jens Rugseth
Board member
Melissa Ann Mulholland
Board member
Morten Meier
CEO
Annual report 2023
22
Executive Management
From the top, left: Bartosz Leoszewski, Morten Meier, David Landerborn, Sheena Lim and Ellen Solum.
Absent: Ellen Skaarnæs
Morten Meier – Chief Executive Officer
Mr. Meier is a seasoned senior executive with more than 25 years of experience from the software and
technology industry, including leadership, strategy, business development, sales, marketing, and
operations. He has a proven track record of driving high performance teams and delivering profitable
growth, and is passionate about driving transformation, innovation, growth and customer success.
Prior to Techstep, he spent the ten past years with Microsoft Norway, where he served several positions
on the leadership team, latest as Senior Director Marketing & Operations (COO) and Deputy General
Manager. Previous experience includes four years of leadership positions at IBM in Norway and at the
Nordic level, and almost ten years with Hewlett-Packard.
Ellen Solum – Chief Financial Officer
Mrs Solum joined Techstep from the role as Partner in Uniconsult AS, and brings extensive experience
from all finance functions, such as accounting, tax, controlling, treasury and investor relations and
significant experience from change management, turn-around cases and IPO processes. She has
worked in both private and publicly listed companies and has previously held positions such as CFO
in TeleComputing ASA, Finance Director in Findus AS, as well as several years as management
Annual report 2023
23
consultant and partner. Mrs Solum holds a bachelor’s degree from University of Colorado Boulder, as
well as an MBA from the Norwegian School of Economics (NHH).
David Landerborn – Chief Operating Officer
Mr. Landerborn is an experienced executive with deep understanding of the mobile technology
industry, having held several prominent positions within Techstep. This experience includes his role as
Deputy Managing Director and Chief Operating Officer at Optidev AB, which Techstep acquired in 2020,
and as part of Techstep’s executive management team since Q4 2022. He is passionate about
strategy and operational excellence, mobile technology solutions, and developing a strong and
winning company culture. He is actively involved in local tech initiatives in Borås, Sweden, to make sure
rising Tech stars choose Techstep as their employer. Mr. Landerborn holds a bachelor’s degree in
computer science from the University of Borås, Sweden.
Sheena Lim – Chief Marketing Officer
Ms Lim has over 22 years of international brand, marketing and communication experience in telecom,
food & beverage, media and pharmaceutical and HR tech. Ms Lim came to Techstep from the position
as Marketing and Communication Director at Zalaris, a provider of simplified HR and payroll
administration. Previous positions include 12 years with Telenor’s international operations, where she
worked through change and improvement projects across all 12 markets in which Telenor was
involved. Ms Lim has an executive MBA from BI Norwegian Business School and ESCP European
Business School, as well as a bachelor’s degree for business (marketing) from University of Monash.
Ellen Skaarnæs – Chief People Officer
As Chief People Officer, Mrs Skaarnæs’ key focus is to ensure that Techstep is an attractive workplace
with a culture and people focus that our people and great talents want to be part of. Mrs Skaarnæs is
an experienced, strategic and business-oriented HR leader with a keen focus on delivering results and
adding value to the business. She has a broad background from international organisations at both
the strategic and operational level. With her 13 years in Shell holding various positions at all levels (from
HR advisor to Managing Director) and five years at Coca-Cola Enterprises as Ass. Director, HR Business
Partner, she brings extensive experience from performance and talent management and change
management in addition to solid leadership and coaching experience.
Bartosz Leoszewski – Chief Product & Technology Officer
Mr Leoszewski is an experienced IT and software leader and entrepreneur. He is experienced in building
software products and their strategy, setting a long-term technology direction with cybersecurity
always at the forefront. As a software engineer in 2006, Mr. Leoszewski co-founded Famoc, where he
was first responsible for product development and engineering as Chief Technology Officer, and in
2012 transitioned to a CEO role - growing the company from just an idea into a recognised player in
the enterprise mobility market. Famoc was acquired by Techstep in 2021. Mr Leoszewski holds an MSc
in computer science from the Technical University of Gdansk and an Executive MBA from Rotterdam
School of Management. He is also a member of the Polish chapter of the Entrepreneurs' Organisation.
Annual report 2023
24
Board of Directors
Michael Jacobs – Chairman of the Board
Mr Jacobs is the Executive Vice President of the Nordics at Crayon ASA, a customer-centric innovation
and IT services company. He has more than 30 years’ experience from extensive management
positions from several international technology companies. He previously was the CEO of Fell Tech
and before that he was the CEO of Atea Norway, where he improved its business performance and led
the transformation to more value-added services. He also served as the Managing Director of
Microsoft Norway and the Managing Director for the Nordics at Dell. He also has experience from
Oracle and Telenor, both in Norway and internationally. He has a degree from California Lutheran
University and continuing education from, among others, Harvard University. Customer focus,
technology innovation and building strong diverse teams are areas that Michael is passionate about.
Mr Jacobs is a Norwegian citizen, living in Oslo, Norway.
Jens Rugseth – Board member
Mr Rugseth has served on the Board in Techstep since February 2019. In January 2023 he stepped down
as chairperson of the Board and remained as an ordinary Board member. Mr Rugseth is a co-founder
and Board member of Crayon Group ASA and Link Mobility Group ASA, and other current directorships
include Chairman of Karbon Invest AS, Sikri Group ASA, Kastel AS and Rift Labs AS, among others. Over
the past 30 years he has founded a number of companies within the IT sector. He has also held the
position as chief executive officer in some of the largest IT companies in Norway, including ARK ASA,
Cinet AS and Skrivervik Data AS. Mr Rugseth studied business economics at the Norwegian School of
Management. Mr Rugseth is a Norwegian citizen, living in Switzerland.
Ingrid E. Leisner - Board member
Ms Leisner has served on the Board of Techstep since February 2016. She has extensive experience as
head of audit committees and member of boards in listed companies currently including the board
of Norwegian Air Shuttle ASA, Maritime and Merchant Bank ASA, Elliptic Lab. ASA and Xplora
Technologies AS. Over several years she held various positions with Statoil (Equinor), including Head
of Portfolio Management Electric Power and trader of different oil products. She holds a Bachelor of
Business Administration (Siviløkonom) from the University of Texas. Ms Leisner is a Norwegian citizen,
living in Oslo, Norway.
Annual report 2023
25
Melissa Mulholland - Board member
Ms Mulholland has served on the Board in Techstep since April 2021. Ms Mulholland is Chief Executive
Officer of Crayon, a digital transformation expert that through innovation and services helps
companies worldwide leverage the power of technology. Her previous experience include 12 years at
Microsoft, leading strategy and business development, and two years in Intel Corporation. She has
authored 12 books focused on how to build a business in the Cloud and is a board advisor for SHE,
Europe’s largest gender equality conference. Ms Mulholland holds an MA in Business Administration
and Strategic Management from Regis University in Colorado. She is a US national, living in Oslo,
Norway.
Harald Arnet - Board member
Mr Arnet has served on the Board in Techstep since September 2021. Mr Arnet has more than 30 years
of experience in national and international finance, industrial and financial investments. He is the CEO
of Datum AS, one of the company’s largest shareholders, and has held several board positions in listed
and non-listed companies, including Kahoot! AS, NRC Group ASA and several companies within the
Datum group. He holds a master's degree from University of Denver and London Business School. Mr
Arnet is a Norwegian citizen, living in Oslo, Norway.
Annual report 2023
26
Sustainability
In Techstep, we want to make positive changes in society by making the
world of work smarter and more sustainable.
We believe in the power of mobile technology to make employees happier and more productive by
freeing them up to work smarter. Our solutions can help them do this in a more sustainable and secure
way. This means we will help our customers deliver on their ESG commitments, but also ensure that
we are using resources in a way so that they aren’t depleted over time. It’s about taking care of people
and the environment, both today and for the future.
Equally important, responsible business practices are a prerequisite for long-term successful
operations and profitability. We need to be environmentally, socially and economically responsible
across our operations to meet the requirements and expectations from our stakeholders. That means
that we need to have effective business processes, tools, governance structures and compliance
practices in place.
At Techstep, our sustainability framework adheres to internationally recognised standards for human
rights, labour practices, environmental protection and anti-corruption measures. We proudly support
the United Nations’ 17 sustainable development goals and uphold the principles outlined in the UN
Global Compact. Our sustainability reporting transparently illustrates Techstep’s impact on, and
response to, environmental, climate and societal changes, demonstrating our commitment to
sustainable progress.
Reporting standards
This sustainability report has been
prepared for the period 1 January to 31
December 2023, unless stated otherwise.
The report covers the entire Techstep
Group, and includes relevant disclosures
for a range of environmental, social and
governance (ESG) topics, as well as
reporting principles related to the
reporting process. The content is in
accordance with the Global Reporting
Initiative (GRI) standards and guided by
the UN Global Compact and the UN
Sustainable Development Goals.
Greenhouse gas emissions are reported
in accordance with the Greenhouse Gas
Protocol and verified by an accredited
third party.
Annual report 2023
27
Key highlights from the year
Material topic
Techstep ambitions
2023 performance
SDGs
Circularity
Grow number of end-of-life
returns
Collected ~14 900 mobile devices;
Prolonged life of 95%;
Avoided emissions ~940 tCO
2
Climate action
Minimum 42% reduction of GHG
emissions in scope 1&2 by 2030,
with 2022 as baseline year
100% electricity consumed at
Scandinavian offices covered
by Guarantees of Origin (GOs)
8% reduction in scope 1&2
emissions, committed to Science
Based Targets
ISO 14001 certified
54% renewable energy at
Scandinavian offices
Diversity &
inclusion
Above 30% women in the
workforce by 2025
28% women in the Group
43% women in executive
management
Employee
engagement
Engagement score at 8.0 of 10
Engagement score
at 7.8 of
10 at
31.12
Supply chain
responsibility
ESG due diligence of all Tier 1,
Tier 2 and Tier 3 suppliers
38 suppliers assessed on ESG
topics
Cybersecurity &
data privacy
No leak of customer data
Security awareness training of
all employees
ISO 27001 certified by H1 2024
Strengthened security
governance
87% of employees completed
security awareness training
Business ethics &
anti-corruption
Zero serious compliance
incidents
Strengthen Techstep
’
s
preventive anti-corruption
programme, including relevant
controls to properly mitigate
corruption
Zero reported compliance
incidents
3
Reduction target is adjusted from 2022 to align with Science Based Target commitment and validation for Small and Medium
sized enterprises
Annual report 2023
28
Corporate governance and sustainability management
Techstep’s ESG policy outlines our overall commitment to responsible business practices with respect
to people, the environment and society. Sustainability is incorporated into Techstep’s strategy,
objectives and management systems. The Board of Directors has the overall responsibility for aligning
Techstep’s strategy and ESG considerations. Operationalising of principles into day-to-day operations
lies with the CEO, supported by the executive management group. Each executive is responsible for
communicating these to everyone in their respective business units.
Techstep also has a dedicated team to ensure sufficient focus on driving sustainability and advancing
the company’s ESG programme across the organisation, as well as ensure compliance with internal
and external requirements. The ESG and compliance function reports to the CFO, the audit committee
and the Board. In addition, the company’s CISO carries responsibility for data protection and
information security. The CISO reports to the CEO and the Board. ESG, risk and compliance are on the
agenda at the monthly management meetings, as well as quarterly audit committee meetings, and
selected board meetings.
During 2023, Techstep further strengthened focus and commitment on ESG, risk and compliance
across the organisation. Much effort was spent on developing and implementing the company’s
management system based on the ISO standard, with emphasis on quality, security and environment,
to support day-to-day operations and ensure a more systematic approach to improving business
processes and ESG performance. The management system was certified in accordance with ISO 9001
(quality) and 14001 (environment) in Q1 2023. The work with continuous improvement across all
business operations continues in 2024, as well as targeting ISO 27001 certification (information
security) by the end of the first half of the year.
Techstep adheres to the Norwegian Code of Practice for Corporate Governance issued by the
Norwegian Corporate Governance Board (NCGB). Techstep’s corporate governance practices are
included as a separate chapter in this annual report on page 48. Publicly available governing
documents are published on the company’s website.
Governance bodies in Techstep
Annual report 2023
29
Stakeholder dialogue and material topics
Continuous dialogue with our stakeholders is considered crucial for sustainable growth, ensuring
valuable insight and opportunities for improvement.
Stakeholder
group
How we engage
Central topics
Customers
●
Ongoing dialogue
●
Tender processes
●
ESG assessments
●
Customer centre
●
Customer satisfaction survey
●
Industry forums
●
Circularity (end-of-life handling, e-waste)
●
Data security and privacy
●
Responsible sourcing (human rights)
●
Environmental management
Quality management
Investors
●
Quarterly presentations
●
Annual general meeting
●
Investor meetings
●
Climate risk (GHG emissions, taxonomy driven,
financial risk)
●
Governance practices
●
People practices (human capital)
●
Data security and privacy
●
Profitability
Employees
●
Weekly townhall updates
●
Digital platforms/-Workplace
●
Employee engagement
surveys
●
Departmental meetings
●
Monthly/quarterly check-ins
●
Day-to-day communication
●
Employee engagement and well-being
(motivation, stress, work-life balance)
●
Equality, diversity and inclusion
●
Development and career opportunities
●
Climate action
●
Circularity
Business
partners/
suppliers
●
Partner meetings
●
Own ESG strategies
●
Transparency
●
Future needs and
requirements
●
Ethical trade
●
Governance practices
●
Environmental impact
●
Data protection and privacy
Industry peers
●
Partnering in industry
coalitions, meetings, seminars
●
Circularity
●
Ethical trade
Regulators
●
Ongoing assessment of
relevant laws and regulations
to ensure compliance.
Monitoring developments and
new legislation to proactively
respond to information
requests.
●
Climate and environmental management
●
Human rights and labour rights in supply
chain
●
Workplace health and safety
●
Diversity and equality
●
Anti-corruption
●
Governance practices
Annual report 2023
30
Materiality
We conducted a materiality assessment in 2021 to identify the sustainability topics that are most
material to our business and to our stakeholders. Topics included in the process were selected based
on requirements and information requests especially from customers and investors, peer and industry
benchmarks, international reporting frameworks and standards such as Global Reporting Initiative
(GRI) and Sustainability Accounting Standards Board (SASB), legal requirements and new
sustainability legislation. The materiality assessment, which was revised at the end of 2023, has helped
us identify topics which are considered to have a significant impact on Techstep’s long-term business
success.
Material topics identified
●
Circularity
●
Climate action and GHG emissions
●
Employee engagement
●
Diversity, inclusion and equal opportunities
●
Responsible sourcing
●
Data security and privacy
●
Business ethics
We consider the prioritisation based on materiality assessments as a dynamic process and will
continuously adjust our priorities and actions based on company development, changing legislation,
stakeholder feedback and developments in sustainability/ESG frameworks.
Looking forward to the EUs Corporate Sustainability Reporting Directive (CSRD), Techstep will conduct
a double materiality analysis in 2024. This approach will evaluate both our internal operational
impacts and external consequences on the wider environment and society, enhancing transparency
and accountability in our sustainability reporting.
EU Taxonomy
The EU taxonomy is a classification system with a list of environmentally sustainable economic
activities and an important enabler to scale up sustainable investment and implement the European
Green Deal. Techstep will be required to disclose to what extent its turnover, investments and
operational costs are aligned with the EU taxonomy criteria, currently expected from 2025. Going
forward, Techstep will evaluate current and possible taxonomy-eligible activities and measures
required to transit towards taxonomy alignment of the activities in question.
4
Changes from 2022 report: Digital literacy & skills in society has been removed as it is considered less material.
Annual report 2023
31
Circularity and responsible use of devices
Mobile devices are excellent work tools, but put a strain on climate, environment and society
throughout their lifespan, from production to disposal. Globally, over 60 million tonnes of electronic
waste are generated each year, and the amount is rising five times faster than documented recycling.
Estimates say that less than one quarter (22.3%) of the yearly e-waste is collected and recycled,
leaving a wealth of valuable rare earth and critical materials such as gold, copper, silver, tungsten and
tin unaccounted for – resources that could be recovered and returned to the production cycle, instead
of causing huge environmental and human health risks.
An effective way of counteracting this is to extend devices’ lifetime and ensure that devices that can
no longer be used are recycled in a responsible manner. By helping customers with lifecycle
management, repair and take-back services, more devices can get a prolonged life and more
resources can be preserved.
Key figures 2023
End-of-life returns and avoided emissions
Circular economy practices and device lifecycle management are a central part of Techstep’s
offering. Our Lifecycle solution is designed to digitise and simplify enterprises’ mobile device lifecycle
management process, including repair, return and recycling until end-of-life. We cooperate with
certified partners specialised in wipe, repair and refurbish and resale of used devices, so that well-
functioning devices can get a new life in the second-hand market. This way, we help extend devices’
lifespan while allowing more people access to mobile technology at an affordable cost. Units that
cannot be used any more, are properly handled for recycling so that resources can be preserved and
reused in the manufacturing of new products.
Through our take-back solution, Techstep collected close to 15 000 mobile devices in 2023. Over 95%
of the units were securely wiped and refurbished for reuse and sold to the second-hand market. The
positive environmental impact (handprint) of this is estimated to be over 940 tonnes of avoided CO
2
emissions. The remaining units were carefully sorted and recycled by appropriate waste operators, in
accordance with the WEEE-directive.
Going forward we will grow the number of devices we collect for end-of-life handling to prolong their
lifespan and intensify collaboration with manufacturers and strategic partners to improve lifecycle
management and circularity along the value chain.
5
Based on calculations from our reseller partners
Annual report 2023
32
Climate and environmental impact
In Techstep we are committed to minimising our climate and environmental impact. Our
environmental policy serves as guiding principles to environmental stewardship, outlining proactive
measures aimed at reducing our carbon footprint and fostering sustainability throughout our
operations, including helping customers and suppliers to optimise their resource usage and minimise
electronic waste.
Key figures 2023
Main developments
During 2023, we have strengthened environmental management in the organisation, which was
validated by the ISO 14001 certification in Q1 2023. Techstep has further committed to reduce emissions
by minimum 42% in Scope 1 and 2 by 2030, with 2022 as a baseline year. This target has been validated
by Science Based Targets for Small or Medium sized enterprises (SMEs). Techstep uses market-based
approach for energy calculation to meet emission reduction targets set for Scope 2.
Key GHG figures denoted in tCO
2
e
2023
2022
Change
Scope 1
16.1
20.2
-20%
Scope 2 (location-based)
33.1
32.1
3%
Scope 2 (market-based)
65.8
71.3
-8%
Scope 3
9 067.9
11 753.8
-23%
Total Scope 1&2 (location-based)
49.2
52.3
-6%
Total Scope 1+2 (market-based)
81.8
91.5
-11%
Total Scope 1+2+3 (market-based)
9 149.7
11 845.2
-23%
6
Note that in 2022 report, Scope 1&2 emissions reported were location-based. We have changed focus to market-based
reporting for Scope 2, to align with reduction targets validated by Science Based Targets. In addition, the methodology for
calculating the share of renewable energy has been changed to focus on electricity covered by Guarantees of Origin (GOs).
Annual report 2023
33
Scope 1&2 emissions
Scope 1 emissions are related to the combustion of fuels in company-leased vehicles. Scope 1
emissions account for 32.7% of the total Scope 1 and Scope 2 emissions for the Group. Scope 1
emissions decreased by 20% from 2022, as Techstep is gradually phasing out fossil fuel vehicles when
leasing agreements expire and vehicles are to be replaced.
Location-based Scope 2 emissions in 2023 was 33.1 tCO
2
e and accounts for 67.3% of the total scope 1
and scope 2 emissions, and 0.4% of total emissions in 2023. These emissions are mainly attributed to
the consumption of electricity and district heating from the company’s offices, as well as electric
vehicles. Location-based Scope 2 emissions increased by 3% from 2022, primarily due to consumption
of district heating related to the Stockholm office which opened in Q4 2022 and is hence included from
2023.
Total share of renewable energy consumption was 68%, and 54% of electricity consumed was covered
by Guarantees of Origin (GOs), up from 42% GOs in 2022. In 2023, 100% of the electricity consumption
in Sweden and Denmark was covered by GOs. In Norway, 36% of the electricity consumption was
covered by GOs, while Poland had zero coverage.
Total Scope 2 emissions per country
Market-
based
Location-
based
% renewable
energy
Norway
35.5
5.4
36%
Sweden
6.9
9.8
75%
Denmark
-
0.1
100%
Poland
23.4
17.8
-
Total
65.8
33.1
For 2024, Techstep purchases GOs for all Scandinavian offices, which is expected to have a positive
effect on the Scope 2 market-based emissions. To further reduce Scope 1&2 emissions, Techstep will
reduce company vehicles and switch to electric vehicles when replaced. We are also exploring
opportunities for more environmentally friendly energy solutions at our Polish office, as we will change
premises during 2024.
Scope 3
Techstep’s Scope 3 emissions account for over 99% of the company’s total emissions in 2023. The
decrease of 23% from 2022 relates primarily to a decline in mobile devices sales both in Norway and
Sweden, partly offset by increased travel activity across the company. As a reseller of mobile devices
and accessories, Techstep does not manufacture any own products. Distribution is outsourced to
logistics partners as a “dropshipping” solution, which is more efficient and more environmentally
friendly as the goods are shipped directly to the customer. Purchased goods mainly represent mobile
devices (94%) and accessories (6%) sold to customers. Techstep uses cloud-based data centres such
as Microsoft 365 and Azure Compute, which are much more energy efficient than traditional on-
premises data centres. In addition, data is stored on different software platforms managed on the
7
renewable energy is calculated as share of scope 2 renewable energy (market-based)
Annual report 2023
34
Emission intensity
providers’ hosting infrastructure. In 2023, business travel increased due to the company’s cross-border
matrix organisational structure, in addition to all employees being gathered in a company-wide kick-
off.
Emissions related to goods and services are expected to increase going forward as Techstep grows
its business, which partly will be offset by the introduction of newer products with lower emissions. In
our commitment to reduce the environmental impact, we proactively assist customers in selecting
more eco-friendly products from available market options. Moreover, we collaborate with our
distributors to improve and optimise logistics solutions.
We will also continue our efforts and broaden the scope of emission data to include additional
emission sources and improving data quality going forward. This will be critical to track the
development of emissions and define meaningful reduction targets for Scope 3.
GHG annual emissions
Figures denoted in tCO
2
e
2023
2022
Scope 1
Transport - Diesel
9,7
Transport - Petrol
6.4
Scope 1 emissions
Electricity (market-based)
Electricity Nordic mix
Electricity Poland
Electric car
District heating
Scope 2 emissions
Business travel
Purchased goods and services
Fuel- and energy related activities
Upstream transportation and distribution
Waste generated in operations
Total emissions Scope 3
Total emissions (market-based)
Total emissions - Scope 1 & 2
Total emissions - Scope 1, 2 & 3
– tCO2 per NOK million
Emission intensity – Scope 1 & 2
Emission intensity – Scope 1, 2 & 3
8
For 2022, electricity from electric vehicles was not treated as a separate item part of the electricity emissions in the accounting
system but included in the total Scope 2 emissions only. Due to recent changes in methodology in the carbon accounting tool,
this is from 2023 added as a separate item under electricity consumption.
9
Emission intensity for 2022 have been restated due to restated total revenues for 2022 + changed focus to market-based
approach
Annual report 2023
35
Environmental key performance indicators
Waste disposed by the type
2023
Non-hazardous
kg
Hazardous
kg
Fuels for transportation
Diesel
m3
5.7
Petrol
m3
2.4
Energy consumption by type
Electricity
MWh
Self-generated renewable energy (solar)
MWh
District heating
MWh
Renewable energy
Total energy consumption (scope 1+2)
MWh
Renewable energy (location-based)
MWh
Total renewable energy share (location-based)
%
60.4%
Renewable energy (market-based)
MWh
Total renewable energy share (market-based)
%
36.5%
For boundaries and methodology, please see note for Greenhouse Gas report on page 145 and/or
Carbon Footprint Report available on our website www.techstep.io
Annual report 2023
36
Our people
At Techstep, one of our main goals is to have the best mobile tech expertise in the market. Achieving
this depends upon nurturing a healthy, engaged and skilled workforce where continuous learning,
knowledge-sharing and personal development are paramount. We are dedicated to fostering a
professional, safe and supportive work environment, characterised by respect, fairness and dignity for
all individuals.
Recognising that people are fundamental to Techstep’s growth and long-term success, we are
committed to recruiting and retaining a talented workforce. Central to our approach is fostering a
culture of continuous learning and knowledge exchange, enabling our employees to thrive and excel
in their roles.
2023 was however another challenging year with transformative changes for Techstep, largely
impacted by the cost reduction programme and changes in executive management. The turnover
rate for the year stood at 27%, reflecting the impact of organisational transformation and rightsizing
efforts. By year- end, our team comprised 261 employees. Becoming One Techstep and getting
acquainted with common standards and practices to streamline our operations and enhance
collaboration across the organisation continues to be our focus going forward.
Annual report 2023
37
Employee engagement
At Techstep, we seek to fostering engaged and high-performing teams through regular dialogue and
feedback mechanisms. To facilitate this, we offer quarterly check -ins and reviews for all employees.
In addition, we utilise an employee engagement survey tool to seek valuable insight and feedback
from our employees. This tool covers a wide range of topics, including personal development, team
dynamics, work environment, and leadership effectiveness. By requesting feedback regularly, we are
able to actively take appropriate actions to continuously maintain a highly engaged organisation and
detect and address issues such as discrimination and work-life balance concerns.
Despite a challenging year, Techstep saw a notable improvement in our engagement score, rising
from 7.1 to 7.8 over the past year. Focus in 2024 will be on building a unified and strong organisational
culture, developing leaders and enhancing our employees’ capabilities. We aim to achieve an
engagement score of 8.0 by the end of the year.
Annual report 2023
38
Diversity, inclusion and equality
At Techstep we embrace diversity and equality, believing that different perspectives, experiences and
backgrounds foster dynamics, creativity, and innovation. With increased diversity and broad
representation of individuals in the company, we will become a better partner to our customers.
Techstep has zero tolerance for discrimination and sexual harassments in the workplace. Techstep’s
HR function is responsible for following up equality and diversity in the Group.
Operating within an industry historically dominated by men, Techstep has made it a priority to actively
recruit, retain, and advance women within our organisation. We seek to promote gender balance in
recruitment processes and monitor closely to measure progress. During 2023, 24% of all new hires and
7% of management hires or promotions were women, respectively. Despite the rightsizing of the
organisation, the share of women increased slightly during the year to 28%. Techstep uses the SHE
Index to track progress, and at the end of 2023 the SHE Index score had improved from 69 to 72 points
out of 100. Over time, Techstep aims to reach a SHE Index score of 80.
Compensation and benefits
Techstep seeks to offer competitive remuneration to all employees, reflecting their educational
background, experience and professional qualifications, and industry standards within their
respective locations. To ensure fairness and inclusivity, all employees are enrolled in a collective bonus
scheme and have access to the same insurance benefits based on country-specific regulations.
Techstep offers additional payment for parental leave for both men and women, based on local
arrangements. In 2023, men and women in Techstep typically used the allocated amounts of parental
leave in line with the national guidelines.
All employees shall be entitled to equal opportunities for equal work, meaning the same rights, salary
and career advancement prospects within their respective roles, all other factors being equal. A recent
mapping of wage levels throughout the organisation has been conducted to identify potential wage
gaps, increase transparency and promote fairness. Our initial analysis indicates no significant
gender-related salary differences; however, we recognise that wage gaps may be attributed more to
Annual report 2023
39
Job level
Norway
Sweden
Poland
Denmark
Level 1
106%
Level 2
96%
116%
60%
Level 3
90%
120%
0%
Level 4
87%
91%
72%
Level 5
92%
117%
Level 6
84%
Level 7
Level 8
83%
variations in length of experience and types of competencies. Moving forward, we are committed to
continued monitoring and refinement of our remuneration practices to foster equity and equality for
all employees.
Figure: Average ratio of women base salary over men’s base salary for 2023
Executive remuneration is guided by Techstep’s remuneration policy, which is prepared by the Board
and adopted by the general meeting. The remuneration report is available from the website
www.techstep.io
.
Share-based incentive programme
We believe that employees owning shares in our company promotes value creation through
increased engagement, commitment and loyalty. A provision has therefore been made for employees
to buy shares at a discount through a share purchase employee programme. Participation is open to
all employees and 5% of the workforce participated in the share purchase programme in 2023.
Working environment, health and safety
Working with IT typically includes many hours in front of a computer. Techstep employees have the
right to a healthy and safe workplace, including a good workplace environment and ergonomics.
Techstep offers a hybrid working solution that facilitates efficiency and collaboration combined with
employees’ personal preferences in terms of their work arrangements. The company’s offices are
located in modern facilities, and all employees are offered health services through private health
insurance arrangements. We also comply with the conventions of the UN Global Compact and the
International Labour Organisation.
Techstep targets a sickness absence rate of 3% or less. In 2023, the sick leave was 2.9% of the total
working hours in the Group, which is a positive improvement from previous years. There were no work-
related illnesses or incidents reported during the year.
10
management (excl. CEO). Level 8 (EMT) was not included in the 2022 report. Levels with less than five employees are not reported.
Annual report 2023
40
Employee data
2023
2022
2021
Total number of employees
Total number of employees
267
315
341
Number of employees based in Norway
102
125
na
Number of employees based in Sweden
119
144
na
Number of employees based in Denmark
3
3
na
Number of employees based in Poland
43
43
na
Number of part-time employees (all of which voluntary)
4
3
6
Turnover rate (incl. downsizing)
27%
24%
13%
Employee engagement score at year end
7.8
7.1
7.4
Diversity and equality
Share of women - Board of Directors
40%
40%
40%
Share of women - Executive management
43%
38%
13%
Share of women - Management direct reporting to EMT
6
27%
27%
29%
Share of women - Group total
28%
27%
23%
Share of women - Part-time employees
25%
67%
33%
Share of women - New employees
36%
38%
na
Share of women - Promotion/ hire to management positions
7%
27%
na
SHE Index score
72
69
61
Age breakdown < 30
12%
11%
14%
Age breakdown 30-50
68%
69%
68%
Age breakdown 50+
19%
20%
18%
Average weeks of parental leave - Norway (women/men)
7
34/15
34/17
25/15
Average weeks of parental leave - Sweden (women/men)
7
7/4
23/7
2/7
Average weeks of parental leave - Poland (women/men)
7
52/1
32/32
46/2
Health and safety
Sick leave
2.9%
3.6%
3.5%
Occupational injuries
0
0
0
6
7
parental benefit is 480 days (16 months) of paid leave, of which 390 days are sickness benefit qualifying days that can be taken,
and each parent has an
exclusive right to 90 of those days (18 weeks). In Poland, parental leave is 32 weeks and can be used
freely by both parents.
Annual report 2023
41
Responsible sourcing and supply chain
management
Techstep is dedicated to upholding and championing internationally proclaimed human rights and
workers’ rights, as evidenced by our ESG policy and commitment to the UN Global Compact. We want
to ensure a responsible value chain and do our part in minimising adverse impacts on people and our
planet.
Collaboration with our partners and suppliers is pivotal to our value chain, as they play a crucial role
in providing the products and services necessary for delivering mobile technology solutions to our
customers. However, this collaboration also entails shared responsibilities. We actively address
environmental impact concerns within our supply chain and remain vigilant about potential social
and compliance risks, including human rights infringements.
While we acknowledge that we do not influence direct control over working conditions or
environmental emissions in our supply chain, we believe in advocating for positive change. Our
approach involves responsible sourcing, where we set clear expectations for our third-party partners.
We challenge them to continually improve and foster ethical and sustainable business practices.
Policy commitment and governance
Techstep’s ESG (Environmental, Social, and Governance) policy has been adopted by the Board and
commits Techstep to conducting due diligence assessments for responsible business practices. The
company’s procurement policy and supplier management procedure establish principles for
selecting and monitoring suppliers, including processes and routines for due diligence assessments.
These assessments consider potential ESG risks, aligning with the UN Guiding Principles on Business
and Human Rights and the OECD Due Diligence Guidance. Additionally, Techstep’s Supplier Code of
Conduct specifies our expectations for sustainable and ethical business practices to suppliers and
subcontractors. New suppliers are familiarised with the Supplier Code during the onboarding process,
while existing suppliers through self-assessments as part of the due diligence process.
The responsibility for responsible business practices and overseeing supplier due diligence and
reporting lies with the Sustainability and Compliance function, who reports directly to the executive
management, audit committee and the Board. The work involves collaboration with representatives
from other parts of the organisation such as procurement related to customer deliveries, internal IT
operations, and security, depending on relevance.
Supplier management and due diligence practices
Techstep uses a risk management tool to monitor and oversee suppliers and partners. Suppliers are
classified and prioritised based on specific criteria, including direct spend, strategic or operational
importance, and the proximity of our relationship with them or their activities.
Techstep’s due diligence process is based on the OECD Due Diligence Guidance for Responsible
Business Conduct and the UN Guiding Principles on Business and Human Rights, and we are
Annual report 2023
42
committed to ongoing improvement based on learnings and new regulations. Our supplier
assessment procedure aims to verify to what extent our suppliers live up to expectations set by
international guidelines, industry standards, our Supplier Code of Conduct, as well as by customer
requirements.
New third- parties undergo due diligence assessment on during the onboarding process, while
existing third parties are assessed based on classification. Techstep achieves this through a
combination of supplier evaluation and self-assessments that suppliers and partners must complete,
with the frequency and scope reflecting the classification and prioritisation of each individual supplier.
Additionally, we maintain a regular dialogue with our key suppliers. The primary source of information
from major global players is their public reporting which serves as the foundation for all
communication.
Suppliers identified as high-risk undergo more comprehensive follow-up and evaluation by gathering
additional information directly from the relevant supplier or obtaining documentation from external
sources. Furthermore, we actively monitor relevant news and media coverage to identify potential
events that could impact the risk profile of Techstep’s supply chain, particularly in countries and
regions where such risks are known. The information is then discussed directly with the supplier and
handled in accordance with the OECD Due Diligence Guidance model.
If we uncover a risk or encounter a situation in the supply chain, we will address this directly with the
supplier. The aim is to challenge them on how they handle the situation and assess the impact of any
measures they may implement. Our own handling and potential contributions to recovery will be
carefully evaluated in each individual case.
Main findings from 2023 assessment
In 2023, we have further developed our procurement and supplier management processes. Our efforts
included due diligence of selected suppliers and internal training of relevant teams. In total 39
suppliers were evaluated using our methodology, where suppliers were prioritised based on specific
criteria. These suppliers collectively accounted for over 90% of our expenditure on hardware,
accessories and software during the year. We also engaged in meaningful dialogues with our primary
hardware suppliers, where we addressed critical issues related to human rights and ethical labour
practices. In response to an allegation towards one manufacturer, we conducted further
investigations which did not uncover any breaches in human rights or ethical labour practices.
However, the supplier had implemented concrete and corrective actions in response to a challenging
situation.
The maturity of our suppliers’ sustainability efforts varies across different product categories and
services. When it comes to mobile devices and related electronic products, we prioritise collaboration
with suppliers who share our commitment to sustainability and uphold rigorous ethical standards
through their operations and supply chains. Around 98% of our spending on mobile devices and
related electronics is attributed to suppliers who are active members of the Responsible Business
Alliance (RBA), as well as the RBA-adjacent Responsible Minerals Initiative and Responsible Labour
Initiative. These initiatives ensure that our suppliers actively support the rights and well-being of
workers and communities worldwide, particularly those affected by the global electronics supply
chain. Rigorous audits, assessments, grievance mechanisms, corrective actions, and comprehensive
Annual report 2023
43
documentation are integral components of their commitment. Additionally, their circular economy
approach involves offering product return programmes and progressively incorporating recycled
materials into their products. This long-term strategy aims to reduce the negative impact on both
people and the environment, including minimising electronic waste and reducing the extraction of
new raw materials.
When it comes to software providers, Techstep only works with best of breed, market leading suppliers
with strong focus on sustainability and high security standards in place. The risk of privacy concerns
or other ESG risks among the software providers are thus considered low. While our distributors,
responsible for delivering products to customers, may be less mature in terms of environmental,
social, and governance (ESG) practices, we’ve witnessed significant improvements in this area over
recent years.
Our risk assessment indicates that certain suppliers – due to the type of products they manufacture,
geographic location and supply chain complexity – entail higher inherent risk related to violations of
human rights and workers’ rights. The supply chain of mobile devices and other electronics is often
lengthy and complex, with limited traceability and transparency, particularly at the product level.
Brand owners typically outsource all production and/or assembly to various suppliers, who in turn
have an extensive and intricate chain reaching down to raw materials. Additionally, production and
assembly occur in countries known for high risks of violations of human and labour rights. Findings
shows that safeguarding workers rights, such as forced labour, overtime and health and security at
the workplace are the highest risks. The longer out in the value chain, the weaker labour rights and
increased risk of salient human rights issues such as child labour and conflict minerals are the risks.
Techstep maintains a proactive approach towards main manufacturers/ brand owners of mobile
devices to advocate increased transparency and traceability, and advancing responsible business
conduct.
The Norwegian Transparency Act: Advancing responsible business
practices
The Norwegian Transparency Act, which took effect on July 1 2022, has significantly shaped our
approach to responsible business practices at Techstep. Our efforts related to the Transparency Act
are an integral part of our broader commitment to promoting sustainability within our value chain. We
focus particularly on mitigating the highest potential risks related to human rights violations, poor
labour standards, and negative environmental impact. These risks affect not only our organisation but
also others, including employees in our supply chain. We actively seek opportunities where we can
make a positive impact, especially through our work with our strategic suppliers and partners.
Annual report 2023
44
Risk assessment and mitigation in own operations
Techstep’s code of conduct, aligned with the UN Global Compact and ILO’s eight core conventions on
labour standards, sets clear expectations for our employees and external stakeholders. Techstep also
adheres to the Norwegian Working Environment Act and other relevant employment rules in the
countries where we operate. Risk assessments and updates to central documents, including
stakeholder analyses, is part of our ongoing work.
Techstep holds certifications in accordance with ISO 9001 (quality management) and ISO 14001
(environmental management), reflecting our commitment to maintaining high standards in our
operations.
In 2023, we conducted a human rights due diligence of our own operations. The most salient risk areas
identified included working conditions related to work/life balance and privacy. While these risks were
not considered very high, we remain committed to addressing them continuously through our risk
assessment processes. Importantly, our operations have not revealed any forms of human rights or
worker’s rights breaches.
Requests for Information
Techstep has a transparent and open mechanism on its website to allow for information requests
under the Transparency Act.
During 2023, Techstep received 15 due diligence requests from customers. All questions were
answered within three weeks, or a specific deadline set by the customer, with supplementary
information showing Techstep’s processes for following up supply chains and ensuring respect for
human rights and decent working conditions. The company regularly reviews the documentation to
ensure that all inquiries can be answered in the best possible way.
Reporting concerns
Techstep’s whistleblower channel is open for both employees and external stakeholders to raise
concerns without fear of retaliation or reprisal and to provide fair investigation. There were no reported
cases during 2023.
Annual report 2023
45
Cybersecurity and data privacy
The threat landscape is constantly changing, with cyberattacks becoming increasingly sophisticated.
While mobile devices, especially smartphones, enhance operational efficiency for companies, they
also introduce heightened risks, as they are often used for both personal and corporate purposes,
making them more vulnerable to theft or loss. Consequently, safeguarding company and personal
data becomes paramount. This necessitates stricter procurement and management protocols for
enterprises’ mobile device estate.
At Techstep, information security constitutes an essential part of our offerings to our customers. With
a growing focus on software solutions, ensuring information security and privacy forms an integral
part of our product development and operational workflows. Committed to adherence to relevant
laws and regulations, we prioritise data protection and management in alignment with established
standards, facilitating our customers in achieving similar goals through our products and services.
Over time, Techstep has implemented policies, processes, methodologies and technologies,
embracing proven standards to meet our customers’ security and privacy needs. We have
implemented and uphold appropriate technical and organisational measures to safeguard customer
data against various threats, including unavailability, accidental loss, or unauthorised access,
disclosure, destruction or alteration.
In 2023, Techstep intensified its focus on information security management, aligning with ISO/IEC
27001:2022 standards, with the objective of achieving certification by the first half of 2024. Recognising
phishing attacks as a prominent threat, we persistently enhance security awareness within our
organisation through regular employee training sessions, including onboarding of new employees.
Training topics encompass our security policies, procedures and guidelines, phishing awareness, data
protection, incident reporting protocols, and emerging threats. Approximately 87% of our employees
completed training in 2023.
Techstep maintains a rigorous information security incident management procedure, ensuring swift
and effective response to any security incidents. In 2023, we did not experience any incidents related
to the leakage of customer data.
Annual report 2023
46
Ethical business conduct
Techstep’s commitment to business ethics and compliance with international regulations and internal
policies is anchored in our code of conduct. The code of conduct outlines the principles guiding the
Group’s operations toward ethical, sustainable, and socially responsible practices.
Every employee is required to review the code of conduct and sign that the content has been read
and understood. Each team member bears individual responsibility for ensuring that their actions
align with the tenets of the code.
Techstep’s code of conduct also establish protocols for reporting any suspicions or instances of illegal
or unethical behaviour. We provide a confidential channel, operated by a third party, for discrete
handling of such reports. Our Compliance function is entrusted with the handling and monitoring of
reported compliance concerns. Techstep received no reported concerns in 2023.
We maintain a zero-tolerance stance against bribery, money laundering and corruption, recognising
the harmful impact they pose to legitimate business practices. Anti-corruption messaging is
communicated to employees through the code of conduct and associated policies. Going forward,
we are committed to enhancing our internal policies and procedures, including providing training to
all employees to reinforce our stance against unethical conduct.
Annual report 2023
47
Summary ESG results
2023
2022
2021
Climate and environmental impact
Scope 1 - tCO
2
16.1
20.2
1.3
Scope 2 - tCO2 (market-based)
65.8
71.3
32.9
Scope 3 - tCO
2
9 068
11 754
9 657
Emission intensity - tCO
2
8.4
9.3
7.4
Circularity
Total units received for end-of-life handing
14 929
14 395
15 149
% re-sold to second-hand market
95%
92%
88%
Avoided emissions tCO
2
941
832
1 189
Employees and working environment
Total number of employees
267
315
341
Number of part-time employees
4
3
6
Turnover rate
27%
24%
13%
Employee engagement score (of 10)
7.8
7.1
7.4
Gender equality
Share of women - Board of Directors
40%
40%
40%
Share of women - Executive management
43%
38%
13%
Share of women - Middle management
27%
27%
29%
Share of women - Group total
28%
27%
23%
SHE index score
72
69
61
Health and safety
Sick leave
2.9%
3.6%
3.5%
Occupational injuries
-
-
-
Cybersecurity
Percentage employees completed security training
87%
65%
92%
# incidents - leaks of customer data
-
-
1
Compliance
Percentage employees signed Code of Conduct
80%
-
-
# reported incidents (whistleblowing)
-
-
-
20.2
1.3
Management certifications
ISO 9001 (quality)
ISO 14001 (environment)
EcoVadis score (points out of 100)
69 (Silver)
66 (Silver)
45 (Bronze)
11
12
Error from the 2022 report corrected, historical figures not applicable due to changes in system.
Annual report 2023
48
Corporate governance report
Techstep ASA’s principles for good corporate
governance establish the foundation for long-
term value creation to the benefit of all
stakeholders and society at large.
The principles should help inspire trust and
confidence in the company, render decision-
making more effective, and improve
communication between management, the
Board of Directors and the company’s
shareholders.
The principles along with the day-to-day efforts
to maintain a healthy corporate culture are
both necessary. Trust and confidence in
Techstep are based on the existence of respect,
responsibility and equality, both internally and
externally.
Implementation and reporting on
corporate governance
Techstep is a Norwegian public limited
company listed on the Euronext Oslo Børs and
subject to corporate governance reporting
requirements according to the Norwegian
Accounting Act section 3-3b, the Oslo Stock
Exchange Rule Book II – Issuer Rules, Chapter
4.4, and the latest version of the Norwegian
Code of Practice for Corporate Governance
(the “Code”), freely available at lovdata.no,
oslobors.no and nues.no, respectively.
The principles and implementation of
corporate governance are subject to annual
reviews and discussions by the company’s
Board of Directors. This report forms part of the
Board of Directors’ report and discusses
Techstep’s main corporate governance policies
and practices and how Techstep has complied
with the Code of Practice in the preceding year.
Application of the Code is based on the “comply
and explain” principle, which stipulates that any
deviations from the Code are explained.
By the company’s own assessment, Techstep
did not have any deviations from the Code of
Practice in 2023.
Business
The business activities in which Techstep is
engaged are set forth in the articles of
association of Techstep ASA, section 3:
“The company’s purpose is to engage in
business operations within information and
communication technology, and to develop
and provide solutions and software related to
the mobility, digitalisation and consultancy
business and everything that belongs thereto,
including owning shares and other securities in
other companies.”
The articles of association are published on
Techstep’s website.
The Board has established clear objectives and
strategic ambitions, with responsible business
as a foundation for Techstep’s strategy, to
support value creation for its stakeholders. The
company’s objectives and strategic ambitions,
which are reviewed on an annual basis, are
described in the annual report for 2023,
together with a report on the company’s
environmental, social and governance
measures.
Equity and dividends
As at 31 December 2023, Techstep’s total equity
was NOK 574 million and total liabilities
amounted to NOK 697 million, which
corresponds to an equity ratio of 45%, and a
debt-to-equity ratio of 121%. The Group's
liquidity is closely monitored by management
and the Board of Directors, and the Group has
Annual report 2023
49
access to multiple funding sources during the
transformation process should the need arise
going forward.
Techstep has not established a dividend policy
beyond a consensus that the company’s goals
and strategy are to increase shareholder value
and contribute to an attractive market for the
company's shares. Techstep has not paid
dividends to date and does not expect to pay a
dividend in the coming years. Techstep’s
intention is to retain future earnings to finance
operations and expansions of the business. Any
future decision to pay a dividend will depend on
the company's financial position, operating
profit and capital requirements.
Board mandates
Three authorisations were granted to the Board
of Directors at the annual general meeting on
23 May 2023:
●
Authorisation to increase the share
capital to NOK 6 102 621 in connection
with cash and non-cash contributions,
including mergers. Valid until AGM 2024,
but no later than 30 June 2024.
●
Authorisation to increase the share
capital to NOK 3 051 310 in connection
with the company’s share incentive
programme for its leading employees.
Amount utilised was NOK 854 940. It is
valid to AGM 2024, but no later than 30
June 2024.
●
Authorisation to acquire 10% of the
share capital (treasury shares). Valid to
AGM 2024, but no later than June 2024.
There was a separate vote on each of the three
authorisations. For supplementary information
about the authorisations, reference is made to
the minutes of the annual general meeting held
on 23 May 2023, available from
www.techstep.io
and
www.newsweb.no.
Equal treatment of shareholders
and transactions with related
parties
Techstep ASA has one class of shares. Treasury
shares will be traded on the stock exchange or
in accordance with guidelines from Oslo Børs.
According to the Norwegian Public Companies
Act, the company's shareholders have pre-
emption rights in share offerings against cash
contribution. Such pre-emption rights may be
set aside, either by the general meeting or by
the Board based on an authorisation to the
Board. In the event of a capital increase based
on authorisation from the general meeting,
where the pre-emptive rights of shareholders
are set aside, the company will provide the
reasons for the practice in the stock exchange
notice in which the capital increase is
announced. There were no such transactions in
2023.
Any transactions in treasury shares, i.e., a share
buy-back programme, will be carried out either
through Oslo Børs or otherwise at stock
exchange prevailing prices. If there is limited
liquidity in the company’s shares, the company
will consider other ways to ensure equal
treatment of all shareholders. There were no
transactions in treasury shares during 2023.
For significant transactions with closely related
parties, the company will use valuations and
statements from an independent third party if
the transaction is not to be considered by the
general meeting. There were no such
transactions in 2023. For further information,
refer to note 24 – “Related party transactions” in
the annual report for 2023.
Freely negotiable shares
The company’s shares are freely negotiable on
the Oslo Børs. There are no restrictions on
Annual report 2023
50
owning, trading or voting for shares in the
articles of association.
General meetings
The general meeting is the company's highest
decision-making body. The general meeting is
open to all shareholders, and Techstep
encourages shareholders to participate and
exercise their rights at the company's general
meetings. In order to vote, the shareholder must
be registered with the Norwegian Central
Securities Depository (VPS) at the time of the
general meeting.
Notices of general meetings are sent no later
than 21 days prior to the date of the general
meeting. According to the company’s articles of
association, there is no requirement to send the
documents up for consideration by the general
meeting directly to shareholders as long as the
documents have been made available on the
company’s website. The same applies to
documents that by law are required to be
included in or attached to the notice of the
general meeting. A shareholder may
nonetheless request that relevant documents
concerning business to be transacted at the
general meeting be sent to him or her. The
registration deadline is set as close to the
meeting as possible, and all the necessary
registration information will be provided in the
notice.
Shareholders who are unable to attend may
vote by proxy. Whenever possible, the company
will prepare a proxy form that permits separate
votes for each item up for consideration by the
general meeting.
The Chairman of the Board normally chairs the
general meeting. In the event of disagreements
about individual items, where the Chairman
belongs to one of the factions or is for other
reasons not regarded as impartial, another
Chairperson will be appointed to ensure
impartial treatment of the items up for
consideration at the meeting.
On 23 May 2023, Techstep held its annual
general meeting with 37.08% of the shares
represented. In addition, two extraordinary
general meetings were held on 15 February and
13 October with respectively 22.46% and 16.01%
of the shares represented.
Nomination committee
The nomination committee is governed by the
articles of association section 6. The general
meeting stipulates the guidelines for the duties
of the committee and determines the
committees’ remuneration. The current
instructions were approved at the annual
general meeting in 2022 and are available from
the company’s website.
The committee nominates candidates for the
Board and the nomination committee, as well
as proposes the Board’s remuneration. Grounds
for nominations by the nomination committee
are provided when nominees are presented to
the general meeting. All shareholders are
entitled to nominate candidates to the Board,
and information on how to propose candidates
can be found on the company’s website.
The current nomination committee consists of
two members, Kyrre Høydalen (Chair) and
Jonatan Raknes. At the annual general meeting
on 23 May 2023, both were re-elected for an
additional two years. Høydalen represents
Datum AS, the company’s largest shareholder
and is a colleague of Board member Harald
Arnet. Raknes is considered independent of the
Board and the executive management.
Board of Directors, composition
and independence
The Board of Directors shall consist of three to
seven members as regulated in the articles of
Annual report 2023
51
association section 5. The Board and the
Chairman are elected by the general meeting
for two years and may be re-elected. At the
annual general meeting on 23 May 2023, all
board members were re-elected for a period of
two years.
The composition of the Board is based on the
representation of the company's shareholders,
as well as the company's need for competence,
experience, capacity and ability to form
balanced decisions. Information on each
director’s expertise, background and
capabilities can be found on the company's
website
www.techstep.io
and on page 24.
Name
Role
Independent
of main
shareholder
Attendance
board
meetings
Served
since
Term
expires
Shares in
Techstep
(direct/indirect)
at 31.12.2023
Michael Jacobs*
Chair
Yes
21.04.2022
AGM
2025
0
Ingrid Leisner
Board member
Yes
11 of 11
22.02.2016
AGM
2025
60 157
Melissa Mulholland
Board member
Yes**
11 of 11
22.04.2021
AGM
2025
n.a.
Harald Arnet
Board member
No
11 of 11
22.09.2021
AGM
2025
63 439
Jens Rugseth**
Board member
No
11 of 11
AGM
2025
4 545 532
* Michael Jacobs was appointed Chairman of the Board at the extraordinary general meeting 15 February 2023.
** Jens Rugseth was serving as Chairman of the Board until 15 February 2023, when he stepped down as ordinary board member.
Melissa Mulholland is the CEO and Michael Jacobs is the Executive Vice President of the Nordics of Crayon ASA, where Jens
Rugseth is a shareholder and member of the Board
All Board members are regarded as
independent in relation to the company's
executive management and material business
contacts. Three of the five Board members are
regarded as independent of the company's
main shareholders. Board members are
encouraged to hold shares in the company.
Annual report 2023
52
The work of the Board of Directors
The Board of Directors is responsible for
overseeing and supervising the company's
management and operations. The duties and
procedures of the Board are regulated by the
Norwegian Public Limited Liability Companies
Act. In addition, the Board has adopted
supplementary rules of procedure which
provide further regulations on inter alia the
duties of the Board, the Chairman and the CEO,
as well as work, responsibilities, authorisations
and reporting.
The Board is responsible for determining the
company’s overall goals and strategic
direction, principles, risk management and
financial reporting. The Board is also
responsible for ensuring that the company has
competent management with a clear internal
distribution of responsibilities, as well as for
continuously evaluating the performance of the
CEO.
Techstep treats transactions with shareholders,
Board members, employees and other related
parties with due care. To ensure that these
transactions and situations are handled in the
best possible manner, the Board has set clear
guidelines for handling agreements in which a
Board member, or a party related to a Board
member, may have an interest. There was one
such case in 2023. See also note 24 in this
annual report.
The Board of Directors meets as often as
necessary to fulfil its duties, and at least six
times each financial year. The Board of
Directors held 11 Board meetings in 2023 with
100% meeting attendance.
The Board conducts a self-assessment of its
work periodically.
Board committees
The Board of Directors has established three
subcommittees to act as preparatory bodies
for the Board. Members are elected by and
among the Board.
The audit committee acts as a preparatory and
advisory body to the Board with respect to
financial reporting and external audits, risk
management and internal control systems,
corporate governance matters and the
appointment mandate and remuneration of
the external auditor. As at 31 December 2023,
the audit committee consisted of Board
members Ingrid Leisner and Melissa Mulholland,
both considered as independent of the
company. The audit committee met six times in
2023.
The M&A committee assists the Board with
tasks related to screening and evaluating
potential M&A candidates and approves
investment analysis and term sheets of
proposed deals. The M&A committee consists of
the Board members Jens Rugseth and Harald
Arnet.
The remuneration committee assists the Board
with tasks related to the company’s
remuneration of executive management. As at
31 December 2023, the remuneration
committee consisted of Board members Jens
Rugseth and Ingrid Leisner. The remuneration
committee met one time in 2023.
Risk management and internal
control
The Board is responsible for ensuring that
Techstep has good systems in place for risk
management and internal control. The systems
and procedures for risk management and
internal control shall ensure efficient
Annual report 2023
53
operations, timely and correct financial
reporting, and compliance with relevant laws
and regulations. The audit committee meets
annually with the auditor to review the
company’s internal control routines, including
identified weaknesses and areas subject to
improvements. The Board may engage external
expertise if necessary.
During 2023, Techstep has further strengthened
its governance, risk and compliance framework.
Techstep’s management system is based on
the ISO standard, with emphasis on quality,
security and environment, to support day-to-
day operations and promote continual
improvement in the organisation. A risk- and
opportunity-based approach is central in the
standard. Risk reviews and reporting are
conducted on a quarterly basis to identify
current and potential risks that need to be
addressed and mitigated. ESG, risk and
compliance are also addressed at monthly
management meetings and quarterly
meetings with the audit committee.
Techstep’s financial accounts are prepared in
accordance with IFRS. The Board receives
monthly management reports on
developments and results related to strategy,
finance, KPIs, projects, challenges and plans for
upcoming periods. In addition, quarterly reports
are prepared in accordance with the
recommendations of the Oslo Stock Exchange,
which are reviewed by the audit committee
prior to approval by the Board of Directors and
subsequent publication. The auditor attends
meetings of the audit committee and board
meetings related to the presentation of the
preliminary annual financial statements.
A summary of the company’s main risks is
presented in the Board of Directors’ report and
note 21 Financial risk management, in the
annual report for 2023.
Remuneration of the Board of
Directors
The remuneration of Board members is
stipulated annually by the annual general
meeting based on the nomination committee’s
recommendation. The remuneration reflects
the Board of Directors’ responsibilities,
competence, time involved and the complexity
of the business.
A total of NOK 1.6 million was paid in directors’
fees for 2023. Fees paid to each director are
presented in the remuneration report for 2023,
available from the company’s website
www.techstep.io/investor.
The remuneration of the Board was not
performance based and the company has not
granted share options to any board members.
Members of the audit committee are
remunerated separately. The company does
not provide loans to Board members.
Board members observe general insider
regulations for trading in the company’s shares.
Reference is made to the Remuneration report
2023 for an overview of shares owned by
directors.
Remuneration of executive
personnel
The main principle of Techstep’s executive
remuneration policy is that the remuneration
should be competitive and motivate to attract
and retain executives with the required
competence to strengthen and ensure the
business strategy, long-term interests and
sustainability of Techstep. The executive
remuneration consists of a fixed salary and a
variable part linked to the company’s and the
individual’s achievement, and pension
schemes. Performance-related remuneration is
subject to an absolute limit of 67% of the fixed
Annual report 2023
54
salary for the CEO and 45% for the other
executives and assessed on both financial,
non-financial and operational criteria including
sustainability and equality. The corporate
objectives are set by the Board and determined
for and agreed with the CEO. In 2023, the share
option programme for executive management
and certain other employees was extended.
The programme is linked to value creation to
the benefit of shareholders over time. Techstep
also conducted a share purchase programme
where employees were offered the chance to
purchase shares at a discount to the market
price.
The executive remuneration guidelines have
been presented to, and were adopted by, the
annual general meeting on 23 May 2023.
Detailed information about the remuneration of
the executive management team can be found
in the remuneration report for 2023, available
from the company’s website.
Information and communications
Techstep seeks to comply with Euronext Oslo
Børs’ Investor Relations (IR) recommendation,
last revised 1 March 2021.
The Board has adopted an IR policy, which sets
the basic principles for the company’s
communication and dialogue with capital
markets participants, including roles and
responsibilities. The policy is based on the
principles of equal treatment and
transparency, to ensure that stakeholders
receive factual, relevant, timely and
comprehensive information. The policy is
available on the company’s website.
The responsibility for IR lies with the CEO and the
Chairman, supported by the IR team. The IR
team focus on the day-to-day communication
and IR activities, while the Chairman focus on
the shareholders’ expectations related to the
company’s strategic direction and risk
preparedness, as well as issues that require
resolution by the general meeting.
Interim reports are provided on a quarterly
basis, in line with the Oslo Stock Exchange’s
recommendations. In connection with the
interim reporting, presentations are given to the
open public to provide an overview of the
operational and financial developments,
market outlook and the company’s prospects.
The presentations are made available on the
company’s website.
All information is primarily provided in English
and is distributed to the company’s
shareholders through Oslo Børs’
www.newsweb.no,
Takeovers
The company’s articles of association contain
no defence mechanisms against takeover bids,
nor have other measures been implemented to
specifically hinder the acquisition of shares in
the company.
In the event of a takeover process, the Board
and the executive management shall ensure
that the company’s shareholders are treated
equally, and that the company’s activities are
not unnecessarily interrupted. The Board has a
special responsibility to ensure that the
shareholders have sufficient information and
time to assess the offer.
In addition to complying with relevant
legislation and regulations, the Board will
comply with the recommendations in the Code
if the situation so permits. The Board has
established guiding principles for how it will act
in the event of a takeover bid. The main
principles include that the Board shall not
hinder or obstruct any takeover bid, give
shareholders or others unreasonable
advantages, or protect their personal interests
at the expense of others, and that the Board
Annual report 2023
55
shall protect the shareholders’ values and
interests.
If deemed necessary, the Board shall also
ensure a valuation from an independent third
party. On this basis, the Board will make a
recommendation as to whether the
shareholders should accept the bid.
Auditor
At the extraordinary general meeting on 13
October 2023, PriceWaterhouseCoopers AS
(PwC) was elected as Techstep’s new auditor
with immediate effect. The auditor is
considered independent of Techstep, which is
annually confirmed to the Board. The audit
committee performs an annual evaluation of
the auditor’s independence.
The auditor prepares an annual plan for the
implementation of the audit, which is made
known to the audit committee and the Board.
The auditor participates in the Board meeting
dealing with the annual accounts. Here the
auditor presents their views on accounting
matters and principles, risk areas and internal
control. The meeting includes an opportunity for
a review with the Board without the company’s
management present. The auditor participates
in Board meetings at the request of the Board,
as well as all audit committee meetings held in
connection with the quarterly financial
reporting.
The Board of Directors has prepared separate
guidelines for using the auditor for services
other than the audit. All non-audit services
rendered by the Group’s auditor are
preapproved by the audit committee, either
through the guidelines or on a case-by-case
basis.
Remuneration to the auditor is presented to and
approved by the annual general meeting,
including any fees for other specific
assignments if relevant (also see note 28
Remuneration to auditor in the annual report for
2023).
Annual report 2023
56
Financial statements
Consolidated financial statements
57
Notes to the financial statements
63
Techstep ASA financial statements
117
Techstep ASA Notes to the financial statements
122
Alternative performance measures
135
Responsibility statement
140
Auditor’s Report
141
Note: Greenhouse Gas reporting
145
Auditor statement Carbon Footprint Report
149
GRI Index
152
Annual report 2023
57
Consolidated income statement
(Amounts in NOK 1 000)
Notes
2023
2022
Revenue *
2, 3, 24
Other revenue
Total revenue
Cost of goods sold *
2
(644 460 )
(813 534 )
Salaries and personnel costs
(207 964 )
(265 027 )
Other operational costs
(99 571 )
(109 626 )
Depreciation
9, 10
(107 603 )
(109 222 )
Amortisation
11
(64 915 )
(58 492 )
Other income
6
Other expenses
6
(1 970 )
(10 015 )
Operating profit (loss)
(36 498 )
(52 205 )
Financial income
7
Financial expenses
7
(33 509 )
(17 565 )
Profit before tax
(59 552 )
(64 170 )
Income tax
8
(4 445 )
Net income
(44 546 )
(68 614 )
Net income attributable to
Non-controlling interests
Shareholders of Techstep ASA
(44 546 )
(68 926 )
Earnings per share in NOK:
Basic
25
(1.43 )
(3.02 )
Diluted
25
(1.43 )
(3.02 )
* Revenues for 2022 and 2023 have been restated due to a reclassification of kick-back and
commissions from mobile device purchases from revenues to cost of goods sold.
Annual report 2023
58
Consolidated statement of comprehensive
income
(Amounts in NOK 1 000)
2023
2022
Net income
(44 546 )
(68 614 )
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
(25 598 )
Income tax related to these items
Other comprehensive income
(25 598 )
Total comprehensive income for the period
(11 647 )
(94 213 )
Total comprehensive income for the period attributable to
Non-controlling interests
Shareholders of Techstep ASA
(11 647 )
(94 524 )
Annual report 2023
59
Consolidated statement of financial position
(Amounts in NOK 1 000)
ASSETS
Note
2023
2022
Deferred tax asset
8
Goodwill
Customer relations and technology
Right-of-use assets
Assets related to Device-as-a-Service
10
Property, plant and equipment
10
Shares and investments
21
Other non-current assets
21
Total non-current assets
Inventories
12
Trade receivables
Other receivables
Total inventories and receivables
Cash and cash equivalents
14
Total current assets
Total assets
Annual report 2023
60
EQUITY AND LIABILITIES
Note
2023
2022
Share capital
26
Other equity
Total equity attributable to the owners of Techstep ASA
Total equity
Deferred tax
8
Non-current interest-bearing borrowings
Financial derivatives
18, 21
-
Non-current liabilities related to Device-as-a-Service
16
Other non-current debt
9, 16, 21, 23
Total non-current liabilities
Current interest-bearing borrowings
Trade payables
Current liabilities related to Device-as-a-Service
17
Other current liabilities
9, 17, 21
Total current liabilities
Total liabilities
Total equity and liabilities
Oslo, 29 April 2024, signatures from the Board of Directors and the CEO of Techstep ASA:
Michael Jacobs
Chairman
Harald Arnet
Board member
Ingrid Leisner
Board member
Jens Rugseth
Board member
Melissa Ann Mulholland
Board member
Morten Meier
CEO
Annual report 2023
61
Consolidated statement of changes in equity
(Amounts in NOK 1 000)
Note
Share
capital
Other
paid-in
capital
Other
equity
Trans-
lation
reserve
SUM
control-
ling
interest
Total equity
capital
Equity as at 1 January 2022
(327 417 )
(6 668 )
Profit for the period
(68 926 )
-
(68 926 )
(68 614 )
Other comprehensive income
-
(25 598 )
(25 598 )
(25 598 )
Total comprehensive income
for the period
(68 926 )
(25 598 )
(94 524 )
(94 213 )
Transactions with owners in
their capacity as owners:
Transactions with non-
controlling interests
(1 585 )
(1 585 )
Issue of ordinary shares as
consideration for a business
combination, net of transaction
costs and tax
22, 25
-
-
Proceeds from issuance of
shares net of transaction costs
25
Share-based payments
-
Equity as at 31 December 2022
(392 252 )
(32 266 )
(Amounts in NOK 1 000)
Note
Share
capital
Other
paid-in
capital
Other
equity
Trans-
lation
reserve
SUM
control-
ling
interest
Total equity
capital
Equity as at 1 January 2023
(392 252 )
(32 266 )
Profit for the period
(44 546 )
-
(44 546 )
(44 546 )
Other comprehensive income
-
Total comprehensive income
for the period
(44 546 )
(11 647 )
(11 647 )
Transactions with owners in
their capacity as owners:
Reverse share split
22, 25
(274 618 )
-
-
Proceeds from issuance of
shares net of transaction costs
25
-
Share-based payments
(1 014 )
-
(1 014 )
(1 014 )
Equity as at 31 December 2023
(437 813 )
Annual report 2023
62
Consolidated statement of cash flow
(Amounts in NOK 1 000)
Note
2023
2022
Profit before tax
(59 552 )
(64 170 )
Depreciation
10
Depreciation right-of-use assets
10
Amortisation
11
Share-based payments
(1 014 )
Dividend and other reclassified to investment activities
8
(690 )
Gain on sale of business reclassified to investment
activities
6
(40 122 )
Gain from sale of PPE reclassified to investment activities
(9 269 )
(2 523 )
Net exchange differences
Taxes paid
(2 386 )
(996 )
Interest expense (revenue) reclassified to
investing/financing activities
Changes in net operating working capital
Net cash flow from operational activities
Payment for acquisition of subsidiaries net of cash
acquired
23
Payment for equipment and other fixed assets
10
(4 133 )
(5 943 )
Payment for equipment related to Device-as-a-service
10
(108 600 )
(126 507 )
Payment for intangible assets
11
(33 920 )
(52 250 )
Proceeds from sale of property, plant and equipment
10
Interest received
Net cash from investment activities
(128 514 )
(180 376 )
Redemption of non-controlling shareholders
23
(9 000 )
Proceeds from issuance of shares
26
Proceeds from borrowings
15
Repayment of borrowings
15
(129 879 )
(29 019 )
Net change in bank overdraft
15
(31 196 )
Lease repayments
9
(15 263 )
(15 423 )
Interest paid
(14 935 )
(11 701 )
Net cash flow from financing activities
(12 730 )
Net change in cash and cash equivalents
Cash and cash equivalents as at 1 January
14
Effects of exchange rate changes on cash and cash
equivalents
(191 )
Cash and cash equivalents as at 31 December
14
Annual report 2023
63
Notes to the Group accounts
1. General information and summary of significant accounting policies
How the figures are calculated
2. Segments
3. Revenues from contracts with customers
4. Payroll
5. Other operational costs
6. Other income
7. Financial income and expenses
8. Tax
9. Leases
10. Tangible Assets
11. Intangible assets
12. Inventories
13. Trade receivables and other receivables
14. Cash and cash equivalents
15. Borrowings
16. Other non-current liabilities
17. Other current liabilities
18. Financial Derivatives
Risk
19. Critical estimates
20. Impairment of intangible assets
21. Financial risk management
22. Legal disputes and contingencies
Group structure
23. Changes in Group structure and business combinations
Other
24. Related party transactions
25. Earnings per share
26. Shares, capital structure and shareholders
27. Group structure
28. Remuneration to auditor
29. Remuneration to the board and executive management
30. Events after the reporting period
Annual report 2023
64
Notes to the consolidated financial statements
Note 1. General information and summary of material accounting policies
. The address
of its registered office is
. The shares are listed on the Oslo Stock Exchange
under the TECH ticker. The Techstep Group (Group) consists of
Techstep Group is a Nordic enabler of the mobile workplace, delivering a full range of devices and
services to facilitate mobile workplaces.
The consolidated financial statements for Techstep Group for the year 2023 were approved by the
Board of Directors on 29 April 2024 and will be presented for approval by the Annual General Meeting
on 27 May 2024.
1.1 Basis for preparation
The consolidated financial statements have been prepared and presented in accordance with the
IFRS® Accounting Standards as adopted by the EU.
1.2 Change in accounting principles
There are no new or amended accounting standards that required the Group to change its accounting
policies for the 2023 financial year.
1.3 Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured in the currency
of the primary economic environment in which the entity operates (“the functional currency”). The
consolidated financial statements are presented in NOK, which is Techstep ASA’s functional and
presentation currency. The figures presented in the annual accounts are in NOK thousand unless
otherwise stated.
1.4 Consolidation principles and subsidiaries
Subsidiaries
The consolidated financial statements incorporate the financial statements of Techstep ASA (the
Company) and entities controlled by the Company (its subsidiaries). The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group. All subsidiaries are
100 percent owned, directly or indirectly, by Techstep ASA.
The income and expenses of Group subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition and up to the effective
date of disposal, as appropriate.
Annual report 2023
65
Intercompany transactions, balances and gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset.
1.5 Transactions in foreign currencies
Transactions and balances
Foreign currency transactions are converted into the functional currency, using the exchange rates
on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions, and from the conversion of monetary assets and liabilities denominated in foreign
currencies at year-end exchange rates, are recognised in the consolidated income statement.
Foreign exchange gains and losses are presented in the consolidated income statement, as financial
items.
1.6 Revenue recognition
Revenue from contracts with customers is recognised when a performance obligation in the contract
is satisfied. The amount recognised reflects the consideration to which the Group expects to be
entitled in exchange for those goods and services. For contracts with several performance obligations,
the transaction price is allocated to each performance obligation on a relative stand-alone selling
price basis.
Annual report 2023
66
Revenue from device sales
A major part of the Group’s revenue arises from the sale of devices to its customers. The delivery of
the device in question is identified as the performance obligation. The customers obtain control of the
device when the item is shipped to them. Revenue is recognised at the time of shipment as the
performance obligations are then satisfied.
The sale of certain items of devices triggers a right to a kick back and commission from partners and
suppliers. Kickbacks and commissions are recognised as reduction in COGS when the performance
obligations for the sale of device are satisfied.
Revenue from Advisory & Service
Revenue from Advisory & Services includes revenue from support and maintenance services to its
customers. These services are organised as subscription programmes where the customers have
access to support and maintenance for a monthly fee. The performance obligations related to support
and maintenance are satisfied on an ongoing basis, and revenue related to the sales of services are
thus recognised on a linear basis over time.
The sales of support and maintenance that exceed the subscription programme are recognised as
revenue based on time and material.
Revenue from Advisory & Services also includes sales of third-party software licenses. Management
has assessed the customer contracts related to software licenses and have found the sale of software
licenses to be distinct performance obligations as software licenses. The revenue from sale of third-
party software licenses is recognised gross, due to maintaining control over the services before
transferring to the customer. This approach includes the bundling of licenses with advisory services or
devices over a set period, which constitutes a single performance obligation. Revenue from this
bundled offering is recognised gross as the services are rendered and control is transferred, reflecting
the company's role in fulfilling the contract.
The Group provides both right-to-use licenses and right-to-access licenses.
For right-to-use licenses, the performance obligation is satisfied when the customer gains access to
the software license, and revenue from the sale of licenses is thus recognised at the point in time when
the software is transferred to the customer.
For right-to-access licences, the performance obligation is satisfied over time.
Own Software
The Group develops and sells own software. The customer buys a right to access the software
developed by Techstep. The performance obligation is satisfied over time.
Bundles
As a part of several product bundles and as a stand-alone product, the Group offers a leasing
alternative to customers (Device-as-a-service). The Group uses external funding to finance the
offering. The Group sells the devices up front to an external funder and receives payment in full. The
devices are delivered to the end users, and the end users are invoiced over the contract period from
Annual report 2023
67
the funder. The Group has no credit risk related to the end user. The funder is in the following
description the customer.
The Group has contracts with customers whereupon the customer can, at the end of the contract
period, require that the Group repurchases the devices at a predetermined price. This price is always
lower than the original selling price.
When the Group enters into contracts containing repurchase options management assesses whether
or not the customer has a significant economic incentive to utilise the option. Where it is determined
that the customer has a significant economic incentive to utilise the option, the contract is determined
to be a lease and the transaction is accounted for as a lease in accordance with IFRS 16.
Leasing - Lessor accounting (IFRS 16)
The Group has operating lease arrangements with customers in which it is a lessor. Leasing contracts
with repurchase agreements are accounted for as operating leases with rentals payable up front at
the inception of the lease. There are no other variable lease payments. The buyback obligation is fixed
at the inception of the lease. At the end of the lease period the Group expects to repurchase the device
from the customer.
Payment received from the customer is accounted for as deferred revenue and recognised as
revenue on a straight-line basis over the lease term, less the agreed-upon residual value (repurchase
amount).
The respective leased assets are included in the balance sheet based on their nature and depreciated
over the lease term to the expected second-hand market value in accordance with IFRS 16.
1.7 Other income and other expenses
Other income and expenses of a special nature are presented in the separate line items “Other income
and other expenses within operating profit (loss)” respectively. Such items are characterised by being
of a non-recurring nature and outside the ordinary business of Techstep Group. Other income and
expenses will include items such as restructuring costs related to executive management, acquisition-
related costs, gains or losses on both the sale and remeasurement of assets or liabilities. Acquisition-
related costs may include both costs related to acquisitions closed and transactions that were not
completed.
1.8 Intangible assets
Intangible assets with finite useful lives that are acquired separately, are carried at cost less
accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a
straight-line basis over the estimated useful lives. Of the assets. The estimated useful life and
amortisation method is reviewed at the end of each reporting period, with the effect of any changes
on estimates being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are acquired separately, are carried at cost less
accumulated impairment losses.
Annual report 2023
68
The costs of intangible assets acquired through acquisitions are recorded at fair value as at the date
of acquisition.
Software expenses related to the purchase of new computer programmes are accounted for as
intangible assets if these expenses are not part of device acquisition costs. Costs incurred due to
updates and general maintenance of the software, are accounted for as running costs over the
income statement, unless the changes in the software increase the future economic benefits from the
software.
1.9 Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and accumulated
impairment losses.
The cost of the asset, less its estimated residual value, is depreciated on a straight-line basis over the
estimated useful life of the asset. Estimates of residual values are applicable for the Group’s leasing
offering where assets are sold at the end of the lease. The estimated useful lives, residual values and
depreciation methods are reviewed at the end of each reporting period, with the effect of any changes
in estimates accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal, or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss that arises on the
disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in the income
statement.
1.10 Trade receivables
Trade receivables are initially measured at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment. The carrying amount of a trade
receivable is written off when the Group has no reasonable expectations of recovering the trade
receivable in its entirety or a portion thereof.
1.11 Financial instruments
Financial assets and liabilities include investment in shares, financial derivatives, trade receivables,
other receivables, borrowings, trade payables, other current and non-current liabilities.
Financial assets and financial liabilities are recognised initially on the date when the Group becomes
a party to the contractual provisions of the instrument.
The Group classifies, at initial recognition, its financial instruments in one of the following categories:
●
Financial assets or financial liabilities at fair value through profit or loss,
●
Financial asset at amortised cost,
●
Financial liabilities at amortised cost.
Annual report 2023
69
Financial liabilities at fair value through profit or loss are financial derivatives entered into to hedge
the interest rate risk for the long-term borrowings.
Financial assets at amortised cost are financial assets held to collect the contractual cash flow and
where the cash flows are solely payment of principal and interest on the outstanding principal. The
category is included in the consolidated statement of financial position financial line items Other non-
current assets, Trade receivables, Other receivables and Cash and cash equivalents. Financial assets
at amortised cost are recognised initially at fair value plus directly attributable transaction costs.
Subsequently, if the asset is non-current it is measured at amortised cost using the effective interest
method, reduced by any impairment loss. The carrying amounts of line items classified as current are
assumed to be the same as their fair values, due to their short-term nature. Short-term loans and
receivables are for practical reasons not amortised unless the effect is material.
The category Financial liabilities at amortised cost is included in the consolidated statement of
financial position line items Non-current interest-bearing borrowings, Other non-current debt, Current
interest-bearing borrowings, Trade payables and Other current liabilities. Items in the Other financial
liabilities-category are recognised initially at fair value. Subsequently, if they are non-current, other
financial liabilities are measured at amortised cost using the effective interest method. Effective
interest is recognised in the income statement as financial expenses. Current items in the category
are for practical reasons not amortised unless the effect is material.
For trade and other receivables, default in payments, significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or debt settlement negotiations are considered to be
indicators that the Group will not be able to collect all amounts due according to the original terms of
the receivables. For trade receivables the loss allowance is measured at the lifetime expected credit
loss. The loss is recognised as other operating expenses in the income statement.
The fair value of financial instruments is based on quoted prices as at the balance sheet date in an
active market, if such markets exist. If an active market does not exist, fair value is established by using
valuation techniques that are expected to provide a reliable estimate of the fair value. The fair value
of unlisted securities is based on cash flows discounted using an applicable risk-free market interest
rate and a risk premium specific to the unlisted securities.
Financial assets and liabilities measured at fair value are classified according to the valuation
method:
Level 1: Valuation based on quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2: Valuation based on inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Valuation based on inputs for the asset or liability that are unobservable market data.
If one or more of the significant inputs are not based on observable market data, the instrument is
included in level 3. Changes in fair value recognised in other comprehensive income are recognised
in the line item Exchange differences on converting foreign operations. Changes in fair value
Annual report 2023
70
recognised in profit or loss are presented in the line item, Financial expenses and Other income and
expenses.
1.12 Trade payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
the balance sheet date which are unpaid. The amounts are unsecured payables and are usually paid
within 30 days of recognition. Trade and other payables are presented as trade payables. The carrying
amount is assessed to be a reasonable approximation of fair value.
1.13 Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable
income, based on the applicable income tax rate for each jurisdiction, adjusted for changes in
deferred tax assets and liabilities attributable to temporary differences, and for unused tax losses.
Tax payable
The current income tax charge is calculated based on the tax laws enacted, or substantively enacted,
at the end of the reporting period in Norway, Sweden, Denmark and Poland, where subsidiaries
generate taxable income. Management periodically evaluates positions taken in tax returns, with
respect to situations in which applicable tax regulation is subject to interpretation. Management
establishes provisions where appropriate, based on amounts expected to be paid to the tax
authorities.
Deferred tax
Deferred income tax is provided on temporary differences arising between the tax bases of assets and
liabilities, and their carrying amounts in the consolidated financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax
is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end
of the reporting period, and are expected to apply when the related deferred income tax asset is
realised, or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available
to utilise the temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities, and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends to either settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the income statement, except to the extent that it relates to
items recognised in other comprehensive income, or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
1.14 Equity
The nominal value of treasury shares is reported in the balance sheet, as a deduction to other equity.
Annual report 2023
71
1.15 Share-based payments
Share-based payments are part of the remuneration to executive management and other key
personnel.
The fair value of options granted is recognised as an employee benefit expense with a corresponding
increase in equity. The total amount to be expensed is determined by reference to the fair value of the
options granted.
The total expense is recognised over the vesting period, which is the period over which the vesting
conditions are satisfied. At the end of each period, the estimate of the number of options that are
expected to vest based on the non-market vesting and service conditions is revised. The revision, if
any, of the original estimates is recognised in the income statement, with a corresponding adjustment
to equity.
Social security tax is provided for at each balance sheet date based on the intrinsic value of the
options.
1.16 Retirement benefit plan
The Group has defined contribution plans. A defined contribution plan is a retirement plan in which
the Group pays fixed contributions to a separate legal entity. The Group has no legal or other obligation
to pay additional contributions if the entity does not have sufficient assets to pay all employee benefits
associated with earnings in present and previous periods. Pre-paid contributions are recorded in the
accounts as an asset, to the extent the contribution may be refunded or may reduce future
contributions.
1.17 Cash flow statement
The cash flow statement is presented using the indirect method. The Group’s activities are divided into
operational, investment and financing activities. Cash investment in new business is classified as
payment for the acquisition of subsidiaries, net of cash acquired in the cash flow statement.
1.18 Leasing
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
●
Leases of low value assets; and
●
Leases with a duration of 12 months or less
Lease liabilities
Lease liabilities are measured at the present value of the contractual payments due to the lessor over
the lease term, with the discount rate determined by reference to the rate inherent in the lease. If the
inherent interest rate is not readily determinable, the Group’s incremental borrowing rate on
commencement of the lease is used. Variable lease payments are only included in the measurement
of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the
Annual report 2023
72
lease liability assumes the variable element will be regulated throughout the lease term. The estimate
is based upon management judgment.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for lease payments made.
Right-of-use assets
Right-of-use assets are initially measured at the amount of the lease liability.
Right-of-use assets are depreciated on a straight-line basis over the remaining term of the lease. The
remaining term of the lease is for all leases held by the Group assessed to be equal to the economic
life of the asset.
Leases of low value assets and short-term leases
Payments associated with short-term leases of equipment and vehicles and all leases of low-value
assets are recognised on a straight-line basis as an expense in profit or loss on the financial statement
line item Other operational costs. Short-term leases are leases with a lease term of 12 months or less.
1.19 Earnings per share
i) Basic earnings per share
Basic earnings per share are calculated by dividing:
●
The profit attributable to owners of the company, excluding any costs of servicing equity other
than ordinary shares.
●
By the weighted average number of ordinary shares outstanding during the financial year,
excluding treasury shares.
ii) Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share, to
take into account:
●
The after-income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares, and
●
The weighted average number of additional ordinary shares that would have been
outstanding, assuming the conversion of all dilutive potential ordinary shares.
1.20 Government grants
Government grants, including the Norwegian Skattefunn tax incentive scheme, are recognised in the
same year as the government grants are received. Grants are recognised as deductions against the
costs that they are intended to compensate.
Annual report 2023
73
Investment grants are capitalised and recognised systematically over the asset’s useful life.
Investment grants are recognised either as deferred income or as a deduction of the asset’s carrying
amount.
1.21 New standards and interpretations not yet effective
The Group has elected not to early-adopt any standards or interpretations that have an effective date
after the balance sheet date. Standards and amendments that are issued, but not yet effective, are
not expected to have a material effect on the Group’s financial statements.
Annual report 2023
74
Note 2. Segments
Over the last year, Techstep has been through a major transition in order to unlock profitability and
growth. Historically consisting of 10 acquisitions and 47 different products, the company has
transformed and streamlined the organisation and its product solutions, through mergers and
disposals of products or services outside the strategic roadmap.
Currently, the product offerings are streamlined into seven different product solutions and three
different revenue streams. The organisation and the profitability measurement has been changed
from purely legal and geographical to a functional organisation, measuring performance on the
product portfolio. The revenue streams are generated, and the Group’s resources are utilised across
the different legal entities and geographical markets. Management reporting now consists of
measuring the performance of the product portfolio on a gross contribution level across markets,
while the net profitability (EBITA) is measured on the group level.
As such, Techstep has changed the segment reporting in line with management’s profitability
measurements. Techstep’s current segment is therefore the Group results on a total level.
xx
Annual report 2023
75
Note 3. Revenues from contracts with customers
In the following tables Total revenue is disaggregated by major revenue streams across the
commercial markets.
2023
Norway
Sweden/
Denmark
Poland
Eliminations
Group
Total revenues
678 873
375 110
33 158
(89 630)
1 089 491
Revenue
Devices
551 078
231 880
-
(7 138)
775 820
Advisory & Services*
79 155
129 744
338
(3 571)
205 667
Own Software
48 251
27 168
32 819
(755)
107 483
Other revenues
388
867
-
(735)
521
Total
678 873
389 660
33 158
(12 199)
1 089 491
Net Gross Profit
Norway
Sweden/
Denmark
Poland
Eliminations
Group
Devices
79 543
35 867
(6)
6 200
121 604
Advisory & Services*
55 926
77 820
338
3 527
137 611
Own Software
45 568
21 491
25 588
1 536
94 183
Other revenues
388
868
-
(735)
521
Total
181 425
136 046
25 920
10 528
353 919
2022*
Norway
Sweden/
Denmark
Poland
Eliminations
Group
Total revenues
778 388
523 245
27 926
(55 971)
1 273 589
Revenue
Devices **
619 863
315 918
477
(8 088)
928 169
Advisory & Services
82 950
176 875
306
(6 315)
253 816
Own Software
44 164
24 454
27 143
(4 169)
91 593
Other revenues
31 411
5 998
-
(37 399)
11
Total
778 388
523 245
27 926
(55 971)
1 273 589
Net Gross Profit
Norway
Sweden/
Denmark
Poland
Eliminations
Group
Devices **
90 198
37 366
471
11 386
139 421
Advisory & Services*
57 029
82 583
306
4 982
144 900
Own Software
43 465
18 609
19 370
1 504
82 948
Other revenues
31 365
5 672
(406)
(36 620)
11
Total
222 057
144 230
19 741
(18 748)
367 280
Annual report 2023
76
*Commission is included in Advisory & Service.
** The revenues and cost of goods sold for previously reported in 2023 and 2022 have been restated
due to a reclassification of kick-backs and bonuses from partners, in the amount of NOK 42 million in
2023 and NOK 49 million in 2022.
Receivables and liabilities
Most of the Group's solution revenues are annual. The majority of the contracts follow the calendar
year. The receivables and liabilities related to Solutions as at the balance sheet date are therefore
immaterial. This also applies to the unfulfilled performance obligations.
Receivables and liabilities originate from the sale of support. Customers are invoiced in advance for
monthly or quarterly support subscriptions. The Group also has customers who are invoiced after the
services are rendered, monthly or annually. Receivables and liabilities vary to an extent throughout
the reporting period.
Deferred revenue
The Group's revenue from sale of Devices is divided into two streams: The customer purchases the
Device and the performance obligation is settled when the Device is delivered, or the customer enters
into a leasing agreement, where the Device will be returned at the end of the lease.
The contracts where the Group acts as a lessor last from 18 - 36 months. Revenue is recognised linearly
over the contract period as the performance obligation is settled.
At the commencement of the lease agreements, the Group receives full settlement from the financing
partners as described under section 1.6
Revenue recognition
in the accounting policies
.
received is split between deferred revenue specified below, and residual obligation (amount to be
repaid). The residual obligation is specified in note 16 (non-current) and note 17 (current).
Changes in deferred revenue during the year
2023
2022
Opening balance deferred revenue as at 1 January
151 568
135 320
Revenue deferral new contracts
104 193
115 993
Revenue periodisation
(112 206)
(99 193)
Translation differences
4 713
(552)
Closing balance deferred revenue as at 31 December
148 268
151 568
The material amount in deferred revenue is related to contracts with customers where the customer
has a return option and management’s assessment is that this option will be utilised. Such contracts
are accounted for as operational leases, where the Group is the lessor.
Payment terms and customer base
Customers have payment terms varying from 15-90 days.
Annual report 2023
77
Of the Group's total customer base as at 31 December 2023, the five largest customers represent
approximately 30% (24%) of total revenue in 2023, and the ten largest customers represent
approximately 39% (31%) of total revenue.
Unsatisfied performance obligations
The Group has unsatisfied performance obligations resulting from fixed price long-term contracts of
mainly leased out devices. The unsatisfied performance obligations are satisfied through passage of
time. The table below shows when the deferred revenue will be recognised.
2023
2024
83 653
2025
30 809
2026 and later
33 807
Closing balance deferred revenue as at 31 December 2023
148 267
2022
2023
98 507
2024
42 979
2025 and later
10 082
Closing balance deferred revenue as at 31 December 2022
151 568
The amounts disclosed do not include variable considerations.
Management assessments
Recognition of revenue from combined customer contracts
Consolidated operating revenues include both sales of Device and IT-related services, often derived
from recognition of multiple elements in the same customer contract.
Determining the transaction price for combined contracts
The Group determines the transaction price in respect of each performance obligations within its
contracts with customers when the stand-alone selling price for each performance obligation is not
readily available by assessing the stand-alone selling prices based on the Group’s customer
contracts for comparable products and services. This relates to contracts with customers where third-
party licenses are bundled with support and maintenance services. The income related to the third-
party license is determined based on the abovementioned stand-alone selling prices. The residual
income is allocated to support and maintenance. The revenue recognition is either at a point in time
or over time depending on the services rendered.
Variable considerations such as commissions, vendor discounts, rebates and other contractual bonus
elements may arise based on contracts with vendors and partners. Variable considerations requiring
management assessment are related to achieving certain thresholds in the agreement. In
determining the impact of variable considerations, the Group uses the most likely amount prescribed
Annual report 2023
78
in IFRS 15 whereby the transaction price is determined by reference to the single most likely amount in
a range of possible consideration amounts.
Note 4. Payroll
2023
2022
Salaries and holiday pay
135 265
200 928
Social security tax
39 526
44 652
Pension costs including social security tax
12 414
14 515
Other personnel costs
20 759
4 932
Total personnel costs
207 964
265 027
Number of employees at year end
267
315
All companies in the Group have defined contribution pension plans covering all employees.
Regarding remuneration to executive management, please refer to Note 29, Remuneration to
management.
Note 5. Other operational costs
2023
2022
Office maintenance expenses
6 307
6 525
Human resources
2 258
6 469
Sales and marketing
3 448
12 853
IT expenses
51 079
48 073
Fees for external services
23 814
27 394
Communication
2 505
2 354
Travel expenses
4 278
4 224
Other expenses
5 882
1 733
Total operating costs
99 571
109 626
Annual report 2023
79
Note 6. Other income and other expenses
Other income
2023
2022
Gain on sale of business
0
40 058
Other non-recurring income
494
0
Total
494
40 058
2022
On 3 January the divestment of the Voice and Contact centre business was completed for the total
consideration of NOK 65.5 million. The settlement was received in December 2021. The gain of NOK 40.1
million was recognised in the income statement of the line item Other income in Q1 2022. NOK 24.5
million was derecognised from the statement of financial position’s line item Assets held for sale.
Other expenses
2023
2022
Acquisition related costs
-
(604)
Other non-recurring expenses
(1 970)
(9 411)
Total
(1 970)
(10 015)
2023
Other non-recurring expenses relate to restructuring costs.
2022
Acquisition-related costs are related to the acquisition of Crypho AS and the remaining 20% of the
shares in Techstep Finance AS. Other non-recurring expenses are related to restructuring.
Note 7. Financial income and expenses
2023
2022
Interest income
1 099
979
Net foreign exchange gain
-
430
Other financial income
-
661
Total financial income
1 099
2 070
Interest expenses interest bearing borrowings
(13 203)
(12 850)
Interest expenses leasing
(1 449)
(1 177)
Net foreign exchange loss
(5 546)
-
Other financial expenses
(3 954)
(7)
Total financial expenses
(24 153)
(14 035)
x
Annual report 2023
80
Note 8. Tax
Income tax expense
2023
2022
Current tax
(1 867)
(5 426)
Change in deferred tax
16 873
981
Tax expense
15 006
(4 445)
Reconciliation of relationship between accounting profit and tax expense
Profit before tax
(59 552)
(64 170)
Tax at the Norwegian tax rate of 22%
13 101
14 117
Tax effect permanent differences
1 778
(4 124)
Difference in tax rates
(739)
(1 019)
Deferred tax asset not recognised
(21)
(10 435)
Other
887
(2 984)
Income tax expense
15 006
(4 445)
Effective tax rate
-25%
-7%
Amounts recognised directly in equity
Deferred tax: Share issue cost
-
(823)
Total
-
(823)
Tax losses
Unused tax losses for which no deferred tax asset has been recognised, see note 19*
(564 667)
(564 572)
Potential tax asset at 22% tax rate
(124 227)
(124 206)
Components of deferred taxes
The balance comprises temporary differences attributable to:
Intangible assets
11 124
15 362
Tangible assets
19 064
18 085
Inventories
(14)
(200)
Trade receivables and other receivables
(180)
(151)
Leasing
(447)
(385)
Other current liabilities
(1 470)
(4 565)
Financial Instruments
(900)
-
Tax loss carried forward
(138 812)
(127 269)
Carry forward interest
(831)
(831)
for which no deferred tax asset has been recognised
125 521
125 363
Goodwill from acquisitions with no deferred tax effect
(16 871)
(16 871)
Other
5 401
5 527
Total net deferred tax
1 582
14 066
Net deferred tax related to Norway
(12 943)
(6 412)
Net deferred tax related to Sweden
10 811
15 827
Net deferred tax related to Polen
3 714
4 651
Total deferred tax (+)/ deferred tax asset (-)
1 582
14 066
Deferred tax asset
(13 092)
(6 470)
Deferred tax liability
14 674
20 536
Total deferred tax (+)/ deferred tax asset (-)
1 582
14 066
Annual report 2023
81
Note 9. Leases
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Buildings
Equipment
Vehicles
Total
As at 1 January 2023
25 508
2 141
2 090
29 738
Additions
7 274
(88)
919
8 105
Additions from business combinations
-
-
-
-
Depreciation
(11 355)
(1 140)
(1 611)
(14 106)
Disposals
-
-
(328)
(328)
Translation differences
765
32
39
836
As at 31 December 2023
22 192
945
1 109
24 245
Buildings
Equipment
Vehicles
Total
As at 1 January 2022
25 990
1 329
2 948
30 267
Additions
10 940
611
950
12 501
Additions from business combinations
-
-
-
-
Depreciation
(10 665)
(944)
(2 154)
(13 763)
Translation differences
(757)
1 145
346
734
As at 31 December 2022
25 508
2 141
2 089
29 739
Annual report 2023
82
Lease liabilities
Buildings
Equipment
Vehicles
Total
As at 1 January 2023
27 456
2 259
2 166
31 880
Additions
7 332
(88)
919
8 162
Additions from business combinations
-
-
-
-
Interest expense
1 111
132
104
1 347
Lease payments
(12 082)
(1 277)
(1 740)
(15 099)
Disposals
-
-
(305)
(305)
Translation differences
676
29
35
740
As at 31 December 2023
24 494
1 055
1 178
26 725
Buildings
Equipment
Vehicles
Total
As at 1 January 2022
28 412
1 423
3 001
32 836
Additions
10 911
576
986
12 473
Additions from business combinations
-
-
-
-
Interest expense
909
120
148
1 177
Lease payments
(12 081)
(1 049)
(2 293)
(15 423)
Translation differences
(695)
1 189
324
818
As at 31 December 2022
27 456
2 259
2 166
31 880
Lease liabilities
2023
2022
Non-current
15 916
16 738
Current
10 809
15 142
Total
26 725
31 880
Maturity analysis nominal payments of lease liabilities 2023
Up to 1 year
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Lease liabilities
10 128
5 096
8 139
0
Maturity analysis nominal payments of lease liabilities 2022
Up to 1 year
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Lease liabilities
15 496
12 258
5 886
0
Description of the Group’s leasing activities
The Group leases offices, equipment and vehicles. Rental contracts are typically made for fixed
periods of 12 months to five years but may have extension options.
Annual report 2023
83
Incremental borrowing rate
To determine the incremental borrowing rate, the Group, where possible, uses recent third-party
financing received by the individual lessee as a starting point, adjusted to reflect changes in financing
conditions since third-party financing was received using a build-up approach that starts with a risk-
free interest rate adjusted for credit risk for leases held by the Group, which does not have recent third-
party financing, and makes adjustments specific to the lease, e.g. term, country, currency and security.
Extension and termination options
Currently the Group has not included any extension or termination options in the liabilities. The options
are most widely used in rental of office buildings. All the Group’s contracts have from 1-4 years left of
the rental period. The Group assesses that premises with less than 2 years will be vacated at the end
of the lease. For premises with longer contracts it is assessed as uncertain whether the extension or
termination options will be utilised.
The majority of extension and termination options held are exercisable only by the Group and not by
the respective lessors.
Critical judgments in determining the lease term
In determining the lease term, management considers all facts and circumstances that create an
economic incentive to exercise an extension option, or not exercise a termination option. Extension
options (or periods after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated). The lease term is reassessed if an option is
actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The
assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee.
During the current financial year such an event has not occurred.
Annual report 2023
84
Note 10. Tangible assets
Right of
use
assets
Equipment*
Other
fixed
assets
Total
Accumulated cost as at 1 January 2023
73 605
337 775
21 498
432 878
Additions
7 890
108 600
4 133
120 623
Additions arising from business combinations
-
-
-
-
Disposals
(10 026)
(132 697)
(5 956)
(148 679)
Translation differences
2 731
9 719
1 384
13 834
Accumulated cost as at 31 December 2023
74 200
323 398
21 058
418 656
Accumulated cost as at 1 January 2022
63 881
292 234
31 090
387 205
Additions
12 500
126 507
5 943
144 950
Additions arising from business combinations
0
0
83
83
Disposals
(2 673)
(76 928)
(15 641)
(95 242)
Translation differences
(103)
(4 236)
(11)
(4 351)
Accumulated cost as at 31 December 2022
73 605
337 577
21 464
432 646
Accumulated depreciation as at 1 January
2023
(43 867)
(177 069)
(13 878)
(234 814)
Additions arising from business combinations
-
-
-
-
Current year depreciation
(14 106)
(91 112)
(2 386)
(107 603)
Disposals
9 484
110 520
3 326
123 329
Translation differences
(1 466)
(6 235)
(855)
(8 556)
Accumulated depreciation as at 31 December
2023
(49 954)
(163 897)
(13 793)
(227 644)
Accumulated depreciation as at 1 January 2022
(33 613)
(149 468)
(25 081)
(208 163)
Additions arising from business combinations
(0)
(0)
-
(0)
Depreciation
(13 763)
(92 840)
(2 620)
(109 222)
Disposals
2 673
64 004
14 082
80 759
Translation differences
837
1 429
(223)
2 043
Accumulated depreciation as at 31 December
2022
(43 866)
(176 874)
(13 842)
(234 584)
Book value of assets 31 December 2023
24 245
159 501
7 265
191 012
Book value of assets 31 December 2022
29 738
160 703
7 622
198 064
2-10
years
2 years
3-5 years
Estimated economic life
Depreciation method
linear
linear
linear
xx
*Equipment comprise mobile phones, tablets and other equipment where the Group is the lessor.
Annual report 2023
85
Note 11. Intangible assets
Goodwill
Customer
relationships
Other
intangible
assets
Total
Accumulated cost as at 1 January 2023
738 168
382 316
204 614
1 325 099
Additions
-
-
33 920
33 920
Disposals
-
-
-
-
Translation differences
23 090
1 555
8 823
33 466
Accumulated cost as at 31 December 2023
761 258
383 871
247 357
1 392 485
Accumulated cost as at 1 January 2022
736 389
385 121
148 288
1 269 797
Additions
-
-
52 250
52 250
Additions arising from business combinations
12 367
-
3 566
15 933
Disposals
(125)
(9 143)
Translation differences
(1 569)
(2 805)
636
(3 739)
Reclassified as held for sale
-
-
-
-
Accumulated cost as at 31 December 2022
738 168
382 316
204 614
1 325 099
Accumulated amortisation and impairment as at 1 January
2023
(137 085)
(326 744)
(77 889)
(541 718)
Amortisation
-
(20 385)
(44 530)
(64 915)
Disposals
-
-
-
-
Translation differences
-
3 092
(3 781)
(688)
Accumulated amortisation and impairment
(137 085)
(344 036)
(126 200)
(607 320)
Accumulated amortisation and impairment as
(143 840)
(305 171)
(45 024)
(494 034)
Amortisation
-
(22 964)
(33 281)
(56 245)
Translation differences
0
1 391
2 600
3 992
Accumulated amortisation and impairment
as at 31 December 2022
(137 085)
(326 744)
(77 889)
(541 718)
Book value as at 31 December 2023
624 173
39 835
121 157
785 164
Book value as at 31 December 2022
601 084
55 572
126 725
783 381
Estimated economic lifetime in years
Indefinite
5 years
3-5 years
Depreciation method
none
linear
linear
For a description of movement in the categories Goodwill and Customer relationships, refer to Note
20 Impairment of intangible assets and Note 23 Changes in Group structure and Business
combinations.
Annual report 2023
86
Note 12. Inventories
Inventories are measured at the lower of cost and net realisable value. Cost is determined using the
FIFO or weighted average method, depending on the nature of the inventories.
Book value of inventories
2023
2022
Inventories
10 791
24 473
Less write-down of inventories
(289)
(1 042)
Total inventories
10 502
23 431
xx
Note 13. Trade receivables and other receivables
Trade receivables and other receivables shown at maturity as at 31 December 2023:
Days outstanding
Book
Value
not
over-
due
0-30
days over-
due
30-60 days
over-due
60-90 days
over-due
> 90 days
over-due
Trade receivables
160 427
140 592
15 353
2 238
883
1 361
Other current receivables
30 586
30 586
-
-
-
-
Less provision for bad debt
(1 361)
-
-
-
-
(1 361)
Total trade receivables and
other short-term receivables
189 653
171 178
15 353
2 238
883
-
Expected loss rate
-
0%
0%
0%
0%
100%
The company has reassessed its loss allowance for 2023 and aligned the expected loss rate with
historical and expected credit losses.
Annual report 2023
87
Trade receivables and other receivables shown at maturity as at 31 December 2022:
Days outstanding
Book
Value
not
over-
due
0-30
days over-
due
30-60 days
over-due
60-90 days
over-due
> 90 days
over-due
Trade receivables
215 566
202 105
9 434
2 239
1 558
228
Other current receivables
33 801
33 801
-
-
-
-
Less provision for bad debt
(1 792)
(747)
(185)
(274)
(358)
(228)
Total trade receivables and
other short-term receivables
247 575
235 159
9 249
1 965
1 200
-
Expected loss rate
-
0%
2%
12%
23%
100%
xx
Changes in the provision for bad debt during the year
2023
2022
Opening balance provision for bad debt as at 1 January
(1 792)
(1 877)
Net change in the provision during the year
431
85
Closing balance provision for bad debt as at 31 December
(1 361)
(1 792)
Other short-term receivables
2023
2022
Accrued revenues
2 074
16 619
Prepaid expenses
28 512
17 183
Total
30 586
33 801
xx
2023
2022
Actual losses on receivables
157
182
xx
Annual report 2023
88
Note 14. Cash and cash equivalents
The fair value for cash and cash equivalents is assessed to be equal to the nominal amount.
The Group’s cash and cash equivalents consists of
2023
2022
Cash and bank deposits
77 459
61 119
Total
77 459
61 119
Of which is restricted
3 957
5 196
The Group’s cash and cash equivalents consist in their entirety of short-term bank deposits.
The carrying amounts of the Group’s cash and cash equivalents by currency
2023
2022
NOK
42 693
27 547
SEK
18 685
22 885
Other
16 081
10 687
total
77 459
61 119
xx
As at 31 December 2023 NOK 30 million of the Group’s available credit facilities has been utilised.
Annual report 2023
89
Note 15. Borrowings
The Group's interest-bearing borrowings consist of:
2023
2022
Current
Non-current
Current
Non-current
Seller credits related to business combinations
0
0
27 789
0
Bank loan incl RCF
48 750
129 927
27 771
90 665
Bank overdraft
0
0
27 762
0
Total interest-bearing borrowings
48 750
129 927
83 322
90 665
*Refer to note 14. Net bank overdraft facility comprises bank overdrafts in cash pool and bank deposits in cash
pool.
The table below sets out expected nominal payments on borrowings:
Due within
Total
1 year
1-5 years
over 5 years
Annual interest rate
Bank overdraft facilities*
0
0
0
0
3-month NIBOR + 225 bps
Bank loan
148 677
18 750
129 927
0
3-month NIBOR + 280 / 260 bps
Revolving Credit Facility
30 000
30 000
0
0
3-month NIBOR + 260 bps
Total
178 677
48 750
129 927
0
*Refer to Note 14 for reconciliation of net cash position
The new financing consists of a Term Loan A and Term Loan B of NOK 75 million each, a Revolving
Credit Facility of NOK 30 million, an overdraft facility of NOK 25 million and a seasonal facility of NOK
20 million. The Term Loan A matures over 5 years, with quarterly straight line amortisations, while the
Term Loan B matures in 5 years.
The annual interest rates are:
• TLA/RCF: NIBOR 3m + 260 bps
• TLB: NIBOR 3m + 280 bps
• Overdraft/seasonal: NIBOR 3m + 225 bps
In connection with the refinancing, Techstep ASA entered into an interest rate hedge agreement,
where interest payments for 75% of the long-term borrowings are secured at 4.47% p.a. The duration
of the agreement is 5 years.
The Polish overdraft facility has a total credit limit of PLN 1.3 million. The facility was not utilised as at
year-end 2023. This overdraft facility was terminated on February 8, 2024.
Pledges in relation to the loans to financial institutions
Nordea Bank ABP has entered into the following agreements regarding security of Techstep ASA’s
loans in Nordea Bank ABP:
- Share Pledge Agreements covering the shares in Techstep Norway AS, Techstep Finance AS,
Techstep AB and Techstep Finance AB.
Annual report 2023
90
- Security Agreements with Techstep Norway AS and Techstep Finance AS, covering their
respective trade receivables, operating assets, and inventory.
- Business Mortgage Agreements (Foretagshypotek) with Techstep AB and Techstep Finance
AB.
Covenants
The financial covenants related to the new financing are:
•
NIBD/EBITA adj.: under 4.0x to 2.75x over the next four quarters
•
EBITA adj./net finance charges: over 2.25x to 4.0x over the next four quarters
•
Equity ratio: above 30%
•
First testing date of financial covenants is 31 December 2023
The Group is in compliance with all covenant requirements as at 31 December 2023.
Due to breach of covenants in Q1 2024, see note 30, it has been set out new financial covenants that
apply from Q1 2024 and forward:
•
Net Debt/EBITDA adj.: under 2.7x to 2.5x over the next four quarters and under 2.2x to 2.0x
from Q1 2025 to Q4 2025.
•
Interest cover ratio: over 2.7x to 2.9x over the next four quarters and over 3.2x to 4.0x from
Q1 2025 to Q4 2025.
•
Equity ratio: above 30%.
Reconciliation of interest-bearing debt
2023
2022
Balance as of 1 January
173 987
171 950
Cash flow from financing
activities
Proceeds from borrowings
178 313
55 768
Payments of borrowings
(161 075)
(29 019)
Net cash flow from
financing activities
17 238
26 749
Additions arising from
business combinations
2 344
Non-cash settlements
(14 607)
(25 215)
Effects from exchange rate
fluctuations
2 024
(286)
Other
35
(1 556)
Balance as of 31
December
178 677
173 987
Annual report 2023
91
Note 16. Other non-current liabilities
Other non-current liabilities consists of the following:
Note
2023
2022
Lease liabilities
9
15 916
16 738
Non-current liabilities related to Device-as-a-Service
19 316
20 848
Other
0
(31)
Total other non-current liabilities
35 231
37 555
xx
Non-current liabilities related to Device-as-a-Service are related to contracts with customers where
the contract contains a buyback obligation. The buyback price is fixed at contract inception.
Note 17. Other current liabilities
Other current liabilities
Note
2023
2022
Trade payable
198 353
205 797
Current liabilities related to Device-as-a-Service
3
167 231
168 160
Provision for restructuring costs
-
2 708
Accrued personnel expenses (bonus, holiday pay etc.)
22 407
40 373
Accrued expenses
20 177
19 650
Prepaid revenue
17 142
19 133
Lease liabilities
9
10 809
15 142
Public duties
24 278
41 100
Tax payable
599
3 315
Other current financial and non-financial liabilities
3 433
4 325
Total other current liabilities
464 429
519 701
The current liabilities related to Device-as-a-Service include deferred revenues from the leasing
contract, to be recognised as revenue over the leasing term. In addition, the liabilities include the
future buyback obligation Techstep has for the leased-out devices. Prepaid revenue is related to
transactional contracts.
The difference between total assets and total liabilities represents the future profits estimated in the leases
Annual report 2023
92
Note 18. Financial Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and
are subsequently remeasured to fair value through profit and loss at the end of each reporting
period.
The purpose of derivative transactions is to reduce the interest rate risk. In connection with the
refinancing, Techstep ASA entered into an interest rate hedge agreement, where interest payments
for 75% of the long-term borrowings are secured at 4.47% p.a. The duration of the agreement is five
years.
Liabilities
2023
2022
Nominal
amount
Fair
Value
Nominal
amount
Fair
Value
Maturity
Date
Interest
rate
Interest rate swap
112 500
(4 092)
-
-
Sept 2028
4.47% p.a
Total interest-bearing debt
112 500
(4 092)
-
-
The interest rate swap is recorded at fair value through profit and loss. A negative change in fair
value of the interest rate swap of NOK 4.1 million is included in financial expenses.
Annual report 2023
93
Note 19. Critical estimates
The preparation of consolidated financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise its judgment in the
process of applying the Group’s accounting policies.
Changes in assumptions may have a significant impact on the consolidated financial statements in
the period the assumptions are changed. Estimates and judgments are continually evaluated and are
based on historical experience as adjusted for current market conditions and other factors.
Management believes the underlying assumptions are appropriate.
Management makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates, assumptions and
management judgments that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are outlined below.
Detailed information and judgment about each of these estimates is included in other notes together
with information about the basis of calculation for each affected line item in the financial statements.
Impairment of intangible assets
Goodwill and customer relationship are recognised based on the acquisition method used to account
for business combinations. Customer relationships acquired in previous periods were recognised at
fair value at the acquisition date, have a finite useful life and are subsequently carried at cost less
accumulated amortisation and impairment losses.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment, or more frequently if events or changes in circumstances indicate
that they might be impaired.
The recognised values of goodwill and customer relationships are material to the 2023 financial
statements as a whole, and it is important that the user of the Group’s financial statements
understands the existence of an inherent uncertainty pertaining to the recognised values.
Impairment test related to goodwill and customer relationships is further described in note 20.
Goodwill
The Group tests whether goodwill has suffered any impairment on an annual basis. For the 2023 and
2022 reporting period, the recoverable amount of the cash generating units (CGUs) was determined
based on value-in-use calculations. This calculation requires management to estimate the future
cash flows expected to arise from the CGUs and a suitable discount rate to calculate present value.
Estimated future cash flows are based on financial budgets and forecasts approved by management
covering a three-year period. Cash flows beyond the three-year period are extrapolated using the
estimated growth rates. Details of recognised goodwill are provided in note 20, including discount
rates calculations and sensitivity disclosures.
Customer relationships
Annual report 2023
94
The Group estimates the useful life of the customer relationship to be at least 5 years based on the
expected future revenue generated from the customer base. However, the actual useful life may be
shorter or longer than five years, based on management assessments of technical innovations,
technical obsolescence of existing products and competitor actions.
Recognition of income tax
The Group is mainly subject to income taxes in three jurisdictions, and significant estimates are
required in determining the provision for income taxes and related tax balances. There are many
transactions and calculations for which the ultimate tax determination is uncertain. The Group
recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes
will be due. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the current tax and deferred tax provisions.
Deferred tax assets are recognized when it is probable the company will have a sufficient taxable profit
in subsequent periods to utilize the tax asset. Assessment of future ability to utilise tax positions is
based on judgements of the level of taxable profit, the expected timing of utilisation and expected
temporary differences.
The Group has at the balance sheet date tax losses carried forward which are not included in the basis
for the recognised deferred tax asset, as significant uncertainty pertaining to the possible utilisation
of these losses has been identified.
Annual report 2023
95
Note 20. Impairment of intangible assets
For impairment testing goodwill acquired through business combinations is allocated to the CGUs as
shown in the table below. Impairment indicators are assessed at each reporting date for individual
assets and cash generating units (CGUs), and impairment testing is performed if any indicators are
identified. Goodwill, intangible assets with indefinite useful life and intangible assets not yet brought
into use are assessed for impairment annually or when impairment indicators are identified.
Goodwill
2023
2022
Norway
349 404
349 404
Sweden
203 166
189 588
Poland
71 603
62 091
Total
624 173
601 083
Cash generating units
CGU Norway
: Comprises the companies Techstep Norway AS, Techstep Finance AS and Crypho AS.
The cash flows from Crypho have been integrated with Techstep Norway AS and for the 2023
impairment test Crypho was included in the Norway CGU. All initial input into Techstep Finance AS is
created by Techstep Norway AS, and Techstep Finance AS is therefore not considered to be a cash
generating unit by itself.
Goodwill allocated to Norway is mainly related to acquisition of Nordialog, Techstep Finance AS and
Mytos AS.
CGU Sweden:
Comprise the companies Techstep AB, Techstep Finance AB and Optidev ApS. The
companies are followed up as Sweden, and are integrated with each other. Similar to Norway,
Techstep Finance AB is not considered to be a cash generating unit by itself.
Goodwill allocated to Sweden is mainly related to the acquisition of Techstep AB, Optidev AB and
eConnectivity.
CGU Poland:
Comprise the companies Techstep S.A. and Famoc ltd. Goodwill allocated to Poland is
related to the acquisition of Techstep S.A and Famoc ltd.
Monitoring
Goodwill is monitored by management at the geographic level defined in the table above. These CGU
represent the lowest level within the Group at which the goodwill and other intangible assets are
monitored for internal management purposes.
Annual report 2023
96
Goodwill is initially recognised at the date of an acquisition of a business combination and represents
the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
and the fair value as at the acquisition date of any previous equity interest in the acquiree over the
fair value of the identifiable net assets acquired. Other intangible assets are recognised at the fair
value as at the acquisition date.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment, or more frequently if events or changes in circumstances indicate
that they might be impaired. Impairment reviews are undertaken by calculating the recoverable
amount of the CGU containing goodwill and other intangible assets. The carrying amount of the CGU
is then compared to the recoverable amount of the CGU, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not
subsequently reversed.
The estimate of the recoverable amount of the CGU is largely based on management’s assumption
pertaining to the Group’s future cash flow projections.
For the 2023 and 2022 reporting period, the recoverable amount of the cash generating units (CGUs)
was determined based on value-in-use calculations which require the use of several key
assumptions. The calculations use cash flow projections based on financial budgets and prognoses
in the strategic plan approved by the Board of Directors covering a three-year period. Cash flows
beyond the three-year period are calculated using the estimated growth rates stated below.
Please refer to the table “Key assumptions for estimating future performance” for further details.
Annual report 2023
97
Key assumptions for estimating future performance
Norway
Sweden
Poland
Material
factors that
affect the
cash flow
from
operations
The cash generating unit
provides the customer with
the entire managed mobility
offering, consisting of Device,
third party software within the
mobility space, consultancy,
maintenance and support,
and all of the Groups’ own
software,. All of the products
are offered stand-alone or
through bundles. The CGU
retains cash flows from the
traditional device business
and own software, which is
expected to increase over the
next years.
The cash flows are based
upon expected future
performance using the 2024
budget as a baseline. Free
cash flows are expected to
increase in the years to come
as the organisation settles
and becomes more effective.
The cash generating unit
provides the market with a
comprehensive service stack
comparable to the Norwegian
counterpart. The company is
moving towards offering a full
suite of managed mobility,
including the Lifecycle
platform adapted to the
Swedish market.
The cash flows are based
upon expected future
performance using the 2024
budget as a baseline. Free
cash flows are expected to
increase in the years to come
as the organisation settles
and becomes more effective.
The cash generating unit is
based in Poland and delivers
software solutions for mobility
management to SMEs and
enterprises throughout Europe.
The software has a good fit with
the Groups other offerings and
integration of the product into
the Nordic offerings is being
undertaken.
The CGU has stable free cash
flows.
The CGU operates in a stable
economy with a high
penetration of use of
advanced mobile devices.
The market related to other
service offerings from the
CGU is expected to grow in
the future.
Third-party independent
agencies have reported an
expected compound average
growth rate in the markets
the CGU operates far above
the growth estimates used in
the impairment assessment.
The CGU operates in a stable
economy with a high
penetration of use of
advanced mobile devices.
The market related to other
service offerings from the
CGU is expected to grow in
the future.
Third-party independent
agencies have reported an
expected compound average
growth rate in the markets
the CGU operates far above
the growth estimates used in
the impairment assessment.
The CGU operates from Poland,
however, it has customers in
many geographies where both
economic and market
conditions differ.
A strength is that the CGU is
diversified, however the risk
profiles of the individual
customers vary.
Annual report 2023
98
Capital expenditure consists
of development costs for own
software.
The larger investments in
business support systems
such as ERP and the
ecommerce platform in 2024
and 2025 will not be
capitalised, as they are
largely investments in SaaS.
These investments are
approved by the Board under
the assumption that
management implement
cost saving initiatives that will
cover the investments. As
such, these investments are
not included in the cash flow
in 2024 or 2025.
Capital expenditure consists
of development costs for own
software.
The larger investments in
business support systems
such as ERP and ecommerce
platform in 2024 and 2025 will
not be capitalised, they are is
largely investments in SaaS.
These investments are
approved by the Board under
the assumption that
management implement
cost saving initiatives that will
cover the investments. As
such, these investments are
not included in the cash flow
in 2024 or2025.
Capital expenditure consists of
development costs for own
software.
The larger investments in
business support systems such
as ERP and ecommerce
platform in 2024 and 2025 will
not be capitalised, they are is
largely investments in SaaS.
These investments are
approved by the Board under
the assumption that
management implement cost
saving initiatives that will cover
the investments. As such, these
investments are not included in
the cash flow in 2024 or 2025.
Main budget
and long
term
assumptions
The budget and long term
plan are based on the
continued transition from old
to new revenue streams. The
budget for 2024 is at the
same level as results
delivered in 2023, however
there is an underlying shift
from old to new revenue
streams. There is a risk that
there is a lag in the transition
and that the result delivered
will be lower. The budget is a
building block in the long-
term strategy plan, which has
an ambition of an increase in
free cash flow.
Refer to sensitivity analysis
below regarding reductions in
free cash flows and impact
on impairment.
The budget and long term
plan in Sweden are based on
the same underlying value
chains as in Norway, where
investments related to
processes and systems were
taken in 2023. The systems,
products and processes will
be rolled out in Sweden and
the group will scale better on
new systems.
Refer to sensitivity analysis
below regarding reductions in
free cash flows and impact
on impairment.
The budget and long-term plan
in the CGU are related to the
integration in the Group,
standardising the product
offering into the smart
packaging, and growing sales
through direct and partner-
sales channels.
Refer to sensitivity analysis
below regarding reductions in
free cash flows and impact on
impairment.
The calculations of the CGU estimated value of equity use cash flows projections based on financial
budgets and forecasts approved by management covering a three-year period. Cash flow for year
four and five were calculated using estimated growth rates. In year six a terminal value is calculated.
The key assumptions are growth in revenue and EBITDA margin presented in the table below.
Annual report 2023
99
Assumptions
DCF Norway
FY25F
FY26F
FY27F
TV (FY28)
Growth in revenue
4.6 %
5.1 %
3.9 %
2.6 %
EBITDA margin
5.2 %
7.4 %
8.5 %
8.4 %
DCF Sweden
FY25F
FY26F
FY27F
TV (FY28)
Growth in revenue
4.7 %
4.7 %
4.0 %
2.9 %
EBITDA margin
5.7 %
7.2 %
8.0 %
7.9 %
DCF Poland
FY25F
FY26F
FY27F
TV (FY28)
Growth in revenue
14.9 %
14.9 %
0.0 %
0.0 %
EBITDA margin
43.4 %
49.1 %
47.4 %
45.6 %
Discount rates
The pre-tax discount rate applied for the impairment testing is set between 11.3% - 13.0% depending
on the geographic area. This rate of return is calculated based on the weighted average of required
rates of return on the Group’s equity and debt (WACC) using the capital asset pricing model (CAPM).
The post-tax rates are converted to pre-tax rates by using nominal tax rates in the relevant countries.
The required rate of return on debt is estimated based on a long-term risk-free interest rate, to which
a premium is added to reflect the creditors' risk when lending funds to the Group. The discount rate
includes a small business premium (operational risk) and the expected future levels of inflation. For
impairment reviews performed at year end 2023 and 2022, these assumptions have been applied
consistently across the Group.
2023
2022
Equity ratio
50%
50%
Growth in terminal value
2.0%
2.0 %
WACC
11.3% - 13.0%
11.2% - 13.7%
Sensitivity
A sensitivity analysis would result in the impairment indications below. We have conducted sensitivity
analyses on the estimated enterprise value, testing the estimated value’s sensitivity towards changes
in applied discount rate (WACC) and long-term growth rate in the terminal year.
Annual report 2023
100
Impact on impairment
Norway
Sweden
Poland
Long-term growth rate 0,1%
No impairment
No impairment
No impairment
Increase in WACC *
No impairment
No impairment
No impairment
*Norway
: In order to have an impairment loss situation - the long-term growth rate is set to 0.1% and
the WACC must be 15.1%.
*Sweden:
In order to have an impairment loss situation - the long-term growth rate must be set to
0.1% and the WACC must be 14.9%.
*Poland
: In order to have an impairment loss situation - the long-term growth rate must be set to 0.1%
and the WACC must be 23.6%.
Annual report 2023
101
Note 21. Financial risk management
The Group's financial risk is related to credit risk, liquidity risk, currency risk and interest rate risk. The
Group's risk management aims to support value creation and ensure a solid financial platform,
through transparent and strategic management of both financial and operational risk factors.
Operational risk relates mainly to major projects, which are continuously reviewed by management.
The Group’s capital consists of net interest-bearing debt (NIBD) and equity:
2023
2022
Non-current interest-bearing borrowings
129 927
90 665
Current interest-bearing borrowings
48 750
83 322
Cash and cash equivalents*
77 459
61 119
NIBD
101 218
112 868
Group equity
573 697
571 520
Net gearing (NIBD/equity)
18%
20%
Undrawn credit facilities*
28 368
64 238
* Seasonal facility of NOK 20 million is not included in undrawn credit facility. Seasonal facilitiy is avaliable
between May and September.
xx
A) Capital management
The Group’s capital structure's primary focus is to ensure sufficient free liquidity in the form of cash
and cash equivalents along with bank overdraft facilities to ensure that the Group can continually
service its obligations and at the same time be able to make strategic acquisitions.
B) Credit risk
Credit risk is the risk that customers are unable to settle their obligations as they mature. Credit risk is
considered part of the business risk and is included in ongoing operations. The Group has established
procedures for credit rating major private customers, and the risk that customers do not have the
financial means to meet their obligations is considered low. Historically, only minor losses have been
realised as a result of customers experiencing financial difficulties.
The customer base comprises many medium-sized customers, along with a few larger customers.
The customer portfolio is considered to be well diversified across industries, as well as private and
public customers. The risk level is considered satisfactory. The bulk of the Group's customers are
Norwegian and Swedish, which constitutes a geographic concentration of risk.
No single customer represents 10% or more of trade receivables as at 31 December 2023 or as at 31
December 2022. No single customer represents 10% or more of the Group's revenues in 2023 or 2022.
The maximum credit exposure consists of the carrying value of receivables and cash and cash
equivalents. All receivables are due within one year. Normally, payment is 14 days after invoicing.
Annual report 2023
102
Provisions for losses on trade receivables are based on portfolio assessment of trade receivables as
disclosed in note 13.
Historically, actual losses on trade receivables have been immaterial, as was also the case in 2023. It
is management’s assessment that the Group's overall credit risk is satisfactory. Please also refer to
note 13, Trade receivables and other receivables.
C) Liquidity risk
Liquidity risk is the risk of not being able to pay the Group's financial obligations upon maturity. Liquidity
risk arises from a mismatch between cash flows from operations and financial commitments. Liquidity
budgets are prepared based on the Group's financial budgets. The budgets are prepared annually
and are updated with new forecasts throughout the year. Transforming from a transactional model to
a recurring revenue model, which by definition postpones incoming cash flows, puts a higher strain
on the liquidity position of the Group. The Group's liquidity is closely monitored by management and
the Board of Directors. If the need arises, the Group has access to multiple funding sources to balance
the transformation.
For details regarding the Group's interest-bearing borrowings refer to note 15 Borrowings.
D) Currency risk
The material part of the Group's operations is conducted in the Nordic countries. The Group is thus not
materially affected by operational currency fluctuations other than fluctuations between NOK and SEK.
The bulk of the Group's goods and services is billed in NOK or SEK as appropriate. To a minor extent,
some solutions revenue and expenses are invoiced in PLN, EUR and USD. The Group does not hedge
cash flows in foreign currencies. The Group has low cash holdings, trade receivables and trade
payables in currencies other than NOK and SEK.
Therefore, the consequences on the Group's profit and equity from changes in exchange rates
between NOK and foreign currencies, and SEK and foreign currencies are limited and deemed
acceptable. There is limited trade between Norway and Sweden and currency risk is considered to be
low overall. Group values related to foreign operations are subject to currency fluctuations. As such,
there will be variations in the financial statement line item Exchange differences on translating foreign
operations in the consolidated statement of comprehensive income.
E) Interest rate risk
Interest rate changes have an effect on consolidated operating income and cash flows from
operating activities. The Group's interest rate risk is related to floating interest rates on bank
accounts and deposits, in addition to floating rate debt in credit institutions. The Group has one
interest rate hedge agreement, where interest payments for 75% of the long-term borrowings are
secured, refer to note 18. The Group has no other fixed-rate deposits or debt, and is therefore not
exposed to fair value interest rate risk. The Group assesses its capital structure on an ongoing basis.
Annual report 2023
103
Interest rate sensitivity
Increase/
decrease in
basis points
Increased
interest
rate effect
on profit
before tax
Decreased
interest
rate effect
on profit
before tax
Based on net interest-bearing items 31.12.2023
+/- 100
-1 012
1 012
Based on net interest-bearing items 31.12.2022
+/- 100
-1 230
1 230
Annual report 2023
104
F) Categories of financial instruments
This section explains the judgements and estimates made in determining the fair values of the
financial instruments that are recognised and measured at fair value in the financial statements. To
provide an indication of the reliability of the inputs used in determining fair value, the Group has
classified its financial instruments into the three levels prescribed under the accounting standards. An
explanation of each level is included in note 1 Accounting principles.
The fair value of all financial assets and financial liabilities are assessed to be, for all material purposes,
be equal to book value. To assess the fair value of shares and investments held by the Group
management assesses the underlying values in the companies where the Group holds shares. The
change in fair value is accounted for over profit and loss.
The Group has the following categories of financial
instruments as at 31 December 2023:
Financial
assets at fair
value through
profit or loss
Financial
assets at
amortised
cost
Total
Level in fair
value
hierarchy
ASSETS
Shares and investments
695
0
695
3
Other non-current assets
0
3 222
3 222
Accounts receivables
0
159 067
159 067
Other receivables
0
30 586
30 586
Cash and cash equivalents
0
77 459
77 459
Total assets
695
270 334
271 029
Financial
liabilities at
fair value
through profit
or loss
Financial
liabilities at
amortised
cost
Total
Level in fair
value
hierarchy
LIABILITIES
Non-current interest-bearing borrowings
0
129 927
129 927
Other non-current debt
0
15 916
15 916
Financial derivatives
4 092
0
4 092
2
Non-current liabilities related to Device-as-a-Service
0
19 316
19 316
Current interest-bearing borrowings
0
48 750
48 750
Accounts payables
0
198 353
198 353
Current liabilities related to Device-as-a-Service
0
167 231
167 231
Current lease liabilities
0
10 809
10 809
Other current financial liabilities
0
88 036
88 036
Total liabilities
4 092
678 337
682 429
Annual report 2023
105
The Group has the following categories of financial
instruments as at 31 December 2022:
Financial
assets at fair
value through
profit or loss
Financial
assets at
amortised
cost
Total
Level in fair
value
hierarchy
ASSETS
Shares and investments
608
0
608
3
Other non-current assets
0
2 655
2 655
Accounts receivables
0
213 773
213 773
Other receivables
0
33 801
33 801
Cash and cash equivalents
0
61 119
61 119
Total assets
608
311 349
311 957
Financial
liabilities at
fair value
through profit
or loss
Financial
liabilities at
amortised
cost
Total
Level in fair
value
hierarchy
LIABILITIES
Non-current interest-bearing debt
0
90 665
90 665
Other non-current debt
0
16 707
16 707
Financial derivatives
0
0
0
2
Non-current liabilities related to Device-as-a-Service
0
20 848
20 848
Current interest-bearing borrowings
0
83 322
83 322
Trade payables
0
205 797
205 797
Current liabilities related to Device-as-a-Service
0
168 160
168 160
Current lease liabilities
0
15 142
15 142
Other current financial liabilities
0
130 604
130 604
Total liabilities
0
731 243
731 243
xx
Note 22. Legal disputes and contingencies
The Group has no ongoing legal disputes.
Annual report 2023
106
Note 23. Changes in Group structure and business combinations
2022
Acquisition of Crypho AS
On 1 June 2022, Techstep acquired 100% of the share in Crypho AS. The company has an end-to-end
encrypted enterprise software as a service (SaaS) messaging and file-sharing application. The
transaction was settled in Techstep ASA shares.
Acquisition of last 20% of shares in Techstep Finance AS
On 14 February 2022, Techstep acquired the remaining 20% of the shares in Techstep Finance AS for
NOK 9.0 million. The transaction was settled in cash. Goodwill of NOK 7.4 million was recognized.
Following the transaction, Techstep owns 100% of the shares in Techstep Finance AS. Techstep Finance
AB is a 100%-owned subsidiary of Techstep Finance AS and the ownership in Techstep Finance AB
increased correspondingly.
Divestment of Voice and Contact centre business unit
On 3 January 2022, the divestment of the Voice and Contact center business unit was completed for
a total consideration of NOK 65.5 million. The gain of NOK 40.1 million was recognised in the income
statement as Other income in 2022.
Note 24. Related party transactions
The following are considered related parties to the Group:
All the members of the Board of Directors and Group management, including close family members,
as defined by the Norwegian Accounting Act and associated regulations.
The following companies are considered as related parties to the Group during 2022 and 2023:
Company
Relationship
Role
Crayon Group Holding ASA and
Crayon AS
Melissa Mulholland
Board member
Crayon Group Holding ASA and
subsidiaries
Jens Rugseth
Board member
Stobor Invest AB*
Åke Fredrik Logenius
Chief operation officer (until June 2023)
Virtudev AB**
Åke Fredrik Logenius
Chief operation officer (until June 2023)
Annual report 2023
107
Consolidated income statement
Revenue from
Expenses to
2023
2022
2023
2022
Crayon
3 044
2 060
5 530
3 536
Stobor Invest AB*
-
-
290
1 557
Virtudev AB **
-
-
8 909
9 530
Receivables
Payables
Balance as at 31 December
2023
2022
2023
2022
Crayon
1 221
172
598
243
Stobor Invest AB*
-
-
-
27 789
Virtudev AB **
-
-
2 680
2 226
xx
*Stobor Invest AB is 50% owned by former COO Åke Fredrik Logenius. He resigned from the role as COO
01.06.2023.
** Virtudev AB is 26% owned by Stubor Invest AB.
All transactions with related parties are carried out at the arm’s length principle.
Annual report 2023
108
Note 25. Earnings per share
2023
2022
Weighted average number of shares outstanding
31 094 275
22 685 743
Weighted average number of shares outstanding (Diluted)
31 094 275
22 685 743
Profit attributable to owners of the parent
(44 546)
(68 614)
Earnings per share
(1.43)
(3.02)
Earnings per share (diluted)
(1.43)
(3.02)
The Group has issued stock options to some members of the executive management group and other
key employees, refer to note 29 Remuneration to the board and executive management for details.
For details regarding the issuance of shares in 2023 and 2022, refer to note 26 Shares, capital structure
and shareholders.
Annual report 2023
109
Note 26. Shares, capital structure and shareholders
Share capital
The company’s share capital as at 31 December 2023 was NOK 31 629 381 based on 31 629 381 ordinary
shares with a par value of NOK 1.00.
Each share gives the right to one vote at the company’s general meeting. At the date of this report,
Techstep holds 192 treasury shares.
The development in share capital and other paid-in equity is set out in the consolidated statement
of changes in equity.
Development in the number of issued and outstanding shares:
Shares outstanding
Treasury shares*
Issued
Number of shares 1 January 2023
30 513 107
192
30 513 107
Employee share purchase programme
63 146
63 146
Conversion of debt
1 053 028
1 053 028
Number of shares 31 December 2023
31 629 281
192
31 629 281
Number of shares 1 January 2022
209 629 830
1 914
209 629 830
Employee share purchase programme
854 940
854 940
Private placement
92 631 820
92 631 820
Consideration shares
2 014 480
2 014 480
Number of shares 31 December 2022
305 131 070
1 914
305 131 070
*Treasury shares are included in the column Other equity in the statement of changes in equity.
Please note that on the Annual General Meeting 23 May 2023, it was approved to resolve a 10:1 reverse
share split, so that 10 shares were reversely split into 1 share (ex-date 30 May 2023). On 12 July, a share
capital decrease was completed, reducing the nominal value of each Techstep to NOK 1. The number
of shares stated for 2023 reflects this reverse share split.
2023
Techstep has issued consideration shares in relation to the following:
●
63 146 new shares related to employee share purchase programme
●
1 053 028 new shares related to issuance of shares to Stobor Invest AB by conversion of the
Company’s debt owed to Stobor Invest AB into shares in the company
2022
Techstep issued consideration shares in relation to the following:
●
854 940 new shares related to employee share purchase programme
●
53 244 140 new shares in relation to private placement
●
2 014 480 new shares related to the Crypho acquisition
Annual report 2023
110
As at 30 December 2023, Techstep’s 20 largest shareholders were as follows:
Shareholder
Number of
shares
Ownership
DATUM AS
1
5 835 198
18.45%
KARBON INVEST AS
2
4 371 619
13.82%
Swedbank AB
3 960 757
12.52%
STEENCO AS
869 566
2.75%
AS CLIPPER
869 566
2.75%
CAMIKO AS
803 300
2.54%
VERDIPAPIRFONDET DNB SMB
662 894
2.10%
CIPRIANO AS
599 916
1.90%
Saxo Bank A/S
577 202
1.82%
SPECTER INVEST AS
439 200
1.38%
GIMLE INVEST AS
413 234
1.31%
TIGERSTADEN AS
411 423
1.30%
Sbakkejord AS
400 000
1.26%
DNB Markets Aksjehandel/-analyse
330 282
1.04%
TVENGE
300 000
0.95%
TIGERSTADEN MARINE AS
250 000
0.79%
NORDHOLMEN AS
238 372
0.75%
HINVEST AS
215 699
0.68%
PIKA HOLDING AS
214 345
0.68%
ADRIAN AS
203 886
0.64%
Total number owned by top 20
21 963 460
69.44%
Total number of shares
31 629 381
100.00%
1)
Datum AS is controlled by deputy Board member Jan Haudemann-Andersen.
2)
Karbon Invest AS is owned by Board member Jens Rugseth. Jens Rugseth also owns shares
in Techstep ASA through Rug Z.
Duo Jag AS, which is partly owned by Board member Ingrid Leisner, owns 60 157 shares in Techstep
ASA. Hermia AS, which is partly owned by Board member Harald Arnet, owns 63 439 shares in Techstep
ASA.
Annual report 2023
111
Share option grant
Prog-
ramme
Grant date
Vesting
date
Expiry date
Share
options
granted
Exercise
price
Share
options
31.12.22
Share
options
31.12.23
2020
2020-06-22
2021-06-22
2024-06-22
426 988
3.00
131 922
131 922
2021
2021-04-22
2022-04-22
2026-04-22
153 110
5.80
70 429
70 429
2021-04-23
2023-04-22
2026-04-22
153 110
5.80
50 525
50 525
2021-04-24
2024-04-22
2026-04-22
153 110
5.80
50 525
50 525
2021
2021-09-22
2024-09-01
2026-09-01
150 000
4.75
150 000
0
2021-09-23
2025-09-01
2027-09-01
150 000
5.75
150 000
0
2021-09-24
2026-09-01
2028-09-01
150 000
6.75
150 000
0
2022
2022-04-21
2023-04-21
2027-04-21
105 688
3.25
84 725
56 775
2022-04-22
2024-04-21
2027-04-21
105 688
3.25
84 725
56 775
2022-04-23
2025-04-21
2027-04-21
105 688
3.25
84 726
56 775
2023
2023-08-30
2024-06-14
2028-06-14
238 333
18.7
-
188 329
2023-08-30
2025-06-14
2028-06-14
238 333
18.7
-
188 333
2023-08-30
2026-06-14
2028-06-14
238 333
18.7
-
188 338
Total
1 007 577
1 038 725
The fair value at grant date is independently determined per tranche using the Black Scholes Model.
"As option gains are taxed with personal income tax rates (higher) and gains on ordinary shares are
taxed with capital gains tax rates (lower), the assessment is that the participants will exercise early.
Hence, exercise is assessed to occur before a full lifetime has lapsed. As the options are “non-
transferable”, it is also likely that participants will tend to realise the gain on the options by exercising
early as soon as exercise is possible.
Due to the arguments above, it is management’s best estimate that using the term from the grant
date until one year after the vesting date as the estimated lifetime on the options is a fair assumption".
The expected volatility of the company’s share price is 64 %. To estimate the volatility of the Techstep
share, the Company’s historic volatility over the expected lifetime of the options has been used.
The risk-free interest rate used in the B&S model is the zero-coupon government bond issues of the
country in whose currency the exercise price is expressed, with the term equal to the expected term of
the option being valued. Since the exercise price is expressed in Norwegian kroner, the “Norges Bank
Treasury Bill” and “Government bond” rate is used as input. The interest rates used for the options with
term structures outside of the quoted terms of Norges Bank’s interest rates are calculated with the use
of a linear interpolation between the two closest quoted rates.
Please see separate remuneration report for 2023 for more information about the share option
programmes.
Annual report 2023
112
Overview of share options held by members of the management group as at 31 December 2023:
Name
Position
Shares
Share Options
David Landerborn
Interim CEO
32 497
82 966
Ellen Solum
CFO
15 402
150 000
Mads Vårdal
Chief Product Officer
502
199 737
Bartosz Leoszewski
Chief Technology Officer
41 336
84 065
Ellen Skaarnæs
Chief People Officer
5 422
84 065
Sheena Lim
Chief Marketing Officer
2 134
84 065
x
Annual report 2023
113
Note 27. Group structure
As at 31 December 2023 the Group consisted of the following companies:
Company
Location
Segment
Ownership
Techstep ASA
Oslo
Headquarters
100%
Techstep Norway AS
Oslo
Norway
100%
Crypho AS
Oslo
Norway
100%
Techstep Finance AS
Oslo
Norway
100%
Techstep AB
Karlstad/Borås
Sweden
100%
Techstep Finance AB
Karlstad
Sweden
100%
Techstep ApS
Vejle
Denmark
100%
Optidev ApS
Vejle
Denmark
100%
Techstep S.A
Gdansk
Poland
100%
Techstep Ireland Ltd.
Cork
Ireland
100%
Santa Rita Private Venture
Gdansk
Poland
100%
Note 28. Remuneration to auditor
Auditor remuneration
2023
Audit
services
Other
attestation
services
Tax
advisory
services
Other non-
audit
services
Total
BDO
1 779
-
-
183
1 962
PWC
1 298
-
-
-
1 298
Other
82
-
-
-
82
Total
3 159
-
-
183
3 342
2022
Audit
services
Other
attestation
services
Tax
advisory
services
Other non-
audit
services
Total
BDO
2 704
62
-
123
2 889
Other
218
-
41
144
403
Total
2 922
62
41
267
3 292
Xx
Annual report 2023
114
Note 29. Remuneration to the board and executive management
For detailed information on remuneration to executive management and the Board of Directors, see
the separate remuneration report for 2023. The company has established guidelines for remuneration
to executive management which were approved by the company’s general meeting on 23 May 2023.
Annual report 2023
115
Note 30. Events after the reporting period
1.
New CEO
On 26 January 2024, Morten Meier was appointed as Techstep’s new CEO. Morten is a seasoned senior
executive from the software and technology industry, with more than 25 years of experience from
international organisations in the areas of leadership, strategy, business development, sales,
marketing and operations. He comes from Microsoft Norway, where he has held several positions on
the leadership team over the past ten years, latest as Senior Director Marketing & Operations (COO)
and Deputy General Manager. Prior to Microsoft, he spent four years with IBM in leadership positions in
Norway and at a Nordic level, and almost 10 years with Hewlett-Packard serving as Country Manager
for Software and Services. David Landerborn, who served as interim CEO since 1 November 2023,
resumed the position as Chief Operating Officer.
2.
Covenants
The Group is in breach of covenants as of Q1 2024. The Lender and the Group have agreed upon an
Addendum permitting continued access to the credit facilities under revised terms. The Addendum
Letter contains an agreement of adjusted financial covenants (see note 15), the two largest
shareholders shall issue an Equity Commitment Letter and the margin shall be adjusted. The Group
shall also provide the Lender with monthly Financial Reports. Management has assessed the
implications of this breach and the subsequent amendment on the Group's ability to continue as a
going concern and its financial position. It has been determined that these events do not affect the
ongoing operations or financial stability.
3.
Strategic partnerships
On 28 February, Techstep signed a strategic partnership agreement with devicenow, a global provider
of subscriptionbased IT devices, to introduce Lifecycle Portal to a wider customer base worldwide.
Devicenow, a German-based company and part of the CHGMERIDIAN Group, has a global reach
across 190 countries and serves several major global customers. Devicenow’s vision is to become the
leading player in the global DaaS marketplace with environmentally conscious IT device subscription,
a market that is expected to grow from about USD 30 billion at the beginning of the decade to almost
USD 500 billion in five years’ time. This partnership allows Techstep increases its global reach whilst
devicenow can add further great value to their offering through the Lifecycle Portal. Furthermore, the
agreement presents opportunities to incorporate Techstep’s managed services into devicenow’s
portfolio.
On 22 April 2024, Techstep signed strategic partner agreement with Consafe Logistics, a leading
supply chain technology company, to assume control over their hardware division specialised in
rugged devices. The collaboration allows Techstep to broaden its mobile devices solutions and
services, while extending its reach into new and existing markets, as Consafe has decided to wind-
down its hardware sales business, including related support services, to focus solely on supply chain
software design. Under the agreement, Techstep assumes responsibility for servicing approximately
130 existing customers across Scandinavia, Poland and the Benelux region, to facilitate new device
sales previously managed by Consafe Logistics. This includes 10,000 active devices and service
agreements for ~2,200 devices. The hardware and services business represents an average yearly
Annual report 2023
116
revenue of SEK 45-55 million the last three years, with a potential to deliver more capabilities and
services from the Techstep portfolio. The transition of services and customers to Techstep is free of
charge, while Consafe Logistics retains the right to a commission from hardware sales for a limited
time. The transition of services and customers from Consafe Logistics to Techstep will be effective from
1 May 2024.
There are no other subsequent events to report after the reporting period.
Annual report 2023
117
Techstep ASA - Income statement
(Amounts in NOK 1 000)
Notes
2023
2022
Other revenue
70 896
67 555
Total revenue
70 896
67 555
Salaries and personnel costs
2
(19 219)
(60 936)
Other operational costs
2, 3
(43 179)
(46 277)
Depreciation
7
(4 319)
(4 387)
Amortisation
8
(6 710)
(4 107)
Other income
10
-
246
Other expenses
10
(1 970)
(2 292)
Operating profit (loss)
(4 501)
(50 197)
Financial income
4
18 541
16 765
Financial expense
4, 13
(26 626)
(14 552)
Profit before tax
(12 586)
(47 983)
Income tax
5
2 512
-
Net income
(10 074)
(47 983)
Statement of comprehensive income
(Amounts in NOK 1 000)
2023
2022
Net income
(10 074)
(47 983)
Other comprehensive income
-
-
Total comprehensive income for the period
(10 074)
(47 983)
Annual report 2023
118
Statement of financial position
(Amounts in NOK 1 000)
ASSETS
Note
31.12.2023
31.12.2022
Non-current assets
Deferred tax asset
5
5 623
3 111
Technology
8
16 249
20 220
Total intangible assets
21 872
23 332
Right of use assets
7
13 156
8 660
Total tangible assets
13 156
8 660
Shares and investments
6
826 352
761 336
Non-current receivables from Group companies
9
-
91 013
Total financial assets
826 352
852 349
Total non-current assets
861 380
884 340
Current receivables from Group companies
9
120 795
121 769
Other receivables
11 157
8 251
Total inventories and receivables
131 952
130 020
Cash and cash equivalents
12
520
1 774
Total current assets
132 472
131 794
Total assets
993 852
1 016 134
EQUITY AND LIABILITIES
31.12.2023
31.12.2022
Share capital
31 629
305 131
Other equity
660 998
383 747
Total equity
692 627
688 878
Non-current interest-bearing borrowings
11
128 365
88 271
Financial derivatives
13
4 092
-
Other non-current debt
7
10 930
4 954
Total non-current liabilities
143 386
93 225
Current interest-bearing liabilities
11
92 257
79 233
Trade payables
8 991
43 085
Current liabilities to Group companies
9
48 302
100 434
Other current liabilities
7
8 288
11 279
Total current liabilities
157 838
234 031
Total liabilities
301 224
327 256
Total equity and liabilities
993 852
1 016 134
Annual report 2023
119
Oslo, 29 April 2024, signatures from the Board of Directors and the CEO of Techstep ASA:
Michael Grant Jacobs
Chairman
Harald Arnet
Board member
Ingrid Leisner
Board member
Jens Rugseth
Board member
Melissa Ann Mulholland
Board member
Morten Meier
CEO
Annual report 2023
120
Statement of changes in equity
(Amounts in NOK 1 000)
Share
capital
Other paid-
in capital
Other equity
Total equity
Equity as at 1 January 2022
209 630
705 655
(261 793)
653 491
Profit for the period
(47 983)
(47 983)
Total comprehensive income for the period
-
-
(47 983)
(47 983)
Transactions with owners in their capacity as owners:
Contributions of equity net of transaction costs
Issue of ordinary shares as consideration for a
business combination, net of transaction costs
and tax
2 014
3 442
5 456
Proceeds from issuance of shares net of
transaction costs
93 487
8 698
102 185
Share-based payments
4 091
4 091
Equity as at 31 December 2022
305 131
717 794
(334 048)
688 878
Equity as at 1 January 2023
305 131
717 794
(334 048)
688 878
Profit for the period
(10 074)
(10 074)
Total comprehensive income for the period
-
-
(10 074)
(10 074)
Transactions with owners in their capacity as owners:
Proceeds from issuance of shares net of
transaction costs
1 116
13 722
14 838
Reverse share split
(274 618)
274 618
-
Share-based payments
(1 014)
(1 014)
Equity as at 31 December 2023
31 629
1 006 134
(345 137)
692 627
Annual report 2023
121
Statement of cash flow
(Amounts in NOK 1 000)
Not
e
2023
2022
Profit before tax
(12 586)
(47 983)
Depreciation and amortisation
7, 8
11 029
8 494
Share-based payments
(1 014)
4 091
Dividends and other reclassified to investment activities
(2 131)
(8 797)
Changes in net operating working capital and other non-
cash
(90 261)
(54 656)
Net cash flow from operational activities
(94 964)
(98 851)
Payment for intangible assets
8
(2 738)
(16 525)
Repayment of loans from subsidiaries
34 340
15 234
Group contribution received
9 996
15 988
Interest received
1 988
1 685
Net cash used on investment activities
43 586
16 382
Redemption of non-controlling shareholders
-
(9 000)
Proceeds from issuance of shares
230
76 969
Proceeds from borrowings
11
178 313
49 925
Net change in bank overdraft
11
15 745
5 843
Repayment of borrowings
11
(124 832)
(24 747)
Lease repayments
7
(4 467)
(5 349)
Interest paid
(14 865)
(10 206)
Net cash flow from financing activities
50 124
83 435
Net change in cash and cash equivalents
(1 254)
965
Cash and cash equivalents at 1 January
12
1 773
808
Effects of exchange rate changes on cash and cash
equivalents
-
-
Cash and cash equivalents as of 31 December*
11
520
1 773
of which is restricted
520
624
Annual report 2023
122
Techstep ASA – Notes to the annual
accounts
1. General information, basis for preparation
2. Salaries and personnel cost
3. Other operational costs
4. Finance income and expenses
5. Income tax
6. Shares in subsidiaries and joint ventures
7. Leases
8. Intangible assets
9. Receivables and liabilities to Group companies
10. Other income and other expenses
11. Borrowings
12. Cash and cash equivalents
13. Financial Derivatives
14. Events after the reporting period
Annual report 2023
123
Note 1. General information, basis for preparation
Techstep ASA is a public limited company incorporated and domiciled in Norway. The address of its
registered office is Brynsalléen 4, 0667 Oslo, Norway. The shares of Techstep ASA are listed on the Oslo
Stock Exchange under ticker TECH.
Techstep ASA is the parent company of the Techstep Group, with business in Norway, Sweden and
Denmark. For more information see the consolidated financial statements.
The financial statements were approved by the Board of Directors on 29 April 2024 and will be
proposed to the General Meeting 27 May 2024.
The financial statements for the company Techstep ASA have been prepared and presented in
accordance with simplified IFRS pursuant to § 3-9 in the Norwegian Accounting Act.
For the accounting principles used to prepare and present the financial statements refer to note 1
General information and summary of significant accounting policies in the Group financial statement.
Accounting principles applicable to the company not presented in the Group financial statements:
Shares in subsidiaries
Subsidiaries are all entities controlled, either directly or indirectly, by Techstep ASA. Techstep ASA
controls an entity when it is exposed to, or has rights to, variable returns from the involvement with the
entity and has the ability to affect those returns through power over the entity.
Shares are classified as investment in subsidiaries from the date Techstep ASA effectively obtains
control of the subsidiary (acquisition date).
Shares are measured at cost, and impairment loss is recognised if the carrying amount exceeds the
recoverable amount. The impairment is reversed if the basis for the write-down is no longer present.
Group contributions received are included in financial income if they do not represent a repayment
of capital invested. Group contributions received are recognised in the year of provision if it is probable
that the future benefits will flow to the entity and the and the amount can be measured reliably. Group
contributions that represent a repayment of capital are accounted for as a reduction in the cost of
investments. Net Group contributions payable (gross Group contributions less tax effect) are
accounted for as cost of investments in subsidiaries.
Dividends from subsidiaries and associates are included in financial income.
Annual report 2023
124
Note 2. Salaries and personnel cost
2023
2022
Salary and holiday pay
6 673
19 474
Social security tax
2 181
1 878
Pension costs including social security tax
786
787
Other personnel costs
8 408
38 797
Total salaries and personnel cost
19 219
60 936
Number of employees at year end
5
5
Other personnel costs include personnel expenses from other Group companies of NOK 29.9 million
in 2022 and 7.9 million in 2023.
The Company's pension plans meet the requirements of the Act on Mandatory occupational
pensions (OTP).
Please refer to note 29 Remuneration to management in the consolidated Group financial
statements for details regarding executive management remuneration and note 26 Share, capital
structure and shareholders in the consolidated Group financial statements for information about
share option grant.
Auditor remuneration
2023
Audit
Services
Other
attestation
services
Tax
Advisory
Services
Other non-
audit
services
Total
PWC
400
0
0
0
400
BDO
876
0
0
123
1 000
Totalt
1 276
0
0
123
1 400
2022
Audit
Services
Other
attestation
services
Tax
Advisory
Services
Other non-
audit
services
Total
BDO
1 174
62
0
0
1 236
Totalt
1 174
62
0
0
1 236
Annual report 2023
125
Note 3. Other operational costs
2023
2022
Office rental and operations
2 063
2 331
Human resources
474
1 944
Sales and marketing
4 349
13 056
Computers and software
25 368
16 249
Fees for external services
8 595
10 614
Communication
39
44
Travel expense
419
397
Other costs
1 873
1 643
Total operating costs
43 178
46 277
Note 4. Finance income and expenses
2023
2022
Gain on sale of equity instruments
0
661
Interest income
5 755
4 534
Dividend received from group companies
1 752
0
Group contributions received
4 590
8 076
Other financial income
6 445
3 494
Total financial income
18 541
16 765
Interest expenses
13 657
11 806
Other financial expenses
12 969
2 746
Total financial expenses
26 626
14 552
Interest income includes interest from group companies with MNOK 5.6 and interest expenses include interest to
group companies with MNOK 1.5.
Annual report 2023
126
Note 5. Income tax
2023
2022
Change in deferred tax
(2 512)
-
Tax expense
(2 512)
-
Reconciliation of relationship between accounting profit and tax expense
Profit before tax
(12 586)
(47 983)
Tax at the Norwegian tax rate of 22 %
(2 769)
10 556
Tax effect permanent differences
(602)
(307)
Deferred tax asset not recognised
749
(10 249)
Correction late adjustment 2022
110
Income tax expense
(2 511)
-
Amounts recognised directly in equity
Deferred tax arising in the reporting period directly debited to equity:
Deferred tax: Share issue cost
-
(823)
Total
-
(823)
Tax losses
22%
22%
Unused tax losses for which no deferred tax asset has been recognised*
(544 931)
(540 360)
Potential tax asset at 22 % tax rate
(119 885)
(118 879)
Deferred tax
The balance comprises temporary differences attributable to:
Property, plant and equipment
(955)
(506)
Accounting accruals
-
(3 680)
Leasing
(1 962)
(1 559)
Financial instruments
(4 092)
-
Tax loss carried forward
(18 551)
(8 397)
Total basis for deferred tax
(25 561)
(14 142)
Tax rate deferred tax
22%
22%
Net deferred tax with applicable year's tax rate
(5 623)
(3 111)
Net deferred tax (+)/ deferred tax asset (-)
(5 623)
(3 111)
Annual report 2023
127
Note 6. Shares in subsidiaries
Shares in subsidiaries 2023
Location
Ownership/
voting
rights
Book value
Equity
31.12.2023
Net income
2023
Techstep Norway AS *
Oslo
100%
365 608
123 427
(12 701)
Techstep Finance AS
Oslo
100%
39 916
8 862
6 261
Crypho AS
Oslo
100%
2 877
(3 020)
(95)
Techstep APS
Denmark
100%
65
474
1 145
Techstep AB**
Borås/Karlstad
100%
308 471
24 723
(23 344)
Techstep Polen S.A***
Gdansk
100%
109 415
24 641
7 286
Techstep Ireland Ltd***
Cork
100%
-
69
443
Santa Rita Private Venture***
Gdansk
100%
-
2 770
472
Total
826 352
173 992
(28 487)
* Mytos AS merged into Techstep Norway AS on 01 November 2023.
** Shares in Techstep AB increased with 65 MNOK due to debt conversion in 2023.
*** Techstep ASA owns 75% of Techstep SA and Techstep Ireland Ltd, Santa Rita Private Venture owns the remaining
25%.
Shares in subsidiaries 2022
Location
Ownership/
voting
rights
Book value
Equity
31.12.2022
Net income
2022
Techstep Norway AS
Oslo
100%
244 078
127 646
16 325
Mytos AS
Oslo
100%
121 530
8 109
(727)
Techstep Finance AS
Oslo
100%
39 916
4 783
2 528
Crypho AS
Oslo
100%
2 877
(2 923)
(848)
Techstep APS
Denmark
100%
65
(615)
(355)
Techstep AB
Borås/Karlstad
100%
243 455
(21 430)
(38 287)
Techstep Polen S.A***
Gdansk
100%
109 415
14 830
1 307
Techstep Ireland Ltd***
Cork
100%
-
1 777
773
Santa Rita Private Venture***
Gdansk
100%
-
1 983
(25)
Total
761 336
134 160
(19 308)
Annual report 2023
128
Note 7. Leases
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Buildings
Equipment
Total
As at 1 January 2023
7 806
853
8 659
Additions
8 821
(5)
8 816
Depreciation
(3 832)
(487)
(4 319)
As at 31 December 2023
12 795
361
13 156
Lease liabilities
Buildings
Equipment
Total
As at 1 January 2023
9 316
904
10 219
Additions
8 821
(5)
8 816
Interest expense
493
30
523
Lease payments
(3 930)
(537)
(4 467)
As at 31 December 2023
14 700
392
15 092
Lease liabilities
2023
2022
Non-current
9 938
4 954
Current
5 154
5 265
Total
15 092
10 219
Maturity analysis nominal payments of lease liabilities 2023
Up to 1 year
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Lease liabilities
5 154
9 937
0
0
Annual report 2023
129
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
2023
2022
Depreciation charge
Buildings
3 832
3 903
Equipment
487
483
Total
4 319
4 386
Interest charge
523
451
Other charges*
0
0
Annual report 2023
130
Note 8. Intangible assets
Technology
Total
Accumulated cost as at 1 January 2023
24 328
24 328
Additions
2 738
2 738
Accumulated cost as at 31 December 2023
27 066
27 066
Accumulated cost as at 1 January 2022
7 803
7 803
Additions
16 525
16 525
Accumulated cost as at 31 December 2022
24 328
24 328
Accumulated amortisation and impairment as at 1 January
2023
(4 107)
(4 107)
Current year amortisation
(6 710)
(6 710)
Accumulated amortisation and impairment
(10 817)
(10 817)
Accumulated amortisation and impairment as
-
-
Amortisation
(4 107)
(4 107)
Accumulated amortisation and impairment
as at 31 December 2022
(4 107)
(4 107)
Book value as at 31 December 2023
16 249
16 249
Book value as at 31 December 2022
20 220
20 220
Estimated economic lifetime in years
3-5 years
Depreciation method
linear
Annual report 2023
131
Note 9. Receivables and liabilities to Group companies
2023
2022
Non-current receivables
0
91 013
Non-current receivables from Group companies
0
91 013
2023
2022
Group contribution received
31 224
16 320
Other current receivables
83 560
89 091
Trade receivables
6 011
16 358
Current receivables from Group companies
120 795
121 769
2023
2022
Other current liabilities
48 302
100 434
Current liabilities to Group companies
40 348
100 434
Non-current receivables 2022 are related to investments in the Swedish operations. The receivable is
interest bearing and considered a part of the Group’s net investment in Sweden.
Techstep ASA has no other related party transactions other than management fee of MNOK 70.896 in
2023 and MNOK 67.555 in 2022.
Note 10. Other income and other expenses
2023
2022
Derecognition of contingent consideration
-
246
Total
-
246
In relation to the acquisition of Crypho AS, a contingent consideration was recognised. The
contingent consideration was partially reversed in 2022.
2023
2022
Acquisition related costs
-
(604)
Other non-recurring expenses
(1 970)
(1 688)
Total
(1 970)
(2 292)
Acquisition related expenses in 2022 are related to the acquisition of Crypho AS and the remaining
20% of the shares in Techstep Finance AS. Other non-recurring expenses in 2022 and 2023 are
related to restructuring.
Annual report 2023
132
Note 11. Borrowings
2023
2022
Current
Non-
current
Current
Non-current
Seller credits related to business combinations
0
0
27 789
0
Bank loan
48 750
128 365
23 682
88 271
Bank overdraft
43 441
0
27 762
0
Total interest-bearing debt
92 191
128 365
79 233
88 271
The table below sets out expected nominal payments on borrowings:
Due within
Total
1 year
1-5 years
over 5
years
Annual interst rate
Bank overdraft facilities*
43 441
43 441
0
0
3-month NIBOR + 225 bps
Bank loan
147 115
18 750
128 365
0
3-month NIBOR + 280 / 260 bps
Revolving Credit Faciclity
30 000
30 000
0
0
3-month NIBOR + 260 bps
Total
220 556
92 191
128 365
0
The new financing consists of a Term Loan A and Term Loan B of NOK 75 million each, a Revolving
Credit Facility of NOK 30 million, an overdraft facility of NOK 25 million and a seasonal facility of NOK
20 million. The Term Loan A matures over 5 years, with quarterly straight line amortisations, while the
Term Loan B matures in 5 years.
Refer to note 15 in the Group financial statement for details about covenants and pledges.
The annual interest rates are:
• TLA/RCF: NIBOR 3m + 260bps
• TLB: NIBOR 3m + 280bps
• Overdraft/seasonal: NIBOR 3m + 225bps
In connection with the refinancing, Techstep ASA entered into an interest rate hedge agreement,
where interest payments for 75% of the long-term borrowings are secured at 4.47% p.a. The duration
of the agreement is 5 years, specified in note 13 Financial Derivatives.
Annual report 2023
133
Note 12. Cash and cash equivalents
The Company's cash and cash equivalents consists of:
2023
2022
Cash and bank deposits
520
1 774
Total
520
1 774
Of which is restricted
520
624
Annual report 2023
134
Note 13. Financial Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and
are subsequently remeasured to fair value through profit and loss at the end of each reporting
period.
The purpose of derivative transactions is to reduce the interest rate risk. In connection with the
refinancing, Techstep ASA entered into an interest rate hedge agreement, where interest payments
for 75% of the long-term borrowings are secured at 4.47% p.a. The duration of the agreement is five
years.
Liabilities
2023
2022
Nominal
amount
Fair
Value
Nominal
amount
Fair
Value
Maturity
Date
Interest
rate
Interest rate swap
112 500
(4 092)
-
-
Sept 2028
4.47% p.a
Total interest-bearing debt
112 500
(4 092)
-
-
The interest rate swap is recorded at fair value through profit and loss. A negative change in fair
value of the interest rate swap of NOK 4.1 million is included in financial expenses.
Note 14. Events after the reporting period
Please refer to note 30 Events after the reporting period in the consolidated Group financial
statements.
Annual report 2023
135
Alternative performance measures
Techstep Group’s financial information is prepared in accordance with International Financial
Reporting Standards (IFRS). In addition, it is management’s intention to provide alternative
performance measures that are regularly reviewed by management to enhance the understanding
of Techstep’s performance, but not instead of the financial statements prepared in accordance with
IFRS. The alternative performance measures presented may be determined or calculated differently
by other companies. The principles for measuring the alternative performance measures are in
accordance with the principles used both for segment reporting in Note 2 and internal reporting to
Group Executive Management (chief operating decision makers) and are consistent with financial
information used for assessing performance and allocating resources.
Gross profit
Gross profit is defined as Total revenue less Cost of goods sold.
Net gross profit
Net gross profit is defined as Total revenue less Cost of goods sold and depreciation from Device-
as-a-Service.
Gross margin
Gross margin is defined as total revenue less cost of goods sold and depreciation from Device-as-
a-Service, divided by total revenue.
EBITDA
Earnings before interest, tax, depreciation, amortisation and impairment. The EBITDA margin
presented is defined as EBITDA divided by total revenue.
EBITDA adjusted
Earnings before interest, tax, depreciation, amortisation and impairment adjusted for transactions of
a non-recurring nature. Such non-recurring transactions include, but are not limited to restructuring
costs, gains or losses related to the sale of subsidiaries, acquisition-related costs and other
nonrecurring income and expenses. The EBITDA adjusted margin presented is defined as EBITDA
adjusted divided by total revenue.
EBITA
Earnings before interest, tax, amortisation and impairment The EBITA margin presented is defined as
EBITA divided by total revenue.
EBITA adjusted
Annual report 2023
136
arnings before interest, tax, amortisation and impairment adjusted for transactions of a nonrecurring
nature. Such non-recurring transactions include, but are not limited to restructuring costs, gains or
losses related to sales of subsidiaries, acquisition-related costs and other non-recurring income and
expenses. The EBITA adjusted margin presented is defined as EBITA adjusted divided by total
revenue.
EBIT
Earnings before interest and tax (EBIT) is useful to users with regard to Techstep's financial information
in evaluating operating profitability on the cost basis as well as the historic cost related to past
business combinations and capex. The EBIT margin presented is defined as EBIT divided by total
revenue.
Total net operating expenses
Total net operating expenses includes the line items Cost of goods sold, Salaries and personnel costs,
Other operating costs, Share of profit (loss) in joint venture, Depreciation, Amortisation, Impairment
and Other income.
Device revenue
Device revenue is defined as revenue from sales of tangible goods and related discounts from
suppliers and partners.
Device share of revenue is the Device revenue divided by total revenues.
Solutions revenue
Solutions revenue is defined as revenue from sales of licenses, support and other non-tangible items
to customers. Also included are discounts from suppliers and partners. Solutions share of revenue is
the solutions revenue divided by total revenue.
Net interest-bearing debt (NIBD)
Net interest-bearing debt is non-current interest-bearing debt plus current interest-bearing liabilities
less cash and cash equivalents.
Equity ratio
Equity ratio is defined as Total equity divided by total equity and liabilities.
Capital Expenditure (Capex)
Capital expenditure is the same as payment for property, plant and equipment and intangible
assets.
Annual Recurring Revenue (ARR)
ARR is defined as Annual Recurring Revenue from Techstep’s Own Software portfolio and is calculated
as 12 times the contractual monthly revenue from existing contracts at the end of a reporting period.
Contracts where invoicing to customers has not commenced at the reporting date, are not included
in the calculation.
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Recurring revenue
The recurring revenue portfolio includes Own Software, Advisory & Services and Device-as-a-Service
on contracts of 24 months or more excluding mobile expenses management (MEM) white label (with
three months’ notice before year-end). Calculated as the recognized recurring revenue each quarter,
annualized.
LTM
Last Twelve Months. Sum of each month for the historical period of the previous 12 months. Used for
gross profit and EBITDA adjusted.
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APM's in the income statement
2023
2022
Total revenue
1 089 491
1 273 652
Cost of goods sold
(644 460)
(813 534)
Gross profit
445 031
460 119
Gross margin
40.8 %
36.1 %
Salaries and personnel costs
(207 964)
(265 027)
Other operational costs
(99 571)
(109 626)
Other income
494
40 058
Other expenses
(1 970)
(10 015)
EBITDA
136 019
115 509
Depreciation
(107 603)
(109 222)
Impairment
-
-
EBITA
28 416
6 287
Amortisation
(64 915)
(58 492)
EBIT
(36 498)
(52 206)
Net gross profit
2023
2022
Gross profit
445 031
460 119
Depreciation from device-as-a-service
(91 112)
(92 840)
Net gross profit
353 919
367 279
Net gross margin
32.5 %
28.8 %
EBITDA adjusted
2023
2022
EBITDA
136 019
115 510
Other income
(494)
(43 476)
Other expense
1 970
13 433
EBITDA adjusted
137 496
85 466
EBITA adjusted
2023
2022
EBITA
28 416
6 287
Other income
(494)
(40 058)
Other expense
1 970
10 015
EBITA adjusted
29 892
(23 756)
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Total net operating expenses
2023
2022
Cost of goods sold
(644 460)
(813 534)
Salaries and personnel costs
(207 964)
(265 027)
Other operational costs
(99 571)
(109 626)
Depreciation
(107 603)
(109 222)
Amortisation
(64 915)
(58 492)
Other expenses
(1 970)
(10 015)
Total net operating expenses
(1 126 483)
(1 365 916)
Revenue splits
2023
2022
Revenue
1 089 491
1 273 652
Device revenue
775 820
928 169
Solutions revenue
313 670
345 472
Device share of revenue
71.2 %
72.9 %
Solutions share of revenue
28.8 %
27.1 %
NIBD
2023
2022
Cash and cash equivalents
77 459
61 119
Non-current interest-bearing borrowings
129 927
90 665
Current interest-bearing borrowings
48 750
83 322
NIBD
101 218
112 868
Equity ratio
2023
2022
Total equity
573 697
571 520
Total equity and liabilities
1 270 799
1 323 299
Equity ratio
45.1 %
43.2 %
Debt to equity ratio
2023
2022
Total liabilities
697 103
751 780
Total equity
573 697
571 520
Debt to equity ratio
1.22
1.32
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Responsibility statement
Oslo, 29 April 2024
From the Board of Directors and CEO of Techstep ASA
We confirm, to the best of our knowledge, that the financial statements for the period 1 January to 31
December 2023, and the comparative figures presented for the period 1 January to 31 December 2022
have been prepared in accordance with current applicable accounting standards and give a true and
fair view of the assets, liabilities, financial position and profit or loss of the entity and the Group taken
as a whole. We also confirm that the Board of Directors’ Report includes a true and fair review of the
development and performance of the business and the position of the entity and the Group, together
with a description of the principal risks and uncertainties facing the entity and the Group.
Michael Jacobs
Chairman
Harald Arnet
Board member
Ingrid Leisner
Board member
Jens Rugseth
Board member
Melissa Ann Mulholland
Board member
Morten Meier
CEO
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Note: Greenhouse Gas reporting
Techstep’s greenhouse gas reporting is guided by the principles of the international standard GHG
Protocol. All activity data are converted into GHG emissions, or CO2e using conversion factors.
Techstep uses the operational control approach when defining the boundaries of its GHG inventory.
The carbon footprint report for 2023 includes all Techstep’s core operations in Norway, Sweden,
Denmark and Poland. The methodology for accounting for the emissions
Boundaries
●
Techstep does not own any office premises and is dependent on data input from landlords
with respect to energy consumption and waste. Access to data from the various landlords
varies, and for some offices the data provided is calculated as a share of the m
2
rented (scope 2, energy consumption + scope 3, waste)
●
Techstep has different expense systems in Norway, Sweden/Denmark and Poland,
respectively, which impacts data quality and comparability with respect to travels (Scope 3,
Business travel)
●
Techstep has outsourced all distribution to logistics partners, mainly as a “drop-shipment”
solution with direct shipment to customers. Emission data provided by distribution partners
and their sub-suppliers are of various quality, and hence impact somewhat the data
accessibility and accuracy on parts of the transportation (scope 3, upstream transportation
and distribution)
●
Techstep is a reseller of mobile devices and accessories, and do not manufacture any own
products. Emission data mainly includes average estimates based on product categories.
Accuracy and granularity of data will be improved in the years to come (scope 3, purchased
products and services”)
●
Scope 3 emissions are not yet complete or fully mapped, and total scope 3 emissions are
expected to change as more emission sources are included in the carbon accounting.
Techstep is committed to expanding the scope 3 emissions to include more emission sources
and improving data quality going forward. This will be critical to track the development of
emissions and define meaningful reduction targets for scope 3.
Annual report 2023
146
GHG annual emissions
Figures denoted in tCO
2
e
2023
2022
1
2021
Techstep Group
Scope 1
16.1
20.2
1.3
Scope 2 (location-based)
33.1
32.1
32.9
Scope 2 (market-based)
65.8
71.3
87.8
59.1
66.8
83.7
6.7
4.5
4.2
Scope 3
5.5
3.7
3.4
203.9
81.4
23.7
8 841.3
11 648.9
9 611.9
14.8
16.7
15
2.4
3
2.5
Techstep Norway
2023
2022
2021
Scope 1
-
-
-
Scope 2 (location-based)
5.4
6.1
5.5
Scope 2 (market-based)
35.5
34.1
36.5
Scope 3
2.8
3.6
3.3
113.5
27.1
5.4
5 757.6
8 109
7 320.2
3.3
1.6
0.7
1.5
2.1
1.7
Techstep Sweden
Scope 1 (transportation)
5.5
6.1
1.3
Scope 2 (location-based)
9.8
7.2
7.3
Scope 2 (market-based)
6.9
11.3
27.4
0.2
6.8
23.2
6.7
4.5
4.2
Scope 3
2.7
0.1
0.1
70.3
51.8
9.5
3 060.1
3 539.6
2 243.1
4.1
6
7.8
0.9
1
0.8
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Techstep Denmark
Scope 1 (transportation)
10.6
14.1
-
Scope 2 (location-based)
0.1
-
-
Scope 2 (market-based)
-
0.5
-
Scope 3
-
-
-
2.9
0.2
-
23.7
0.3
48.6
2.6
3.4
-
Techstep Poland
Scope 1
-
-
-
Scope 2 (location-based)
17.8
18.7
20
Scope 2 (market-based)
23.4
25.4
23.9
Scope 3
16.1
20.2
-
-
-
17.1
8.3
8.8
-
-
-
4.8
5.7
6.5
Methodology
Techstep reports according to the GHG Protocol Corporate Accounting and Reporting Standard
Revised edition for calculating and reporting GHG emissions. The reporting is done through the
Cemasys portal where emission sources are converted into CO2-equivalents.
The GHG Protocol provides the following definitions for scope 1,2 and 3 emissions:
Scope 1 emissions:
direct emissions from owned and controlled sources, including fuel combustion
from company vehicles.
Scope 2 emissions
: indirect emissions related to purchased energy; electricity and heating/cooling
consumed by Techstep’s offices or company owned electric vehicles. The emission factors used are
based on assumptions in the International Energy Agency’s statistics (IEA Stat).
The location-based method
: is based on statistical emissions information and electricity output
aggregated and averaged within a defined geographic boundary and during a defined time period.
Within this boundary, the different energy producers utilize a mix of energy resources, where the use
of fossil fuels (coal, oil, and gas) result in direct GHG-emissions. These emissions are reflected in the
location-based emission factor.
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The market-based method
: The choice of emission factors when using this method is determined by
whether the business acquires Guarantees of Origin (GoOs/RECs) or not. When selling GoOs or RECs,
the supplier certifies that the electricity is produced exclusively by renewable sources, which has an
emission factor of 0 grams CO2e per kWh. However, for electricity without the GoO or REC, the
emission factor is based on the remaining electricity production after all GoOs and RECs for
renewable energy are sold. This is called a residual mix, which is normally substantially higher than
the location-based factor.
Scope 3
and services, business travel, transportation and distribution (upstream and downstream),
investments, leased assets etc.
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152
GRI Index
GRI Standard
Reference
Disclosures
GRI 2:
2-1
Organisational details
Techstep ASA
General disclosures 2021
2-2
Entities included in the organisation’s
sustainability reporting
p. 6, 155
2-3
Reporting period, frequency and
contact point
1 January to 31 December 2023 (unless stated
otherwise). Annual reporting.
cathrine.birkenes@techstep.no
2-4
Restatements of information
See footnotes on p. 27,32,34,47
2-5
External assurance
The GHG report has been assured by PwC p.149-151
2-6
Activities, value chain and other
business relationships
p. 5, 11-12
2-7
Employees
p. 36-40
2-8
Workers who are not employees
Unavailable/incomplete
2-9
Governance structure and organisation
p. 28
2-10
Nomination and selection of the highest
governance body
Corporate governance report, p. 50-52
2-11
Chair of the highest governance body
p. 24 and p. 51
2-12
Role of the highest governance body in
overseeing the management of
impacts
p. 28
2-13
Delegation of responsibility for
managing impacts
p. 28
2-14
Role of the highest governance body in
sustainability reporting
p. 28
2-15
Conflicts of interests
Corporate governance report, p.52
2-16
Communication of critical concerns
p. 46, Code of conduct
2-17
Collective knowledge of the highest
governance body
p. 24-25
2-18
Evaluation of the performance of the
highest governance body
p. 52
2-19
Remuneration policies
Corporate governance report from p.48 +
Remuneration policy
2-20
Process to determine remuneration
Corporate governance report + Remuneration
policy
2-21
Annual total compensation ratio
The organization’s highest paid individual is the
CEO. Total compensation ratio (CEO vs employee
average): na due to changes in management.
Additional information on CEO remuneration can
be found in the Remuneration Report 2023,
available from the website www.techstep.io.
2-22
Statement on sustainable development
strategy
p. 26-27
2-23
Policy commitments
p. 28, ESG policy
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2-24
Embedding policy commitments
p. 28, p. 41
2-25
Process to remediate negative impacts
p. 41-44
2-26
Mechanisms for seeking advice and
raising concerns
p. 47, Code of conduct
2-27
Compliance with laws and regulations
No non-compliances during the year
2-28
Membership associations
UN Global Compact, Sustainability Board of Tech
Sweden, Science Based Targets
2-29
Approach to stakeholder engagement
p. 29
2-30
Collective bargaining agreements
All employees in Sweden are covered by collective
bargaining agreements
Stakeholder engagement
GRI 3:
Material topics 2021
3-1
Process to determine material topics
p. 30
3-2
List of material topics
p. 30
Material topics
Ethical business conduct
GRI 3:
Material topics 2021
3-3
Management of material topics
p. 46, Code of conduct
GRI 205:
Anti-corruption 2016
205-1
Operations assessed for risks related to
corruption
All business areas in the group
205-2
Communication and training about
anti-corruption policies and procedures
Mandatory signature on Code of Conduct for all
employees
205-3
Confirmed incidents of corruption and
actions taken
No incidents reported during 2023
GHG emissions (climate and environmental impact)
GRI 3:
Material topics 2021
3-3
Management of material topics
p. 32-34
GRI 305: Environment
305-1
Direct (Scope 1) GHG emissions
p. 33
305-2
Energy indirect (Scope 2) GHG
emissions
p. 33,35
305-3
Other indirect (Scope 3) GHG emissions
p. 33-34
305-4
Emission intensity (Scope 1 & 2 per NOK
million revenue)
p. 34
305-5
Reduction of GHG emissions
p. 32-35
Circularity
GRI 3:
Material topics 2021
3-3
Management of material topics
p. 31
GRI 306:
Waste
306-1
Waste generation and significant
waste-related impacts
p. 31, 34
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GRI 306:
Topic-specific
Management approach
disclosures
306-2
Management of significant waste-
related impacts
p. 31
Techstep-specific
disclosure
Number of mobile devices received
p. 31
Avoided emissions (scope 4)
p. 31
Responsible sourcing and supply chain management
GRI 3:
Material topics 2021
3-3
Management of material topics
p. 41-43
GRI 308:
Supplier environmental
assessment 2016
308-2
Negative environmental impacts in the
supply chain and actions taken
p. 42-43
GRI 214:
Supplier social assessment
2016
414-2
Negative social impacts in the supply
chain and actions taken
p. 42-43
Cybersecurity & data
privacy
GRI 3:
Material topics 2021
3-3
Management of material topics
p. 45
GRI 418: Customer privacy
418-1
Substantiated complaints concerning
breaches of customer privacy and
losses of customer
p. 45
Gender equality
GRI 3:
Material topics 2021
3-3
Management of material topics
p. 38
GRI 405:
Diversity and equal
opportunity
405-1
Diversity of governance bodies and
employees
p. 38-40
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Mandatory concepts
Name of reporting entity or other means of identification
Techstep ASA
Explanation of change in name of reporting entity or
other means of identification from end of preceding
reporting period
Domicile of entity
Norway
Legal form of entity
ASA
Country of incorporation
Norway
Address of entity's registered office
Brynsalléen 4, NO-0667 Oslo
Principal place of business
Description of nature of entity's operations and principal
activities
Name of parent entity
Techstep ASA
Name of ultimate parent of group
Techstep ASA
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