Group's presentation of results for the fourth quarter of 2020. My name is Jennifer Goode, I'm CSAM's Communications Director. Here with me today is CSAM CEO, Sverre Flatby, and CFO, Einar Bonnevie. Today's presentation is being made available on the investor relations section of our website, where you can also find our full Q4 report. This presentation will also be made available later today on our website. We'll begin today with a discussion of Q4 highlights, including an overview of our most recent acquisitions, and that will be followed by a detailed review of the financial results. The remaining time will be available for a live Q&A session, but you can ask your questions at any point during this presentation by typing them into the Q&A box that you'll see either beside or below this video. Please note that if you're watching this video in full screen mode, you won't be able to see that Q&A box. We expect the entire event will last less than an hour. Now it's my pleasure to turn it over to Sverre. Thank you, Jennifer. Good morning, everyone. It's a pleasure for me to present another predictable and profitable quarter. I have with me, Einar, our CFO. He used to say that there are two things that are important when it comes to our KPIs. That's right, Sverre, and that is the recurring revenue, and it's growing through acquisitions. That's really the main things. Yeah, Einar will go through the numbers in a few minutes. Before that, I also have two important things that is important when it comes to understanding CSAM's business. To start with the position we have as the leading software company in the Nordics, I want you to understand the three first words here. We are only within e-health, we are only focusing on niches, and only on software. That's how we have been creating this leading Nordic position. That's the first thing, the industrial position we have got through this strategy. The second thing, and probably more important actually, what is CSAM really? If you look at that couple on this picture, whether they plan to have and maybe have a dream that they want a child, or maybe one of them have got cancer, or maybe something happened in an acute situation with somebody in their family. Whatever happens of those types of milestones, certainly most healthcare personnel in the Nordics will help the patients, will have some kind of CSAM component at hand when they're doing their job. This is why many of our employees, of course, work for us. We have low churn, not only with customers, but also employees, because we are actually doing something good. We have created a business out of this, and a healthy business, a viable business. We have put together niches that are viable, and inside those niches, we have a lot of different types of component that has this important role within the healthcare sector in the Nordics, and also Europe. How did we manage to put this together? That is important to understand exiting the fourth quarter 2020, because our history here, to put the fourth quarter into perspective, it started in a national hospital, and the reason for creating CSAM in the first place was to manage all these complex systems. Then we had a period of 10 years creating a company with software and consulting, but then we got on board a private equity fund. As you see in the bottom part of this slide, the whole history of CSAM is about M&As. We have put together one of the best collections of critical, specialized solutions through this type of approach, M&A approach. Of course, the fourth quarter 2020, what is that? As you can see, we have accelerated the M&As in our history until the fourth quarter, and exiting the fourth quarter, we have had the IPO and the bond issue behind us, meaning that we are fully fueled to actually get going when it comes to further accelerating our M&A strategy. Just let me explain to you our two recent acquisitions. They are important, and it's important to understand how we work. In the fourth quarter, we acquired Fertsoft from Sweden. What is the point with Fertsoft? Well, ultimately, it's helping people to realize their dream when it comes to having a child. This requires software that actually helps these clinics to do that the right way with high quality. Again, highly specialized, very diversified in many clinics in many countries. This is a Swedish company, but also with European customers, which is in line with how we want to grow this company. Then 80% is, of course, Nordic, so we are still the strong Nordic player. Also here, we got 20% from Europe. Then the completeness of our maternity solution set is now, of course, much better because now we are ranging from early, from the conception part and to the early childhood, meaning that the value chain of this highly specialized component within one of our niches is getting more deeper in the niche. That is how we work, and that is what creates this fantastic diversification and long-term revenue. Finally, of course, this also shows, in a way, our strategy when it comes to focus on these clinical specialties and also demonstrates then the diversification, how that works, why it becomes so diversified over time. As you all know, recently, just after the fourth quarter, we also made a new acquisition. This was different. It's similar in a way, highly specialized. Carmenta Public Safety is, of course, a much bigger company, but this company is delivering critical systems when it comes to acute sector. Ultimately in Europe, it's helping saving life and of course, that is part of our strategy. We have been in the sector of emergency and acute for many, many years, and this really puts us in lead not only in the Nordics but also in places in Europe. This software also to see how robust this is, this is the national platform in Sweden when it comes to handling the 112 emergency service. SOS Alarm in Sweden is a major customer of Carmenta, and which is also in line with what type of solution we want to serve in the future in this area. Not only that, this acquisition actually bringing us to Europe in a very smart way because we're now covering people, 45 million European citizens, through this type of solutions. This way, this is how we actually want to grow, having strong positions in the Nordics and gradually going to other places in Europe, like for instance, in Valencia, in Spain. This is a very good way for CSAM to expand in Europe with low risk. It's also increasing, of course, our platform here in the Nordics because we are serving not only the control rooms in Norway and Sweden, but of course also ambulance services. We have multiple products here that can put together a fantastic collection of recurring revenue components in the future. Of course, most importantly, many of you have seen our plans when it comes to growth, we are planning to grow fast. We have grown about 40% from 2015 to 2019, annually, that we have done through acquisitions mostly. Of course, as you see here on the volume of these two acquisitions and our current business exiting Q4, you'll see we are on our way to do exactly what we said we want to do. That is a good news when it comes to our plan. Of course, I think also it's important just to, I know, being this Nordic leader, to actually see how we can grow in Europe without doing binary big things, but do that step by step like we've done here. The mix of our different countries and our different diversified components is now getting better and better, and also now position us to do it better in Europe. Back to our plan before I give Einar the turn talking a bit more about the numbers. Of course, we have done this simple sketch. We used that for 10 years ago to grow, and we have followed that plan, and it has been successful, and we are planning to do exactly the same, actually. If you look at this, it's important to understand actually the components of our growth strategy. If you start with the green one, you see the underlying market is extremely strong when it comes to e-health these days. You probably know the digital world is coming, it's coming faster and definitely within the healthcare, this is a strong platform itself. However, what makes us unique, if you look at other players, we have chosen to focus only on these highly specialized niche approaches within the software. As long as we stick to that discipline, we will then have the third one on top, the gray bar there, the current long-term recurring revenues, almost without churn. Far less than 1%, which is fantastic. The reason is the combination of those, the strong market there with the niche focus, and then to secure that these operational businesses are working. On top of that, our organic growth being between 5% and 10%, growing along the market. This part is mainly sales to current customers. In that sense, that is also predictable and that's what make it fantastic for CSAM to handle such a predictable business as the platform, and then on top of that, add these steps. Our plan remains going from a current run rate to NOK 1 billion in 2025. As you've seen through the recent acquisitions and the fourth quarter, this is going to be possible, and we are on our way to do exactly that. I think, Einar, you should present the actual numbers behind the fourth quarter. Go ahead. Thank you, Sverre. Let's go through the financials. As we said at the start, CSAM is really about two things. It's about recurring revenue, and it's about growth through acquisitions. Let's take a look at recurring revenue. These are the quarter-over-quarter recurring revenues. You can see that we are growing. We continue to grow. We have grown 14% year-over-year, the Q4 2019 to the Q4 2020, ending 14% higher than last year. That is, of course, wonderful news for our bondholders, and again, the perfect base on which to have a roll-up story like CSAM through acquisitions. Let's take a look at the revenue development quarter-over-quarter, Q4 2020 over Q4 2019, a growth of 5%. We have said before, organic growth in this market is between 5% and 10%, we are growing with the market. Decent. For year-over-year, 2020 versus 2019, there's a growth over 12% accumulated, 10% nominal. You see that the growth is first and foremost linked to the recurring revenue, whether that is on a quarterly basis or on an annual basis. The recurring revenue growing 10% quarter-over-quarter and 14% year-over-year. You will see that the growth is a little stifled when it comes to the license sales. That is really preferences from the customer. They have prioritized services from us, and that is probably the little effect we have from the COVID. For comparison's sake, we mentioned that we had some effects in 2020. It was a very unusual year when it comes to FX, Norwegian kroner weakening against all other trading currencies, and not the usual 2% or 3%, but 20%-30%. That was accumulated to approximately NOK 6 million by the third quarter, a little less in the fourth quarter as the Norwegian kroner regained some strength. You see the license sales, as I said, a little low, but that is the recognized income from the license sales. We are building a solid order backlog that we expect will be realized through 2021. That was the top line. What about the bottom line? To make it easier for you to compare, for those of you that participated in the IPO and saw that material, we have used the adjusted EBITDA numbers both for 2019 and for 2020 so that you can compare apples to apples and not pears to bananas. You will see that the growth in the fourth quarter in the EBITDA is around our target of 30% going long term and the same for 2020. We have used the adjusted number. There are some one-off effects, as you would expect in the fourth quarter, primarily linked to the IPO and the bond issue. Then we have just shown you the FX effect on top on the gray part of the bar. We are hovering around 30% on the adjusted margins on the EBITDA. We just recently announced the acquisition of Fertsoft and then also in the first quarter, the acquisition of Carmenta. As we have said before, with all acquisitions, expect margins to go down temporarily while we work on the acquisitions. The margin improvement, that is not by performing the oldest trick in the book and increasing the capitalized R&D. On the contrary, from quarter-over-quarter, from 2019 to 2020 in the fourth quarter, you see that CapEx is coming down to around 11%, slightly below that, as a matter of fact, 10.7%. For the full- year, you see CapEx just above 11% in 2020, down from 13% in 2019. We have previously said that we expect CapEx capitalized R&D to be around 10% of total sales, and that is still the case. For those of you wondering about PP&E, there's very little in CSAM. These were the numbers in a nutshell. We have grown through M&A. We have grown organically. We have a strong recurring revenue base. Based on this, on the strong base, we will continue to grow. I think we have shown you that we have currently achieved growth of approximately 40%. We grew from 2015 to 2020. We established lines to the credit market and in the equity market. We completely refueled. We are now not only ready, but we are started on the second leg of the journey on our way to the NOK 1 billion in 2025. By that, I open up for questions. None so far. Maybe it's self-explanatory. Maybe. Here's one question. Adjusted for currency effects, what would net sales have been in Q4? Professional services more than doubled in Q4 2020 versus Q3 2020. Can you explain the reason for that? Is that a seasonality effect? I suggest you start with the professional services versus license sales, Sverre. Because that is customer behavior, and I can fill you in on the currency effects. Yes. The market, the hospitals, the regions in the Nordics are, of course, affected by the COVID-19 situation. That hasn't impacted us, it has impacted the composition of income. The reason for that is very specific, because many of the customers are asking us to do something else while they may be postponing some projects. That means maybe an installation we were supposed to do, which initiated some license sales, instead, we have to help them maybe create a new field in the screenshot somewhere to support the COVID-19, for instance. It has been a shift during the COVID situation for us, where the income composition is different, meaning the professional services are higher. Yeah. The follow-up question was, adjusted for currency effects, what would net sales have been in Q4? Approximately NOK 234, give or take. It's a question about the Carmenta business, but before that, there was a question about, you report one-offs of NOK 9 million in Q4, with NOK 7 million related to funding. You also mentioned one-off cost of NOK 5.2 million related to salary and personnel in Q4. Can you explain the one-offs in more detail? I guess I can do that. The one-off cost totals amounts to NOK 9 million, it's a combination of salary, personnel, other costs, and also one-time adjustments of government grants. You will remember that we adjusted the amortization schedule of software, we will also have to adjust the amortization schedule of the government grants. It has very little cash effect, it has some income recognition effect. It's a combination of those that adds up to NOK 9 million. There's a question about Carmenta and the recent acquisition. The question is, what are the main risks regarding the Carmenta acquisition and its business? That's a good question. The good thing with the Carmenta is that most of the budget is already contracted. On that side, and as you know, all these types of highly specialized solutions stay for many years. There is a predictability there as well. However, the risk is then of course, the ability to deliver, and that is always the case when it comes to software deliveries. We're used to that, so we will manage that risk. Another question on the Carmenta acquisition. Why are you paying NOK 150 million upfront for Carmenta and not partly in shares with lockup? Will management and employees stay in the acquired business, and what are their incentives to do just that? You can of course discuss the price and why we paid the way we did, but when it comes to employees, we have already started integrating the very good people in Carmenta. They love to be with us, and we love that we got them on board, so we're not feeling that as the main risk and why we formally had to do the transaction exactly how we did it. That's your game, Einar. Yeah. If you settle in shares or settle in cash, it's always a part of the total package that you present and you agree with the seller. There will be differences. We have used all the methods. It has been seller credit, vendor notes. It has been settlement in cash. It has been settlement in shares. You saw that we used shares with Fertsoft, to use cash with Carmenta. It's really part of the package. This is how this deal ended. That said, remember we did the IPO, and we had a bond issue, and we raised cash through the bond and the shares for this specific purpose. You should expect us to directly utilize that cash and acquire businesses. Another question about acquisitions. Can you say something more on your screening process of new acquisitions? How many are you screening simultaneously, and what size of companies on average, et cetera? That's a good question. Of course, we have a culture in CSAM since we were created by a hospital, and the inflection point was to integrate all these specialized solutions. Already when we established CSAM in 2005, we had an overview of all these important clinical solutions. From that point on, we started thinking about what are the type of players dealing with this in the Nordics and later on also in Europe. What we have done is actually creating a database and our strategy director is handling that as a running business, looking at how is the market functioning, what type of solutions are relevant to CSAM. There are many, I would say in the world, maybe 30,000 small companies or mid-size companies that are relevant to this game in the world, and many in the Nordics, many in Europe. Of course, we are focusing on making sure that the characteristics of these targets are relevant to us. There are many, but I would say it's about 200 that are relevant to us at this point in time. We have had dialogue with many over many, many years. One acquisition, for example, in 2018, we had talked to them since 2008, so 10 years discussions. That's the way we've been handling all these targets over many years. We feel comfortable that the volume is there, and also that we can stick to our plan of 40% growth. Another question about M&As, Sverre. Can you talk some more about your M&A integration process, sales and cost synergies, cultural aspects, et cetera? Yes. Of course, our success and our profitability has come from integration, and by integration, it's a soft thing for people. We are not a company that acquires a separate entity and to develop that entity. It's the opposite way. We are creating one CSAM, and that has been successful because then you share some resources, you share competencies, and you have a possibility to create one culture over time. What makes this good is that as long as we stick to the characteristics that this is highly specialized type of components, then you have the same type of approach. The people there is always there for a reason, and that means that the culture comes even by itself when it comes to focus on developing all these niches over time. Okay. A question from me, I guess. Could you please clarify what the adjusted EBITDA was in Q4 net of all the one-offs? If I understand this question correctly, that would be 16%. That is the reported EBITDA versus approximately 30% on the adjusted basis. However you want to look at it, is an increase from last year. Even the reported EBITDA, including all the one-offs, still show an improvement from 11% to 16% from last year. That was the EBITDA. Another question about Carmenta. What was the organic growth in Carmenta? How has it been historically? Do you see any particular growth synergies with the Carmenta deal? Yes. I can connect that to another question that came below there, which has to do with how big is SOS Alarm. To put things together, it's a big customer. Over half of the sales is related to SOS Alarm. You can look at it as a problem or an opportunity. Of course, we've been talking to SOS Alarm's management, and seen from our side and their side, of course, we have synergies, we have competencies, we have other components within emergency and acute. In a way, to me, it's more of a positive thing than you might look at it as a big customer, because put together with all the rest of CSAM, it's the biggest customer, but it's not too big. That is one thing. Historically, the growth is based on added components, new digital solutions, and the jump specifically then from last year to 2021 is based on new projects and also increased digital projects in SOS Alarm, but not only in Sweden, because it also relates to other regions in Europe, for instance, Valencia. That region has the same type of challenges, and that means they need the software add-on components also. In a way, we see that the growth is based on actual needs for the customer to add things to current solutions. Since, as you know, with Carmenta, as with every type of specialized solutions, they have a very long lifespan because they are extremely complicated to change. That means that the past growth and the further growth is based on added functionality to current customer installations. The interest about Carmenta keeps coming here, this is about the growth rates. There's a question here. Roughly which growth rates are you expecting Carmenta Public Safety to generate in the coming years? Closer to 5%, 10%, or higher? Yeah. To put it this way, Carmenta's business is the same type of business that we already have, not only within the emergency and acute, but also within the other niches. What is the real growth coming from here? Well, it's in CSAM's context, it's first and foremost the acquisition itself, because then you take the recurring revenue that are there, that's the main growth. The other one, between 5%-10%, we have said that all the time. It depends, and as you see now, our recurring revenue grows about that or more. It will follow the market. We are not too focused on bringing from 10%-11%. We would rather accelerate M&As. We look at Carmenta the same way as all the other niches actually. Between 5%-10% is our expectations. There's a question about the acquisition process as such. How many acquisitions can you manage to acquire per year from a resource perspective, and how many do you target per year? Well, first of all, the CSAM organization is an M&A machine. All the people here working continuously with acquisitions and integrations, because since these types of solutions are there for decades, staying there is very stable. That means also there's no big things happening on the sales side. It's add-on components and the growth between 5% and 10%. What are we celebrating in CSAM? Well, that is new acquisitions. We have a methodology, we have an approach to handle exactly that. Yes, we have the resources to do what we're doing now, and we've done that for years. We would say if you do four a year, two a year, depending on size, at least that would bring us to the current target. That is not a capacity issue for us when it comes to the current plan. Okay. Another question about acquisitions. M&A is as discussed, an integral driver for growth. Previous large acquisitions were made at one and a half to two years ago. Why such a long time, and why this time lag? Is this the frequency we should expect, or are you speeding up? To answer the last question first, yes, we are speeding up. The reason is very simple. We are a management-driven team focusing on these M&A projects. Of course, the IPO and the preparation of the IPO, preparation of the bonds, and also the process around that in 2020 is, of course, affecting us a bit. We needed to make sure that that process was successful, and it was. From now on, fully fueled and the ability to receive many acquisitions, I'm sure we are not going to be lazy, I can promise you that. Okay. Also, in what time frame do you believe your buy, integrate, and build model can achieve the 30% EBITDA margin in Carmenta? Is it closer to one or to two years? I would say it's closer to two years. It's a big company, and it's important customers that we have to handle in a proper way. Based on the signals we get from the biggest customers, it will not be a problem because we can support Carmenta with resources, methodology, and the ability to get better profitability than they have from before. It's not going to happen fast because our priority now is to make sure that the already happy customers stay happy, and that we can deliver more to them and give the buy, integrate, and build is two things. One thing is the top line, and the other thing is the profitability and cost. We will make sure that we do both, and that will take at least these 24 months that we used to do with the bigger acquisitions. Yeah. Just to add to that, we have said that, over time, over a period of two years, we will bring companies and the acquired businesses up to our target margin of approximately 30% as we continue to grow. Carmenta is a big acquisition, is an important acquisition. It will take the time it takes. Really no point in trying to speed things up more than is possible. Not at all. It's a recurring business, and it's a very important business, as it's practically saving all the lives in acute situations, supporting that activity in Sweden as a national service, and also in the other regions in Europe. Of course, we need to take care of that in a good way. The buy, integrate, and build model is handling exactly that. The customer dialogue part, the employees, and then, of course, the structural thing to share cost elements to secure the other synergies as well. What you're saying is that we are going to do exactly the same with this one as we have done successfully in the past. You are quite right. In that sense, we are extremely boring. I think the boring results speak for themselves. Okay. There's a question about the payment structure in Carmenta. Is it annual upfront? How large part of sales in 2020 were software and recurring revenue? I think I can address the first part of that. This business, the e-health business, is typically a business where a large part of the payment structure is front-loaded one way or another. Very often that is also linked to whether the degree, if you have recurring revenue, i.e., service maintenance agreements, or if it's new license sales, or if there is professional services, i.e., consultancy. Typically, the service and maintenance contracts, the recurring revenue is invoiced in advance. It can be annual, it can be semi-annual, or quarterly. Professional services are typically time and material, and is invoiced at advance end. That is the typical structure. We will look at that is also part of the working capital, net working capital profile that CSAM has. The same basic profile is also found in Carmenta, but there's always room for optimization and always room for improvements. Together with the management of Carmenta, we will do exactly that. How much is software and how much is recurring? Maybe you can start answering that one, Sverre. The good thing here is that when you use the term recurring, there are contracts here being recurring over years anyway, based on what's going to be delivered. The question is, what type of income is recurring? What we've done successfully, and I also think in this case, is that to create more of software than services, because all companies that start within this business normally start as consulting projects, and then they end up in a product situation, and then you add services on top, and you add software on top, et cetera. The mix there is lower than we normally would have. Again, to move it the other way around is a positive thing for customers and also for us. That's part of the buy, integrate, and build model to secure that the software part is increased as well. We feel quite comfortable because there are long-term contracts and the ability in those contracts to do exactly that. Okay. Another question about Carmenta. It's a public company. It's a public company. It's attracting a lot of interest. In Carmenta's public safety report and their annual report for 2019, it states that they had 32 employees. In our press release, it says that it has approximately 50 employees. The question is, has it really increased that dramatically, and why? The answer is yes, it has. Why? It's because the ramp-up of the need of digital tools within the acute sector is high, and it's even increasing and accelerating through the COVID situation. The contracts in there, it's actually supporting the business. They had to scale up the business to do exactly that. That is the real growth, actually, both in income and the number of employees. Yeah. The business is growing and more hands. Another question about Carmenta, and it's about presence in Europe. The question is, Carmenta Public Safety in 2019 had presence in 13 countries in Europe. In which parts of Europe are most of Carmenta's customers, and which opportunities do you see for further geographical expansion? There are several countries, but the biggest country would be Spain, and the biggest customer would be Valencia, which is the same size as Norway when it comes to target citizens. We see that there are add-ons there as well. We already see that other customers in Spain are interested. We see huge possibilities actually here because this software has been working for 20 years, and it's critical software. Being able to deliver the way they have done in the past here is something that we will accelerate and of course participate also in those current requests we get, for instance, from partners internationally. Many of the deliveries from Carmenta historically has been through partners, for instance, bigger industrial partners, and we would like to support that model to continue that growth as well. Yeah. As you saw from the pie charts in the presentation, the green and the blue pie chart, you will see that CSAM is now increasingly two main takeaways. We are getting more and more a true representation of the Nordics, Sweden being the biggest country, both when it comes to number of employees and sales. You see that Europe, the European presence or outside of the Nordics, is moving from around 1% to almost 10%. The way we've calculated those numbers is to add Carmenta's and Virtual business in 2020 to our own 2020 numbers, just to give you an idea of the impact. Okay. I think we have been through them all. If I haven't missed any. I think there's one we missed. How many% of Carmenta Public Safety, NOK 81 million in sales, did SOS Alarm represent in 2020? That is one we haven't. I can probably address that one. SOS Alarm is a big customer, is an important customer, and it's by far the biggest customer of Carmenta, and they represent more than half of the sales in 2020. An important customer, we're going to take real good care of that one, Sverre. Definitely. As I mentioned, it's not a problem having such a big customer. Quite the opposite. It's a mutual future collaboration that will be good for both parties. That's right. There are no more questions. It's quarter past nine. Shall we wait? No? No more questions? If there are no more questions, everything is either perfectly clear or they are perfectly confused. You never know. One out of two. Hopefully, it's clear. This last comment, this is not really a question, I guess. It's, "Thank you for taking the questions and good luck going forward. Thank you. Thank you very much for that. Thank you. Thank you Eddie. Thank you all. Thank you for tuning in. Thank you for watching. Yeah. Thank you, everyone. I hope you are as happy as we are with the company's performance and the future possibilities here. Looking forward to seeing you next time. In the meantime, full speed ahead.