B3 Consulting : Q4 2022

October - December 2022

• Sales amounted to SEK 332.3 (271.6) million, corresponding to an increase of 22.3 (22.6) per cent
• The operating profit (EBIT) was SEK 39.7 (27.8) million, with an operating margin of 11.9 (10.2) per cent
• Profit after tax was SEK 33.8 (24.6) million
• Cash flow from operating activities for the period was SEK 74.4 (43.7) million
• Earnings per share before dilution amounted to SEK 3.49 (2.67). Earnings per share after dilution amounted to SEK 3.48 (2.66).

January - December 2022

• Sales amounted to SEK 1,148.1 (921.9) million, corresponding to an increase of 24.5 (8.3) per cent
• The operating profit (EBIT) was SEK 137.7 (70.6) million, with an operating margin of 12.0 (7.7) per cent
• Profit after tax was SEK 114.7 (49.8) million
• Cash flow from operating activities for the year was SEK 151.7 (77.7) million
• Earnings per share before dilution amounted to SEK 11.83 (5.32). Earnings per share after dilution amounted to SEK 11.79 (5.30).

B3 passes a billion in sales and sets its sights on continued profitable growth

Summing up the full year, 2022 is the 19th growth year in a row for the B3 Consulting Group and I would like to start by thanking both our co-workers and clients for their fantastic commitment this year. We reached an important milestone in the company's history. Sales passed one billion and reached SEK 1,148.1 million, which is mainly an organic increase of 24.5 per cent compared with the previous year. The largest companies during the year were B3 Poland (associated company), B3 Business Transformation and B3 Cloud, which together accounted for SEK 375 millions of B3's sales in 2022. Profit also reached record levels, and we are both happy and proud to note that 2022 was the best year ever in terms of earnings. The operating profit (EBIT) for the full year was SEK 137.7 (70.6) million, giving an operating margin of 12.0 per cent, in line with B3's new financial target for the period 2023 - 2025.

Sales in the quarter amounted to SEK 332.3 (271.6) million, an increase of 22.3 per cent compared with the same period in the previous year. The operating profit, EBIT, was SEK 39.7 (27.8) million, an increase of 42.8 per cent. The operating margin was 11.9 (10.2) per cent. Growth is largely from an increased number of consultants, and we are very pleased to be able to continue to welcome many new colleagues into the Group.

New assignments and business

During the quarter we continued to be successful in the client market with many exciting new assignments. In the fourth quarter we won a lot of new business, and we are strengthening our relation with Preem, Telia, Region Stockholm and Vattenfall, among others. We are also very pleased to have signed a new framework agreement with Verisure that has chosen B3 as its preferred partner and that Hyresgästföreningen (Swedish Union of Tenants) has partnered with B3 to develop a new business system.

Implementation of the new strategy

I am pleased and proud to have taken over as Chief Executive Officer of this fine company during the year and we have worked actively to present B3's new strategy that we are continuing to implement. The new strategy strengthens and clarifies B3's focus in the areas of Multicloud, Secure, Agile Teams and system development in banking and insurance. We are already seeing results and interest among our clients. B3 has recently taken the lead position in the AWS partner network, which along with our collaboration with Microsoft will be important for continued growth and development of our cloud offering. We have established agile teams for several clients, and we are strengthening our business in IT security.

President and CEO Anette Billing

B3 arouses interest

This autumn we had the pleasure of welcoming clients, partners and co-workers to the B3 Arena, a day of inspiration focusing on the opportunities of digitalisation. The event was fully booked and was a great success. In October B3 also won first prize as Career Company of the Year in IT, which we regard as confirmation that we have created a corporate culture in which our co-workers thrive and develop. B3 is visible and noticed in many places and we continue to work actively to attract more new talent to B3 with high relevance, always based on clients' demand and the needs we see in the market.

Continued unrest in the world

The geopolitical situation continues to be very tense and every day we are reading about the horrible situation in Ukraine, high inflation, and energy prices. B3 continues to stand strong and at present we see continued strong demand for our services, even though pressure in the market has not been quite as intense as at the beginning of 2022. We are receptive to external signals so as to quickly be able to adapt our delivery to client needs. In a changing world we see that digitalisation will continue to be in focus for companies' streamlining and automation potential and that security gets an increasingly place on the agenda.

B3 celebrates 20 years in 2023

This year it is 20 years since B3 was formed and we will mark and celebrate this during the year together with our co- workers, clients, and partners. B3 has undergone a fantastic journey, with growth every year and we are now entering our 20th year as a billion kronor company with continued focus on growth and development.

February 2023

Anette Billing

Events

In Q4

New business and partnerships

• B3 was engaged to develop a new business system for Hyresgästföreningen (the Swedish Union of Tenants). The assignment has an estimated volume of SEK 15 million.
• B3 was entrusted with developing new operational support for the Legal, Financial and Administrative Services Agency in collaboration with Redpill Linpro AB. The assignment runs for two years with an estimated scope of 5,000 hours.

Awards

• B3 was named as Career Company of the Year 2022 in the IT category when Karriärföretagen chose the winners from almost 200 qualifying companies.

Other events

• The Board of Directors decided on new financial targets for the period until the close of 2025, see page 10.
• The Board of Directors resolved, on the basis of the authorisation given by the Annual General Meeting in May 2022, to buy back own shares for SEK 50 million in the period up to the next Annual General Meeting. During the fourth quarter B3 completed the approved buyback program for own shares. Altogether 300,209 shares were bought back as part of the programme, which corresponds to 3.5 per cent of the total number of shares and votes in the company.
• The B3 Consulting Group's warrant programme 2019:1B has been redeemed by the warrant holders. This entails an increase in the number of shares and votes in the company by 184,324 to a total of 8,763 098, which is equivalent to a dilution of about 2.1 per cent.

After the close of the period

• B3 strengthened its collaboration with AWS and took the lead position in the AWS partner network.
• B3 signed a new framework agreement with Verisure and strengthened the earlier partnership.
• B3 started a new partnership with Women In Tech, the largest Nordic technology conference for women.

In Q1, Q2 & Q3

New business and partnerships

• B3 signed a new framework agreement with the eHealth company Cambio. The framework agreement includes expert support for several of Cambio's development and implementation projects.
• B3 signed a new framework agreement with Skandia. The framework agreement covers a broad range of IT consulting services.
• B3 signed a new framework agreement with Vattenfall. The framework agreement includes several services linked to system development projects and administration and creates many new opportunities.
• Through the associated company B3 IT-Sourcing Partners AB, B3 signed another framework agreement with the Legal, Financial and Administrative Services Agency for IT consulting services in the area of IT Security and IT projects, valid for two years with the option of extension for up to two more years.
• B3 signed a new cooperation agreement and partnered with Sitevision, the company that develops a sought-after platform for websites and intranet.

New companies and units

• B3 established a new specialist company in web development and design, B3 Grit.

Other events

• Anette Billing took over in April as new President and Chief Executive Officer after the company's founder and first CEO, Sven Uthorn. Anette Billing has worked in the IT consulting industry for 30 years in several leading positions in various tech companies.
• B3 made new recruitments to Group Management. Pernilla Brolin took over as new Head of HR and Eva Clavin as Head of Sales for public sector procurement.
• Johanna Eriksson was appointed in June as new CFO for B3. Johanna Eriksson has long and broad experience in accounting and finance and her most recent role was as CFO of Dedicare.

Group

Fourth quarter 2022

Revenue and profit

Sales in the quarter amounted to SEK 332.3 (271.6) million, which corresponds to growth of 22.3 (22.6) per cent compared with the same period in the previous year. The sales growth is mainly attributable to an increase in the number of co-workers.Sub-consultants account for a small part of sales, amounting during the quarter to 7.5 (8.2) per cent. The average number of co-workers in the quarter amounted to 799 (656), which corresponds to an increase of 143 compared with the same period in the previous year.

Sales SEK million per quarter and R12

Total operating expenses in the quarter were SEK 293.5 (244.5) million. Staff costs were SEK 229.2 (179.2) million, corresponding to 69.0 (66.0) per cent of sales. The operating profit (EBIT) for the quarter was SEK 39.7 (27.8) million, giving an operating margin of 11.9 (10.2) per cent. The improved profit and higher margin are mainly due to an increased number of co-workers and increased operational efficiency.

The action programme launched in mid-2021 was expected to reach full effect of SEK 30 million on an annual basis as of the second quarter of 2022, which has been achieved.

Through the measures taken to adapt the company's cost base, conditions have been created for B3 to constantly report an operating margin in excess of 10 per cent. In the fourth quarter of the year the Group reported an operating margin of 11.9 per cent and in the period January-December 2022 the operating margin was12.0 per cent.

Realisation of measures (SEK 30 million):

Utfall Förväntad

January - December 2022

Revenue and profit

Sales in the year amounted to SEK 1,148.1 (921.9) million, corresponding to an increase of 24.5 (8.3) per cent The revenue growth is mainly attributable to an increase in the number of co-workers as well as high-capacity utilisation and increased hourly rates. Sub-consultants account for a small part of sales, amounting during the year to 8.0 (7.9) per cent. During the year the B3 Consulting Group purchased shares in four associated companies, which thus became subsidiaries (see Note 6). Excluding these acquisitions, the increase was 12.3 per cent. The average number of coworkers in the year amounted to 746 (643), which corresponds to an increase of 103 compared with the same period in the previous year.

Total operating expenses in the year were SEK 1,013,5 (852.8) million. Staff costs were SEK 789.9 (639.9) million, corresponding to 68.8 (69.4) per cent of sales.

The operating profit (EBIT) for the year was SEK 137.7 (70.6) million, giving an operating margin of 12.0 (7.7) per cent. The improved profit and higher margin are mainly due to an increased number of co-workers, as well as high-capacity utilisation, increased hourly rates and increased operational efficiency.

Seasonal variations

In general, the first and second quarters have a relatively even work rate. The third quarter includes most of the holiday period and the fourth quarter is the most work intensive. Development of revenue and earnings are closely linked to the work intensity. The number of working days in the period January-December 2022 was the same number in the same period in the previous year.