Presentation for Investors Q3 2013

Smarter IT solutions

A group of companies in the IT industry 500 employees in Iceland, in Denmark and Sweden

Nýherji – domestic Technical services and sales of technical solutions and infrastructure

Dansupport A/S Technical services and sales of IT systems infrastructure

Applicon in Iceland, Denmark and Sweden Nordic consulting company in the field of business software

TM Software Own software production along with consulting and development of web

solutions and specific software solutions

Smarter solutions

Strength in cooperation and

solution development

Helstu niðurstöður F3 2013 Fjárhagur

Results Q3 2013

Highlights – third quarter 2013

• Product and service sales total ISK 2,897 million

– Gross margin of 21.5%

• EBITDA total ISK 71 million in Q3 and ISK 218 million for the

first 9 months 2013

• Adjusted for one-off expenses, Q3 EBITDA was ISK 118

million versus ISK 125 million in 2012

• Net loss in Q3 2013 was ISK 100 million

• Equity is ISK 1,187 million with an equity ratio of 18,4%

• Turnaround in Applicon AB in Sweden which is now profitable

• TM Software performed well with a significant revenue growth

Domestic operations

Nýherji

• Growth in Technical Services

• Increased demand for audio and visual solutions

• Product sales under budget in July and August

• Good sales of Lenovo computers and IBM storage solutions

• Expecting continued growth in tecnhical services and steady product sales

TM Software

• TM Software performed exceptionally well in Q3

• 24% revenue increase YOY

• 60% increase in foreign revenues

• Received two international awards (London and San Francisco)

• New products will be introduced this year and prospects are good

Applicon

• Positive results this year, turnaround from last year

• Growth in software sales and services

• Considerable interest in SAP financial solutions and Vigor business software

• Received an award from SAP in an international innovation contest

• Good sales prospects and performance will continue to improve

Foreign operations

Applicon Denmark

• Applicon A/S posted a loss in the quarter

• Efforts underway to improve results, short and long term

• Focus on streamlining operations between the Applicon companies

• Continued losses are expected in Q4

• Applicon Solutions posted good results

Applicon Sweden

• Positive EBITDA, turnaround from 2012

• Implementation of SAP Core Banking with LH closed

• Great potential in selling banking solutions from SAP and making use of the knowledge already gained

• Profit expected in Q4

Dansupport Denmark

• Good performance in Q3

• Project status is good

• Profits are expected through the end of the year

Helstu niðurstöður F3 2013 Financials

Income Statement Q3 2013

in ISK million Q3 2013 % of

revenues Q3 2012

% of revenues

Sales of goods and services..................... 2.897 100% 3.068 100%

Cost of goods and services sold............... (2.275) (79%) (2.359) (77%)

Gross profit............................................. 622 21% 709 23%

Operational cost....................................... (643) (22%) (652) (21%)

(Loss) Profit before financial income

and expenses.......................................... (21) (1%) 56 2%

Net financial expenses............................. (64) (2%) (48) (2%)

(Net Loss) Profit for the period ............ (100) (3%) 5 0%

EBITDA ................................................... 71 2% 125 4%

Income Statement 1.1-30.9.2013

in ISK million 2013

1.1-30.9

% of

revenues

2012

1.1-30.9

% of

revenues

Sales of goods and services......................... 9.415 100% 10.560 100%

Cost of goods and services sold................... (7.445) (79%) (8.378) (79%)

Gross profit................................................. 1.970 21% 2.181 21%

Operational cost............................................ (2.003) (21%) (2.032) (19%)

Write-down of goodwill.................................. (835) (9%) 0 0%

(Loss) Profit before financial income and

expenses..................................................... (868) (9%) 149 1%

Net financial expenses.................................. (223) (2%) (154) (1%)

(Net Loss) Profit for the period ................. (1.086) (12%) (10) 0%

EBITDA ........................................................ 218 2% 335 3%

Revenues

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

ISK

Milli

on

s

Sales EBIT% EBITDA%

Operational cost

0%

5%

10%

15%

20%

25%

-

100

200

300

400

500

600

700

800

900

1.000

Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

ISK

Mil

lio

ns

Operational cost Operational cost % of Revenue

EBITDA foreign and domestic operations

-120

-80

-40

0

40

80

120

160

200

ISK

Mil

lio

ns

Foreign operations

-120

-80

-40

0

40

80

120

160

200

ISK

Mil

lio

ns

Icelandic operations

Balance sheet 30. September 2013

0%

5%

10%

15%

20%

25%

30%

35%

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

Working capital ratio and equity ratio

Working capital ratio Equity ratio

0

10

20

30

40

50

60

DSO and DPO

Days sales outstanding Days payable outstanding

In ISK millions 30.09.2013 31.12.2012

Fixed assets .......................... 3.623 4.537

Current access....................... 2.810 3.562

Total assets........................... 6.433 8.099

Equity..................................... 1.187 2.293

Long-term liabilities................ 2.632 2.773

Short-term liabilities................ 2.615 3.034

Total equity and liabilities.... 6.433 8.099

Cash flow

0

50

100

150

200

250

300

350

400

450

500

ISK

Mil

lio

ns

Cash at end of period

In ISK millions Q3 2013 Q3 2012

Cash from operations.................. 39 130

Investing activities........................ (225) (228)

Financing activities...................... 112 (63)

Increase/decrease in cash........ (74) (161)

Effects of changes in foreign

exchange rates on cash............... (3) 7

Cash at beginning of year............ 218 316

Cash at end of period................ 141 162

Outlook

Outlook

• Upcoming collective bargaining renegotiation, state budget and vague government promises regarding mortgage relief create uncertainties in the Icelandic economy – will impact business and consumer sentiment for the next several months

• Important to address these uncertainties as soon as possible and create more favorable conditions for businesses

• Many sectors still have a considerable built-up need for investment • The domestic companies in the Nýherji group are expected to improve on their recent

performance

• Efforts underway to formulate a new strategy and redefine principal areas of focus for the group as a whole – Aim is to put a sharper focus on core activites and identify core markets, customers and solutions

which the company will focus on in the next several years

Q&A