Tecnotree Oyj - Interim report (Q1 and Q3)

Tecnotree Corporation Interim Report 1 Jan - 31 Mar 2024 (unaudited)

Tecnotree Corporation Stock Exchange Release 26 April 2024 at 9.00 EEST

On-track revenue growth, improved profitability while facing currency exchange
fluctuations

First quarter (January - March 2024)

  · Net sales increased 4.7% to EUR 16.3 (15.5) million.
  · Net sales constant currency increased  35% EUR 21.6 (16.0) million
  · Operating result increased 22.3% to EUR 4.4 (3.6) million.
  · Foreign exchange losses increased 80.3% to EUR 1.7 (1.0) million.
  · Result for the period decreased by 10.4% to EUR 1.6 (1.8) million.
  · Gross cash inflow from operating activities EUR 1.0 (4.9) million.
  · Earnings per share EUR 0.01 (0.01).
  · Order book at the end of the period increased by 10.3% to EUR 74.8 (67.8)
million.

Key figures, MEUR                          1-3/2024  1-3/2023  1-12/2023
Net sales                                      16.3      15.5       78.4
Operating result                                4.4       3.6       23.8
Result before taxes                             2.1       2.7       13.9
Result for the period                           1.6       1.8       11.2

Earnings per share, basic, EUR                 0.01      0.01       0.04

Order book                                     74.8      67.8       80.2

Gross cash inflow from operations               1.0       4.9       17.4
Change in cash and cash equivalents            -4.4      -0.9        8.6
Cash and cash equivalents                      16.4      10.9       20.8

Equity ratio % (Equity/Total Liabilities)      65.9      74.6       67.5
Debt Equity ratio % (Debt/Equity)               6.1       2.5        6.6

Personnel at end of period                      892       884        883

*Unless otherwise stated, all figures presented below are for the financial
period 1-3/2024 and the figures for comparison are for the corresponding period
in 1-3/2023.

Prospects 2024

Tecnotree expects in 2024:

•   Revenue to be higher by 2%-7% compared to 2023

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

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

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

The outlook is based on the constant currency terms

From the CEO's desk

Ontrack revenue growth with higher profitability while foreign exchange losses
continue

In Q1 2024,Tecnotree continued to further its embedded AIML offerings in the
Middle East with its most recent win for the Sensa Fabric in Jordan.  This
reinforces Tecnotree's position as a trusted partner for leading
Telecommunication partners in AIML powered BSS solutions.  As operators focus on
de-layering their  business models beyond connectivity, to drive accelerated
revenue growth in adjacent verticals, Tecnotree announced its third MVNO win in
a new market, with Nuh-Digital in Brazil.  Nuh-Digital is a dynamic network
player in the realm of education services and has selected Tecnotree's
comprehensive digital platform to enhance customer experience and accelarate
revenue growth.

Revenue

In Q1 2024, Tecnotree continued growth trend and recorded a solid 4.7% increase
in revenue totaling to EUR 16.3 million compared to EUR 15.5 million last year.
In constant currency terms (exchange rate as at the Dec of previous year)
increased by 35% to EUR 21.6 million compared to EUR 15.0 million in the same
quarter last year.  High exchange volatility voilataility has impacted the
revenue in the current quarter.

In the first quarter of 2024, Tecnotree continued to drive sales of its digital
platform globally, completing a number of AIML and digital transformations for
key customers, thereby increasing revenue from these deliveries.

While Tecnotree had new wins in the LATAM region, EMEA and APAC continue to be
the growth markets for the digital platform.

Tecnotree earns revenue in multiple global currencies and predominantly in US
dollars. In Q1/2024, one third of revenue was in Nigerina nairas resulting in
further currency exchange losses.  In terms of mitigating the exchange losses,
we continue to work with a number of financial institutions for currency swaps
and hedges.

Since February of 2024 the naira has continued to show signs of improvement and
this

will hopefully minimize our exchange risks going forward.

Cost

Tecnotree began cost optimization last year and continue to embark on a global
initiative targeting significant cost optimization also in 2024. The total
operating expenses for Q1/2024 was 73% of the revenue, which is lower than 76%
in Q1/2023. This has resulted in higher EBIT for the current quarter.

Profitability

The operating result in the first quarter improved by 22.3% to EUR 4.4 million
compared to EUR 3.6 million last year. During the quarter, Tecnotree also
initiated a new cost rationalization program, and the company expects full-year
operating result to be 7% to 15% higher than in 2023. In the first quarter, net
profitability continued to be negatively impacted by exchange differences.
However the actions taken  to mitigate the risk continue and have started to
show positive signs for the situation to improve.

Collections

Tecnotree business has a high degree of seasonal variations. A number of digital
deliveries were completed in Q1/2024, which have now been invoiced and  are due
for collection over the next quarter.  The overall collections for Q1/2024
totaled EUR 9.5 million and in constant currency it would have been EUR 12.0
million. Q1/2024 also witnessed a heavy period of holidays and lesser number of
available banking days, adding further slowing collections.

Order Book

Tecnotree's order book grew in total by 6% year on year to EUR 74.8 million and
the growth was supported by LATAM, Middle East, Africa and APAC.

Recognitions

In Q1 2024, Tecnotree announced its Partnership with Bytedance, combining its
expertise in technology and content creation with Tecnotree Moments' telecom
industry insights and innovative solutions. The partnership seeks to create
synergies that accelerate digital transformation and unlock value for telecom
operators worldwide. Leveraging advanced AI capabilities and high-speed 5G
networks.These solutions will empower telecom enterprises to drive new revenue
streams and enhance customer engagement.

In Q1/2024, Tecnotree Moments was selected by  Global Hitss, an American Movil
Group Co. to enhance e-health services across Mexico and Latin America. This
digital platform will improve healthcare services by transforming various
aspects, such as registration, appointment scheduling, accessing records of
patient history, subscription management, and billing processes - ensuring
seamless operations across the entire value chain.

Tecnotree Moments in Q1 2024 was also selected as a finalist in the prestigious
TMForum 2024 Excellence Awards in the category of network monetization, for
enabling B2B2C network monetization in healthcare. The results will be announced
in June 2024.

Further information
Padma Ravichander, CEO, tel +97 156 414 1420
Indiresh Vivekananda, , CFO, tel +971 56 410 8357

Tecnotree is a 5G-ready digital Business Support System (BSS) player, with AI/ML
capabilities and multi-cloud extensibility. Tecnotree is as No.1 on the TM Forum
Open API Conformance table with 59 Open APIs, and this is a result of our
pursuit towards delivering excellence and consistently providing differentiated
experiences and services to the CSPs and DSPs. Our agile and open-source Digital
BSS Stack comprises the full range (order-to-cash) of business processes and
subscription management for telecom and other digital services industries
creating opportunities beyond connectivity. Tecnotree also provides Fintech and
B2B2X multi-experience digital marketplace to its subscriber base through the
Tecnotree Moments platform to empower digitally connected communities across
gaming, health, education, OTT, and other vertical ecosystems. Tecnotree is
listed on Helsinki Nasdaq (TEM1V).

For more information, please visit www.tecnotree.com or social media channels -
LinkedIn I Facebook I Twitter

Attachments:

04257902.pdf