Untitled

Copenhagen, 21 February 2024

Annual report for the period

1 January 2023 - 31 December 2023

ANNUAL REPORT

2023

Penneo A/S

Enghavevej 40, 4. sal,

1674 Copenhagen V, Denmark

Business reg. no. 35633766

Penneo Annual report 2023 2

Contents

Management’s Review 3

ARR performance highlights 3

Financial performance highlights 4

Our vision 5

Letter to our stakeholders 6

How we measure our performance 10

Performance highlights 11

Outlook 19

Guidance methodology 20

Penneo at a glance 21

Analyst coverage 24

ESG strategy 25

ESG highlights 26

ESG statement 28

Our business 29

Cultivating new and existing markets 30

Supporting Belgium’s digital leap forward in

auditing and accounting

Joining Germany in its eort to get back on the

digital track

Germany: Why the timing is now 35

Governance section 37

Governance 38

Executive bios and Board of Directors 39

Key risks 43

Company information 44

2024 Financial calendar 44

Financial review 45

CFO statement 46

Key gures 47

Financial commentary 49

Financial statements 51

Statement by management 52

Independent Auditor’s Report 53

Financial statements 57

Notes 62

ESG report 2023

In our ESG report, you can read more

about Penneo’s environmental, social, and

governance indicators.

https://penneo.com/wp-content/

uploads/2024/02/penneo-2023-esg-

report.pdf

Remuneration report 2023

In our remuneration report, we provide a

transparent overview of the remuneration

of our Executive Board and our Board of

Directors.

https://penneo.com/wp-content/

uploads/2024/02/penneo-2023-

remuneration-report.pdf

Penneo Annual report 2023 3

Management’s review

ARR performance highlights

ARR Performance highlights

ARR increased by 6.8M DKK including the

positive currency exchange related impact of

0.1M DKK compared to 6.0M DKK in 2022-Q4

ARR increase from newbiz amounted to 3.8M

DKK compared to 2.3M DKK in 2022-Q4

ARR increase from uplift amounted to 4.5M

DKK compared to 4.4M DKK in 2022-Q4

ARR lost to churn amounted to 1.4M DKK

compared to 0.8M DKK in 2022-Q4

ARR from foreign markets increased by 3.0M

DKK compared to 0.9M DKK in 2022-Q4

ARR increased by 18.4M DKK despite a

negative currency related impact of 0.6M

DKK compared to 15.5M DKK in 2022

ARR increase from newbiz amounted to

10.1M DKK compared to 8.5M DKK in 2022

ARR increase from uplift amounted to 11.4M

DKK compared to 9.1M DKK in 2022

ARR lost to churn amounted to 3.2M DKK

compared to 2.2M DKK in 2022

ARR from foreign markets increased by 7.1M

DKK compared to 5.2M DKK in 2022

ARR amounted to 89.3M DKK at the end of

2023 compared to 71.0M DKK at the end of

2022 (26% YoY growth)

YoY ARR net retention rate amounted to

112%

YoY ARR uplift amounted to 16%

YoY ARR churn rate amounted to 4%

ARR from foreign markets amounted to

26.7M DKK at the end of 2023 compared

to 19.6M DKK at the end of 2022 (36% YoY

growth)

2024 ARR guidance

Penneo expects continued growth in ARR and guides ARR at the level of 105-112M DKK at the end of 2024

corresponding to an ARR growth rate of 18%-25%.

The outlook is based on currency exchange rates per end of 2023.

2023-Q4 development 2023 development End of year 2023

The below performance highlights are calculated based on actual end-of-year currency exchange rates.

Penneo Annual report 2023 4

*EBITDA does not include income and costs categorised as “Other income” and “Other operating expenses”

on page 57.

Financial performance highlights

EBITDA development

Cash development

*Adjusted for the cost that is associated with the listing on both the First North and the Copenhagen Main

Market (2.3M DKK in 2020 and 2.4M DKK in 2022)

M DKK 2023 2022 2021 2020

Revenue 88.4 72.1 54.3 35.5

Cost of sales (12.4) (12.5) (9.7) ( 7.0)

Gross prot 76.1 59.5 44.6 28.5

Other external expenses (20.9) (17.8) (14.4) (8.6)

Sta costs (63.8) (52.8) (44.2) (28.6)

EBITDA* (8.7) (11.1) (14.1) (8.7)

M DKK 2023 2022 2021 2020

Cash ow from operating activities 7.5 (10.0) (8.1) (8.7)

Cash ow from investing activities (22.8) (19.4) (15.5) (13.4)

Free Cash Flow (15.3) (29.4) (23.6) (22.2)

Adjusted* 0.0 2.4 0.0 2.3

Adjusted Free Cash Flow (15.3) (27.1) (23.6) (19.9)

Cash ow from nancing activities 4.4 57. 2 17.1 45.8

Net cash ow (10.9) 27.8 (6.5) 23.6

M DKK 2023 2022 2021 2020

Cash and cash equivalents end of period 42.2 53.2 25.4 31.8

Management’s review Financial performance highlights

2024 EBITDA guidance

Penneo expects an EBITDA at a level of

5M DKK to 10M DKK.

Penneo remains condent in its current

growth strategy. We will continue to in-

vest in maturing our organization, al-

though we may choose to adjust invest-

ments if market conditions change. These

investments span across sales and mar-

keting, product development, and other

key areas.

5Penneo Annual report 2023

Our vision

A world where you can trust the way

businesses do business.

Penneo transforms the way business-to-business companies

in Anti-Money-Laundering (AML) regulated industries can

meet growing compliance demands. With Penneo’s signing

and KYC workow platform, they can optimize and automate

critical business workows throughout the client lifecycle,

from customer onboarding to document signing and ongoing

risk assessment. This empowers them to spend less time on

quality assurance, compliance, and control freeing up time

for more value-adding tasks.

Penneo Annual report 2023 6

Management’s review Letter to our stakeholders

Letter to our

stakeholders

Over the past year, Penneo has made signicant

progress maturing and scaling its business, catering to

a larger customer base and expanding our footprint

in Europe beyond our existing markets in the Nordics.

Particularly in Belgium where we have seen strong

growth. Meanwhile, we have invested signicantly in

enhancing, diversifying and localizing the solutions we

oer to streamline critical business workows in digital

signing and KYC for AML regulated B2B companies.

In 2023, we achieved an ARR of 89.3M DKK. This

corresponds to a YoY growth rate of 26%. In a xed

currency scenario based on the exchange rate end of

2022, we achieved 89.9M DKK corresponding to a YoY

growth of 27%. This is in line with the guidance of 87-92M

DKK that we provided as part of our Q3-2023 nancial

reporting (company announcement no. 31-2023).

Speaking of our 2023 ARR result, it should be noted

that we experienced uctuation in currency exchange

rates throughout the year, especially when comparing

the NOK to the DKK. This negatively impacted our 2023

ARR result by 0.6M DKK which means that currency

uctuation is concealing a slightly more positive ARR

development.

In 2023, we achived an EBITDA of negative 8.7M DKK

which is better than the guidance of negative 10-15M

DKK that we provided as a part of our Annual Report

2022. The positive deviation is mainly due to eective

cost management.

At the end of 2023, Penneo’s cash position was 42.2M

DKK. As we move forward, our approach is to invest the

cash that is available and continuously ensure that we

have a clear path to a cash positive position given the

cash available. At the end of 2024, we expect to reach

a position where our ARR will exceed our overall cost

base, positioning us to achieve at least a cash neutral

status on a yearly basis by 2025 according to our current

projections.

In general, 2023 has been yet another extraordinary

year with ongoing economic, environmental, social and

geopolitical volatility. Combined with increasing interest

rates and unfavorable exchange rates this has led to

cautious buying behavior in some of our key markets.

This was particularly noticeable among our new

customers where we observed reduced deal sizes due

to smaller initial sales commitments. However, this

mostly applied to our established markets, i.e. Denmark,

Norway and Sweden, whereas our new market Belgium

showed much stronger growth, especially in terms of

onboarding new customers and higher initial deal sizes.

Furthermore, we managed to outweigh the trend of

lower deal sizes across some markets by a stronger

performance in terms of acquiring new customers. In

2023, for example, we onboarded a total of 584 new

customers up from 404 in 2022 which led to a 19%

increase in our new business ARR that amounted to

10.1M DKK in 2023 up from 8.5M DKK in 2022.

In this way, we are proud that Penneo’s business model

has proven itself resilient. We have faced challenging

market conditions and been able to oset smaller

average deal sizes by securing more deals. This holds

special value when considering that we are a company

with ‘sticky’ products and a low customer churn rate of

Penneo Annual report 2023 7

4% as well as a strong historical track record of uplift.

This implies that customers not only tend to stay with

us, but also gradually buy more over time underscoring

why initial customer acquisition is important.

Another key achievement in 2023, was the continued

ARR growth in new business from foreign markets. More

than 60% of our new business ARR in 2023 originated

from foreign markets, primarily due to our success in

Belgium. For instance, during 2023 alone, we successfully

acquired 184 new customers in Belgium, resulting in a

171% increase in ARR compared to 2022.

Breaking into new markets while nurturing existing

ones is a key part of our growth strategy and therefore

we are particularly pleased with this development.

Furthermore, we are currently getting ready for our

next market expansion targeting an entry into Germany

in 2024. Due to its large size and commercial potential,

Germany is highly interesting.

However, there are still barriers to penetrate the German

market, such as the relatively low level of digitalization

and eID adoption. Nonetheless, we believe that the

timing is now for Penneo to enter and grow as the

market gradually matures. As elaborated further later in

this report, this is due to the recent strong political drive

to digitize its public administration, along with various

regulatory developments and changed conditions for

leveraging eID solutions.

During 2023, we also achieved other key milestones that

we believe will strengthen Penneo’s continued growth

and internationalization. In Q3-2023, for example, we

attained ISO 27001 and ISO 27701 certications for our

information security and privacy management systems.

These certications require a robust framework of

policies and controls to protect sensitive information,

including personal data. In this way, they emphasize

our dedication to the highest privacy and data security

standards, which is crucial since our core customer value

proposition revolves around assisting organizations

optimize and securely manage digital collaboration and

privacy.

In general, Penneo has made signicant investments

in strengthening its product development organization

Management’s review Letter to our stakeholders

during 2023 including the recruitment of Hans Jørgen

Skovgaard, our Chief Technology Product Ocer

(CTPO). This eort has focused on expanding the team,

reinforcing key leadership positions, and aligning

product development objectives with our expansion

plans. Consequently, Product Development employed 41

people by the end of 2023, an increase of 28% compared

to 32 employees at the end of 2022. This highlights our

increased focus on product development and has already

led to concrete progress. For example, during 2023,

Penneo has launched a total of 14 new integrations to

relevant third-party business applications and improved

the functionality of our KYC solution based on selected

industry best practices related to legal AML compliance.

In general, Penneo’s product development eort has

focused on supporting the growth of Penneo KYC as

well as facilitating the expansion of Penneo Sign in

the Belgian market and preparing it for other markets.

Moreover, the team has focused on enhancing the

features and functionality of Penneos’ solutions since

continuous improvement is important to meet customer

expectations and maintain a competitive edge. This

Mads Paludan Aabling

Chief Sales Ocer (CSO)

Hans Jørgen Skovgaard

Chief Technology & Product Ocer (CTPO)

Casper Christiansen

Chief Financial Ocer (CFO)

Christian Stendevad

Chief Executive Ocer (CEO)

Kirstine Møller Pedersen

Chief Marketing Ocer (CMO)

André Clement

Chief Commercial Ocer (CCO)

Penneo Annual report 2023 8

Management’s review Letter to our stakeholders

Christian Sagild

Chair of the Board of Directors

Christian Stendevad

Chief Executive Ocer

includes for example support for MitID Erhverv,

investigation of face- or passport-based identication

methods and other areas. Moreover, developing

integrations that seamlessly integrate with other

software systems is essential, as they serve as a valuable

sales enabler for us.

Another noteworthy project done in 2023, was the

completion of a brand positioning project in Q4-2023

that is aimed at strengthening our brand and providing

a clearer market dierentiation to drive growth with

new customers, and in new markets. Headed by our

newly recruited CMO, Kirstine Møller Pedersen, this

project began by engaging a broad range of employees,

customers and other stakeholders in dening the

positioning strategy that can dierentiate Penneo

moving forward. With this is in mind, we then worked to

update and revitalize our overall brand narrative, and

as we move further into 2024, we will build on this by

introducing a new corporate visual identity providing

Penneo with a new look and feel.

As part of enhancing value creation in Penneo, the

board will continue the work of formulating nancial

goals for Penneo. These nancial goals are expected to

be announced in the rst half of 2024.

On a nal note, we would like to underline that we

remain condent in the long term growth potential of

Penneo. Across Europe, and especially in countries that

are late digital adopters, political focus on automation

and digitization remains strong due to the huge potential

it holds to unleash eciency improvements saving both

time and money. This focus is supported by national

political initiatives and also regulation at the EU level.

In the AML-regulated industries we serve, continued

digital transformation and disruption combined with

increased regulation is changing work assignments and

increasing the daily workload and complexity of tasks.

In this environment, doing nothing or throwing more

people at the problem no longer works.

Organizations must seize the opportunity to use the

power of intelligent automation to optimize critical

business workows throughout the entire client

lifecycle, from customer onboarding to document

signing and ongoing risk assessment. This is exactly

what Penneo delivers and in 2024 we will do our utmost

to communicate this value proposition to the market.

As we move further into 2024, we believe Penneo is well

prepared to continue on its growth trajectory. In 2023,

our organization has evolved and matured signicantly

and our employees have navigated challenges and

uncertainties with an amazing determination. The

results we have achieved and the sustained trust of our

customers are due to their hard work and care for each

other.

On behalf of the entire Penneo Board of Directors and our

leadership team, we would like to extend our heartfelt

thanks to all customers, employees, shareholders, and

partners for the progress we achieved.

We look forward to the continued journey in 2024.

9Penneo Annual report 2023

Penneo Annual report 2023 10

Management’s review How we measure our performance

How we measure

our performance

Penneo uses a range of SaaS metrics to evaluate its

performance. E.g. Annual Recurring Revenue (ARR),

ARR churn, Net Revenue Retention (NRR), Customer

Acquisition Cost (CAC) and Customer Life-Time Value

(CLTV). These metrics provide a picture of our potential

ability to generate revenue and cash ow and how

eective we are in terms of gaining, developing and

keeping customers.

Continuous high ARR growth rates

Development in ARR comes from three sources:

(i) maintaining low churn, (ii) securing upsell and cross

sales to existing customers, and (iii) attracting new

customers on existing and new markets. Penneo has

signicantly increased ARR each year since it was

founded. From 2020 to 2023, Penneo increased ARR by

34% in CAGR from 37M DKK to 89M DKK.

Low ARR churn rate

By providing a strong product t to our customers,

Penneo has consistently maintained a low ARR churn

rate of 4% for 2022 and 2023.

Signicant ARR uplift from existing customers

In absolute terms, Penneo achieved an uplift from existing

customers of 9.5M DKK in 2021 and 9.1M DKK in 2022. In

2023, this gure increased to 11.4M DKK demonstrating

the company’s ability to sell more to existing customers.

Over the last year, uplift has been driven by three factors;

(i) existing customers increasing their usage of Penneo

Sign and upgrading their subscription, (ii) existing Penneo

Sign customers subscribing to Penneo KYC, and (iii) a net

positive eect from an annual adjustment of our pricing

reecting the general increase in ination rate.

New customers onboarded

Over the years, Penneo has been able to expand its

customer base signicantly. In 2022 for example, we

onboarded 404 new customers and in 2023, a record

number of 584 new customers were added.

SaaS terms explained

Annual Recurring Revenue (ARR)

Used to measure the recurring revenue from customers. ARR can

be measured in two ways: Live ARR and Contract ARR. Live ARR is the

recurring revenue currently being received, whereas Contract ARR also

includes the recurring revenue that a company has contracted to receive

from its customers, but not necessarily started receiving yet. In Penneo,

we calculate ARR as Live ARR since we prefer to present the current

status of our business. From 2019 and onwards, all new customers in

Penneo were onboarded to a fully subscription-based model. By the end

of 2023, 83% of the revenue was subscription-based compared to 80%

at the end of 2022.

ARR churn

Refers to the decrease in ARR in a given time span due to the expiration of

a customer relationship. A low ARR churn rate indicates that a company’s

products have a strong market t and the price/value relationship is in

balance. In Penneo, we consider a churn rate below 5% as healthy.

ARR uplift

Used to measure growth from customers who became customers in a

previous period. In Penneo, ARR uplift comes from upgrading existing

subscriptions, e.g. a larger commitment from Penneo Sign customers

or upselling Penneo KYC to Sign customers. Downgrades are included

in ARR uplift.

Net Revenue Retention (NRR)

Measures the retention of ARR from existing customers in a given time

period. NRR is calculated by subtracting ARR churn from ARR uplift. A

high NRR indicates that it might be protable in the long term to invest

in acquiring more customers in the short term even if CAC increases.

Customer Acquisition Cost (CAC)

How much a company spends to acquire one new customer in a given

period. Overall, there are two types of CAC; Fully loaded CAC and Direct

CAC. Fully Loaded CAC includes all costs associated with acquiring a new

customer, whereas Direct CAC includes only direct costs.

In Penneo, we include compensation costs to employees in sales

and marketing who are involved in the sales process and also direct

advertising expenses. In other words, we use Direct CAC, as we believe

it is the best metric in a scaling phase where measuring the incremental

investment in one new customer makes sense. In the future, where

overall protability has a higher priority than growth, it makes sense to

use Fully loaded CAC. It’s important to note that CAC is a metric that

should be tracked over time, as the number of new customers can vary

due to seasonality, selling cycle and coincidental factors.

Average Revenue Per Account (ARPA)

A metric used to measure the average yearly revenue generated from

each individual customer. Commonly used to measure the ability to

create uplift from customers.

Customer Life-Time Value (CLTV)

Highlights the long-term value of a customer relationship making it

possible to make informed decisions about pricing, customer acquisition,

and retention. Development in CLTV should be viewed alongside CAC

to evaluate the protability in a scaling phase where cash ow often is

negative.

Penneo Annual report 2023 11

1 1 1 1

2 2 2 2

2015 2016 2017 2018 2019 2020 2021 2022 2023

2014

2015

2022

2023

2021

2020

2019

2018

2017

2016

Annual Recurring Revenue Development

Yearly cohorts (M DKK)

This chart shows net ARR

growth development

from customer cohorts in

M DKK. Customer cohorts

refer to groups of new

customers that Penneo

has acquired in a 12

month nancial period.

Management’s review

ARR growth from

nancial year

cohorts

Performance highlights

New customers that Penneo acquires in one specic

nancial period (customer cohorts) evolve and

gradually contribute with additional ARR in subsequent

years. This is important since the cost of acquiring

a new customer on average initially outweighs the

upfront income generated by this customer.

A cohort analysis based on all nancial years since

the establishment of Penneo, shows a yearly growth

of 20% in net ARR the rst ve years (including both

churn of customers and ARPA development of retained

customers). Moreover, when viewed individually,

cohorts are developing with a positive year-on-year

growth.

From 2019 and onwards, new customers have been

onboarded to a fully subscription-based model. 83% of

the revenue, by the end of 2023, was subscription based

compared to 80% by the end of 2022. Subscription-

bas ed ARR ha d the h ighes t g row th rate, bu t t rans ac tion -

based ARR also grew since Penneo’s older customer

cohorts continue to develop positively.

Penneo Annual report 2023 12

The annual development represents the development from 2022 to 2023 and is measured on the last day of both periods.

EoY 2022 Churn

Penneo

Sign

Churn

Penneo KYC

Uplift

Penneo

Sign

Uplift

Penneo

KYC

Existing

customers

New Penneo

Sign

New Penneo

KYC

EoY 2023

-2.9

-0.2

79.2

71.0

8.9

1.3

89.3

4% ARR churn on

lost customers

2.4

9.0

Sign

63.0

14% ARR new

customers

Sign

77.9

Sign

69.0

Annual Recurring Revenue Development

In the period (M DKK)

KYC

11.5

KYC

10.2

KYC

3.4

16% ARR uplift on

existing customer

In 2023, Penneo increased its ARR with 18.4M DKK

which increased total ARR for the full year of 2023 to

89.3M DKK. During 2023, this performance was driven

by a total ARR uplif t of 11.4M DKK from existing Sign and

KYC customers before adjusting for 3.1M DKK in ARR

lost due to churn, which corresponds to a 4% year-on-

year churn rate. Meanwhile, ARR from new customers

contributed with 10.1M DKK of which Penneo Sign

accounted for 8.9M DKK and Penneo KYC for 1.3M DKK.

At the end of 2023, ARR from foreign markets amounted

to 26.7M DKK compared to 19.6M DKK at the end of

2022, which corresponds to 36% year-on-year growth.

A growing share of Penneo’s total ARR now comes from

Penneo KYC that accounted for 11.5M DKK in 2023

compared to 8.0M DKK of total ARR in 2022.

At the end of 2023, Penneo’s ARR results were negatively

inuenced by uctuations in currency exchange rates

when comparing the NOK to the DKK, resulting in a

currency loss of 0.6M DKK. Consequently, In a xed

currency scenario, Penneo would have achieved a

slightly higher total ARR of 89.9M DKK (27% YoY growth)

compared to the reported result of 89.3M DKK (26% YoY

growth).

During 2023, Penneo secured a record number of 584

new customers compared to 404 in 2022. Belgium,

Penneo’s newest market, was particularly successful

onboarding 184 new customers in 2023.

Overview of ARR

development

Management’s review Performance highlights

Penneo Annual report 2023 13

Reported numbers Q4-2023 Q3-2023 Q2-2023 Q1-2023 Q4-2022 Q3-2022 Q2-2022 Q1-2022 Q4-2021 Q3-2021 Q2-2021 Q1-2021

ARR newbiz 3.8 2.1 2.3 2.0 2.3 1.1 2.9 1.9 2.7 1.4 3.2 2.5

ARR uplift 4.5 1.7 3.4 2.0 4.4 1.0 2.4 1.6 2.7 1.8 3.6 1.4

ARR churn (1.4) (0.6) (0.6) (0.6) (0.8) (0.7) (0.3) (0.4) (0.2) (0.6) (0.1) 0.0

Total ARR growth 6.8 3.3 5.0 3.3 6.0 1.5 5.0 3.1 5.2 2.6 6.7 3.9

ARR EoQ 89.3 82.5 79.2 74.2 71.0 65.0 63.5 58.5 55.5 50.2 47.6 40.9

Q4-2023 was the best ever quarter in Penneo’s history in

terms of ARR uplift and new business ARR.

ARR decrease due to churn

In Q4-2023, ARR lost due to customer churn amounted to

1.4M DKK compared to 0.8M DKK in Q4-2022. Moreover,

the Average Revenue Per Account (ARPA) for customers

who churned in Q4-2023 remained in the lower end.

Management’s review Performance highlights

ARR new business

In Q4-2023, Penneo achieved an ARR new business

growth of 3.8M DKK, compared to 2.3M DKK in Q4-2022.

This increase is primarily due to an enhanced ability to

acquire new customers, driven especially by the success

we are currently observing in Belgium. Furthermore,

approximately 70% of new business ARR came from

foreign markets in Q4-2023.

ARR uplift

In Q4-2023, Penneo’s existing customer base contributed

4.5M DKK to our ARR growth up from 4.4M DKK in Q4-

2022. However, when comparing Q4-2023 with Q4-2022,

it is important to note that the ARR uplift achieved in Q4-

2022 was inuenced by a signicant expansion of our

agreement with Bankdata.

ARR development in Q4-2023

Penneo Annual report 2023 14

In Q4-2023, Penneo signicantly improved its ability

to acquire new customers. Compared to 125 new

customers in Q4-2022, 218 new customers were

welcomed in Q4-2023 which corresponds to a growth

of 74%. Especially noteworthy is the onboarding of

83 new customers in Belgium in Q4-2023 compared

to 28 in Q4-2022, which underlines the strong growth

momentum we have in this market.

Average ARR in the initial year for new customers over a

trailing 12-month period reached 17.4T DKK in Q4-2023,

showing a decrease from 20.4T DKK in Q4-2022.

At the end of Q4-2023, ARPA was 31.0T DKK compared

to 26.6T DKK at the end of Q4-2022 which corresponds

to a growth of 17%. This indicates a higher revenue

SaaS metrics

Management’s review Performance highlights

generation per account and demonstrates Penneo’s

continued strong ability to create uplift from existing

customers.

On average, Customer Acquisition Cost (CAC) was

26.5T DKK in 2023. This corresponds to a 18% decrease

compared to 2022 where CAC was 32.4T DKK on

average. This was especially driven by the high inux

of new customers in Q4-2023 generated without a

proportional increase in sales costs. In 2023, the Net

Revenue Retention (NRR) amounted to 112%* as a

result of an ARR uplift of 16% and ARR churn of 4%,

which indicates steady growth, as also supported by

the continued increase in ARPA. Compared to 2022,

NRR stays the same.

* The Net Revenue Retention is calculated using these gures:

(79.2/71.0*100=112%)

Q4-2023 Q3-2023 Q2-2023 Q1-2023 Q4-2022 Q3-2022 Q2-2022 Q1-2022 Q4-2021 Q3-2021 Q2-2021 Q1-2021

New customers 218 113 142 111 125 78 103 98 123 87 171 149

Average ARR in the rst

year for new customers

17,363 18,527 16,016 17,839 18,619 14,686 28,131 19,432 21,939 16,366 18,845 17,027

Customer Acqusition Costs

(CAC)

(18,628) (31,864) (26,639) (36,574) (32,633) (35,833) (31,952) (29,871) (32,229) (35,640) (21,523) (22,511)

Net Revenue Retention

(NRR)

112% 114% 113% 113% 113% 112% 114% 120% 124% 124% 130% 123%

Average Revenue per

account (ARPA)

31,038 30,115 29,914 28,315 26,608 25,288 25,092 23,751 23,137 21,960 21,444 19,988

Penneo Annual report 2023 15

2021-Q1 2021-Q2 2021-Q3 2021-Q4 2022-Q1 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4

Foreign markets

Foreign markets break-down

(2023-Q4)

Domestic market

Norway 47.1%

Belgium 29.4%

Other 2.3%

Sweden 21.1%

Management’s review

Domestic and foreign

ARR base split

Performance highlights

Penneo’s growth strategy is centered around entering

new markets while simultaneously increasing its market

share in existing markets. This chart shows the growth

of Penneo’s ARR base split into the domestic market

(Denmark) and foreign markets including Norway,

Sweden, Belgium and others.

In 2023, the share of total ARR from the Danish market

increased by 22.3% to 62.6M DKK up from 51.2M

DKK in 2022. This was driven by a continued eort to

strengthen the company’s domestic market position

further as well as growing demand for Penneo KYC.

Meanwhile, the share of ARR from foreign markets

increased from 19.6M DKK in 2022 to 26.7M DKK in 2023

which corresponds to year-on-year growth rate of 36%.

This is primarily due to the traction we have gained in

the Belgian market where ARR grew from 2.9M DKK

end-of 2022 to 7.9M DKK end-of 2023 corresponding

to a growth of 171%. In general, more than 60% of our

new business ARR in 2023 came from foreign markets.

Looking into ARR from foreign markets in 2023, Norway

remained Penneo’s largest market accounting for 47.1%

of the company’s foreign ARR. Belgium, however,

surpassed Sweden as Penneo’s second largest foreign

market with a foreign ARR share of 29.4% whereas

Sweden accounted for 21.1%.

Penneo Annual report 2023 16

Management’s review

Projected ARR

contribution

Year 1 Year 2 Year 3 Year 4 Year 5

CAC (Last 12 months)

Expected ARR for new customers (Last 12 months)

Average ARR development (T DKK)

A ve year cohort analysis based on new customers

CAGR 20%

Performance highlights

A cohort analysis based on all nancial years since the

establishment of Penneo in 2014, shows a year ly grow th

of 20% in net ARR over the rst ve years for a given

cohort (including both churn of customers and ARPA

development of retained customers). Consequently,

the ARR could grow from 17.4T DKK in year one to 36.1T

DKK in year ve.

In a SaaS business model, it is important to understand

the relationship between the cost of acquiring the

next new customer with the projected Customer Life-

Time Value (CLTV) of the customer. To calculate this

relationship, there are various elements that Penneo

considers.

Among others Customer Acquisition Cost (CAC),

Average Revenue Per Account (ARPA), contribution

margin, yearly ARR uplift and expected customer

lifespan based on churn rate. While these elements are

provided in this report, we have chosen not to provide

this calculation since our low churn in principle provides

a customer lifespan of 25 years and we have only been

active in the market for 10 years.

Penneo Annual report 2023 17

In 2023, Penneo realized an ARR growth of 18.4M DKK

and a free cash ow of negative 15.4M DKK. This is

equivalent to a cash to acquired ARR ratio of 0.8 which

we consider satisfactory considering that one acquired

DKK of ARR on average results in a revenue of more

than seven DKK in the rst ve years.

A combination of a strong sales performance in Q4-

2023 and improved management of our working capital

(including accounts payable and accounts receivable)

impacted our cash ow from operating activities

positively in 2023 to an extent that it now contributes

positively to cover the expenses we have in terms of

product development.

Furthermore, in 2023 this trend was amplied by the

fact that we have simultaneously only increased the

total number of employees by 9%, since our focus has

been on leveraging the full potential of our current

investments and existing employees.

Management’s review Performance highlights

2020 2021 2022 2023

ARR growth /

Negative free cash ow

12.0

(6.4)

(13.5)

(19.9)

18.6

18.4

15.5

-1.7 -1.3 -1.7 -0.8

ARR growth, YoY

Cash ow from

operating activities*

Cash ow from

investing activities

*Adjusted for the cost that is

associated with the listing on both

the First North Growth Market and

the Copenhagen Main Market (2.3M

DKK in 2020 and 2.4M DKK in 2022)

ARR growth compared to

negative free cash ow

(23.6) (27.1)

(15.4)

(8.1)

(7.7)

7.5

(15.5)

(19.4)

(22.8)

Penneo Annual report 2023 18

Q4-2020

Q4-2019

Q1-2021

Q1-2022

Q1-2020

Q3-2021

Q2-2022

Q2-2020

Q2-2021

Q3-2022

Q3-2020

Q4-2021

Q4-2022

Q1-2023

Q2-2023

Q3-2023

Q4-2023

107

115

119

117

101

111

119

123

120

121

Contractors

Employees

Penneo’s workforce is diverse with +20 nationalities and a gender representation of 34% women and 66% men.

Management’s review

Employee

development

Performance highlights

Penneo is committed to investing in building a robust

foundation that supports the ongoing expansion of the

company. The majority of these investments focus on

hiring new personnel, with a mindful strategy to ensure

that each new addition contributes signicant value.

Over the last year, the number of employees has grown

by 9% from 111 end of Q4-2022 to 121 end of Q4-2023.

New hires have mainly been done within product de-

velopment and have been aimed at accelerating the roll

out of Penneo’s KYC solution in new markets including

e.g. integration with local data providers such as na-

tional company registries and eID’s as well as localiza-

tion of the solution. The remaining new employees have

primarily been hired in sales and support functions.

While we may choose to recruit additional new employ-

ees, our current priority is to fully utilize and optimize

the capabilities of our current talent. This strategy is

in line with our broader objective of practising careful

resource management.

Penneo’s workforce is diverse with +20 nationalities

and a gender representation of 36% women and 64%

men.

OutlookManagement’s review

Penneo Annual report 2023 19

Outlook 2024

ARR guidance

Penneo expects continued growth

in ARR and guides ARR at the level

of 105-112M DKK at the end of 2024

corresponding to an ARR growth rate

of 18%-25%.

EBITDA guidance

Penneo expects an EBITDA at a level

of 5-10M DKK at the end of 2024.

Penneos guidance for 2024 is based on several

assumptions outlined below and it is based on currency

exchange rates per end of 2023.

Continued market conditions

In 2024, we expect a continuation of the market conditions

that we observed throughout 2023. This relates to an

expected continued high demand for our products due

to increasing AML legislation and inspections, as well as

further digitalisation in the markets we operate. However,

we also expect that the cautious buying behavior will

continue and has become the new normal.

Unchanged strategic priorities

Penneo remains condent in its current growth strategy,

despite uncertain market conditions and increased

competition. We will continue to invest in our Penneo

platform, maturing our organisation and promoting

operational excellence supporting the continued

geographic expansion of Penneo Sign and Penneo KYC.

In 2024, we intend to leverage the momentum we have

seen in Belgium during 2023. In addition, we intend to

enter Germany. However, we have only assumed a

relatively small share of new revenue from Germany in

our 2024 guidance, as it will take time to gain traction and

adapt our solutions to local rules and legislation.

We expect to invest available cash, while continuously

ensuring we have a clear path towards a cash-positive

position. At the end of 2024, we expect to reach a position

where our ARR exceeds our overall cost base, positioning

us to achieve at least a cash-neutral status yearly by 2025,

aligned with current projections.

Continued improvement of demand generation

capabilities

During 2023 we have improved our demand generation

and sales capabilities resulting in a larger number of

new customers added compared to previous years. We

expect this trend to continue in 2024, but we might see

a lower percentage of customer growth compared to

2023, outweighed by an increase in the average deal

size. In addition, we expect to see a larger percentage of

revenue from our KYC solution in 2024, as we mature the

product further, and increasingly promote and sell our

two solutions together. Finally, we are investing in further

localisation of our product and go-to-market eorts

across all of our existing markets.

Low churn and continued uplift

In 2024, we expect a customer churn rate below the 5%

benchmark we have set as our company goal based on

historical performance. We also expect a continued uplift

from our customer base, based on increased usage of the

Penneo platform (Sign and KYC) and revenue from cross-

selling (Penneo KYC to Sign customers and vice versa).

However, we do not anticipate a net positive impact on

ARR uplift from our annual pricing adjustment, given that

the overall ination rate has returned to a low level. This

is a change compared to 2023.

Forward-looking statements

Statements about the future expressed in the annual

report reect Penneo’s current expectations for

future events and nancial results. The nature of

these statements is aected by risk and uncertainties.

Therefore, the company’s actual results may dier from

the expectations expressed in the management report.

Any consequences of the outcome of the extraordinary

general meeting, to be held on 29 February 2024, have

not been factored into the guidance for 2024.

Guidance methodologyManagement’s review

Penneo Annual report 2023 20

Guidance

methodology

ARR guidance

For 2024, our projection of Annual Recurring Revenue

(ARR) is based on a new approach since we have

transitioned to a Revenue Operation Model. As part

of this model, Penneo’s sales, marketing, product

development and customer success teams have

begun working more closely together to identify

opportunities to drive ARR growth. This includes

setting concrete objectives and dening supporting

projects that are needed to accomplish them. While our

historical performance remains a foundational aspect

of our forecast, it is now enhanced with this structured

methodology.

This ARR projection is then reviewed and discussed

with the commercial teams and Executive Management,

who review it based on their knowledge of our current

pipeline as well as their specic qualitative knowledge

of the current conditions across Penneo’s dierent

markets.

Lastly, the adjusted forecast and the underlying drivers

are presented to the Board of Directors for nal

approval.

EBITDA guidance

In 2024, Penneo is set to reach a signicant milestone

with the rst yearly positive EBITDA result since 2019.

This is in line with our plans and strategic intention to

reach protability and reinvest a signicant part of our

liquidity in initiatives that are able to drive growth in

both the short and long term. This includes Penneo’s

ongoing product development, where substantial

investments are planned in the coming years.

Having said this, our investment approach will be

calibrated on an ongoing basis to make sure that our

growth investments are aligned with our revenue

growth and available cash reserves.

Penneo’s EBITDA expectations continue to be closely

correlated with the projections for ARR. This includes

maintaining a strategic approach where, based on

historical data, the costs of acquiring new customers

are expected to be outweighed by the subscription

revenue generated from these customers over time.

However, our growth investments will be carried out

within the limits of our cash ow. This strategy includes

a dynamic approach to hiring and cost management,

closely aligned with the development of our ARR. We

monitor our ARR on a monthly basis, adjusting our

costs accordingly to ensure that changes in expected

ARR do not directly impact our EBITDA.

This exible approach allows us to respond to

uctuations in ARR, scaling our operations up or down

as required and in accordance with our cash ow and

long-term business strategy.

Thus, while 2024 marks a pivotal year for Penneo

with a positive EBITDA forecast, our focus remains

steadfast on sustainable growth and prudent nancial

management, guided by our long-term vision and

strategic objectives.

Penneo Annual report 2023 21

Penneo is pursuing a two-fold growth strategy aimed at creating more

growth in our existing markets, while simultaneously expanding to new

geographical markets across Europe.

This eort is supported by three primary investment streams:

In existing markets, our focus is

to target the broader auditing and

accounting industry and other

AML regulated B2B industries.

Furthermore, through the

auditors, Penneo is exposed to

the auditors’ clients locally and

gl ob ally, c rea t ing a b asi s for f ur t he r

expansion to other industries and

customer segments.

Step Step

Penneo is a Danish Software-as-a-Service (SaaS)

company and a European leader in signing and

know-your-customer workow software for the au

diting and accounting industry.

Management’s review Penneo at a glance

Our strategy Our equity story

Upsell Penneo KYC

product to auditor

and accounting

customers

Penetrate AML

regulated B2B

industries with

Penneo’s KYC and

Sign products

Expand through the

audit and accounting

vertical to become

the preferred solution

for auditors in Europe

Outside existing markets, our

approach is to attract auditing and

accounting companies by capitalising

on the product market t and strong

relations and referral opportunities

we have with larger auditing and

accounting customers

1 2

The combination of a strong subscription-based model with growing ARR

from both existing and new customers, low yearly churn, high contribution

margin, and attractive possibilities in both existing and new markets gives

us a strong foundation for growth. Particularly since our business model

is scalable and we operate in high-growth markets driven by increasing

digitalisation and regulatory demands.

We provide a scalable software platform that enables Anti-Money-

Laundering regulated B2B companies to optimise and automate critical

business workows throughout the client lifecycle, from customer

onboarding to document signing and continual risk assessment.

Growing digitisation in Europe and the network eects provided

by the large audit and accounting customers are powerful

enablers for Penneo to become the preferred solution for AML-

regulated business-to-business companies throughout Europe.

Our key differentiators

Our view on trust

Penneo Annual report 2023 22

Trust is a foundational principle that holds all business relationships

together because it plays a pivotal role in establishing and maintaining

positive connections and collaborations.

In today’s digital world, however, trust no longer relies on face-to-face

interactions and personal relationships. In this context, establishing trust

is far more complex due to the absence of physical interactions and the

prevalence of digital fraud.

Penneo’s platform for signing and KYC workows is trusted by the world’s

most respected auditing companies and complies with the highest privacy

and security standards. In this way, it delivers positive experiences,

consistency, transparency, and reliability over time.

As the world continues to transform digitally, Penneo exists to make sure

our trust remains intact.

Because without trust,

there is no business.

Why leading AML-regulated B2B companies choose Penneo Why we exist

Created to connect

Penneo seamlessly integrates with existing core applications and

tools used by auditors and accountants today.

Built on trust

Penneo places trust and security at the heart of our products and

our way of working. Because without trust, there is no business.

Driven to simplify

Penneo combines digital signing and KYC in a single platform,

streamlining previously disconnected processes.

Trusted by the best

The world’s most trusted and respected auditing companies, trust

Penneo.

Designed for workows

Work that doesn’t ow, doesn’t work - which is why Penneo is

designed to support the workows of AML-regulated B2B businesses.

Penneo at a glanceManagement’s review

Penneo Annual report 2023 23

Our marketsOur history

Denmark

Norway

Sweden

Belgium

Penneo was founded in 2014 by by a group of Danish entrepreneurs with

a shared ambition of reducing the “hassle to get documents signed” by re-

placing pen and paper with a digital alternative.

Today Penneo has a strong presence in Denmark, Norway, Sweden, and

Belgium. These four countries have our main commercial focus. In addition,

we have customers in Finland, Germany, and other countries.

The Nordic markets are some of the most digitalised in Europe and have by

far the highest adoption of eIDs. Despite a strong foothold among auditors

and accountants, Penneo still has considerable potential to penetrate our

exis ting market s f ur ther wi th our combined plat for m oering by focusing on

other business-to-business AML-regulated industries with similar complex

client lifecycle needs as the accountant and auditing industry.

In line with the broader digitalisation of Europe, including the adoption of

national eIDs, Penneo is also well positioned to gain market share outside

of our existing markets.

Today, Penneo has evolved into much more

than just a digital signature tool. With our two

solutions, we ensure secure and convenient

digital interactions with digital signing featuring

automated signing ows and identity verication,

as well as automated client onboarding/KYC

processes with risk assessment, record keeping,

and continuous data monitoring in compliance

with GDPR and AML regulation.

customers

2,800+

Early on, auditors became a strategic focus for

Penneo, and the company has evolved together

with the increasing complexit y of workows and

requirements related to this industry. However,

as companies in many other industries carry out

similar workows and are subject to the same

regulation, Penneo is now helping more than

2,800 customers across many industries with

automating recurring administrative tasks. We

are headquartered in Copenhagen and currently

employ more than 120 people.

Management’s review Penneo at a glance

Analyst coverageManagement’s review

Penneo Annual report 2023 24

Analyst coverage

Penneo A/S is followed by the analysts listed below. Please note that any opinions, estimates or forecasts regarding

Penneo’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or

predictions of Penneo A/S or its management. Penneo A/S does not by its reference below or distribution imply its

endorsement of or concurrence with such information, conclusions or recommendations.

Company information

Penneo is a SaaS company originally established to

help companies with digital signatures. Penneo was

founded by a group of Danish entrepreneurs with

a shared ambition to reduce the “hassle of getting

documents signed” by replacing pen and paper with a

digital alternative. This new digital “pen” (Pen-neo) was

launched in 2014.

Today, Penneo transforms the way B2B companies in

anti-money laundering regulated industries can meet

growing compliance demands. With Penneo’s signing

and KYC workow platform, customers can optimize

and automate critical business workows throughout

their client lifecycle, from customer onboarding to

document signing and ongoing risk assessment.

This empowers them to spend less time on quality

assurance, compliance and control freeing up time for

more value adding business tasks.

ANNUAL GENERAL

MEETING

April 10, 2024

Q1 REPORT H1 REPORT Q3 REPORT

May 23, 2024 August 28, 2024 November 20, 2024

2024 Financial calendar

With an open Application Programming Interface

(API), integrating existing applications to Penneo is

easy, and we are already trusted by 2900 companies

- including the world’s leading auditing and accounting

organizations.

For more information about Penneo please visit:

https://penneo.com/investors/

Governance Section Company information and 2024 Financial Calendar

45Penneo Annual report 2023

Financial review

Penneo Annual report 2023 46

Financial review CFO statement

CFO statement

In April 2022, Penneo raised 59M DKK as part of its listing

on Nasdaq Copenhagen. The original plan was to reach

a position with positive liquidity from our operations

in 2024. This was reached already in the nancial year

2023, where we achieved 7.5M DKK in positive cash ow

from operating activities, and therefore I would like to

outline what led us to achieve this positive milestone

and also lay out our expectations for the coming years.

ARR growth and negative free cash ow in 2023

In 2023, we anticipated a ratio between Annual Recurring

Revenue (ARR) growth and negative free cash ow of

approximately 1.3 to 1.4 for the entire nancial year,

but successfully achieved 0.8. The primary reason for

this was an improved management of our net working

capital, a milestone we initially projected to reach in

2024. The improved management of net working capital

was due to invoicing in early December 2023 and the high

rate of prompt payments we received before end-year.

This lowered the net amount on accounts receivable to

a level that was lower than the total invoiced amount for

December, including receivables billed prior to Q4-2023.

Furthermore, we have also improved management

of vendor payments which has positively inuenced

our accounts payable. Viewed in combination this has

improved the operating liquidity that is available to us.

Considering that we achieved our best ever Q4 with a

total ARR growth of 6.8M DKK, this is a result we are very

pleased with.

Free cash ow expectation for 2024

Free cash ow consists of two main components:

Cash ow from investing activities and cash ow from

operating activities.

Cash ow from investing activities is predominantly

made up of product development expenses. These costs

are not included in the prot and loss statement and in

2023 they remained at the same level (on average 5.7M

DKK) on a quarterly basis. Looking forward, we anticipate

the same level of quarterly investment in 2024.

Regarding our cash ow from operating activities, we

anticipate signicant seasonal variations during 2024.

We expect that cash ow from operating activities will

be negative in Q1-2024 and Q3-2024. This is due the

seasonal dip that we typically observe in recognized

revenue during these quarters. In addition we expect

to pay back employee taxes postponed from August

2023 to February 2024 and this will also impact Q1-2024

negatively by 2.4M DKK. The cash ow in Q2-2024 is

expected to be slightly negative or roughly neutral and

in Q4-2024 (similar to Q4-2023), we predict a positive

cash ow from operations driven by the peak season in

terms of when we invoice our customers. However, in

Q4-2024, we do not expect to receive a tax credit facility

based on the income year 2023, which will result in a

reduced cash ow of 5.5M DKK when compared year-

over-year. Despite this we still expect a strong positive

cash ow in Q4-2024.

Cash position going forward

At the end of 2023, Penneo’s cash position was 42.2M

DKK. As we move forward, our approach is to invest the

cash that is available and continuously ensure that we

have a clear path to a cash positive position given the

cash available. For 2024, we expect a decrease in our

cash reserves, resulting in a negative cash ow for the

year. This is mainly due to our investments in product

development. By the end of 2024, we expect to reach a

position where our ARR exceeds our overall cost base.

In other words, for the nancial year 2025, we foresee

that our operational income will cover these product

development costs, which should bring our overall cash

ow to either a neutral or a positive state. It’s important

to note that we have seasonality in our cash ow which is

why one isolated quarter might be negative and another

positive. In general, this is why, when we refer to cash

ow, we refer to a period of 12 months.

Penneo Annual report 2023 47

Key gures

Financial review Key gures

DKK 2023-Q4 2023-Q3 2023-Q2 2023-Q1 2022-Q4 2022-Q3 2022-Q2 2022-Q1

Revenue 32,567,558 15,904,086 21,934,250 18,043,494 25,388,533 14,748,751 17,565,608 14,354,746

Cost of sales (2,975,526) (3,374,083) (3,116,138) (2,897,461) (3,563,534) (2,834,338) (3,187,849) (2,936,584)

Gross prot 29,592,032 12,530,003 18,818,112 15,146,033 21,824,999 11,914,413 14,377,759 11,418,162

91% 79% 86% 84% 86% 81% 82% 80%

Other external expenses (6,102,025) (4,654,858) (5,571,369) (4,612,033) (4,419,983) (4,820,340) (4,556,908) (4,025,980)

Sta costs (14,469,437) (15,321,261) (16,882,535) (17,169,609) (14,185,712) (11,764,446) (13,489,501) (13,399,421)

EBITDA* 9,020,570 (7,446,116) (3,635,792) (6,635,609) 3,219,304 (4,670,373) (3,668,650) (6,007,239)

DKK 2023 2022

Revenue 88,449,388 72,057,638

Cost of sales (12,363,208) (12,522,305)

Gross prot 76,086,180 59,535,333

86% 83%

Other external expenses (20,940,285) (17,823,211)

Sta costs (63,842,842) (52,839,080)

EBITDA* (8,696,947) (11,126,958)

*EBITDA does not include income and costs categorised as “Other income” and “Other operating expenses” on page 57.

Penneo Annual report 2023 48

Key gures

Financial review Key gures

M DKK 2023 2022 2021 2020 2019

Financial performance

Annual recurring revenue

89.3 71.0 55.5 37.0 25.0

Revenue 88.4 72.1 54.3 35.5 27.6

Gross prot 76.1 59.5 44.6 28.5 22.2

Operating prot (23.1) (23.5) (22.7) (16.2) (2.2)

Net nancials (1.6) (2.3) (1.4) (1.0) (0.5)

Net prot/(loss) (24.7) (20.3) (18.6) (12.8) (2.7)

Purchase of property, plant and equipment 0.0 0.1 0.7 0.6 0.2

Purchase of intangible assests 22.6 19.1 14.8 23.9 3.4

Trade receivables 15.8 20.0 11.8 8.7 3.5

Free cash ow (15.3) (29.4) (23.6) (22.2) (5.7)

Equity 94.1 105.5 57.0 57.6 9.0

Total assets 140.7 152.0 104.5 95.9 39.4

Financial ratios

ARR growth 26% 28% 50% 48% 39%

Revenue growth 23% 33% 53% 29% 21%

Gross margin 86% 83% 82% 80% 81%

Operating margin (26%) (33%) (42%) (46%) (8%)

Solvency ratio 67% 69% 55% 60% 23%

Asset turnover 0.6 0.6 0.5 0.5 0.9

Trade receivables turnover ratio 5.0 4.5 5.4 6.1 5.8

ARR growth vs FCF

(0.8) (1.9) (1.3) (1.8) (0.8)

Adjusted ARR growth vs FCF

(0.8) (1.7) (1.3) (1.7) (0.8)

Annual recurring revenue is a non-IFRS Accounting Standard nancial measurement.

The growth rate represents the cost of increasing Annual Recurring Revenue by 1 DKK.

Adjusted for the cost that is associated with the listing on both the First North and the Copenhagen Main Market (2.3M DKK in 2020 and 2.4M DKK in 2022).

Penneo Annual report 2023 49

Financial review Financial commentary

Financial commentary

Recognized revenue

Recognized revenue increased by 23% in 2023 com-

pared to 2022. Revenue from the Belgian market in-

creased by 183% compared to 2022 due to Penneo’s

continued increased focus on internationalization.

The Danish market grew by 19% in 2023 compared to

2022.

The deviation between ARR and recognized revenue is

mainly caused by the following two reasons.

1. Recognized revenue from signature packag-

es are not equal to the ARR from signatures,

since the ARR is calculated by taking the past 12

months of usage multiplied by the signature price.

2. Revenue is recognized when outlined performance

obligations are met. Please refer to note 1. Account-

ing policies for further explanation.

Cost of sales

Cost of sales has decreased by 1% in 2023 compared to

2022. The decrease is caused by an optimized server

cost structure, as well as spending less money on the

Danish e-IDs combined.

As a result of the increase in revenue and decrease in

cost of sales the gross prot margin has increased from

83% in 2022 to 86% in 2023.

Other external expenses

Other external expenses have increased by 17% in 2023

compared to 2022. This is a result of the investments

we have made to improve the way Penneo operates

and to support the company’s growth and interna-

tionalization. It includes for example marketing costs,

software costs and the cost of consultants working for

Penneo such as consultants responsible for scheduling

meetings with potential new customers.

Sta costs

Sta costs have increased by 21% in 2023 compared

to 2022. The increase is driven primarily by full time

equivalents which has increased from 85 in 2022 to 104

in 2023. Furthermore, Penneo has also invested in re-

cruiting specialists and resources devoted to manage-

ment to strengthen and professionalize its organiza-

tion further.

Intangible assets

Intangible assets have increased by 20% in 2023 com-

pared to 2022 which is caused by the growing and con-

tinuous investment into development projects.

Trade receivables

In 2023, there was a 21% decrease in trade receivables

compared to the previous year. This decline is attribut-

ed to enhanced attention towards working capital man-

agement and improved eciency in managing debtors.

Additionally, December 2023 marked the highest in-

voicing month ever for Penneo, showing a 32% increase

from December 2022.

Income tax receivables

Income tax receivables consist of tax credit related to

development projects from the income year of 2022.

Penneo does not expect to apply for tax credit for the

income year of 2023.

Other payables (current)

Other payables have increased by 30% in 2023 com-

pared to 2022. The increase is primarily due to a post-

ponement of employee taxes for August which are due

in February 2024.

Cash ow from operating activities

Net cash ow from operating activities resulted in an

inow of 7.5M DKK in 2023 compared to an outow of

10.0M DKK in 2022. Net cash ow from operating activ-

ities is related to the increase in the operations related

costs (e.g. sta costs and increased marketing activi-

ties) that are being invested in the international expan-

sion of Penneo. In 2023 Penneo has enhanced attention

towards working capital management and improved ef-

ciency in managing debtors which is why the working

capital has resulted in an inow of 7.4M DKK in 2023

compared to an outow of 7.8M DKK in 2022.

Cash ow from investing activities

Net cash ow from investing activities resulted in an

outow of 22.8M DKK in 2023 compared to an outow

of 19.4M DKK in 2022. The increase is caused by an in-

creased focus and investment in the continued devel-

opment and enhancement of Penneo’s products.

Cash ow from nancing activities

Net cash ow from nancing activities resulted in an

inow of 4.4M DKK in 2023 compared to an inow of

57.2M DKK in 2022. The decrease is caused by the net

59M DKK capital raise in March 2022. In 2023 the net

cash ow from nancing activities primarily consisted

of exercised warrants and payments related to nan-

cial leasing.

Penneo Annual report 2023 50

Financial review Financial commentary

DKK 2023 2022

Cash ow from operating activities 7,507, 822 (10,043,589)

Cash ow from investing activities (22,846,116) (19,403,043)

Free Cash Flow (15,338,293) (29,446,632)

Cash and cash equivalents beginning of period 53,161,291 25,415,797

Free Cash Flow (FCF) (15,338,293) (29,4 46,631)

Cash Flow from nancing activities 4,400,138 57,192,126

Cash position end of period 42,223,137 53,161,291

DKK 2023-Q4 2023-Q3 2023-Q2 2023-Q1 2022-Q4 2022-Q3 2022-Q2 2022-Q1

Cash ow from operating activities 11,381,871 (585,314) (4,236,847) 9 48,112 795,552 (2,054,739) (3,542,478) (5,241,924)

Cash ow from investing activities (5,997,383) (5,838,698) (5,640,207) (5,369,828) (5,037,090) (5,198,482) (4,481,480) (4,685,991)

Free Cash Flow (FCF) 5,384,489 (6,424,012) (9,877,054) (4,421,716) (4,241,537) (7,253,221) (8,023,958) (9,927,915)

Adjusted* 0 0 0 0 0 0 2,365,758 0

Adjusted free cash ow 5,384,489 (6,424,012) (9,877,054) (4,421,716) (4,241,537) (7,253,221) (5,658,200) (9,927,915)

DKK 2023-Q4 2023-Q3 2023-Q2 2023-Q1 2022-Q4 2022-Q3 2022-Q2 2022-Q1

Cash and cash equivalents beginning

of quarter

34,873,492 40,995,085 51,034,048 53,161,291 58,336,779 65,524,735 73,378,894 25,415,797

Free Cash Flow (FCF) 5,384,489 (6,424,012) (9,877,054) (4,421,716) (4,241,537) (7,253,221) (8,023,958) (9,927,915)

Cash Flow from nancing activities 1,965,156 302,419 (161,909) 2,294,473 (933,951) 65,265 169,799 57,891,012

Cash position end on quarter 42,223,137 34,873,492 40,995,085 51,034,048 53,161,291 58,336,779 65,524,735 73,378,894

*Adjusted for the cost that is associated with the listing on both the First North and the Copenhagen Main Market (2.4M DKK in 2022)

51Penneo Annual report 2023

Financial statements

Penneo Annual report 2023 52

Statement by

Management

Copenhagen, 21 February 2024

Executive Board

CEO, Christian Stendevad

Board of Directors

Christian Sagild

Rikke Stampe Skov

Morten Kenneth Elk

Steffen Heegaard

Jakob Neua Nørgaard

The Board of Directors and Executive Board have today

considered and approved the annual report for the

nancial year 1 January 2023 – 31 December 2023 for

Penneo A/S.

The nancial statements have been prepared in

accordance with International Financial Reporting

Standards as adopted by the EU and additional

requirements of the Danish Financial Statements Act.

In our opinion, the nancial statements give a true and

fair view of Penneo’s assets, liabilities and nancial

position as of 31 December 2023 and of the results of

Penneo’s activities and cash ows for the nancial year

1 January 2023 – 31 December 2023. We believe that

the management commentary contains a fair review

of the aairs and conditions referred to therein. The

annual report is submitted for adoption at the Annual

General Meeting which is scheduled to be held on 10

April 2023.

In our opinion, the annual report of Penneo A/S for

the nancial year 1 January to 31 December 2023, with

the le name Penneo-Annual-Report-2023, has been

prepared, in all material respects, in compliance with

the ESEF Regulation.

Financial statements

Statement by Management

Penneo Annual report 2023 53

Independent

Auditor’s Report

To the shareholders of PENNEO A/S

Our opinion

We have audited the nancial statements of Penneo

A/S for the nancial year 1 January 2023 – 31 December

2023, which comprise the income statement, statement

of nancial position, statement of changes in equit y and

notes, including a summary of signicant accounting

policies, statement of comprehensive income and cash

ow statement. The nancial statements are prepared

in accordance with IFRS Accounting Standards as

adopted by the EU and additional requirements of the

Danish Financial Statements Act.

In our opinion, the nancial statements give a true

and fair view of the Company’s nancial position at 31

December 2023, and of the results of its operations

and cash ows for the nancial year 1 January 2023 –

31 December 2023 in accordance with IFRS Accounting

Standards as endorsed by the EU and additional

requirements under the Danish Financial Statements

Act.

Our opinion is consistent with our Audit Book

comments issued to the Audit Committee and the

Board of Directors

Financial statements

Basis for opinion

We conducted our audit in accordance with

International Standards on Auditing (ISAs) and the

additional requirements applicable in Denmark.

Our responsibilities under those standards and

requirements are further described in the Auditor’s

responsibilities for the audit of the nancial statements

section of this auditor’s report. We are independent of

the Company in accordance with the International Ethics

Standards Board for Accountants’ International Code

of Ethics for Professional Accountants (IESBA Code)

and the additional ethical requirements applicable

in Denmark, and we have fullled our other ethical

responsibilities in accordance with these requirements

and the IESBA Code. We believe that the audit evidence

we have obtained is sucient and appropriate to

provide a basis for our opinion.

To the best of our knowledge and belief, we have not

provided any prohibited non-audit services as referred

to in Article 5(1) of Regulation (EU) No 537/2014.

We were appointed auditors of Penneo A/S for the rst

time on 29 December 2019, for the nancial year 2019.

We have been reappointed annually by decision of the

general meeting for a total contiguous engagement

period of 5 years up to and including the nancial year

2023.

Key audit matters

Key audit matters are those matters that, in our

professional judgement, were of most signicance in

our audit of the nancial statements for the nancial

year 1 January 2023 – 31 December 2023.

These matters were addressed in the context of our

audit of the nancial statements as a whole, and in

forming our opinion thereon, and we do not provide a

separate opinion on these matters.

Revenue recognition

The recognition of revenue is subject to the inherent

complexities in the software industry. We focused on

this area due to the judgemental and complex nature

of revenue recognition, which include identication of

performance obligations in the contracts including the

associated timing of the revenue recognition. Refer to

note 3 “Critical accounting judgements and key sources

of uncertainty” and note 5 “Revenue” in the Financial

Statements.

How the matter was addressed in our audit

We performed risk assessment procedures to obtain an

understanding of the IT systems, business processes

and relevant controls over the Company’s revenue

cycle. For revenue recognized, we evaluated and

challenged Management’s assessment that all benets

for the licenses have been transferred.

For revenue recognized at a point in time, we evaluated

and challenged Management’s documentation for

the right to payment and that the licenses have been

transferred and made available to the customer.

For revenue recognized over time we evaluated and

challenged Management’s assessment that customers

over time consumes and benet from the services

delivered. We also assessed the outcome of prior

period estimates.

Independent Auditor’s Report

Penneo Annual report 2023 54

Financial statements

Statement on the management review

Management is responsible for the management review.

Our opinion on the nancial statements does not cover

the management review, and we do not express any

form of assurance conclusion thereon.

In connection with our audit of the nancial statements,

our responsibilit y is to read the management review and,

in doing so, consider whether the management review

is materially inconsistent with the nancial statements

or our knowledge obtained in the audit or otherwise

appears to be materially misstated.

Moreover, it is our responsibility to consider whether the

management review provides the information required

by relevant law and regulations.

Based on the work we have performed, we conclude

that the management review is in accordance with

the nancial statements and has been prepared in

accordance with the requirements by relevant law

and regulations. We did not identify any material

misstatement of the management review.

Management’s responsibilities for the Financial

Statements

Management is responsible for the preparation of

nancial statements that give a true and fair view

in accordance with IFRS Accounting Standards as

endorsed by the EU and additional requirements of

the Danish Financial Statements Act as well, and for

such internal control as Management determines

is necessary to enable the preparation of nancial

statements that are free from material misstatement,

whether due to fraud or error. In preparing the nancial

statements, Management is responsible for assessing

the Company’s ability to continue as a going concern,

for disclosing, as applicable, matters related to going

concern, and for using the going concern basis of

accounting in preparing the nancial statements unless

Management either intends to liquidate the Entity or to

cease operations, or has no realistic alternative but to

do so.

Auditor’s responsibilities for the audit of the

Financial Statements

Our objectives are to obtain reasonable assurance

about whether the nancial statements as a whole

are free from material misstatement, whether due to

fraud or error, and to issue an auditor’s report that

includes our opinion. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs and the additional

requirements applicable in Denmark will always detect

a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered

material if, individually or in the aggregate, they could

reasonably be expected to inuence the economic

decisions of users taken on the basis of these nancial

statements.

As part of an audit conducted in accordance with

ISAs and the additional requirements applicable in

Denmark, we exercise professional judgement and

maintain professional scepticism throughout the audit.

We also:

• Identify and assess the risks of material

misstatement of the nancial statements, whether

due to fraud or error, design and perform audit

procedures responsive to those risks, and obtain

audit evidence that is sucient and appropriate

to provide a basis for our opinion. The risk of

not detecting a material misstatementresulting

from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations,

or the override of internal control.

• O b t a i n a n u n d e r s t a n d i n g o f i n t e r n a l c o n t r o l r e l e v a n t

to the audit in order to design audit procedures

that are appropriate in the circumstances, but

not for the purpose of expressing an opinion on

the eectiveness of the Entity’s internal control.

• Evaluate the appropriateness of accounting policies

u s e d a n d t h e r e a s o n a b l e n e s s o f a c c o u n t i n g e s t i m a t e s

andrelated disclosures made by Management.

• Conclude on the appropriateness of Management’s

use of the going concern basis of accounting in

preparing the nancial statements, and, based on

the audit evidence obtained, whether a material

uncertainty exists related to events or conditions

th at ma y c as t signi  ca nt do ubt on th e En ti t y ’ s abilit y

to continue as a going concern. If we conclude that

a material uncertainty exists, we are required to

draw attention in our auditor’s report to the related

Independent Auditor’s Report

Penneo Annual report 2023 55

Financial statements

disclosures in the nancial statements or, if such

disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence

obtained up to the date of our auditor’s report.

However, future events or conditions may cause

the Entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and

content of the nancial statements, including the

disclosures in the notes, and whether the nancial

statements represent the underlying transactions

and events in a manner that gives a true and fair view.

We communicate with those charged with governance

regarding, among other matters, the planned scope

and timing of the audit and signicant audit ndings,

including any signicant deciencies in internal control

that we identify during our audit.

We also provide those charged with governance with

a statement that we have complied with relevant

ethical requirements regarding independence, and to

communicate with them all relationships and other

matters that may reasonably be thought to bear on our

independence, and, where applicable, safeguards put

in place and measures taken to eliminate threats.

From the matters communicated with those charged

with governance, we determine those matters that

were of most signicance in the audit of the nancial

statements of the current period and are therefore

the key audit matters. We describe these matters in

our auditor’s report unless law or regulation precludes

public disclosure about the matter.

Report on compliance with the ESEF Regulation

As part of our audit of the nancial statements of

Penneo A/S we performed procedures to express an

opinion on whether the annual report of Penneo A/S

for the nancial year 1 January 2023 – 31 December

2023 with the le name Penneo-Annual-Report-2023 is

prepared, in all material respects, in compliance with

the Commission Delegated Regulation (EU) 2019/815 on

the European Single Electronic Format (ESEF Regulation)

which includes requirements related to the preparation

of the annual report in XHTML format.

Management is responsible for preparing an annual

report that complies with the ESEF Regulation. This

responsibility includes the preparing of the annual

report in XHTML format.

Our responsibility is to obtain reasonable assurance on

whether the annual report is prepared, in all material

respects, in compliance with the ESEF Regulation based

on the evidence we have obtained, and to issue a report

that includes our opinion. The procedures consist of

testing whether the annual report is prepared in XHTML

format.

In our opinion, the annual report of Penneo A/S for the

nancial year 1 January 2023 – 31 December 2023 with

the le name Penneo-Annual-Report-2023 is prepared,

in all material respects, in compliance with the ESEF

Regulation.

Copenhagen, 21 February 2024

Deloitte

Statsautoriseret Revisionspartnerselskab

Business Registration No 33 96 35 56

Bjørn Winkler Jakobsen

State-Authorised Public Accountant

MNE-nr. mne32127

Henrik Wolff Mikkelsen

State-Authorised Public Accountant

MNE-nr. mne33747

Independent Auditor’s Report

56Penneo Annual report 2023

Penneo Annual report 2023 57

Statement of prot or loss and other comprehensive income

Prot/Loss Note

2023

DKK

2022

DKK

Revenue 5 88,449,388 72,057,638

Cost of sales (12,363,208) (12,522,305)

Gross prot 76,086,180 59,535,333

Other external expenses (20,940,285) (17,823,211)

Sta costs 6 (82,906,123) (67,850,914)

Capitalized sta costs 19,063,281 15,011,834

Other income 44,785 44,785

Other operating expenses

(2,365,758)

Depreciation, amortisation, impairment 8 (14,446,523) (10,012,975)

Operating prot/(loss) (23,098,685) (23,460,907)

Financial income 9 483,033 122,528

Financial expenses 10 (2,118,410) (2,420,728)

Prot/(loss) before tax (24,734,062) (25,759,107)

Tax for the year 11

5,500,000

Prot/(loss) for the year (24,734,062) (20,259,107)

Total comprehensive income for the year (24,734,062) (20,259,107)

Earnings per share, basic (EPS) 18 (0.75) (0.65)

Earnings per share, diluted (DEPS) 18 (0.75) (0.65)

Financial statements

Penneo Annual report 2023 58

Statement of nancial position

Assets Note

31.12.2023

DKK

31.12.2022

DKK

Intangible assets 12 68,387,457 57,012,359

Property, plant and equipment 13 804,988 1,094,886

Right-of-use assets 14 9,719,849 11,602,470

Deposits 15 1,677,045 1,439,174

Total non-current assets 80,589,339 71,148,888

Trade receivables 16 15,837,505 19,980,670

Income tax receivables 11 0 5,500,000

Other receivables 1,734 1,585

Prepayments 2,097,320 2,198,270

Cash 42,223,136 53,161,291

Total current assets 60,159,696 80,841,817

Total assets 140,749,034 151,990,705

Financial statements

Penneo Annual report 2023 59

Statement of nancial position

Liabilities Note

31.12.2023

DKK

31.12.2022

DKK

Share capital 18 681,825 642,933

Reserve for development expenditure 53,397,890 43,224,973

Retained earnings 20,835,341 44,232,570

Treasury shares 3,431 4,477

Other capital reserves 19 19,170,233 17,396,193

Total equity 94,088,720 105,501,145

Interest bearing liabilities 20 12,972,425 10,699,587

Provisions 21 466,114 454,302

Lease liabilities 14 7,481,513 9,626,100

Other payables 2,548,217 2,442,713

Contract liabilities 5 313,496 358,281

Total non-current liabilites 23,781,764 23,580,983

Contract liabilities 5 5,332,142 5,104,931

Lease liabilites 14 3,142,095 2,835,660

Trade payables 2,898,440 2,691,826

Other payables 11,189,098 8,606,762

Interest bearing liabilities 20 316,775 3,669,397

Total current liabilities 22,878,550 22,908,576

Total liabilities 46,660,314 46,489,559

Total equity and liabilites 140,749,034 151,990,705

Financial statements

Penneo Annual report 2023 60

Statement of changes in equity

2023

Share capital

DKK

Reserve for

development

expenditure

DKK

Retained earnings

DKK

Treasury shares

DKK

Other capital

reserve

DKK

Total

DKK

Equity beginning of 2023 642,933 43,224,973 44,232,570 4,477 17,396,193 105,501,145

Net prot/(loss) for the period (24,734,062) (24,734,062)

Excercise of warrants 38,892 10,227,591 (1,585,337) 8,681,146

Transaction costs (44,800) (44,800)

Transfer to reserves 10,172,917 (10,172,917)

Transfer of shares as a part of Employee

Share Scheme

1,326,959 (1,046) (1,325,914)

Share-based payments 4,685,291 4,685,291

Equity end of 2023 681,825 53,397,890 20,835,341 3,431 19,170,233 94,088,720

2022

Share capital

DKK

Reserve for

development

expenditure

DKK

Retained earnings

DKK

Treasury shares

DKK

Other capital

reserve

DKK

Total

DKK

Equity beginning of 2022 542,579 30,600,906 12,050,329 7,177 13,842,673 57,043,664

Net prot/(loss) for the period (20,259,107) (20,259,107)

Excercise of warrants 10,770 2,790,926 (457,521) 2,344,175

Capital increase 89,584 61,499,471 61,589,055

Transaction costs (3,659,841) (3,659,841)

Transfer to reserves 12,624,067 (12,624,067) 0

Treasury shares transfered as consideration

in a business combination

3,001,826 (1,826) (3,000,000) 0

Transfer of shares as a part of Employee

Share Scheme

1,433,033 (874) (1,432,159) 0

Share-based payments 8,443,200 8,443,200

Equity end of 2022 642,933 43,224,973 44,232,570 4,477 17,396,193 105,501,145

Financial statements

Penneo Annual report 2023 61

Cash ow statement

Note

2023

DKK

2022

DKK

Cash flows from operating activities 7,507,822 (10,043,589)

Operating profit/loss (23,098,685) (23,460,907)

Amortisation, depreciation and imparment losses 14,446,523 10,012,975

Share-based payment expense 4,685,291 8,443,200

Other income (44,785) (44,785)

Changes in working capital 17 7,365,631 (7,775,213)

Income taxes received 5,500,000 4,756,084

Financial income received 483,033 122,528

Financial expenses paid (1,829,185) (2,097,471)

Cash flows from investing activities (22,846,116) (19,403,043)

Acquisition etc, of intangible assets (22,563,114) (19,149,425)

Acquisition etc, of property, plant and equipment (45,131) (103,386)

Deposits (237,871) (150,232)

Cash flows from financing activities 4,400,138 57,192,126

Repayment of borrowings (1,079,785) (328,668)

Payment of principal portion of lease (3,156,423) (2,752,596)

Transaction costs from capital increase (44,800) (3,659,841)

Cash increase from capital 8,681,146 63,933,231

Cash and cash equivalents beginning 1 January 53,161,291 25,415,797

Net cash flow (10,938,155) 27,745,494

Cash and cash equivalents 31 of December 42,223,137 53,161,291

Financial statements

Penneo Annual report 2023 62

Notes

Financial statements

Notes

1. Accounting policies 63

2. Adoption of new and amended standards 68

Critical accounting judgements and key

sources of estimation uncertainty

4. Segment information 69

5. Revenue 70

6. Sta costs 71

7. Share-based payments 72

Depreciation, amortisation and

impairment

9. Financial income 77

10. Financial expenses 77

11. Tax for the year 78

12. Intangible assets 80

13. Property, plant and equipment 83

14. Leases 84

15. Deposits 85

16. Trade receivables 86

17. Working capital changes 86

18. Share capital and earnings per share 87

19. Other capital reserves 88

20. Interest-bearing liabilities 88

21. Provisions 90

22. Financial risks 91

23. Liabilities arising from nancing activities 94

24.

Guarantees, contigent liabilities and

collateral

25. Business combinations 95

26. Fee to the auditor 95

27. Related parties 96

28. Events after the reporting period 96

Penneo Annual report 2023 63

Financial statements

Notes

1. Accounting policies

Penneo’s nancial statements have been prepared

in accordance with International Financial Reporting

Standards (“IFRS Accounting Standards”) as adopted by

the EU and additional Danish disclosure requirements for

the nancial statements of reporting class D enterprises

cf. the Danish Executive Order on Adoption of IFRS

Accounting Standards (“IFRS bekendtgørelsen“) issued

in accordance with the Danish Financial Statements Act

(“DFSA”).

Reporting under the ESEF Regulation The Commission

Delegated Regulation (EU) 2019/815 on the European

Single Electronic Format (ESEF Regulation) requires

the use of a particular electronic reporting format for

annual reports of listed companies. More specically,

the ESEF Regulation requires the annual report to

be prepared in XHTML format. Consistently with the

requirements of the ESEF Regulation, the annual report

approved by Management is an XHTML le Penneo-

Annual-Report-2023 that may be opened using standard

web browsers.

Basis of preparation

The nancial statements are presented in Danish kroner

(DKK). The nancial statements have been prepared

on a going concern basis and in accordance with the

historical cost convention, except where IFRS Accounting

Standards explicitly requires use of other values.

For the purpose of clarity, the nancial statements

and the notes to the nancial statements are prepared

using the concepts of materiality and relevance. This

means that line items not considered material in terms

of quantitative and qualitative measures or relevant to

nancial statement users are aggregated and presented

together with other items in the nancial statements.

Similarly, information not considered material is not

presented in the notes.

The accounting policies, except as described below,

have been applied consistently during the nancial year

and for the comparative gures.

Foreign currency translation

Transactions denominated in currencies other than

the functional currency are considered transactions in

foreign currency.

On initial recognition, transactions denominated in

foreign currencies are translated to the functional

currency at the exchange rates at the transaction date.

Foreign exchange rate adjustments arising between

the transaction date and at the date of payment are

recognised in the income statement under nancial

income or nancial expenses.

Monetary assets and liabilities denominated in foreign

currencies are translated at the exchange rates at the

reporting date. The dierence between the exchange

rates at the reporting date and at the date of transaction

or the exchange rate in the latest nancial statements

is recognised in the income statement under nancial

income or nancial expenses.

Income statement

Revenue

Revenue is recognised exclusive of VAT and taxes and with

deduction of any rebates given. Net revenue is allocated

to performance elements, where performance elements

are training/education, customer access to systems

agreed, delivery of any validations and certicates of

signatures and to a lesser extent support and storage.

Allocation is based on the contract with the customer

to the extent possible, but for combined contracts, an

estimate is being made for the distribution of sales

price to the performance elements. Such allocation to

performance elements is based on historical data to

the extent possible, with frequent reestimation based

on the development in data or other knowledge around

tendencies or expected development. The contracts held

by Penneo are to a huge extent combined contracts. The

main contracts contain three elements: right to use the

system, signatures and support.

Penneo has two main price models within the Sign

solution: “old” transaction based and “new” subscription

based price model. The “old” transaction based price

model which is only for customers who signed up before

2019 is recognized when the two distinct performance

obligations are met. The invoiced subscription is

recognized upfront at the start date of the subscription.

The signatures are recognized upon the specic use

since the customers have an inventory that comprises

signatures. Bought but not used signatures are deferred

according to the cost-plus a margin approach as a part

of the Contract liabilities.

Penneo Annual report 2023 64

Financial statements

Notes

The “new” subscription based price model which

comprises a fair usage is recognized according to the

subscription period by a specic percentage upfront and

the remaining amount recognized on a straight-line basis

over time. The percentage is calculated by the average

cost of signature lines as certicates on the signature

lines is the only performance element not fullled at the

start date of the subscription. Refer to note 3 for further

details.

One-time fees comprises onboarding, other consultancy

services as well as platform overuse and is recognized

upon fulllment.

Cost of sales

Cost of sales comprise costs incurred to achieve the

year’s revenue.

Other external costs

Other external expenses include expenses relating to

Penneo’s ordinary activities, including expenses for

stationery and oce supplies, marketing costs, etc.

Sta costs

Sta costs consist of salaries and wages, share-based

payments, and other benets. Salaries, share-based

payments, and other benets are recognised in the year

in which the associated services are rendered by the

employees. Contributions to dened contribution plans

are recognised in the income statement in the period

to which they relate and any contributions outstanding

are recognised in the statement of nancial position as

other liabilities.

Depreciation, amortisation and impairment losses

relating to property, plant and equipment, intangible

assets and right-of-use assets comprise depreciation

and amortisation.

Share-based payments

The Board of Directors, Management and other

employees have been granted warrants. In addition

the Company has also had an employee share scheme

where the employees were able to sign up. The warrants

as well as the share scheme are measured at fair value

at the grant date and are recognised as an expense

in sta costs over the vesting period. Expenses are

set o against equity as a consequence of the share

based payments being equity settled. Lender warrants

are measured at fair value at the grant date and are

recognised as an expense in nancial expenses over the

vesting period. Expenses are set o against equity as a

consequence of the share based payments being equity

settled.

The fair value of the warrants is measured using the

Black Scholes valuation method or other generally

accepted valuation techniques. The calculation takes

into account the terms and conditions under which the

warrants are granted.

Fair value is not subsequently remeasured. If subsequent

modications to a warrant program increase the value

of the warrants granted, measured before and after the

modication, the increase is recognised as an expense.

If the modication occurs before the end of the vesting

period the increase in value is recognised as an expense

over the period for services to be received. If the

modication occurs after the vesting date, the increase

in value is recognised as an expense immediately.

Consideration received for warrants sold are recognised

directly in equity.

Other operating income and expenses

Other operating income and other operating expenses

comprise income and expenses of a secondary nature

relative to the principal activities of Penneo.

Other nancial income

Other nancial income comprises interest income,

net capital or exchange gains on securities, payables

and transactions in foreign currencies, amortisation of

nancial assets as well as tax relief under the Danish Tax

Prepayment Scheme etc..

Impairment losses on nancial assets

Impairment losses on nancial assets comprise

impairment losses on nancial assets which are not

measured at fair value on a current basis. They are

included in the line item “depreciation, amortisation and

impairment losses”.

Other nancial expenses

Other nancial expenses comprise interest expenses,

lease interest, net capital or exchange losses on payables

and transactions in foreign currencies, amortisation of

nancial liabilities as well as tax surcharge under the

Danish Tax Prepayment Scheme, etc.

Penneo Annual report 2023 65

Financial statements

Notes

Tax

Tax on the prot/loss for the year comprises the year’s

current tax and changes in deferred tax. The tax expense

relating to the prot/loss for the year is recognised in

the income statement, and the tax expense relating to

items recognised in other comprehensive income and

directly in equity, respectively, is recognised in other

comprehensive income or directly in equity. Exchange

rate adjustments of deferred tax are recognised as part

of the adjustment of deferred tax for the year.

Current tax payable and receivable is recognised in

the balance sheet as the expected tax on the taxable

income for the year, adjusted for tax paid on account.

The current tax charge for the year is calculated based

on the tax rates and rules enacted at the balance sheet

date.

Deferred tax is calculated using the liability method

on all temporary dierences between the accounting

and taxable values of assets and liabilities. Deferred

tax assets are assessed yearly and only recognised

to the extent that it is more likely than not that they

can be utilised. Deferred tax assets, including the tax

value of tax losses carried forward, are recognised as

other non-current assets and measured at the amount

at which they are expected to be realised, either by

setting o deferred tax liabilities or by setting o tax

on future earnings within the same legal entity.

However, no deferred tax is recognised for amortisation

of goodwill disallowed for tax purposes and temporary

dierences arising at the date of acquisition that do

not result from a business combination and that do not

have any eect on prot or loss or on taxable income.

Penneo recognises deferred tax assets relating to

losses carried forward when Management nds that

these can be oset against taxable income in the

foreseeable future. An assessment is made taking into

consideration the eect of restrictions in utilisation

in local tax legislation. Future taxable income is

assessed based on budgets as well as Management’s

expectations regarding growth and opeating margin in

the coming years.

Balance sheet

Intangible assets

Goodwill

In connection with every acquisition of businesses,

goodwill and a non-controlling interest (minority) are

recognised as follows:

Goodwill relating to the entity acquired comprises a

positive dierence, if any, between the consideration

paid plus the fair value of previous held interest in the

acquiree and the fair value of the total net assets for

accounting purposes.

Goodwill is recognised in intangible assets. It is not

amortised, but reviewed for impairment once a year

and also if events or changes in circumstances indicate

that the carrying value may be impaired. If impairment

is present, the goodwill is written down to its lower

recoverable amount. Sold or liquidated entities are

recognised up to the date of disposal.

Intellectual property rights and development projects

Intellectual property rights etc. comprise development

projects completed and in progress with related

intellectual property rights, acquired intellectual

property rights and prepayments for intangible assets.

Development projects on clearly dened and identiable

products and processes, for which the technical

feasibility, adequate resources and a potential future

market or development opportunity in the enterprise

can be established, and where the intention is to

manufacture, market or apply the product or process in

question, are recognised as intangible assets.

Development costs that does not meet the criteria for

capitalization are recognised as costs in the income

statement as incurred. Following initial recognition of

the development expenditure as an asset, the asset is

carried at cost less any accumulated amortisation and

accumulated impairment losses. Amortisation of the

asset begins when development is complete and the

asset is available for use.

Acquired intangible assets are at initial recognition

measured at cost where as intangible assets acquired in

a business combination is measured at fair value.

Intangible assets are amortised over the period

of expected future benet. During the period of

development, the asset is tested for impairment

annually. For development projects protected by

intellectual property rights, the maximum period of

amortisation is the remaining duration of the relevant

rights. The amortisation periods used are 2-10 years.

Penneo Annual report 2023 66

Financial statements

Notes

Property, plant and equipment

Property, plant and equipment comprise other xtures

and ttings as well as leasehold improvements and are

measured at cost less accumulated depreciation and

accumulated impairment. Cost comprises the acquisition

price, costs directly attributable to the acquisition and

preparation costs of the asset until the time when it

is ready to be put into operation. Property, plant and

equipment are depreciated on a straight-line basis over

the expected useful lives of the nite-lived assets, which

are as follows:

Leasehold improvements – 5 years

Other xtures - 5 years

For leasehold improvements, the depreciation period

cannot exceed the contract period. Estimated useful

lives and residual values are reassessed annually. Items

of property, plant and equipment are written down to

the lower of recoverable amount and carrying amount.

Leasehold improvements are tested for impairment

if indications of impairment exist. Tangible assets are

written down to its recoverable amount, if the carrying

amount exceeds the higher of the fair value less costs to

sell and the value in use. Depreciation and impairment

charges are recognised in the income statement

Leases

When entering into an agreement, Penneo assesses

whether an agreement is a lease agreement or contains

a lease element.

The right-of-use asset is measured at cost, which is

calculated as the present value of the lease obligation

plus any direct costs related to the entering into of the

lease and prepaid lease payments. The cost also includes

an estimate of costs to be incurred by the lessee in

dismantling and removing the underlying asset.

The right-of-use asset is depreciated on a straight-line

basis over the shorter of the lease term and the useful

life of the asset.

Penneo leases properties which includes a service

element in the payments to the lessor. This service is

deducted from the lease payment when measuring the

lease obligation. Where Penneo cannot reliably separate

lease and non-lease items, it is considered a single lease

payment. Short leases with a maximum lease term of 12

months and leases where the underlying asset has a low

value are not recognised in the statement of nancial

position.

The lease term is dened as the non-cancellable period

of a lease together with periods covered by options

to extend the lease if it is reasonably certain that the

options will be exercised and periods covered by options

to terminate the lease if it is reasonably certain that

the options will not be exercised. A number of leases

contain extension and termination options in order to

guarantee operational exibility in managing the leases.

The lease obligation, which is recognised under “Lease

liabilities”, is measured at the present value of the

remaining lease payments, discounted by Penneo

incremental loan interest rate, if the implicit interest

rate is not stated in the lease agreement or cannot

reasonably be determined. The lease obligation is

subsequently adjusted if:

• The value of the index or interest rate on which the

lease payments are based changes.

• There is a change in the exercise of options to

extend or shorten the lease period due to a material

event or material change in circumstances which

are within the control of the lessee.

• The lease term is changed as a result of exercising

an option to extend or shorten the lease term.

Subsequent adjustments of the lease obligation are

recognised as a correction to the right-of-use asset.

Trade receivables

Trade receivables are measured at amortised cost less

allowance for lifetime expected credit losses.

For trade receivables, Penneo applies a simplied

approach in calculating expected credit losses (ECLs).

Therefore, Penneo does not track changes in credit

risk, but instead recognises a loss allowance based on

lifetime ECLs at each reporting date.

Penneo may also consider a nancial asset to be in

default when internal or external information indicates

that Penneo is unlikely to receive the outstanding

contractual amounts in full before taking into account

Penneo Annual report 2023 67

Financial statements

Notes

any credit enhancements held by Penneo. Trade

receivables are written o when all possible options have

been exhausted and there is no reasonable expectation

of recovery.

The cost of allowances for expected credit losses and

write-os for trade receivables are recognised in the

income statement under other external expenses.

Prepayments

Prepayments comprise incurred costs relating to sub-

sequent nancial years. Prepayments are measured at

cost.

Cash and cash equivalents

Cash comprises bank deposits.

Contract liabilities

Contract liabilities include prepayments from customers,

which comprise amounts received from customers prior

to delivery of the goods agreed or completion of the

service agreed.

Interest-bearing liabilities

Interest-bearing liabilities are measured at amortised

cost, which usually corresponds to nominal value.

Trade payables and other payables

Other payables include bonus and commission accruals,

vacation pay obligations, payroll taxes and VAT. Payables

are measured at cost.

Provisions

Provisions are recognised when Penneo has a present

obligation (legal or constructive) as a result of a past

event, it is probable that an outow of resources

embodying economic benets will be required to settle

the obligation and a reliable estimate can be made of

the amount of the obligation.

If the eect of the time value of money is material,

provisions are discounted using a current pre-tax rate

that reects, when appropriate, the risks specic to the

liability. When discounting is used, the increase in the

provision due to the passage of time is recognised as

nancial expense.

Reserves for development expenditure

Reserve for development expenditure is a reserve

mandatory by law related to development projects. The

reserve is increasing upon additions to the development

projects and decreasing upon depreciation or

impairment of the development projects. The reserve

does not hold any deferred tax as the deferred tax asset

of Penneo has not been recognized. Refer to note 11.

Other capital reserves

Other capital reserve is used to recognise the value

of equity-settled share-based payments provided to

employees, including key management personnel, as

part of their remuneration as well as lender warrants.

In addition the reserve is used for shares issued as

consideration in a business combination refer to note

25.

The reserve is decreasing upon exercise of warrants and

issuance of shares as consideration for the business

combination.

Cash ow statement

The cash ow statement is presented using the indirect

method and shows cash ows from operating, investing

and nancing activities for the year as well as Penneo’s

cash and cash equivalents at the beginning and end of

the nancial year.

Cash ows from operating activities are calculated

based on operating prot/loss, adjusted for the cash

ow eect of non-cash operating items, working capital

changes, nancial expenses paid and income tax paid.

Cash ows from investing activities comprise payments

in connection with the acquisition and sale of non-

current intangible assets, property, plant and equipment

as well as nancial assets.

Cash ows from nancing activities comprise proceeds

from borrowings, repayment of borrowings, payments

relating to leasing obligations as well as cash increase

from capital and transaction costs related to the

increase.

Cash and cash equivalents comprise cash.

Penneo Annual report 2023 68

2. Adoption of

new and amended

standards

Management has assessed the impact of new or

amended accounting standards and interpretations

(IFRS Accounting Standards) issued by the IASB and

IFRS Accounting Standards endorsed by the European

Union eective on or after 1 January 2023. Management

assessed that application of these has not had a material

impact on the nancial statements for 2023.

Furthermore, Management has assessed the impact

of new or amended accounting standards and

interpretations (IFRS Accounting Standards) issued by

the IASB that has not yet become eective. Management

does not anticipate any signicant impact on future

periods from the adoption of these amendments.

3. Critical accounting

judgements and key

sources of estimation

uncertainty

As part of the preparation of the nancial statements,

Management makes a number of accounting estimates

and assumptions as a basis for recognising and measuring

Penneo’s assets, liabilities, income and expenses as well

as judgements made in applying Penneo’s accounting

policies. The estimates, judgements and assumptions

made are based on experience gained and other factors

that are considered prudent by Management in the

circumstances, but which are inherently subject to

uncertainty and volatility.

The assumptions may be incomplete or inaccurate, and

unforeseen events or circumstances may occur for which

reason the actual results may dier from the estimates

and judgements made. The accounting policies are

described in detail in note 1 to the nancial statements

to which we refer. Management considers the following

accounting estimates and judgements to be signicant

in the preparation of the nancial statements.

Revenue

Contracts with customers often include several

components. Subscription to the platform and

certicates on signature lines constitute the main

performance obligations. The fees allocated to the

dierent performance obligations are recognized

separately.

The only performance obligation related to subscription

has been identied as the right to use the Penneo

platform which is why this is recognized upon the start

date of subscription.

Penneo uses the cost-plus a margin approach relating

to the determination of the deferred revenue relating

to the certicates on the signature lines. The residual

between the transaction price and the allocated price

for certicates on the signature lines are allocated to

the subscription to the platform. Judgment is applied

in allocating the transaction price to the dierent

performance obligations, subscription and certicates

Development costs

Penneo capitalises costs for software development

projects. Initial capitalisation of costs is based on

management’s judgement that technological and

economic feasibility is conrmed, usually when a

product development project has reached a dened

milestone according to an established project

management model. In determining the amounts to be

capitalised, management makes assumptions regarding

the expected future cash generation of the project and

the expected period of benets. At 31 December 2023,

the carrying amount of capitalised development costs

was DKK 55,532k (2022: DKK 43,497k).

Financial statements

Notes

Penneo Annual report 2023 69

Share-based payments

Estimating fair value for share-based payment trans-

actions requires determination of the most appropriate

valuation model, which depends on the terms and

conditions of the grant. This estimate also requires

determination of the most appropriate inputs to the

valuation model including the expected life of the share

option or appreciation right, volatility and dividend yield

and making assumptions about them. The assumptions

and models used for estimating fair value for share-based

payment transactions are disclosed in note 7.

Impairment of non-nancial assets

Impairment exists when the carrying value of an asset

or cash-generating unit exceeds its recoverable amount,

which is the higher of its fair value less costs of disposal

and its value in use. The fair value less costs of disposal

calculation is based on available data from binding sales

transactions, conducted at arm’s length, for similar assets

or observable market prices less incremental costs of

disposing of the asset. The value-in-use calculation is

based on a DCF model.

The cash ows are derived from the budget for the next

ten years and do not include restructuring activities that

Penneo is not yet committed to or signicant future

investments that will enhance the performance of the

assets of the CGU being tested. The recoverable amount

is sensitive to the discount rate used for the DCF model as

well as the expected future cash-inows and the growth

rate used for extrapolation purposes. These estimates

are most relevant to goodwill and other intangibles with

indenite useful lives recognised by Penneo.

The assumptions may be incomplete or inaccurate, and

unforeseen events or circumstances may occur, for which

reason the actual results may dier from the estimates

and judgements made.

4. Segment

information

For management purposes and based on internal

reporting information, Penneo is organised in only one

operating segment, as the information reported includes

operating results at a consolidated level only.

The company setup and costs related to the main nature

of the business are not attributable to any specic

revenue stream or customer type and are therefore borne

centrally. The results of the single reporting segment are

shown in the statement of comprehensive income. All

non-current assets are related to Denmark.

Financial statements

Notes

Penneo Annual report 2023 70

Revenue

2023

DKK

2022

DKK

Subscription 71,568,212 54,707,740

Signature packages 15,237,939 15,512,159

One-time fee 1,643,237 1,837,739

Total 88,449,388 72,057,638

2023

DKK

2022

DKK

Denmark 62,791,149 52,633,272

Sweden 5,352,831 4,767,952

Norway

12,204,659 11,474,263

Belgium

7,612,545 2,693,868

Other countries

488,203 488,284

Total 88,449,388 72,057,638

Contract balances (liability)

2023

DKK

2022

DKK

Contract balances at 1 January 5,463,212 4,619,523

Additions 4,198,377 3,954,261

Performance obligations satised (4,015,951) (3,110,572)

Contract balances at 31 December 5,645,638 5,463,212

None of the Company’s customers constitutes 10% or more of the total revenue

Customers are invoiced in the starting or renewal month of their subscription. In addition the signature packages are invoiced upon request or at latest when the customer

runs out of signatures. The default payment term is net 14 days.

The following table shows the opening and closing balances of contract liabilities. There was no revenue recognised in the current reporting period that related to performance

obligations that were satised in a prior year.

Management expects that around 75% of the transaction price allocated to the unsatised contracts as of the year ended 2023 will be recognised as revenue during the next

reporting period. The remaining 25% will be recognised in the upcoming nancial years.

Financial statements

Notes

Penneo Annual report 2023 71

Staff costs

Financial statements

Notes

2023

DKK

2022

DKK

Salaries (67,174,141) (51,988,101)

Share-based payments (4,660,218) (8,418,127)

Pension contributions (683,523) 0

Other social security costs (5,232,349) (3,635,471)

Other sta costs (5,155,892) (3,809,216)

Total (82,906,123) (67,850,914)

Average numbers of FTE during the year 104 85

2023

Board of

Directors

Executive

management

Key management

personnel Total

Remuneration (1,276,305) (3,001,363) (5,531,040) (9,808,708)

Share-based payments (1,280,033) (2,006,047) (294,386) (3,580,467)

Pension contributions 0 0 (54,334) (54,334)

Total (2,556,338) (5,007,410) (5,879,760) (13,443,509)

2022

Board of

Directors

Executive

management

Key management

personnel Total

Remuneration (939,167) (2,861,448) (2,990,789) (6,791,404)

Share-based payments (2,303,447) (5,103,213) (214,178) (7,620,837)

Total (3,242,613) (7,964,661) (3,204,967) (14,412,241)

In 2023, Penneo has capitalized an amount corresponding to 19.1M DKK of sta costs as a part of development projects (2022: 15.0M DKK)

Employment contracts for members of Executive mangement and Key management personnel contain terms and conditions that are common to those of their peers in similar

companies including terms of notice and non-competitive clauses.

Penneo Annual report 2023 72

Share-based payments

2023

DKK

2022

DKK

Cost of share-based payments (4,660,218) (8,418,126)

Cost of lender warrants (25,072) (25,072)

Total (4,685,290) (8,443,198)

Costs of share-based payments are recognised as sta

costs with a corresponding eect in equity. In 2023

Penneo has capitalized an amount corresponding to

186K DKK of the share-based payments as a part of

development projects (2022: 119K DKK).

Costs of lender warrants are recognised as nancial

expenses with a corresponding eect in equity.

Consideration received for warrants sold is recognised

directly in equity.

Employee shares

In December 2021, the employees were oered to

participate in an Employee Share Scheme starting as

of January 2022. A number of shares with a total fair

value at grand date equal to the voluntary deduction

in pre-tax salary vest successively over a period of 12

months ending 31 December 2022 and are transferred

to the employees when the Company has published

the 2022 Annual Report. If the employee leaves in the

vesting period, the employee will still receive the shares

corresponding to the amount deducted from the pre-tax

salary until they leave. Every employee was oered to

subscribe for shares within a maximum of 20% of the

pre-tax salary before deduction.

27 employees accepted the oer and 51,481 shares were

earned corresponding to 0.16% of the share capital.

The share price was DKK 25.81 per share based on the

average share price during week 47 in 2021.

In December 2022, the employees were oered to

participate in an Employee Share Scheme starting as

of January 2023. A number of shares with a total fair

value at grand date equal to the voluntary deduction

in pre-tax salary vest successively over a period of 12

months ending 31 December 2023 and are transferred

to the employees when the Company has published

the 2023 Annual Report. If the employee leaves in the

vesting period, the employee will still receive the shares

corresponding to the amount deducted from the pre-tax

salary until they leave. Every employee was oered to

subscribe for shares within a maximum of 20% of the

pre-tax salary before deduction.

32 employees accepted the oer and 79,438 shares were

earned corresponding to 0.25% of the share capital.

The share price was DKK 10.49 per share based on the

average share price during week 48 in 2022.

In December 2023, the employees were oered to

participate in an Employee Share Scheme starting as

of January 2023. A number of shares with a total fair

value at grand date equal to the voluntary deduction

in pre-tax salary vest successively over a period of 12

months ending 31 December 2023 and are transferred

to the employees when the Company has published

the 2023 Annual Report. If the employee leaves in the

vesting period, the employee will still receive the shares

corresponding to the amount deducted from the pretax

salary until they leave. Every employee was oered to

subscribe for shares within a maximum of 20% of the

pre-tax salary before deduction.

18 employees accepted the oer corresponding to

the issue of 89,898 shares equal to 0.26% of the share

capital. The share price was DKK 6.91 per share based

on the average share price during November 30th to

December 6th 2023.

Financial statements

Notes

Penneo Annual report 2023 73

Employee warrant programmes

The company has over the years introduced Warrant

programmes aimed to key employees. Warrants are

vesting over time to ensure the retention of such key

employees.

The warrant program of 28 May 2020 is fully vested

and is a modication to non-exercised warrants under

an existing program where all warrants were fully

vested upon the listing of the Company on First North

in 2020. The program consists of 4,502,603 warrants.

The warrants could be exercised within a period of 14

days after the announcement of the interim nancial

reporting ending 30 June 2021 at the earliest and no

later than 14 days after announcement of the interim

report ending 30 September 2023.

Further, in accordance with the provisions of the

warrant programme the warrant holders were bound

by a lock-up agreement on terms equivalent to the

terms of the Lock-Up Obligation applying to the Existing

Shareholders.

At 13 October 2020, 37,500 warrants were granted to

two key employees divided in 5 tranches. The warrants

in each tranche vest upon the fulllment of dierent

performance conditions before 30 September 2023

provided that the employee is employed at the date

the performance condition is fullled. Vested warrants

could be exercised after the announcement of the

nancial reporting ending 30 June 2021 at the earliest

and no later than 14 days after announcement of the

interim report ending 30 September 2023.

At 22 March 2021, 630,000 warrants were granted in

connection with the appointment of Christian Stendevad

as the new CEO of Penneo. The warrants are vested over

36 months starting from the rst day of the employment.

Continuous employment during the vesting period is a

condition for the vesting. Warrants that have not been

exercised before 22 March 2029 will lapse automatically.

Vested warrants can be exercised in periods of four

weeks starting the day after the publication of the

Company’s annual report, half-year report or quarterly

report, respectively.

At 28 April 2021, 406,377 warrants were granted in con-

nection with the election of Christian Sagild as new Chair

of Penneo. The warrants will vest over 36 months starting

from the rst day of employment. Continuous board

duties during the vesting period is a condition for the

vesting. Warrants that have not been exercised before

28 April 2029 will lapse automatically. Vested warrants

can be exercised in periods of four weeks starting the

day after the publication of the Company’s annual

report, half-year report or quarterly report, respectively.

At 27 April 2022, 220,600 warrants were granted to

the Board of Directors. The warrants are vested over

36 months starting from the grant date. Continuous

board duties during the vesting period is a condition

for the vesting. Warrants that have not been exercised

no later than 8 years after the date of issuance will

lapse automatically. Vested warrants can be exercised

in periods of four weeks starting the day after the

publication of the Company’s annual report, half-year

report or quarterly report, respectively.

At 1 July 2022, 660,000 warrants were granted to Key

management personnel as well as key employees.

The warrants are vested over 36 months starting from

between the grant date and 1 January 2023. Continuous

employment during the vesting period is a condition

for the vesting. Warrants that have not been exercised

no later than 8 years after the date of issuance will

lapse automatically. Vested warrants can be exercised

in periods of four weeks starting the day after the

publication of the Company’s annual report, half-year

report or quarterly report, respectively.

At 31 March 2023, 553,491 warrants were granted to

the Board of Directors, Key management personnel as

well as key employees. The warrants are vested over

3 years starting from between 31 March 2024 and 30

June 2024. Continuous employment during the vesting

period is a condition for the vesting. Warrants that have

not been exercised no later than 6 years after the date

of issuance will lapse automatically. Vested warrants can

be exercised in periods of four weeks starting the day

after the publication of the Company’s annual report,

half-year report or quarterly report, respectively.

At 31 March 2023, 227,122 warrants were granted to the

Chair of the board, Christian Sagild. The warrants are

vested over 36 months starting from the grant date.

Continuous board duties during the vesting period

is a condition for the vesting. Warrants that have not

been exercised no later than 8 years after the date of

issuance will lapse automatically. Vested warrants can

be exercised in periods of four weeks starting the day

after the publication of the Company’s annual report,

half-year report or quarterly report, respectively.

Financial statements

Notes

Penneo Annual report 2023 74

Lender warrant programme

At 8 December 2021, 25,000 warrants were granted to Vækstfonden in connection with raising of a loan. The warrants will vest upon and can solely be exercised in connection

with one of the following three events: In a period of fourteen days following repayment of the loan, in a period of fourteen days from the due date of repayment in which

repayment has not been completed or in a period of ten working days following the Company’s announcement of delisting from Nasdaq First North with no simultaneous listing

of the Company on Nasdaq Copenhagen Main Market. Warrants that have not been exercised before 18 January 2027 will lapse automatically.

The average weighted share price on exercised warrants in 2023 was DKK 8.66.

As of 31-12-2023, 1,303,548 of the outstanding warrants have been vested and are able to be exercised. None of those warrants have a lower exercise price than the closing

share price as of 31-12-2023 which amounted to 7.36 DKK.

Number of warrants

Weighted

average

exercise price

DKK

Board of

Directors

Key

management

personnel

Employees,

former

employees and

advisors

Lender

warrants Total

Outstanding at 1 January 2022 19.96 689,544 2,365,305 523,428 25,000 3,603,277

Transferred 2022 4.35 (848,302) 848,302 0

Granted 2022 12.15 220,660 350,000 310,000 880,660

Exercised 2022 4.35 (182,413) (356,099) (538,512)

Forfeited 2022 19.06 (77,222) (77,222)

Outstanding at 31 December 2022 20.38 910,204 1,684,590 1,248,409 25,000 3,868,203

Granted 2023 8.91 286,582 409,031 85,000 780,613

Exercised 2023 4.46 (283,167) (755,650) (905,798) (1,944,615)

Forfeited 2023 11.04 (64,884) (64,884)

Outstanding at 31 December 2023 28.94 913,619 1,337,971 362,727 25,000 2,639,317

Specication of outstanding warrants:

Financial statements

Notes

Penneo Annual report 2023 75

Specication of outstanding warrants:

Warrants outstanding

Weighted average

exercise price

DKK Vesting period Exercise period 2023 2022

Warrants granted 28 May 2020 4.86 Fully vested as of 28 May 2020 From August 2021 to November 2023 0 1,965,888

Warrants granted 13 October 2020 32.93 From October 2020 to November 2023 From August 2021 to November 2023 0 7,500

Warrants granted 22 March 2021 58.94 From August 2021 to July 2024 From August 2021 to March 2029 630,000 630,000

Warrants granted 28 April 2021 53.79 From April 2021 to March 2024 From April 2021 to April 2029 406,377 406,377

Warrants granted 8 December 2021 23.20 From December 2021 to January 2027 From December 2021 to January 2027 25,000 25,000

Warrants granted 27 April 2022 17.85 From May 2022 to April 2025 From May 2022 to April 2030 220,660 220,660

Warrants granted 1 July 2022 10.24 From August 2022 to July 2025 From August 2022 to July 2030 91,667 127,778

Warrants granted 1 July 2022 10.24 From November 2022 to October 2025 From November 2022 to October 2030 35,000 35,000

Warrants granted 1 July 2022 10.24 From December 2022 to November 2025 From December 2022 to November 2030 50,000 50,000

Warrants granted 1 July 2022 10.24 From January 2023 to December 2025 From January 2023 to December 2030 400,000 400,000

Warrants granted 31 March 2023 8.91 From March 2024 to March 2026 From March 2024 to March 2029 518,491 0

Warrants granted 31 March 2023 8.91 From June 2024 to June 2026 From June 2024 to March 2029 35,000 0

Warrants granted 31 March 2023 8.91 From April 2023 to March 2026 From April 2023 to March 2031 227,122 0

Outstanding at 31 december 2,639,317 3,868,203

2023 2022

Average remaining life of outstanding warrants at 31 December (years) 5.9 3.8

Exercise price for outstanding warrants at 31 December (DKK) 8.91 to 58.94 4.28 to 58.94

Financial statements

Notes

Penneo Annual report 2023 76

Warrant programs

2023

Warrant programs

2022

Warrant programs

2021

Lender warrants

2021

Average share price (DKK) 8.91 10.24 -17.85 53.79-58.94 23.20

Expected volatility rate (% p,a,) 18.05 15.75-16.49 25 25

InterRisk-free interest rate (% p,a,) 2.75 0.5 0 0

Expected duration of warrants (in years) 6-8 8 8 5

Exercise price (DKK) 8.91 10.24 -17.85 53.79-58.94 23.20

Fair value all warrants, after dilusion (DKK'000) 1,826 1,762 16,300 129

From 2022 and onwards the expected volatility rate is based on Penneos historical standard deviation on the share price during Penneos time listed on the Nasdaq market. The

standard deviation on the share price is dened as the daily average.

Before 2022 expected volatility rate is applied based on the annualised volatility on relevant peer groups derived from the standard deviation of daily observations over 12 months

ending 2020 as the entity had not been listed for 12 months as of grant date.

The fair value of the warrants issued is measured at calculated market price at the grant date based on the Black & Scholes option pricing model. Penneo expects no dividend to

be paid out within the near future. The calculation is based on the following assumptions at the grant date:

Financial statements

Notes

Penneo Annual report 2023 77

2023

DKK

2022

DKK

Amortisation of intangible assets (11,188,016) (7,185,359)

Depreciation of property, plant and equipment (335,029) (235,693)

Depreciation of right-of-use assets (2,923,478) (2,591,924)

Total (14,446,523) (10,012,975)

2023

DKK

2022

DKK

Interest expenses (1,451,976) (1,667,262)

Exchange rate adjustments (244,153) (346,740)

Other nancial expenses (422,281) (406,727)

Total (2,118,410) (2,420,728)

2023

DKK

2022

DKK

Other nancial income 343,638 0

Exchange rate adjustments 139,395 122,528

Total 483,033 122,528

8. Depreciation, amortisation, and impairment

9. Financial income

10. Financial expenses

Financial statements

Notes

Penneo Annual report 2023 78

11. Tax for the year

2023

DKK

2022

DKK

Current tax for the year income 0 5,500,000

Changes in deferred tax 0 0

Adjustment concerning previous years 0 0

Total 0 5,500,000

2023

DKK

2022

DKK

Tax calculated as 22% of prot/loss before tax (5,441,494) (5,667,004)

Non-capitalised tax assets 6,232,154 1,165,207

108-130% development costs 0 (1,792,313)

Non-deductible expenses (790,660) 794,110

Eective tax 0 (5,500,000)

Eective tax rate for the year 0% 21%

Income tax benets for 2022 relate to tax credit for research and development expenses at the applicable tax rate under the Danish Corporate Income Tax Act.

Financial statements

Notes

Penneo Annual report 2023 79

Deferred tax is recognized in the statement of nancial position as follows:

2023

DKK

2022

DKK

Deferred tax (asset) 0 0

Deferred tax (liability) 0 0

Total 0 0

Deferred tax concerns

2023

DKK

2022

DKK

Intangible assets 11,745,000 9,243,000

Property, plan and equipment 35,000 41,000

Right-of-use assets 1,980,000 2,446,000

Lease liabilites (2,337,000) (2,742,000)

Tax loss carried forward (11,423,000) (8,988,000)

Total 0 0

Due to uncertainty of utilisation of the tax loss carry-forward, Penneo has not recognised any deferred tax assets. Deferred tax assets not recognized has a total value of 20.7M

DKK as of 31-12-2023 (2022: DKK 14.9M DKK). Total tax loss carried forward amounts to DKK 32.1M DKK in 2023 (2022: 23.9M DKK).

Financial statements

Notes

Penneo Annual report 2023 80

12. Intangible assets

2023 DKK

Acquired

intellectual

property rights

Completed

development

projects

Development

projects in

progress Goodwill Total

Cost as at 1 January 6,600,000 40,209,510 21,630,680 9,500,000 77,940,190

Additions 22,563,114 22,563,114

Transfer 21,630,679 (21,630,679) 0

Cost as at 31 December 6,600,000 61,840,189 22,563,115 9,500,000 100,503,304

Amortisation and impairment as at 1 January (1,485,000) (18,342,831) (1,100,000) (20,927,831)

Amortisations during the year (660,000) (10,528,017) (11,188,017)

Amortisations and impairment as at 31 December (2,145,000) (28,870,848) (1,100,000) (32,115,848)

Carrying amount as at 31 December 4,455,000 32,969,342 22,563,115 8,400,000 68,387,456

2022 DKK

Acquired

intellectual

property rights

Completed

development

projects

Development

projects in

progress Goodwill Total

Cost as at 1 January 6,600,000 27,927,134 14,763,630 9,500,000 58,790,764

Additions 19,149,426 19,149,426

Transfer 12,282,376 (12,282,376) 0

Cost as at 31 December 6,600,000 40,209,510 21,630,680 9,500,000 77,940,190

Amortisation and impairment as at 1 January (825,000) (11,817,472) (1,100,000) (13,742,472)

Amortisations during the year (660,000) (6,525,359) (7,185,359)

Amortisations and impairment as at 31 December (1,485,000) (18,342,831) (1,100,000) (20,927,831)

Carrying amount as at 31 December 5,115,000 21,866,679 21,630,680 8,400,000 57,012,359

Financial statements

Notes

Penneo Annual report 2023 81

Impairment testing

Penneo tests goodwill for impairment annually, or more frequently if there are indications that goodwill might be impaired. The carrying amount of goodwill has been allocated

to the following cash-generating unit:

Expected remaining lifetime of Acquired intellectual property rights are 7 years, (2022: 8 years)

Expected remaining lifetime of Completed development projects are 4 years, (2022: 4 years)

Development projects in progress include the

development of a new software platform. The

development project essentially consists of costs in

the form of direct costs which are registered through

Penneo’s internal project module.

Management is of the opinion that it is technically

possible to complete the development projects during

execution.

Completed development projects comprise software

development costs related to development of the

existing software platform. The software is under

continuous development for the use of customers

and is sold as a licence to use the software for a given

period. The user has access to upgrades and new

functionalities during the contract period. Costs related

to maintenance are expensed when incurred.

Development costs for the year cover both development

of the front-end and the back-end part of the software

solution. Both parts to increase the user experience and

functionalities within the software in order to increase

Penneo’s revenue by maintaining existing clients and

acquiring new clients.

It is Management’s assessment that the expected

future revenue streams from the assets are sucient

to cover the value of recognized developed software at

the reporting date.

In 2023, Penneo expensed DKK 8.9M DKK (2022:

DKK 8.0M DKK) for development projects, primarily

planning, administrative and other general overhead

expenditures not meeting the recognition criteria

applicable to internally generated intangible assets.

2023

DKK

Penneo KYC

2022

DKK

Penneo KYC

Goodwill 8,400,000 8,400,000

Acquired intellectual property rights

4,455,000 5,115,000

Development projects in progress 10,109,772 5,899,422

Completed development projects

7,495,034 3,750,471

Total 30,459,806 23,164,893

Financial statements

Notes

Penneo Annual report 2023 82

Management is of the opinion that the lowest level of cash-generating unit to which the carrying amount of goodwill can be allocated is in the CGU.

In both 2023 and 2022, the impairment test of goodwill showed no impairment.

The following key assumptions have been used in the impairment testing:

Budgets used for the impairment testing are based on an external and independent research report. The report has been evaluated by management and adjusted to the Penneo

KYC CGU. In addition to the research report a projection has been made by Management according to the research report, historical values and expected revenue split.

WACC:

WACC has been calculated before tax and according to the company’s nancial numbers and loan agreements.

Growth rate in terminal period:

Growth rate in the terminal period has been set to 1% according to external and independent research reports.

Budget period:

The budget period of 10 years has been set according to the current growth stage of Penneo. The growth is not expected to hit a terminal period before 10 years.

CAGR:

Compound annual growth rate has been set to 27% for the budget period. The revenue growth rate is decreasing over the years.

Penneo has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to determine the recoverable amount for the company’s CGU

to which goodwill is allocated. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount of Penneo KYC is based would

not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the related CGU.

2023

Penneo KYC

2022

Penneo KYC

WACC 11.19% 15.81%

Growth rate in terminal period 1.00% 2.00%

Budget period (years) 10 10

CAGR 27% 32%

Financial statements

Notes

Penneo Annual report 2023 83

13. Property, plant and equipment

2023

Other xtures

DKK

Leasehold improvements

DKK

Total

DKK

Cost as at 1 January 509,237 1,290,640 1,799,877

Additions 45,131 45,131

Cost as at 31 December 509,237 1,335,771 1,845,008

2022

Other xtures

DKK

Leasehold improvements

DKK

Total

DKK

Cost as at 1 January 494,966 1,201,525 1,696,491

Additions 14,271 89,115 103,386

Cost as at 31 December 509,237 1,290,640 1,799,877

Depreciation as at 1 January (16,975) (688,016) (704,991)

Depreciation during the year (101,847) (233,181) (335,028)

Depreciation as at 31 December (118,822) (921,197) (1,040,019)

Carrying amount as at 31 December 390,415 414,573 804,988

Depreciation as at 1 January 0 (469,298) (469,298)

Depreciation during the year (16,975) (218,718) (235,693)

Depreciation as at 31 December (16,975) (688,016) (704,991)

Carrying amount as at 31 December 492,262 602,624 1,094,886

Financial statements

Notes

Penneo Annual report 2023 84

14. Leases

2023

Properties

DKK

Cost as at 1 January 19,138,054

Additions 1,037,903

Adjustments and revaluations 2,955

Cost as at 31 December 20,178,912

2022

Properties

DKK

Cost as at 1 January 17,795,996

Additions 221,842

Adjustments and revaluations 1,120,216

Cost as at 31 December 19,138,054

Depreciation as at 1 January (7,535,585)

Depreciation during the year (2,923,478)

Depreciation as at 31 December (10,459,063)

Carrying amount as at 31 December 9,719,849

Depreciation as at 1 January (4,943,661)

Depreciation during the year (2,591,924)

Depreciation as at 31 December (7,535,585)

Carrying amount as at 31 December 11,602,469

Financial statements

Notes

Penneo Annual report 2023 85

Carrying amounts of lease liabilities and movements during the period:

The following amounts have been recognized in the income statement:

Penneo had total cash outow for leases of DKK 3.2M DKK (2022: DKK 2.8M DKK). Penneo leases oces and lease terms are negotiated on an individual basis and contain dierent

terms and conditions. In addition Penneo have short term and low value leases which according to IFRS Accounting Standard 16 have not been recognised as a part of leases. The

total recognised cost in the income statement amounted to 293K DKK in 2023 (2022: 237K DKK).

Refer to note 22 for a table of the maturity prole of Penneo’s lease liabilities.

2023

DKK

2022

DKK

At 1 January 12,461,760 13,560,555

Additions 1,037,903 221,842

Acrual of interest 277,413 311,743

Payments (3,156,423) (2,752,596)

Adjustments 2,955 1,120,216

At 31 December 10,623,608 12,461,760

Non-current 7,481,513 9,626,100

Current 3,142,095 2,835,660

2023

DKK

2022

DKK

Depreciation expense of right-of-use assets 2,923,478 2,591,924

Interest expense on lease liabilities 277,413 311,743

Total amount recognised in the income statement 3,200,891 2,903,667

15. Deposits

2023

DKK

2022

DKK

Cost as at 1 January 1,439,174 1,288,942

Additions 237,871 150,232

Cost as at 31 December 1,677,045 1,439,174

Financial statements

Notes

Penneo Annual report 2023 86

16. Trade receivables

31.12.2023

DKK

31.12.2022

DKK

01.01.2022

DKK

Trade receivables 16,626,028 21,653,655 13,370,333

Write-downs (788,523) (1,672,985) (1,539,512)

Total 15,837,505 19,980,670 11,830,821

DKK Not past due Overdue by 0-45 days Overdue by 46-90 days Overdue by >90 days Write-downs

Carring amount of

receivables

31 December 2023 (Trade receivables) 8,269,989 5,962,850 1,154,943 1,238,245 (788,523) 15,837,505

31 December 2022 (Trade receivables) 13,026,399 4,670,121 1,061,224 2,895,911 (1,672,985) 19,980,670

01 January 2022 (Trade receivables) 9,100,665 1,646,099 1,084,057 1,539,512 (1,539,512) 11,830,821

The carrying amounts are equivalent to the fair value of the assets. In 2023 an income of 0.9M DKK was recognized as a result of Expected credit loss. In 133K DKK was recog-

nized as an expense.

The following table details the risk prole of trade receivables based on Penneo’s expected loss on trade receivables:

Expected credit loss

The expected credit losses on trade receivables are estimated using a provision matrix. The matrix has been divided into the specic industries in which Penneo has sales.

In addition to the matrix, Penneo has made specic provisions towards high risk customers. The total provision is considered to cover all expected credit loss in the trade

receivables.

17. Working capital changes

2023

DKK

2022

DKK

Change in receivables and prepayments 4,243,966 (8,288,108)

Change in trade payables and other payables 3,121,665 512,895

Total 7,365,631 (7,775,213)

Financial statements

Notes

Penneo Annual report 2023 87

18. Share capital and earnings per share

As at 31 December 2023, the share capital consisted of 34,091,262 (2022: 32,146,647) shares with a nominal value of DKK 0.02 each.

The shares are not divided into classes and carry no right to xed income.

Earnings per share

*The diluted eect of outstanding share options has not been calculated as the Earnings per share is negative.

DKK Number of shares

As at 1 January 2022 542,579 27,128,931

Capital increase 100,354 5,017,716

As at 31 December 2022 642,933 32,146,647

Capital increase 38,892 1,944,615

Share capital as at 31 December 2023 681,825 34,091,262

The calculation of earnings per share is based on the following: 2023 2022

Prot/(loss) for the period (24,734,062) (20,259,107)

Average numbers of ordinary shares for calculation of earnings per share: 33,053,687 31,054,573

Earnings per share, basic (EPS) (0.75) (0.65)

Earnings per share, diluted (DEPS)* (0.75) (0.65)

Treasury shares Number Nominal value

% of share capital,

year-end

Holding at 1 January 2022 358,841 7,177 1.1%

Shares issued as consideration in a business combination (43,698) (874) (0.1%)

Transfer of shares as a part of Employee Share Scheme (91,302) (1,826) (0.3%)

Holding at 31 December 2022 223,841 4,477 0.7%

Transfer of shares as a part of Employee Share Scheme (52,276) (1,046) (0.2%)

Holding at 31 December 2023 171,565 3,431 0.5%

Financial statements

Notes

Penneo Annual report 2023 88

20. Interest-bearing liabilities

The carrying amount is by Management assessed as equivalent to the fair value of the liabilities as explained in note 22.

Non-current borrowings

31.12.2023

DKK

31.12.2022

DKK

Debt to credit institutions 12,972,425 10,699,587

Lease liabilities 7,481,513 9,626,100

Total 20,453,938 20,325,687

Current borrowings

Debt to credit institutions 316,775 3,669,397

Lease liabilities 3,142,095 2,835,660

Total 3,458,870 6,505,057

19. Other capital reserves

Other capital reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their

remuneration as well as lender warrants. Refer to Note 7 for further details of these programmes.

In addition the reserve is used for the potential shares issued as consideration in a business combination (earn out), see note 25.

The reserve is decreasing upon exercise of warrants and issuance of shares as consideration for the business combination.

Financial statements

Notes

Penneo Annual report 2023 89

2023 Vækstfonden (i) Vækstfonden (ii) Vækstfonden (iii) Total

Non-current borrowings (DKK) 3,420,682 9,551,743 12,972,425

Current borowings (DKK) 316,775 316,775

Total 316,775 3,420,682 9,551,743 13,289,199

2022 Vækstfonden (i) Vækstfonden (ii) Vækstfonden (iii) Total

Non-current borrowings (DKK) 300,387 2,451,814 7,947,386 10,699,587

Current borrowings (DKK) 364,468 1,252,315 2,052,614 3,669,397

Total 664,855 3,704,129 10,000,000 14,368,984

Vækstfonden (i) Vækstfonden (ii) Vækstfonden (iii)

Last scheduled repayment July 2024 April 2027 October 2028

Exit obligation (maximized DKK) 0 800,000 0

Performance obligation (maximized DKK) 0 400,000 0

Dividend limitation agreement Yes Yes Yes

Warrants granted No No Yes

Debt to credit institutions

Penneo has signed a dividend limitation agreement, which entails that the Company is not entitled to propose a resolution to pay dividends without the consent of Vækstfonden.

The dividend limitation agreement applies until all current and future loans are fully repaid. The last scheduled repayment fall due on 2 October, 2028.

Vækstfonden has the right to demand the loans to be repaid if a change of control in Penneo should happen. A “change of control” is dened as a direct or indirect transfer of

more than 25% of the shares or the rights of the shares in the Company, or in any other way the transfer of a controlling majority.

Vækstfonden (ii) is entitled to a one-time performance bonus of 400,000 DKK if the Company reaches a performance target within a nancial year during the loan period. The

performance target is reached when the Company’s accumulated earnings measured at EBITDA-level exceeds 15,000,000 DKK in accordance with the latest audited report.

Financial statements

Notes

Penneo Annual report 2023 90

21. Provisions

2023

Decommissioning

DKK

As at 1 January 454,302

Unwinding of discount and changes in the discount rate 11,812

As at 31 December 466,114

2022

Decommissioning

DKK

As at 1 January 442,790

Unwinding of discount and changes in the discount rate 11,512

As at 31 December 454,302

A provision has been recognised for decommissioning costs associated with an oce lease. Penneo is committed to restore the site at the end of the lease term.

Cash ow eect of the decommissioning is expected in 2027.

Further, Vækstfonden (ii) is entitled to a one-time exit bonus of 800,000 DKK, if an exit transaction occurs, and the Company has experienced an added (equity) value in the period

between July 2019 and the date of the exit transaction. An “exit transaction” is dened as a direct or indirect transfer of more than 25% of the shares or the rights of the shares

in the Company, or in any other way the transfer of a controlling majority. For the avoidance of doubt, capital increases by the issuance of new shares does not constitute an exit

transaction.

Warrants have been granted as a part of the loan agreement with Vækstfonden(iii). Refer to Note 7 for further details regarding the warrants.

Financial statements

Notes

Penneo Annual report 2023 91

22. Financial risks

Capital Management

Penneo manages its capital to ensure that it will be

able to continue as a going concern while maximising

the growth in ARR through the optimisation of the

debt and equity balances. The capital structure of

Penneo consists of net debt and equity. Management

reviews the capital structure continually to consider if

the current capital structure is in accordance with the

company and shareholders’ interests. In March 2022,

the company made a capital increase of net 59M DKK in

order to continue to invest in continued ARR growth and

optimise the capital structure.

Financial risk management

Due to the nature of its operations, investments, and

nancing, Penneo is exposed to a number of nancial

risks. It is company policy to operate with a low risk

prole, so that currency risk, interest rate risk and credit

risk only occur in commercial relations.

The scope and nature of the nancial instruments

appear from the income statement and statement of

nancial position in accordance with the accounting

policies applied. Provided below is information about

factors that may inuence amounts, time of payment, or

reliability of future payments, where such information

is not provided directly in the nancial statements. This

note addresses only nancial risks directly related to

Penneo’s nancial instruments.

Credit risk

Credit risk is the risk that a counterparty will not meet

its obligations towards Penneo, leading to a nancial

loss. Penneo is exposed to credit risk primarily related

to its trade and other receivables. Penneo are using

a provision matrix to write o expected credit loss,

in addition to a specic provision towards high risk

customers or when there is a court order of bankruptcy

from the counterparty. The maximum exposure to credit

risk at the reporting date is the carrying value of trade

receivables in note 16. Penneo does not hold collateral

as security

Penneo is also exposed to credit risk in regards to

bankdeposits. In order to limit Penneo’s counterparty

risk, deposits are only made in well-reputed banks.

Foreign currency risk

Foreign currency risk is the risk that the fair value or

future cash ows of an exposure will uctuate because

of changes in foreign exchange rates. Penneo issues

invoices in local currency, which is why the incoming

cash ow reects dierent currencies. Penneo has in all

aspects only transactions in DKK, NOK, SEK and EUR. The

material costs and investments are primarily paid in DKK

and EUR, which is why there is low risk on that part.

Penneo operates with bank accounts in NOK and EUR

currencies, as well as DKK, to reduce costs and lower

risks in the short term. Penneo avoids the small eects

of uctuations, as both incoming and outgoing payments

are made directly in the respective currencies.

Liquidity risk

Penneo ensures sucient liquidity resources by liquidity

management. Overall Penneo has a policy to only

allocate cash ow that the company has at its disposal

dened as cash, cash equivalents, forecasted cash ow

and credit facility.

After each month, the previous month is nancially

closed and reviewed with an updated running 12 month

forecast. The forecast is adjusted to meet Penneo’s policy

through adapting it to the hiring plan. Each quarter, an

updated 12 month cash ow forecast is reviewed and

approved by the Board of Directors.

At 31 December 2023, Penneo’s cash and cash equivalents

amounted to 42.2M DKK (2022: 53.2M DKK). The cash

reserves, including the current credit facility, which was

increased from 5.0M DKK end of 2023 to 10.0M DKK at

the beginning of 2024, and the expected cash ow for

2024 and 2025, are considered to be adequate to meet

the obligations of Penneo as they fall due.

Financial statements

Notes

Penneo Annual report 2023 92

The table below summarises the maturity prole of Penneo’s nancial liabilities based on contractual undiscounted payments:

Year ended 31 December 2023

demand

DKK

Less than 6

months

DKK

6 to 12 months

DKK

1 to 5 years

DKK

> 5 years

DKK

Total

DKK

Interest-bearing loans 808,813 717,747 15,400,841 16,927,401

Lease liabilities 1,701,184 1,674,859 7,683,726 11,059,769

Trade and other paybles 782,505 7,850,338 2,548,217 11,181,060

782,505 10,360,335 2,392,607 25,632,784 0 39,168,230

Year ended 31 December 2022

demand

DKK

Less than 6

months

DKK

6 to 12 months

DKK

1 to 5 years

DKK

> 5 years

DKK

Total

DKK

Interest-bearing loans 2,372,768 2,372,768 12,101,339 16,846,875

Lease liabilities 1,553,928 1,555,948 10,006,221 13,116,097

Trade and other paybles 704,443 8,926,588 2,442,713 12,073,744

704,443 12,853,284 3,928,716 24,550,273 0 42,036,715

Financial liabilities:

Financial statements

Notes

Penneo Annual report 2023 93

Financial assets measured at amortised cost

2023

DKK

2022

DKK

Deposits 1,677,045 1,439,174

Trade receivables 15,837,505 19,980,670

Other recelvables 1,734 1,585

Current Cash 42,223,136 53,161,291

Total 59,739,420 74,582,721

Financial liabilities measured at amortised cost

Interest bearing loan 13,289,199 14,368,984

Lease liabilities 10,623,608 12,461,760

Trade payables 2,898,440 2,691,826

Other payables 8,282,620 9,381,918

Total 35,093,868 38,904,488

Financial instruments:

Interest rate risk

Interest rate risk arises in relation to interest-bearing assets and liabilities. Penneo’s interest-bearing debt to Vækstfonden of 13.3M DKK as per 31 December 2023 (2022: 14.4M

DKK) is subject to a variable rate of interest based on a 3-month CIBOR plus a premium. If market interest rates increased by one percentage point, the interest rate sensitivity

as calculated based on the loan balance to credit institutions as per end of 2023 would lead to a yearly increase in interest expenses of 133K DKK. A corresponding decrease in

market interest rates would have the opposite impact.

Penneo’s bank deposit at Danske Bank of DKK 42.2M DKK as per 31 December 2023 (2022: 53.2M DKK) is subject to a variable rate of interest based on Danske Banks calculations

including, among other things, the interest rates of Nationalbanken as well as competitive and business considerations. If the interest rate decreased by one percentage point, the

interest rate sensitivity as calculated based on the bank deposit as per end of 2023 would lead to a yearly increase in interest expenses of 422K DKK. A corresponding increase in

interest rates would have the opposite impact.

Fair value of nancial assets measured at amortised cost

Since Penneo’s nancial instruments measured at amortised cost are either short-term and/ or exposed to oating interest rates, Management has assessed that the carrying

amount is a reasonable approximation of fair value.

Financial statements

Notes

Penneo Annual report 2023 94

23. Liabilities arising from nancing activities

2023

Interest bearing

liabilities

Lease

liabilities

Total

DKK

Liabilities at 1 January 14,368,984 12,461,760 26,830,745

Loans raised 1,037,903 1,037,903

Repayments (1,079,785) (3,156,423) (4,236,208)

Adjustments 2,955 2,955

Other 277,413 277,413

Liabilities at 31 December 13,289,200 10,623,608 23,912,808

2022

Interest bearing

liabilities

Lease

liabilities

Total

DKK

Liabilities at 1 January 14,697,652 13,560,555 28,258,207

Loans raised 221,842 221,842

Repayments (328,668) (2,752,596) (3,081,264)

Adjustments 1,120,216 1,120,216

Other 311,743 311,743

Liabilities at 31 December 14,368,984 12,461,760 26,830,745

24. Guarantees, contingent liabilities and collateral

Contingent liabilities

As security for debt to credit insitutions of 13.3M DKK, a company charge of 15.0M DKK has been provided comprising trade recievables, intangible assets and property, plant and

equipment. The total carrying amount of the comprised assets is 85.0M DKK (2021: 78.1M DKK).

Financial statements

Notes

Penneo Annual report 2023 95

Acquisition of business activities from CLA Reply in 2020

On 6 October 2020, Penneo acquired a part of CLA Reply business division concerning Anti Money Laundering (AML) and Know Your Customer (KYC) activities, in exchange for

cash consideration, issue of Penneo shares and earn out in terms of potential Penneo shares.

As a part of the acquisition an earn-out clause was agreed. The earn-out clause was triggered by:

a) Retention of critical business knowledge and know-how from key stakeholders

b) Successful technical integration of Penneo’s and CLA Reply’s platforms

c) Proof of internationalizing CLA Reply’s platform

The fair value of the earn-out was 3.0M DKK and was recognised upon acquisition due to the expectation of fulllment. The triggers were as of 31-12-2021 all fullled which is

why there has been no changes to the recognised amount. The earn out in terms of Penneo shares has been transferred in January 2022.

25. Business combinations

26. Fee to the auditor

2023

DKK

2022

DKK

Statutory audit 433,000 545,500

Other assurance agreements 69,000 45,000

Tax and VAT advisory services 7,000 0

Other services 20,000 23,000

Total fee to the auditor 529,000 613,500

Financial statements

Notes

Penneo Annual report 2023 96

27. Related parties

Shareholders Registered oce Basis of inuence

Viking Venture 29 AS Norway 8.95%

Biostrat Biotech Consulting ApS Denmark 6.83%

ARBEJDSMARKEDETS TILLAEGSPENSION Denmark 6.40%

Flora IT ApS Denmark 6.30%

Clausen Online ApS Denmark 5.92%

DKK

Impero A/S 2023

Services provided by Impero A/S 60,000

Estaldo ApS 2023

Services provided by Penneo A/S 91,854

* None of the shareholders have control or signicant inuence over the company

Other related parties

Other related parties of Penneo A/S with signicant inuence comprise the Board of Directors and Executive Board and their related parties. There were no other related parties

identied.

From the balance sheet date and until today, no matters, which would inuence the evaluation of the annual report has occured.

There were no unsettled balances with related parties at the end of the year.

In Penneo A/S there were no transactions with the Board of Directors or Executive Management besides remuneration. For information on remuneration of the Board of

Directors and Executive Management please refer to note 6.

28. Events after the reporting period

Financial statements

Notes

Learn more on www.penneo.com

Penneo Annual report 2023 97