0
WEBSTEP | ANNUAL REPORT 2021
Key figures
NOK million
2021
2020
2019
2018
Operating revenues
775
690
660.5
663.2
EBITDA
81.2
63.9
60.4
78.8
EBITDA margin
10.50%
9.30%
9.10%
11.90%
EBIT
65.9
50
49.1
75.9
EBIT margin
8.50%
7.20%
7.40%
11.40%
Net profit
48.5
36.7
36.1
56.2
Net cash flow
7.0
14.3
-8
26.9
Earnings per share (NOK)
1.80
1.38
1.36
2.13
Earnings per share, fully diluted (NOK)
1.77
1.38
1.36
2.12
Number of employees, average (FTE)
449
410
397
407
Number of employees, end of period
478
415
409
394
Operating revenue per employee (NOKt)
1,725
1,681
1,663
1,630
EBIT per employee (NOKt)
146.7
122
124
186
2
WEBSTEP | ANNUAL REPORT 2021
Letter from the CEO
2021: Back on track
Webstep is back on track with profitable growth. Thanks to a
solid finish in Q4 2020, we entered 2021 with ambitions to
make a difference. And so we did.
Digital technology is a key enabler for the society to develop for
tomorrow, and the demand for IT services has been strong
throughout the year. This has made it even more important to
succeed with our increased focus on recruiting activities, which
is a key factor for continued growth for Webstep. With an
impressive achievement of 63 additional employees compared
to 2020, I am pleased that we’re now quickly approaching 500
employees in total.
With increased capacity we also generated more revenue than
ever before, achieving a solid NOK 775 million in revenues and
a profit before tax of NOK 66 million. The key driver for this
improved performance is a successful implementation of our
growth strategy. As the market has changed, so has Webstep.
We predicted demand for team-as-a-service and developed
suitable offerings and services that reflected this growing
market opportunity. In parallel we have been strict in
maintaining focus on building competencies and attracting
talent focused on software development.
New business and renewed trust
A broader go-to-market model has in 2021 been very well
received by our customers. We are in the process of delivering
services that are making us a valuable partner to our
customers. Our approach has ensured a stronger market
presence and increased awareness, and the revenue growth
has come through successful deliveries to customers like
Domstoladministrasjonen and Equinor. Equally important is the
renewed trust from long term customers that has ensured a
strong revenue growth of 12.3 percent.
In sync with market trends
The successful execution of the business strategy has been
fueled by strong demand in the market for experienced
experts. This is in line with market predictions from Radar
Ecosystem Specialists, a leading vendor of fact based market
insight. Their State of the nation 2022 survey shows four
distinct focus areas related to the IT consultant market where
customer investments are being made:
Webstep covers all four areas, and is positioned as a vendor
with both skills and experience to build, assemble and deliver
the right competencies at the right time. This is essential to
stay relevant in the market.
Optimized go-to-market model
We entered 2021 with promising outlooks for
Team-as-a-Service. Through 2021 we have grown this business
segment substantially. Our base service of experts for hire is
perfect for setting up cross-functional teams and adding
team-specific roles to the mix. We are getting great feedback
from our customers, encouraging us to continue delivering
optimized teams. We are also able to deploy the full breadth of
services and competencies from Webstep in these teams.
In addition to the success with teams, we have also delivered
tailored IT projects to customers like Enova and Diar. Even
though the large volumes in the current market is dominated by
single consultant hires through large frame agreements and
specialized sourcing channels, we expect a growing demand
for both team-as-a-service and projects. As a key player in the
segment of experienced software consultants, we are
following this development closely.
In summary 2021 shows a sound balance between the three
kinds of deliveries in our go-to-market model: experts for hire,
team-as-a-service and tailored IT projects.
3
WEBSTEP | ANNUAL REPORT 2021
Structural actions
On the organizational side, we have focused on structural
actions in four areas:
Firstly, successful recruiting is key and we have strengthened
the talent acquisition group that is supporting all regional
offices in identifying new candidates. Coordinated sourcing
activities have proven very successful, and we have increased
the inflow of talents.
Secondly we are working hard to reduce churn. Many of our
consultants cherish the flexibility at Webstep. As an employer
we are making it simple for our employees to focus on skill
enhancement and professional development. At the same time
we offer a solid package of social benefits, in addition to our
well-known favorable salary model.
The third part is related to organizational structure. Through
2021 we have taken steps towards a more unified Oslo office.
This will make Webstep more effective and visible in the
competitive Oslo region.
The last element I want to highlight is our continued focus on
teams-as-a-service. This has proven to be a very well received
delivery model and brings predictability to both customers and
consultants.
Shaping the future
With a mission to help shape the future, Webstep is also
playing an active role influencing how society is being
developed. Through our operations, projects and activities we
are proud to state that we are creating profitability without
compromising ethical values, and with respect for individuals,
the environment and the society at large. We believe that the
UN’s Sustainable Development Goals are important beacons
for business in our time. It’s our responsibility as an
organization and employer to contribute to the achievement of
the Sustainable Development Goals.
What’s next?
2021 was a good year for Webstep. With continued high
demand for IT consultants, we are optimistic about 2022. We
are experiencing renewed trust from our long term customers
as well as seeing new business opportunities arise.
Our market focus will continue to be on organic growth in
existing locations. Our broad go-to-market platform brings
flexibility and value to both customers and our own
consultants. We will focus on organic growth in existing
locations, and further improve our operations in Oslo. A more
unified Oslo office will improve both mindshare and
effectiveness in a highly competitive region. The Webstep
working experience is also continuously being enhanced.
Last but not least we will work to improve our margin. We
expect a scaling effect from our organic growth and effective
team deliveries. Strengthened core processes like talent
sourcing and improved onboarding processes will also have a
positive impact on our margins.
Teamwork for growth
All our great employees deserve both honor and thanks for
their adaptability and their solid efforts in 2021. And with such
a solid team of great people, sound finances and high demand
from customers, we are well positioned to develop for
tomorrow.
Save Asmervik
CEO Webstep ASA
4
WEBSTEP | ANNUAL REPORT 2021
Board of
director’s
report
5
WEBSTEP | ANNUAL REPORT 2021
Board of directors’
report
Highlights
Webstep had a good recruitment year in 2021, and reported
revenue growth of 12.3 per cent and EBIT growth of 31.8 per
cent. The Company reported a net growth of 63 employees,
from 415 end of 2020 to 478 end of 2021, and this establishes
a solid platform for further growth. Webstep continues to
demonstrate that it has the capacity and expertise to deliver
comprehensive projects and solutions in line with the
previously communicated growth strategy, which also attracts
a broader range of employees. Webstep enjoys a strong
position in an attractive growth market and enters 2022 with a
very robust order book. Strong financial position and positive
outlook support a dividend proposal of NOK 1.70 per share for
2021.
Webstep ASA recorded consolidated revenues in 2021 of NOK
775.0 million, up by 12.3 per cent from NOK 690.0 million in
2020. Revenue growth was driven by increased headcount and
higher hourly rates. Consolidated EBIT for 2021 amounted to
NOK 65.9 million, up from NOK 50.0 million in 2020. EBIT was
impacted by increased headcount which has resulted in higher
revenues, but also increased personnel cost.
The market for IT services in Norway and Sweden is strong,
and the competition in the recruitment market is fierce. In
2021, Webstep has continued to improve the expanded
go-to-market model which has proven to cover a larger share of
the market, and expand the recruitment base.
To provide clients with hand-picked technology experts who in
an efficient and effective manner help to solve the client’s
challenges, is the traditional Webstep go-to-market model. The
projects are normally run and managed by the clients. The
experts employed by Webstep handle a broad range of
technology platforms and disciplines - from the traditional
programming languages such as .Net and Java, to highly
sought-after services such as Cloud migration, advanced
analytics, big data and machine learning.
Since the clients to an increasing extent request full scale
developer teams (“team-as-a-service”), projects and end-to-end
solutions that are managed and executed by their IT service
vendors, Webstep has invested in the expertise and
methodologies required in order to be a provider of these
services. Webstep signed a significant three-year-contract with
Equinor in March 2021, which would not have been possible
without these investments. What distinguishes this delivery
from the traditional Webstep model, is the fact that Webstep
will provide the client with full scale development teams as
opposed to single consultants for expert roles.
Go-to-market model
6
WEBSTEP | ANNUAL REPORT 2021
The development of the delivery model further improves the
edge in attracting new talented employees. The team and
project deliveries give the consultants the opportunity to work
closely with other Webstep colleagues on technically advanced
and interesting challenges. The new delivery models also
increase predictability and impact utilization and
cross-leverage of expertise positively.
In February 2021, Save Asmervik was appointed the new CEO
of Webstep. Mr. Asmervik previously held the position as
regional director. He has been with the company for ten years,
and has created an impressive growth story within Webstep
with the success of the office in Trondheim.
The dividend policy remains unchanged, and the board of
directors intend to propose a dividend of NOK 1.70 per share
representing 96 per cent of the annual net profit of the Group
for 2021.
Operations
The board of directors’ report for the Webstep group
(“Webstep” or “the Group”) comprises the parent company
Webstep ASA (“the Company”) and its subsidiaries. Webstep
ASA is a Norwegian public limited liability company
headquartered in Oslo, Norway. The Group has offices in
Norway and Sweden and had 478 employees as of 31
December 2021. The Company’s shares are listed and traded
on Oslo Børs under the ticker WSTEP. Webstep's business is
conducted through the Group’s two subsidiaries, Webstep AS
in Norway and Webstep AB in Sweden. The Group has offices
in Oslo, Bergen, Stavanger, Trondheim, Kristiansand and
Haugesund (Norway), and in Stockholm, Malmö and Uppsala
(Sweden). Webstep believes in the flexibility and
responsiveness of a decentralized model based on strong local
presence. The regional offices serve local clients with
considerable autonomy, while leveraging the full expertise and
capacity of Webstep.
Webstep is a provider of IT consultancy services and offers
expertise to solve demanding digitalization and IT projects in
the private and public sector, in a number of different industries
including banking, finance and insurance, public administration,
agriculture and food production, IT and telecommunication,
commerce and transportation.
Webstep aims to be at the forefront of technological
development and offers cutting-edge IT expertise such as
digitalization, cloud migration and integration, Internet of
Things (IoT), machine learning, IT security, robotics and
analytics.
An important part of the Group's strategy is to employ and
offer highly qualified senior IT consultants with significant
experience. As of 31 December 2021, the Group employed 478
employees, of which approximately 420 were IT consultants.
The Group's consultants have on average more than 10 years
of experience. This creates a solid foundation for a strong
professional environment and high-quality deliveries. The
Webstep work culture is driven by the values of being skilled,
innovative, generous and uncomplicated.
Just like 2020, 2021 has also been a year affected by the
COVID-19 pandemic. Most of the employees have worked from
home offices the majority of the year, which has been in
accordance with the Norwegian and Swedish authorities’
recommendations. The pandemic has not had a significant
financial impact on the business in 2021.
Financial review
The following financial review is based on the consolidated
financial statements of Webstep ASA and its subsidiaries. The
statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted
by the EU as well as the Norwegian accounting legislation.
In the view of the board, the income statement, the statements
of comprehensive income, changes in equity and cash flow, the
balance sheet and the accompanying notes, provide
satisfactory information about the operations, financial results
and position of the Group and the parent company 31
December 2021.
(All amounts in brackets are comparative figures for 2020
unless otherwise specifically stated).
Consolidated statement of income and comprehensive
income
Total operating revenues amounted to NOK 775.0 million, up
12.3 per cent from NOK 690.0 million in 2020. The revenue
growth was driven by an increased number of consultants,
higher utilization and higher hourly rates. Revenues from
subcontractors decreased by 18.2 per cent to NOK 68.8 million
in 2021.
Webstep’s revenue model is based on hourly fees, with revenue
capacity depending on the number of consultants and number
of working days available. Calendar effects may therefore
cause differences in revenue capacity between years. The
average number of employees in 2021 was 449 (410) and the
number of working days was 252 (252) and 253 (252) in
Norway and Sweden, respectively.
Cost of services and goods sold, mostly from use of
subcontractors, amounted to NOK 70.2 million (NOK 78.9
million) for the year.
The Group has a highly flexible and efficient cost base.
Personnel expenses include salaries and benefits, pension, tax,
vacation pay and other items. A high proportion of salary is
variable. New consultants receive a guaranteed base salary in
7
WEBSTEP | ANNUAL REPORT 2021
the onboarding phase, which is the main driver for higher
personnel expenses in periods with high onboarding activity.
Webstep’s salary model is a merit-based model where the
consultant directly benefits from his or her attractiveness in the
market through a fixed share of the billable rate.
Salaries and personnel costs amounted to NOK 583.7 million
(NOK 513.2 million) for the full year. The increase from 2020 is
explained by higher revenue-based salaries for consultants,
culture building activities and increased number of sales- and
management personnel.
Other operating expenses amounted to NOK 40.0 million (NOK
34.0 million) for the full year. The increase from 2020 is
explained by increased expenses related to external services,
software and IT-related events.
Depreciation and impairment costs were NOK 15.3 million
(NOK 13.9 million). The main reason for the increase was the
relocation of Webstep offices, which has contributed to
increased lease costs year-on-year.
The Group uses earnings before interest and taxes (EBIT) and
earnings before interest, taxes, depreciation and amortization
(EBITDA) as alternative performance measures. Total
consolidated EBITDA amounted to NOK 81.2 million (NOK 63.9
million), and EBIT amounted to NOK 65.9 million (NOK 50.0
million).
Net financial costs were NOK 3.5 million (NOK 2.9 million) and
income tax amounted to NOK 13.9 million (NOK 10.3 million).
Net profit for the year was NOK 48.5 million (NOK 36.7 million).
Consolidated financial position
Total assets on 31 December amounted to NOK 649.0 million
(NOK 591.7 million). Non-current assets were NOK 458.1
million (NOK 432.1 million) and consisted mainly of intangible
assets. Intangible assets amounted to NOK 383.6 million (NOK
389.8 million), and comprised primarily acquisition-related
goodwill of NOK 380.5 million (NOK 385.3 million). Currently,
there are no indications that impairment is required for any of
the reporting units. Right-of-use assets related to office rentals
and car leases have been recognized in the balance sheet at
the total amount of NOK 62.5 million (NOK 34.8 million). Total
current assets of NOK 190.9 million (NOK 159.5 million)
consisted of trade receivables, other current receivables and
cash and short-term deposits. Trade receivables amounted to
NOK 132.8 million (NOK 108.0 million). Revenues are invoiced
on a monthly basis, and most receivables are due 30 days after
invoicing. Other current receivables were NOK 11.4 million
(NOK 11.8 million). Cash and short-term deposits amounted to
NOK 46.7 million (NOK 39.7 million).
Total equity on 31 December was NOK 393.7 million (NOK
380.2 million). The change is mainly related to earnings
generated, offset by 2020 dividends paid in 2021.
Non-current liabilities amounted to NOK 51.0 million (NOK 25.8
million) and consisted mainly of non-current leasing liabilities
of NOK 49.5 million (NOK 24.1 million). The increase is mainly
related to new lease agreements for offices in Bergen and
Stavanger. Current liabilities of NOK 204.3 million (NOK 185.6
million) consisted of current leasing liabilities, trade payables,
tax payables, social taxes and VAT and other short-term
liabilities.
Cash flow
Net cash flow from operating activities amounted to NOK 54.7
million (NOK 63.3 million) in 2021. The decreased cash flow
from operations compared to 2020 can primarily be explained
by change in receivables and liabilities.
Net cash flow from investing activities was negative NOK 7.8
million (negative NOK 4.0 million). The investments are mainly
related to equipment for new employees and office upgrades.
The nature of the Company’s operations requires relatively low
levels of investments, and the Company has a sufficient ability
to finance any investment required as part of its regular
operations through its net cash flow from operating activities
and the RCF.
Net cash flow from financing activities was negative NOK 40.0
million (negative NOK 45.1 million). The financing activities in
2021 mainly consist of payment of dividends, net equity
proceeds and payment of lease liabilities.
The Webstep Group had an unutilized Revolving Credit Facility
(RCF) with SpareBank1 SR-Bank of NOK 110 million and SEK 5
million with SEB. The Group has not been in breach with the
covenants of the RCF during 2021. See note 17 and 21 for
further details.
Segment information
The Group’s activities are organized in two geographical
segments, Norway and Sweden. Revenues and results are
recorded in the entity where they occur and hence reported in
the segment, in which the legal entity belongs. Segment
performance is evaluated on the basis of revenue and EBIT
performance. Assets and liabilities are not allocated between
the segments.
Norway is the largest segment, accounting for 86 per cent of
the consolidated operating revenues in 2021.
Norway
Webstep Norway is headquartered in Oslo and also has offices
in Bergen, Stavanger, Trondheim, Kristiansand and Haugesund.
The Group provides high-end IT consultancy services to around
250 public and private clients across the country.
8
WEBSTEP | ANNUAL REPORT 2021
Total operating revenues for 2021 came to NOK 668.4 million
(NOK 583.9 million), up 14.5 per cent compared to 2020. More
employees, higher utilization and hourly rate impacted
revenues. Revenus from subcontractors decreased by 15.2 per
cent in 2021 to 45.8 million.
EBIT for the full year came to NOK 61.1 million (NOK 41.6
million). The increased EBIT is explained by increased
revenues and therefore also increased salaries in line with the
salary model. Also increased expenses related to external
services, software, events and culture building activities
impacted EBIT.
Webstep Norway had 403 employees on 31 December 2021
(352 employees). The average number of employees in 2021
was 379 (348).
Sweden
Webstep Sweden has offices in Stockholm, Malmö, and
Uppsala. Webstep Sweden serves clients in different
industries, mainly in the private sector, and delivers the same
high-end IT consultancy services as Webstep Norway, primarily
within the Group’s core digitalization offering.
Operating revenues for the full year came to NOK 106.7 million
(NOK 106.1 million), an increase of 0.5 per cent. Revenues
were primarily impacted by a higher number of employees,
offset by less use of subcontractors, lower utilization rate and
a negative currency effect.
Adjusted for fluctuation in exchange rates, revenue grew by 3.3
per cent compared to 2020. EBIT came to NOK 4.8 million
(NOK 8.4 million) for the full year. The decreased EBIT is
impacted by extensive onboarding, decreased utilization rate,
reduced revenues from subcontractors, increased number of
sales personnel and office related expenses.
Webstep Sweden had 75 employees 31 December 2021 (63
employees). The average number of employees in 2021 was 70
(63).
Research and development
The nature of the business of Webstep, is to contribute to the
digital R&D processes of the Group’s customers, and to explore
the opportunities created by new technologies. The Group has
Centers of Excellence as well as other permanent and ad-hoc
in-house teams, which continuously work on different
innovation initiatives that create new insight.
The Group did not have any defined R&D initiative in 2021
which met the criteria of an intangible asset. The recognition
as an asset is based on the management's assessment of
future economic benefits from the projects and that the criteria
in IAS 38.57 is met.
Specific projects related to GDPR and Samla have been
approved by the Research Council of Norway (Forskningsrådet)
to qualify for SkatteFUNN (government R&D tax incentive
scheme) in 2021. Gross R&D costs related to these two
projects amounting to NOK 2.0 million have been expensed in
2021, and the expected refund from SkatteFUNN is NOK 0.4
million.
Risk and risk management
The Group is exposed to various risks and uncertainties of
operational, market and financial character. Webstep identifies
and manages risks on an ongoing basis. The risk factors
described below have been identified as key risks by the
management. The list is not exhaustive. See note 4 for further
information on Financial Risk.
Business Risk
The Group is exposed to business risk especially related to:
● market development
● its ability to attract and retain talent
● project risk and potential legal liability
● regulatory risk in the markets where the Group
operates
The Group's results are affected by macroeconomic
development and demand for its services. The major event that
affected the macro economy in 2021, is the COVID-19
pandemic which started in 2020. The business implications of
COVID-19 have been limited for Webstep. The large diversity of
customers combined with various projects in different sectors
and geographic areas, have a somewhat mitigating effect on
the market risk exposure of the Group. Long-term contracts
and consistent deliveries over time have secured a
low-volatility price structure. The variable salary model for the
majority of the consultants also reduces market risk exposure
as the salary expenses to a large extent correlate with
revenues.
The employees are the most important asset of Webstep. In
order to ensure stable growth, the Group is dependent on being
an attractive employer to retain and attract new employees.
Webstep’s strategy is to continuously invest in new
technological trends and services, provide interesting and
challenging assignments, and to offer attractive remuneration
and benefits to its employees. The compensation model is
based on a high proportion of variable salary, which is closely
linked to the consultants’ individual performance. Personnel
expenses will therefore in general correlate with the Group’s
earnings.
Consultancy businesses are exposed to the risk of
disagreements and legal disputes related to client projects. A
majority of the Group’s assignments are based on standardized
agreements with “Time & Material” pricing and monthly
invoicing, which implies limited risk per contract.
9
WEBSTEP | ANNUAL REPORT 2021
If the consultant can be held responsible for gross negligence
or willful misconduct, the Group may be liable to damages. In
order to reduce these risks, according to market practice, the
Group has insurance coverage for professional liability,
occupational injury, general liability and employee dishonesty.
The Group has in the past been, and may in the future be,
subject to legal claims, including those arising in the normal
course of business. Contracts may contain penalty clauses for
the Group's failure to timely deliver or failure to meet agreed
service levels and the Group may face claims as a result of
breach of contract.
An unfavorable outcome on any litigation or arbitration matter
could require that the Group pays substantial damages, could
prevent the Group from selling certain of its products or
services, or in connection with any intellectual property
infringement claims, it could require that the Group pays
ongoing royalty payments.
A settlement or an unfavorable outcome on any litigation or
arbitration matter could have an adverse effect on the Group's
operating revenue and profitability.
Changes in laws and regulations in the markets where
Webstep operates could hinder or delay the Group's operations,
increase the Group's operating costs and reduce demand for
its services. Changes in laws and regulations applicable to the
Group could increase compliance costs, mandate significant
and costly changes to the way the Group implements its
services and solutions, and threaten the Group's ability to
continue to serve certain markets.
Financial Risk
The Group is exposed to financial risk such as:
● credit risk
● currency risk
● interest rate risk
● liquidity risk
The Group’s executive management team and the board of
directors monitor these risk factors on an ongoing basis and
take the necessary actions when required.
The Group’s exposure to credit risk is influenced mainly by the
individual characteristics of each customer. Webstep engages
with large and regular customers and has had low historical
losses on receivables. Webstep has a diversified portfolio of
customers in various industries, and there is no single
customer that represents a significant proportion of total
revenues.
Currency risk refers to the exposure through operations across
different countries, in regard to unpredictable gains or losses
due to changes in the value of one currency in relation to
another currency. Webstep operates in Norway and Sweden
and fluctuations in exchange rates between NOK and SEK
could affect the Group's business, results of operations, cash
flows, financial condition and/or prospects. Currently, the
Group does not have any hedging positions in place to limit the
exposure to exchange rate fluctuations. The Group has
assessed the currency risk to be limited, since the Group
entities endeavor to match income and expenses as well as
assets and liabilities in the same currency.
The Group is exposed to interest rate risk primarily in relation
to its revolving credit facility, issued at floating interest rates
based on NIBOR (Norwegian Interbank Offer Rate). As such,
movements in interest rates could affect the Group's business,
results of operations, cash flows, financial condition and/or
prospects. The Group does not currently have any hedging
positions in place to limit the exposure to interest rate
fluctuations. The Group evaluates the interest rate risk to be
minimal due to the stable financial situation in Norway,
combined with low net debt and strong financial position for
the Group.
Liquidity risk arising from the Group not being able to meet its
financial obligations as they fall due, is considered low. The
Group’s approach to manage liquidity risk is through proper
liquidity planning to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s
reputation. Executive management has monitoring controls in
place to ensure that the Group has sufficient liquidity.
Going concern
The annual accounts have been prepared on a going concern
assumption. The board has confirmed that this assumption
can be made on the basis of the Group’s budgets and
long-term forecasts.
Parent company results and allocation of net profit
Webstep ASA is the parent company of the Group. The
Company facilitates and supports internal processes
throughout the Group, especially in areas such as finance,
business development, communication and marketing. The
annual financial statements for Webstep ASA are prepared in
accordance with the Norwegian Accounting Act and the
regulations on simplified application of international
accounting standards (IFRS).
The Company had an operating loss of NOK 20.9 million (NOK
23.4 million) in 2021. The Company’s net financial revenue for
2021 was NOK 59.1 million (NOK 44.7 million) and mainly
consists of group contribution from its subsidiary, Webstep AS.
Profit before tax came to NOK 38.3 million (NOK 21.3 million),
while net profit was NOK 29.8 million (NOK 16.6 million). The
10
WEBSTEP | ANNUAL REPORT 2021
overall increase in profit before taxes, relates to the increase in
Group contribution NOK 61.1 million (NOK 46.5 million) and
reduced operating expenses.
The board proposes the following allocation of the net profit of
NOK 29.8 million for the parent company:
Transferred from other equity NOK 76.3 million
Proposed dividends for 2021 NOK 46.5 million
The book value of the Company’s investments in the subsidiary
companies 31 December 2021 is NOK 432.1 million (NOK
432.1 million). The Company is the administrator and owner of
the Group’s bank accounts in Norway, and hence the positive
cash flow generated by the Group increases the cash position
of the Company. Any deposits generated by the Norwegian
subsidiary are classified as liabilities to Group companies. At
year end the cash and short-term deposits amounted to NOK
31.1 million (NOK 22.7 million), and the liabilities to Group
companies amounted to NOK 182.2 million (NOK 164.9
million). Total receivables from Group companies amounted to
NOK 66.0 million (NOK 56.8 million). Equity amounted to NOK
287.7 million (NOK 290.3 million), which corresponds to an
equity ratio of 54.2 per cent (56.7 per cent). Changes in equity
is mainly explained by profit for the period offset by the
proposed dividend for 2021.
The board of directors considers that Webstep ASA had
adequate equity and liquidity at the end of 2021. The board of
directors will propose an ordinary dividend of NOK 1.70 per
share for approval by the Annual General Meeting 28 April
2022. The proposed dividend represents 156 per cent of the
annual net profit of the Company, and 96 per cent of the
consolidated annual net profit of the Group. This is in
accordance with the Company’s dividend policy.
Corporate Responsibility Statement
Webstep has a strong vision to make an impact on how society
is being developed.
By recognizing its responsibility Webstep seeks to influence
and help support the work of individuals and groups that are
relentlessly dedicated to making a positive change creating a
safe and sustainable world. Webstep is subject to corporate
responsibility (CR) reporting requirements under section 3-3c
of the Norwegian Accounting Act.
The Group delivers digital expertise and helps develop IT
services to public and private businesses in Norway and
Sweden. The services will often contribute to solving critical
community tasks within a broad range of sectors such as
healthcare, manufacturing, transportation, IT, energy, utilities,
telecom and public administration. Webstep’s business model
consists of building regional offices and employing local IT
experts within these regions, which in turn provide services to
local customers.
The Group’s ability to succeed rests on the confidence from its
key stakeholders. This drives Webstep’s commitment to
operate the business in accordance with responsible, ethical
and sound corporate values and principles.
Risks
The nature of Webstep’s operations implies relatively low
inherent risk within areas for corporate responsibility such as
environment, social conditions, work environment,
discrimination, human rights, corruption, bribery and equal
opportunities.
However, considering the statistics for gender balance,
Webstep recognizes the need for improvement both for the IT
industry at large, and within the Company. Webstep works hard
to promote IT to future generations of women in order to
contribute to the closing of this gender gap. The activities
include actively participating in the public debate as well at
supporting events focused on women in technology. In 2021
Webstep invested time and resources to support 50 leading
women in tech, TENK Tech Camp for girls aged 13-18 as well as
Jenter og teknologi organized by Abelia.
Regarding the work environment in Webstep, the level of
employee churn can be a relevant index in order to reveal any
areas of improvement. Employee churn is also considered one
of Webstep’s key risks when it comes to revenue growth, hence
important indexes to monitor are the Employee Satisfaction
Index and the Employee Loyalty Index which may be leading
indicators to anticipate employee churn. Employee churn is
monitored internally, but will not be stated externally as it is
considered competitively sensitive information. See “Relevant
Sustainability Metrics” on the next page for further information.
As an IT company, Webstep is dependent on the trust of its
customers in order to maintain a sustainable business. If
Webstep were involved in serious data breaches where for
instance customers’ confidential business information was
compromised, this would cause serious harm to Webstep’s
reputation. Webstep consultants are engaged in business
critical systems for customers, and cyber security is key to
protect the customers’ data and processes. Webstep ensures
that consultants are trained on cyber security, and has
recruited many experts within this area of expertise the past
years. This is regarded as an important part of maintaining the
Company’s professional integrity. As the digital world becomes
increasingly connected, the risk of cyber-attacks and
information security breaches are on the rise. Data protection
and digital security are key priorities at Webstep, and the
Company is continuously monitoring the situation.
Security policies are also integrated in Webstep’s internal
corporate governance, providing a platform for effective risk
11
WEBSTEP | ANNUAL REPORT 2021
assessment and activities preventing security breaches and
loss of data. There is ongoing work in the digital security area
making sure Webstep avoids being affected by cyber security
incidents affecting operations.
Relevant sustainability metrics
2021
2020
Women in per cent of total employees
14%
15%
Sick leave in per cent
2.2%
2.3%
Employee Satisfaction Index (0 to 100)
92
91
Employee Loyalty Index (-100 to +100)
66
63
Data Security Breaches
0
0
Environment and society
Webstep aims to create profitability without compromising
ethical values, and with respect for individuals, the environment
and the society at large.
Webstep recognizes its responsibility as an organization and
employer to contribute to the achievement of UN’s Sustainable
Development Goals (SDGs). The following SDGs are goals in
the Guidelines for Corporate Responsibility where Webstep
believes it can have an impact:
Although Webstep’s operations have a limited negative effect
on the environment, the Group makes systematic efforts to
reduce the environmental impact of its business, for instance
by using video and telephone conference solutions as often as
possible to reduce pollution through business travel.
The Norwegian subsidiary of Webstep has received an
Eco-Lighthouse certification (Miljøfyrtårn), and has reviewed its
routines and processes in order to be able to contribute to the
green shift in the best possible way. This includes sustainable
procedures and processes in areas including business travel,
procurement and waste management.
Corporate social responsibility values are deeply rooted in the
organization. One aspect of this is the willingness and ability to
share knowledge across platforms and communities. As a
knowledge-based company Webstep has employees with
market leading expertise, and it’s key that sharing of this
knowledge and insight is not restricted to customer projects.
Webstep is across all regional offices known for its generosity
and will continue to leverage this corporate value to help build
and support communities and players developing for
tomorrow.
With a mission to help shape the future, Webstep is playing an
active and direct role influencing how society is being
developed. Through Arendalsuka, newspaper editorials and
branding campaigns the Company has been vocal about the
importance of technology and IT competencies to solve
societal challenges. In addition, local regional offices have
been involved in local charity and supporting organizations
working to help less fortunate groups of individuals.
Employees
Webstep makes great efforts in taking good care of its
employees in terms of health, safety and environment
management. The Company has a zero-tolerance policy
against harassment, bullying and discrimination, and is equally
supporting the employees’ personal and professional
development. As of 31 December 2021, the Group had a total
of 478 employees (415).
Internal guidelines
Webstep has established Guidelines for Corporate
Responsibility and Ethical Guidelines which are part of the
employees’ work agreements. Webstep’s Guidelines for
Corporate Responsibility are based on the UN Global
Compact’s ten principles on Human Rights, Labor, Environment
and Anti-Corruption. Webstep’s guidelines emphasize among
others ethical behavior, strong data security, and encourage
excellent financial and practical business practices. All
employees are required to comply with the Company’s
established guidelines which are essential to build strong
relationships with clients, suppliers and partners.
Work environment and employees’ rights, terms and benefits
Webstep gives weight to caring about the work environment
and the employees’ rights, terms and benefits, as well as their
opportunities for personal development on and off work. This
is based on the idea that employees thrive in an environment
built on trust, with the opportunity to make a difference, and
freedom to take responsibility and make mature decisions in
the best interest of oneself, the customers and the
organization.
Webstep has established whistleblowing guidelines which are
designed to reassure the employees that any matters reported
will be taken seriously, heard and assessed, followed up and
answered.
Webstep has an established working environment committee
(AMU) with selected representatives from the employees and
the administration of Webstep. Further, there are three selected
12
WEBSTEP | ANNUAL REPORT 2021
employees serving as board members in Webstep AS and
observers to the board of directors in Webstep ASA.
Webstep strives to offer competitive terms and benefits to their
employees. The work opportunities for IT professionals in the
markets where Webstep operates are good, and if Webstep did
not offer competitive salaries and benefits, the company would
risk losing employees to its competitors.
Sickness and injuries
Webstep works systematically with health, safety and
environment management and makes concerted efforts to
mitigate health risks and prevent injuries. No accidents or
injuries were registered in neither 2021 nor 2020. Sick leave in
the Group was 2.2 per cent in 2021, down from 2.3 per cent in
2020. The decrease is a result of reduced long-term sickness
absence. The employees on long-term sick leave are closely
followed up by their respective managers, and the reasons for
the sick leave are not considered to be work environment
related. Webstep has strived to follow the COVID-19 infection
prevention and control guidelines issued by the Norwegian and
Swedish governments during the pandemic.
Company culture and work environment
Webstep puts great emphasis on building a strong company
culture and a healthy work environment in and across all its
geographical locations. The Webstep work culture is driven by
the values of being skilled, innovative, generous and
uncomplicated. The board of directors considers the work
environment to be good and the collaborative relationship with
employee observers to the board is perceived as positive.
During the COVID-19 pandemic the employees have been
encouraged to keep delivering services to the customers as
long as this was possible and did not compromise the security
or well-being of the employees, the customers or their families.
The Webstep organization has been leveraging collaborative
tools and video conferencing for many years. The collaborative
culture among employees has ensured a smooth transition to
working from home as the new normal, and the customers
have also adapted well to the situation.
Building and sharing of competence and skills is vital to
Webstep. The concept «Webstep Community» fuels initiatives
across Webstep, labeled Webstep Discover, Webstep Learn and
Webstep Create. On-site live productions all over Webstep are
made digitally available for all employees, as sources of
inspiration, learning and innovation. This also is an important
part of ensuring the Company’s professional integrity.
Webstep runs annual employee surveys. The 2022 report, with
a response rate of 79%, run January/February 2022, covers the
2021 employee experiences.
The areas of measures are working environment, personal
development and culture and leadership show very satisfying
results.
Webstep has higher results than Netigate’s benchmark for all
question areas. (Netigate being a recognized survey supplier)
2021 numbers show a raise in the Employee Satisfaction index
(ESI 0-100 index) from 91 to 92 from 2020 to 2021 - and a raise
of the Employee Loyalty index (eNPS (-100 to +100 index) from
63 to 66 (towards a benchmark of -2. (eNPS >0 is perceived to
be good >+20 to be very good.)
The total score (scale 1-5, 5 being the best), on the question
«I’m proud to work at Webstep» uncovered a 4,84 score for
women, respectively a 4,64 score for men. The question on
overall satisfaction of how Webstep had handled the Covid-19
situation, resulted in a net score of 4,71
Retaining and attracting experienced IT consultants
As part of its business strategy, the Group primarily hires
experienced IT consultants. At year end, the consultants have
on average more than 10 years of experience. The employees
are highly skilled, and an increasing portion of the Group's
consultants have PhD degrees. The majority of the IT
consultants hold a master's degree in computer engineering or
similar.
The Group endeavors to assign its consultants interesting and
challenging projects that ensure personal development and
contentment. By constantly developing the consultants' skill
sets, the Group's services as such are also improved. Further,
the Group's incentive model for consultants is designed to
attract and motivate highly experienced experts. Whereas the
Group's management and sales personnel receive fixed
salaries and may be entitled to other variable pay, the salary
model for the Group’s consultants is based on revenue sharing.
The salary model for consultants has been a pillar in Webstep
ever since inception in 2000.
The above-mentioned incentive model is designed to directly
incentivize the Group's consultants to deliver high-end services
to the Group's clients, while at the same time providing the
consultants with a high degree of personal freedom, attractive
compensation and a certain downside protection. The model is
also designed to inspire the consultants to be entrepreneurial
due to the close link between salary and effort. The Group's
incentive model appears to be particularly attractive for highly
experienced IT consultants, and the model is hence
instrumental in the Group's strategy of attracting such
consultants. Further, the incentive model makes the Group less
vulnerable to price fluctuations and macro-economic changes
due to the large degree of proportionality between costs and
revenues related to the Group's consultants.
13
WEBSTEP | ANNUAL REPORT 2021
The Group's success is dependent on the performance of its
employees and the Group's ability to attract the very best
candidates and to train and further develop such IT
professionals.
Equality and non-discrimination Statement
The purpose of Norway’s Equality and Anti-Discrimination Act
is to promote equal opportunities and rights, and to prohibit
discrimination on the grounds of ethnicity, skin color, language,
religion and beliefs. It is clearly stated in the employee
guidelines that discrimination is not tolerated, and in the event
that this should occur, it should be reported immediately.
To the best knowledge of the board and the executive
management, the Group does not discriminate on the grounds
of gender, disability, ethnicity, religion or the like. Awareness
and guidelines on equal opportunities are emphasized
throughout the organization in processes such as recruitment,
appointment, pay and customization of working conditions,
and in work on developing attitudes.
However, there is an inherent risk that discrimination can occur
in different processes within the Company, such as the
recruitment processes, the sales process, appointment
processes, social activities etc. The responsibility lies with the
management to ensure that discrimination on the basis of
gender, ethnicity, disabilities or other grounds does not occur in
these processes. The risk is mainly considered to be related to
unconscious biases rather than conscious discrimination. But
even the risk of unconscious biases is considered low, as
diversity is something Webstep strives to achieve. Diversity is
an asset when it comes to creating the best solutions for the
customers. Webstep has a broad range of nationalities
employed, and many of them are hand-picked experts with
PhDs within their field. The individual departments work on
different initiatives to address the local challenges and
opportunities when it comes to diversity.
In order to avoid discrimination, the Company has established
clearly defined ethical guidelines for all employees stating that
discrimination is not accepted within the Company, and
explaining how any instances should be reported.
The IT business is characterized by a high share of male
employees. Webstep works actively to attract female
employees and recognizes its responsibility to strive for a
better gender balance within the whole tech industry. Webstep
is a member of the national ODA Female Network for women in
the IT industry in Norway and participates actively in the
network. Both in 2020 and in 2021 female consultants in
Webstep were recognized among the top 50 female talents and
role models within the tech industry in Norway by Abelia.
Webstep employees also participate in events for children and
students such as the TENK Tech camp and “Girls and
Technology” by The Confederation of Norwegian Enterprise
(NHO) to promote the tech industry for the next generation.
One important mitigating factor to the risk of gender pay gap in
Webstep, is the consultants’ salary model which is based on
the revenue they generate. For sales- and management
personnel, the bonus pay criteria are equal for men and
women, and the model as such does not give room for
discrimination.
68 (14 per cent) of the Group’s 478 employees 31 December
were female and 410 (86 per cent) were male. The executive
management team comprised one (one) woman and nine (six)
men. See note 7 in the notes to the consolidated financial
statement for further details on the salaries for the executive
management team. The parent company board of directors
consisted of two female and three male directors 31 December
2021. The employees have elected three observers to the
board of directors. In 2021 one (two) women were elected and
two (one) men. The average number of weeks of parental leave
for women and men were 16 and 7, respectively.
On 31 December 2021 there were two (none) temporary
employees in the Group. Both temporary employees are men.
There were three (four) part-time employees. All part-time
employees are women and work part-time voluntarily.
31 December 2021, 57 (14 per cent) of the employees in
Webstep Norway were women. On average for employees in
Webstep Norway, the salary of women is the equivalent of 95 %
compared to their male colleagues. For employee groups with
less than five employees per gender, percentage share of
salary will not be stated.
- Consultants: 13 % female employees. Average salary
for women 92 % compared to male employees.
- Advisors: 32 % female employees. Average salary for
female 94 % compared to male employees.
- Management: 11 % female employees. Average salary
for female 1.04 times compared to male employees
- Administration: 43 % female employees.
31 December 2021, 17% of the employees in Webstep Sweden
were female. On average, the salary of women employed in
Webstep AB is the equivalent of 67 % compared to their male
colleagues. For employee groups with less than five employees
per gender, percentage share of salary will not be stated.
- Consultants: 9 % female employees. Average salary
for women 75 % compared to male employees.
- Advisors: 20 % female employees.
- Management: 33 % female employees.
- Administration: 100% female employees.
Webstep aims to be a workplace with no disability
discrimination. Efforts are made to design and arrange the
Group’s premises so all functions can be carried out regardless
of disabilities. Workspace and job responsibilities are tailored
14
WEBSTEP | ANNUAL REPORT 2021
for employees or job applicants with disabilities as far as
possible.
Webstep has a Health, Safety and Environment (HSE)
handbook and a clearly communicated process for
whistleblowing. No warnings have been submitted in 2021,
neither in 2020.
Corporate governance
Good corporate governance provides the foundation for
long-term value creation, to the benefit of shareholders,
employees and other stakeholders. The board of directors of
Webstep has established a set of governance principles in
order to ensure a clear division of roles between the board of
directors, the executive management and the shareholders.
The principles are based on the Norwegian Code of Practice
for Corporate Governance.
Webstep is subject to annual corporate governance reporting
requirements under section 3-3b of the Norwegian Accounting
Act and the Norwegian Code of Practice for Corporate
Governance, cf. section 4.4 of the continuing obligations for
issuers of shares pursuant to Oslo Rule Book II – Issuer Rules.
The Accounting Act may be found (in Norwegian) at
www.lovdata.no. The Norwegian Code of Practice for
Corporate Governance, which was last revised on 14 October
2021, may be found at www.nues.no.
The annual statement on corporate governance for 2021 has
been approved by the board and can be found on page 89 in
the Annual Report.
Share and shareholder matters
The Company's shares have been listed on Oslo Stock
Exchange since 11 October 2017. Webstep has only one share
class, where all shares have equal rights in the Company.
The shares are traded under the ticker WSTEP and had a
closing price 30 December 2021 of NOK 33.60.
The total number of outstanding shares 31 December 2021
was 27.3 million (excl. treasury shares). The shares are
registered in the Norwegian Central Securities Depository
(VPS). The Company's registrar is SR-Bank ASA. The shares
carry the securities number ISIN NO 0010609662.
Dividend policy
Webstep has an ambition to create long term shareholder
value in the form of dividend payments and share price
appreciation over time. Dividend payments will be considered
in light of the Company's financial situation and investment
plans. The Company's objective is to pay annual dividends
representing minimum 75 per cent of the Group’s net profit.
In deciding whether to propose a dividend and in determining
the dividend amount, the board of directors will take into
account legal restrictions, the Company's capital requirements,
including capital expenditure requirements, its financial
condition, general business conditions and any restrictions that
its contractual arrangements in place at the time of the
dividend resolution may place on its ability to pay dividends
and the maintaining of appropriate financial flexibility. Except in
certain specific and limited circumstances set out in the
Norwegian Public Limited Companies Act, the amount of
dividend paid may not exceed the amount recommended by
the board of directors.
Employee share purchase program
In December 2021, all employees in Webstep AS and Webstep
ASA were given the opportunity to purchase shares in Webstep
ASA through a share investment program using the Company’s
own treasury shares. 66 per cent of the eligible employees
participated in the program. They acquired a total of 232,103
shares with a 25 per cent discount to the market price.
Long-term incentive program
The annual general meeting in 2019 approved a three year long
long-term incentive program (the “Long-term Incentive
Program” or “LTIP”) for the Company's executive management
and other managers as decided by the board of directors. The
LTIP has an initial term of three years. The number of options
granted in each respective year cannot exceed 2.5 per cent of
the Company's share capital. The total number of issued
options under the program cannot constitute more than 8 per
cent of the Company's share capital at any time. The LTIP is
structured so that 25 per cent of the options may be exercised
following the first anniversary of the grant date, an additional
25 per cent of the options may be exercised following the
second anniversary of the grant date and the outstanding 50
per cent of the options may be exercised following the third
anniversary of the grant date. The options expire following the
fifth anniversary of the grant date. The exercise of options is
conditional on continued employment in the group at the
exercise date.
The exercise price of the share options is equal to the market
price of the underlying shares on the date of grant. The share
options vest if the senior executive remains employed during
the vesting period. The total number of outstanding options in
the Company is 1,707,666 on 31 December 2021.
The potential dilution through the LTIP accounts for 424,501
shares. 5,865 of the vested shares had been exercised 31
December 2021. The outstanding options may be settled in
cash. See note 22 for further details.
Share investment program
On the basis of a resolution by the annual general meeting 28
April 2021, certain management employees and the members
15
WEBSTEP | ANNUAL REPORT 2021
of the board of directors were invited to participate in a Share
Investment Programme iIn June 2021.
The participants in the Share Investment Programme were
offered to acquire new shares in the Company for an amount
of between NOK 50,000 and NOK 200,000 each, and for up to
NOK 4,200,000 in aggregate. The shares were offered at a
share price of NOK 22.41, which implies a discount of 21.7% to
the market price. The shares acquired are subject to a lock-up
period of two years, and the reduced offer price reflects the
value-reducing effect of the lock-up period.
A total of 123,088 shares were acquired in the program. Shares
acquired in the program were settled in the form of new shares
in the Company issued pursuant to an authorisation granted to
the board of directors by the annual general meeting held on 28
April 2021.
Changes to the executive management and board of directors
Save Asmervik was appointed new CEO 15 February 2021.
In January 2021 Kjetil Bakke Eriksen was elected as a new
board member after Bjørn Ivar Danielsen made his directorship
available.
Directors’ and Officers’ Liability Insurance
Webstep has signed a directors’ and officers’ liability insurance
agreement with Ryan Speciality Group Sweden AB covering the
board of directors and executive management. The insurance
will cover damages amounting to NOK 50,000,000 for each
incident and accumulated over the insurance period (one year).
Events after the balance date
Material events after the balance sheet date that occur before
the Board of Directors has approved the financial statements
may make it necessary to change the annual financial
statements or to disclose the matter in the notes to the
financial statements. If new information emerges regarding a
matter that existed on the balance sheet date, and the matter
is material, the financial statements must be changed.
The condemnable invasion of Ukraine and the sanctions
against Russia incorporated in Norwegian Law in March 2022,
are not expected to have a direct impact on Webstep’s
business activities, but the consequences of the acts of war
are uncertain. Webstep is following the developments closely
to detect any direct or indirect consequences that may follow.
No other events have taken place after the balance sheet date
that would have had a material effect on the financial
statements or any assessments carried out. No material
acquisitions or disposals of companies were carried out after
the balance sheet date.
Outlook
These forward-looking statements reflect current views about
future events and are, by their nature, subject to significant risks
and uncertainties.
The company continues to prove that it has the capacity and
expertise to deliver comprehensive projects and solutions. This
is in line with the previously communicated growth strategy,
ando attracts a broader range of employees.
The acceleration in the digital shift following the pandemic,
creates opportunities for IT expert companies such as
Webstep. The ongoing projects and the newly won contracts
are expected to build a solid foundation for the coming
quarters. The recruitments made in 2021 are also expected to
further strengthen the organization and enhance revenue and
profit growth.
The dividend policy remains unchanged, and the board of
directors intend to propose a dividend of NOK 1.70
representing 96 per cent of the annual net profit of the Group
for 2021.
Webstep ASA
Oslo, 5 April 2022
Trond Klethagen Johannessen
Save Asmervik
Toril Nag
Chair of the board
Chief Executive Officer
Board member
Siw Ødegaard
Trygve Christian Moe
Kjetil Bakke Eriksen
Board member
Board member
Board member
16
WEBSTEP | ANNUAL REPORT 2021
17
WEBSTEP | ANNUAL REPORT 2021
Financial statements -
Group
18
WEBSTEP | ANNUAL REPORT 2021
Financial statements – Group
Consolidated statement of comprehensive income
NOK 000's
Note
2021
2020
Sales Revenues
5
Total revenues
Cost of goods and services (COGS)
(70,200 )
(78,918 )
Salaries and personnel expenses
7,8,22
(583,665 )
(513,151 )
Depreciation and impairment
11,12
(15,273 )
(13,916 )
Other operating expenses
7,24
(39,961 )
(33,998 )
Total operating expenses
(709,100 )
(639,983 )
Operating profit (loss)
Finance income
9
Finance expense
44,098
(3,633 )
(3,163 )
Profit before tax
Income tax expense
10
(13,916 )
(10,348 )
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interest
Other comprehensive income that will
be reclassified to the income statement
Foreign currency translation:
Exchange differences on translation of
foreign operations
(5,929 )
Other comprehensive income for the
year, net of tax
(5,929 )
Total comprehensive income for the
year, net of tax
Attributable to:
Equity holders of the parent
Non-controlling interest
Earnings per share
23
Earnings per share, fully diluted
23
19
WEBSTEP | ANNUAL REPORT 2021
Consolidated statement of financial position
31 Dec
31 Dec
NOK 000's
Note
2021
2020
Assets
Intangible assets
11
Fixed assets
12
Right-of-use assets
12,24
Non-current financial assets
13
Deferred tax asset
10
Total non-current assets
Trade receivables
14
Other receivables
14
Cash and short-term deposits
15
Total current assets
Total assets
Equity
Share capital
15
Treasury shares
15
(54 )
(60 )
Share premium
Retained earnings
Non-controlling interest
Shareholders equity
16, 22
Liabilities
Deferred tax
10
Non-current leasing liabilities
24
Total non-current liabilities
Debt to credit institutions
15,17, 21
Current leasing liabilities
24
Trade and other payables
18
Tax payables
10
Social Taxes and VAT
18
Other short-term debt
18,19
Total current liabilities
Total liabilities
Total equity and liabilities
Webstep ASA
Oslo, 5 April 2022
Trond Klethagen Johannessen
Save Asmervik
Toril Nag
Chair of the board
Chief Executive Officer
Board member
Siw Ødegaard
Trygve Christian Moe
Kjetil Bakke Eriksen
Board member
Board member
Board member
20
WEBSTEP | ANNUAL REPORT 2021
Consolidated statement of change in equity
Issued
capital
Treasury
shares
Share
premium
Foreign
currency
translatio
n reserve
Retained
earnings
Total
earned
equity
Non-cont
rolling
interests
Total
equity
NOK 000's
Note
1 January 2020
-293
Profit for the period
Other comprehensive
income/(loss)
Sales of treasury shares
22
Share incentive program
22
Dividends
26
(42,677 )
(42,677 )
(42,677 )
31 December 2020
-59
Profit for the period
Other comprehensive
income/(loss)
(5,929 )
(5,929 )
(5,929 )
Sales of treasury shares
22
Share incentive program
22
Share issue
22
Dividends
26
(43,052 )
(43,052 )
(43,052 )
31 December 2021
-53
21
WEBSTEP | ANNUAL REPORT 2021
Consolidated statement of cash flows
NOK 000's
Note
2021
2020
Operating activities
Profit/ (loss) before tax
Adjustments for:
Depreciation of property, plant and equipment
11,12,24
Interest income
9
(120 )
(256 )
Interest expense
9
Net change in trade and other receivables
14
(24,390 )
(7,891 )
Net change in trade and other liabilities
18,19
Net foreign exchange differences
(1,323 )
Income tax expense
10
(9,959 )
(9,395 )
Interest received
9
Interest paid
9
(3,633 )
(3,163 )
Net cash flow from operating activities
Investing activities
Investments in property and equipment
12
(7,750 )
(3,974 )
Net cash flow from investing activities
(7,750 )
(3,974 )
Financing activities
Payment of principal portion of lease liabilities
24
(10,920 )
(8,989 )
Change in bank overdraft
17
Net proceeds from equity
Sales of treasury shares/employment incentive plan
Payment of dividends
(43,052 )
(42,677 )
Net cash flow from financing activities
(39,978 )
(45,091 )
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at 1 January
15
Cash and cash equivalents at 31 December
15
22
Notes to the consolidated
financial statement
23
WEBSTEP | ANNUAL REPORT 2021
Notes to the consolidated financial statements
Note 1 General information
The Company and the Group
Webstep Group (“the Group”) is a limited liability company
incorporated and domiciled in Norway , with its head office at
The Company and its subsidiaries (together “the Webstep
Group”/”the Group”) are leading providers of I T expert
be at the forefront of the technological development and to
assist its customers in their digitalization through the offering
of cutting-edge IT expertise. The Group’s core offerings are
digitalization, cloud migration and integration, in addition to its
other new focus areas Internet of Things (IoT), machine
learning, IT security, robotics and analytics.
These consolidated financial statements have been approved
for issuance by the Board of Directors on 5 April 2022 and are
subject to approval by the Annual General Meeting on 28 April
2022.
Note 2 Significant accounting principles
Basis for preparation
The consolidated financial statements at 31 December 2021
for Webstep ASA have been prepared in accordance with the
International Financial Reporting Standards (IFRS) as adopted
by the European Union.
The consolidated financial statements for the year ended 31
December 2021 were authorised for issue by the Board of
Directors on 6 April 2022.
The consolidated financial statements are presented in
Norwegian kroner (NOK) and all values are rounded to the
nearest thousand (NOK 000’s), except when otherwise
indicated.
The format for presenting the income statement is based on
the nature of the expenditure.
Going concern
The Group has adopted the going concern basis in preparing
its consolidated financial statements. When assessing this
assumption, management has assessed all available
information about the future. This comprises information
about net cash flows from existing contracts and debt service
obligations. Forecasts take into consideration expected future
net income. Management has a reasonable expectation that
the Group has adequate resources to continue its operational
existence for the foreseeable future.
Basis of measurement
The consolidated financial statements have been prepared
under the historical cost convention.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates.
It also requires management to exercise its judgment in the
process of applying the Group's accounting policies. The areas
involving higher degree of judgment or complexity, or areas
where the assumptions and estimates are significant to the
consolidated financial statements are disclosed in note 3.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Group and its subsidiaries as at 31
December 2021. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee. The Group re-assesses
whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more
of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated
financial statements from the date the Group gains control
until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive
income (“OCI”) are attributed to the equity holders of the parent
of the Group and to the non-controlling interests, even if this
results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
into line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are
eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it derecognises the
related assets (including goodwill), liabilities, non-controlling
interest and other components of equity, while any resultant
gain or loss is recognised in profit or loss. Any investment
retained is recognised at fair value.
24
WEBSTEP | ANNUAL REPORT 2021
Foreign currency translation
The Group’s consolidated financial statements are presented in
Norwegian kroner (NOK), which is also the parent company’s
functional currency. For each entity, the Group determines the
functional currency and items included in the financial
statements of each entity are measured using that functional
currency.
Transactions in foreign currencies are initially recorded by the
Group’s entities at their respective functional currency spot
rates at the date the transaction first qualifies for recognition.
Receivables, debt and other monetary items denominated in
foreign currencies are translated using the exchange rate at the
balance sheet date. Differences between the exchange rate at
the balance sheet date and the date on which the receivable or
debt arose, or was included in the latest balance sheet, are
recognised in the income statement and presented as financial
income and expenses.
Differences in exchange rates arising from the translation of
foreign subsidiaries’ equity at the beginning of the year at the
exchange rates at the balance sheet date and from the
translation of income statements from the monthly average
exchange rates for the currency exchange rates at the balance
sheet date are recognised directly in other comprehensive
income.
Segment reporting
Operating segments are reported by country of operation,
which currently is Norway and Sweden. The board of Webstep
ASA has appointed a strategic steering committee which
assesses the financial performance and position of the Group
and makes strategic decisions. The steering committee, which
has been identified as being the chief operating decision
maker, consists of the chief executive officer (CEO) and the
chief financial officer (CFO).
Changes in accounting policies and disclosures
Standards issued but not yet effective
The new and amended standards and interpretations that are
issued, but not yet effective, up to the date of issuance of the
Group’s financial statements are disclosed below. The Group
intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective.
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts
(IFRS 17), a comprehensive new accounting standard for
insurance contracts covering recognition and measurement,
presentation and disclosure. Once effective, IFRS 17 will
replace IFRS 4 Insurance Contracts (IFRS 4) that was issued in
2005. IFRS 17 applies to all types of insurance contracts (i.e.,
life, non-life, direct insurance and re-insurance), regardless of
the type of entities that issue them, as well as to certain
guarantees and financial instruments with discretionary
participation features. A few scope exceptions will apply. The
overall objective of IFRS 17 is to provide an accounting model
for insurance contracts that is more useful and consistent for
insurers. In contrast to the requirements in IFRS 4, which are
largely based on grandfathering previous local accounting
policies, IFRS 17 provides a comprehensive model for
insurance contracts, covering all relevant accounting aspects.
The core of IFRS 17 is the general model, supplemented by:
• A specific adaptation for contracts with direct participation
features (the variable fee approach)
• A simplified approach (the premium allocation approach)
mainly for short-duration contracts
IFRS 17 is effective for reporting periods beginning on or after
1 January 2023, with comparative figures required. Early
application is permitted, provided the entity also applies IFRS 9
and IFRS 15 on or before the date it first applies IFRS 17. This
standard is not applicable to the Group.
Amendments to IAS 1: Classification of Liabilities as Current
or Non-current
In January 2020, the IASB issued amendments to paragraphs
69 to 76 of IAS 1 to specify the requirements for classifying
liabilities as current or non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the reporting
period
• That classification is unaffected by the likelihood that an
entity will exercise its deferral right
• That only if an embedded derivative in a convertible liability is
itself an equity instrument would the terms of a liability not
impact its classification
The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and must be applied
retrospectively. The Group is currently assessing the impact
the amendments will have on current practice and whether
existing loan agreements may require renegotiation.
New and amended standards and interpretations
The Group has not early adopted any new standard,
interpretation or amendment that has been issued but is not
yet effective.
Amendments to IFRS 3: Definition of a Business
The amendment to IFRS 3 Business Combinations clarifies that
to be considered a business, an integrated set of activities and
assets must include, at a minimum, an input and a substantive
process that, together, significantly contribute to the ability to
create output. Furthermore, it clarifies that a business can exist
without including all of the inputs and processes needed to
create outputs. These amendments had no impact on the
consolidated financial statements of the Group, but may
25
WEBSTEP | ANNUAL REPORT 2021
impact future periods should the Group enter into any business
combinations.
Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate
Benchmark Reform
The amendments to IFRS 9 and IAS 39 Financial Instruments:
Recognition and Measurement provide a number of reliefs,
which apply to all hedging relationships that are directly
affected by interest rate benchmark reform. A hedging
relationship is affected if the reform gives rise to uncertainty
about the timing and/or amount of benchmark-based cash
flows of the hedged item or the hedging instrument. These
amendments have no impact on the consolidated financial
statements of the Group as it does not have any interest rate
hedge relationships.
Amendments to IAS 1 and IAS 8 Definition of Material
The amendments provide a new definition of material that
states, “information is material if omitting, misstating or
obscuring it could reasonably be expected to influence
decisions that the primary users of general purpose financial
statements make on the basis of those financial statements,
which provide financial information about a specific reporting
entity.” The amendments clarify that materiality will depend on
the nature or magnitude of information, either individually or in
combination with other information, in the context of the
financial statements. A misstatement of information is
material if it could reasonably be expected to influence
decisions made by the primary users. These amendments had
no impact on the consolidated financial statements of, nor is
there expected to be any future impact to, the Group.
Conceptual Framework for Financial Reporting issued on 29
March 2018
The Conceptual Framework is not a standard, and none of the
concepts contained therein override the concepts or
requirements in any standard. The purpose of the Conceptual
Framework is to assist the IASB in developing standards, to
help preparers develop consistent accounting policies where
there is no applicable standard in place and to assist all parties
to understand and interpret the standards. This will affect
those entities which developed their accounting policies based
on the Conceptual Framework. The revised Conceptual
Framework includes some new concepts, updated definitions
and recognition criteria for assets and liabilities and clarifies
some important concepts. These amendments had no impact
on the consolidated financial statements of the Group.
Amendments to IFRS 16 Covid-19 Related Rent Concessions
On 28 May 2020, the IASB issued Covid-19-Related Rent
Concessions - amendment to IFRS 16 Leases The
amendments provide relief to lessees from applying IFRS 16
guidance on lease modification accounting for rent
concessions arising as a direct consequence of the Covid-19
pandemic. As a practical expedient, a lessee may elect not to
assess whether a Covid-19 related rent concession from a
lessor is a lease modification. The amendment applies to
annual reporting periods beginning on or after 1 June 2020.
Earlier application is permitted. This amendment had no
impact on the consolidated financial statements of the Group.
Summary of significant accounting policies
Revenues from contracts with customers
The Group is in the business of selling IT-consultancy
manhours to its customers. Revenue for IT- services are to be
recognised over time because the customer simultaneously
receives and consumes the benefits provided by the Group, and
satisfies each of its performance obligations (that is, it fulfills
its promises to the customer) over time by transferring control
of the promised service underlying that performance obligation
to the customer. The fact that another entity would not need to
re-perform the services that the Group has provided to date
demonstrates that the customer simultaneously receives and
consumes the benefits of the group’s performance as it
performs. The input method is considered to be the best
method when recognising revenue over time because there is a
direct relationship between the group’s effort (i.e., labour hours
incurred) and the transfer of service to the customer. The
contracts are normally based on service agreements with
hourly fees. Fixed price contracts are recognised as revenue
according to the stage of completion, using an input method to
measure progress towards complete satisfaction of the
service, because the customer simultaneously receives and
consumes the benefits provided by the group. The input
method used to measure progress is based on the number of
hours worked, as this is considered to provide a faithful
depiction of the transfer of services.
Estimated loss on contracts will be recognised in the income
statement in its entirety in the period when it has been
identified.
Contract balances
Contract assets
A contract asset is initially recognised for revenue earned from
billable hours delivered yet not invoiced the customer. When
the billable hours are invoiced, the invoiced amount is
transferred to trade receivables. Contract assets are subject to
impairment assessment.
Trade receivables
A receivable is recognised if an amount of consideration that is
unconditional is due from the customer.
Contract liabilities
A contract liability is recognised if a payment is received or a
payment is due from the customer before the Group transfers
the related services. Contract liabilities are recognised as
26
WEBSTEP | ANNUAL REPORT 2021
revenue when the Group performs under the contract and
delivers or transfers the services to the customer.
Cost of goods and services (COGS)
Cost of goods and services is recognised at the point in time
when the corresponding service or good is delivered to the
customer. Cost of goods and services mainly comprises cost
to subcontractors which are engaged by the Group to deliver
consultancy hours to the customers.
Salaries and personnel expenses
Salaries and personnel expenses include salaries and wages,
as well as social benefits, pensions, etc. for the Group’s
employees.
Other operating expenses
Other operating expenses include expenditure for sales,
marketing, advertising, IT, administration, facilities, etc.
Finance income and expense
“Finance income” and “Finance expense” respectively, include
interest, capital gains and losses concerning securities, debt
and exchange differences on transactions in foreign currency.
Government grants
For contributions received accounted for as government grants
related to income under IAS 20, the accounting policy of the
Group is to recognize such grants when there is reasonable
assurance that the conditions attaching to the grant will be
complied with and that the grants will be received. The grants
are recognized as income unless directly related to specific
items of expense.
Taxes
The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
temporary differences and tax losses carried forward.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in Norway and Sweden where the Group
operates and generates taxable income. Management
periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the
consolidated financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial
recognition of goodwill.
Deferred income tax is also not accounted for if it arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and tax laws) that
have been enacted or substantially enacted by the end of the
reporting period and are expected to apply when the related
deferred income tax asset is realized or the deferred income
tax liability is settled.
Deferred tax assets are recognised only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses.
Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and
accumulated impairment losses.
Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which
the expenditure is incurred.
The useful lives of intangible assets are assessed as either
finite or indefinite.
Intangible assets with finite lives are amortised over the useful
economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The
amortisation period and the method are reviewed at least at
the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future
economic benefits are considered to modify the amortisation
period or method, as appropriate, and are treated as changes
in accounting estimates.
Intangible assets with an indefinite economic life are tested for
impairment at least once a year, either individually or as a part
of a cash-generating unit. Intangible assets with an indefinite
economic life are not amortised. Economic life is assessed
annually with regard to whether the assumption of an indefinite
economic life can be justified. If it cannot, the change to a
definite economic life is made prospectively.
Research and development costs
Expenses relating to research activities are recognised in the
statement of comprehensive income as they incur. Expenses
relating to development activities are capitalised to the extent
that the product or process is technically and commercially
viable and the Group has sufficient resources to complete the
development work. Expenses that are capitalised include the
costs of materials, direct wage costs and a share of the
directly attributable common expenses. Capitalised
27
WEBSTEP | ANNUAL REPORT 2021
development costs are recognised at their cost less
accumulated depreciation and accumulated impairment
losses. Depreciation of the asset begins when development is
complete and the asset is available for use. Capitalised
development costs are depreciated on a straight-line basis
over the period of expected future benefits. During the period
of development, the asset is tested for impairment annually.
Business combination and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, which is measured
at acquisition date fair value, and the amount of any
non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the
non-controlling interests in the acquiree at fair value or at the
proportionate share of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred and
included in administrative expenses.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the
acquisition date. Goodwill is initially measured at cost (being
the excess of the aggregate of the consideration transferred
and the amount recognised for non-controlling interests and
any previous interest held over the net identifiable assets
acquired and liabilities assumed). If the fair value of the net
assets acquired is in excess of the aggregate consideration
transferred, the Group re-assesses whether it has correctly
identified all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the
reassessment still results in an excess of the fair value of net
assets acquired over the aggregate consideration transferred,
then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Goodwill is tested for impairment annually as at 31 December
and when circumstances indicate that the carrying value may
be impaired. Impairment is determined for goodwill by
assessing the recoverable amount of each CGU (or group of
CGUs) to which the goodwill relates. The Group bases its
impairment calculation on detailed budgets and forecast
calculations, which are prepared separately for each of the
Group’s CGUs to which the individual assets are allocated.
These budgets and forecast calculations generally cover a
period of five years. A long-term growth rate is calculated and
applied to project future cash flows after the fifth year. When
the recoverable amount of the CGU is less than its carrying
amount, an impairment loss is recognised. Impairment losses
relating to goodwill cannot be reversed in future periods.
Current versus non-current classification
An asset is classified as current when it is expected to be
realised or sold, or to be used in the Group's normal operating
cycle or falls due or is expected to be realised within 12
months after the end of the reporting period. Other assets are
classified as non-current. Liabilities are classified as current
when they are expected to be settled in the normal operating
cycle of the Group, are held for trading, are expected to be
settled within 12 months of the end of the reporting period, or
if the group does not have an unconditional right to postpone
settlement for at least 12 months after the reporting date.
Provisions for obligations and other liabilities are classified as
non-current.
Property, plant and equipment
Office machinery and operating equipment are measured at
cost less accumulated depreciation.
Where individual components of an item of property, plant and
equipment have different useful lives, they are depreciated
separately. Depreciation is provided on a straight-line basis
over the expected useful lives of the assets/components.
Depreciation on machinery and operating equipment is linear
over the expected useful lives of the assets based on the
following assessments of the expected useful lives of the
assets:
● Office machinery 3-5 years
● Operating equipment 3-5 years
Impairment of assets
The carrying amount of intangible assets and property, plant
and equipment alike is assessed annually for indications of
impairment.
Should indications of impairment occur, each asset or group of
assets, respectively, will be assessed in terms of impairment.
Assets are written down to the recoverable amount if this is
lower than the carrying amount. The highest value of the net
realisable value and the estimated value in use is used as the
recoverable amount.
The value in use is calculated as the present value of the
anticipated net income from the use of the asset or group of
assets.
Leases
The Group, as a lessee, assesses at contract inception whether
a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a
period of time in exchange for consideration
28
WEBSTEP | ANNUAL REPORT 2021
The Group, as a lessee, applies a single recognition and
measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Group, as a lessee,
recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying
assets.
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any
lease incentives received. Right-of-use assets are depreciated
on an amortization basis, so that depreciation equals
instalments on the lease liabilities, over the shorter of the lease
term and the estimated useful lives of the assets, as follows:
● Offices 1-5 years
● Company cars 1-3 years
If ownership of the leased asset transfers to the Group at the
end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the
estimated useful life of the asset.
The Group applies IAS 36 Impairment of Assets to determine
whether the right-of-use asset is impaired and to account for
any impairment loss identified.
Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments less any lease incentives receivable,
variable lease payments that depend on an index or a rate. The
lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and
payments of penalties for terminating the lease, if the lease
term reflects the Group reasonably certain would be exercising
the option to terminate. Variable lease payments that do not
depend on an index or a rate are recognised as expenses in the
period in which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Group
uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the
lease is not readily determinable. If the implicit rate is
determinable, the implicit rate is applied. After the
commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the lease payments or a
change in the assessment of an option to purchase the
underlying asset.
The Group applies the short-term lease recognition exemption
to its short-term leases of machinery and equipment. It also
applies the lease of low-value assets recognition exemption to
leases of equipment that are considered to be low value. Lease
payments on short-term leases and leases of low-value assets
are recognised as expense on a straightline basis over the
lease term.
Receivables
Receivables, which comprise receivables from sales, group
companies and other receivables are non-derivative financial
assets with fixed or determinable payments that are not
quoted in an active market.
Receivables are initially measured at fair value.
After initial measurement, they are subsequently measured at
amortised cost using the effective interest rate method (EIR),
less impairment. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation
is included in finance income in the statement of profit or loss.
The losses arising from impairment are recognised in the
statement of profit or loss in finance costs for loans and in
cost of sales or other operating expenses for receivables.
Cash and short-term deposits
Cash and short-term deposits in the statement of financial
position comprise cash at banks and at hand and short-term
highly liquid deposits with a maturity of three months or less,
which are subject to an insignificant risk of changes in value.
For the purpose of the consolidated statement of cash flows,
cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts
as they are considered an integral part of the Group’s cash
management.
Treasury shares
Own equity instruments that are reacquired (treasury shares)
are recognised at cost and deducted from equity.
No gain or loss is recognised in profit or loss on the purchase,
sale, issue or cancellation of the Group’s own equity
instruments. Any difference between the carrying amount and
the consideration, if reissued, is recognised in the share
premium.
Fair value measurement
The Group measures financial instruments at fair value at each
balance sheet date. Fair-value related disclosures for financial
instruments and non-financial assets that are measured at fair
29
WEBSTEP | ANNUAL REPORT 2021
value or where fair values are disclosed, are summarised in the
following note 13.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either in the
principal market or, if not available, in the most advantageous
market.
The principal or the most advantageous market must be
accessible by the Group.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
● Level 1 - Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
● Level 2 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable
● Level 3 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy, as explained above.
Dividends
Dividends are recognised when the Group’s right to receive the
payment is established, which is generally when shareholders
approve the dividend. Dividends to the Company's
shareholders are classified as a liability when the dividends
proposed have been approved by the Annual General Meeting.
Employee benefits
The Group has defined contribution pension plans. The
pension premiums are charged to expenses as they are
incurred and classified as salary.
Share-based payments
Employees, including senior executives of the Group, receive
remuneration in the form of share-based payments, whereby
employees render services as consideration for equity
instruments (equity-settled transactions). Group employees in
the Norwegian entities have been granted shares at discounted
prices, within the limit for such grants according to Norwegian
tax legislation (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an
appropriate valuation model. The cost is recognised in
employee benefits expense, together with a corresponding
increase in equity, over the period in which the service and the
performance conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent
to which the vesting period has expired and the Group's best
estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement of profit
or loss for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share.
The discounts granted to employees in the Norwegian entities
are recognised as a cost in salaries and personnel cost in the
profit and loss statement. A total share value of 30,000
NOK(2021) per employee, measured at the market share price
on the granting day, is the threshold given by the tax authorities
in Norway for discounted shares which are tax-free discounts
for the employee.
Cash flow statement
The cash flow statement shows the Group’s cash flow for the
year divided into operating, investing and financing activities
during the year, as well as the year’s changes in cash and cash
equivalents and the Group’s cash and cash equivalents at the
beginning and end of the year.
Cash flow from operating activities
Cash flow from operating activities is presented using the
indirect presentation form and is stated as the year’s
profit/loss before tax plus depreciation and impairment losses
and with adjustments for changes in working capital and paid
corporate tax.
30
WEBSTEP | ANNUAL REPORT 2021
Cash flow from investing activities
Cash flow from investing activities includes payments in
connection with the purchase and sale of non-current assets.
Cash flow from financing activities
Cash flow from financing activities includes changes in volume
after the pooling of the Company’s share capital and related
costs as well as raising of loans, repayments on
interest-bearing debt, and payment of dividends to owners.
Note 3 Estimates, judgments and assumptions
Significant accounting judgment, estimates and assumptions
The preparation of the Group’s consolidated financial
statements requires management to make judgements,
estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected in future
periods.
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year, are described below.
The Group based its assumptions and estimates on
parameters available when the consolidated financial
statements were prepared. Existing circumstances and
assumptions about future developments, however, may change
due to market changes or circumstances arising that are
beyond the control of the Group. Such changes are reflected in
the assumptions when they occur.
Judgements
In the process of applying the Group’s accounting policies,
management has made the following judgements, which have
the most significant effect on the amounts recognised in the
consolidated financial statements:
Determining the lease term of contracts with renewal and
termination options – Group as lessee
The Group determines the lease term as the non-cancellable
term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be
exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Group has several lease contracts that include extension
and termination options. The Group applies judgement in
evaluating whether it is reasonably certain whether or not to
exercise the option to renew or terminate the lease. That is, it
considers all relevant factors that create an economic
incentive for it to exercise either the renewal or termination.
After the commencement date, the Group reassesses the lease
term if there is a significant event or change in circumstances
that is within its control and affects its ability to exercise or not
to exercise the option to renew or to terminate.
Estimates and assumptions
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year, are described below. The Group based its
assumptions and estimates on parameters available when the
consolidated financial statements were prepared. Existing
circumstances and assumptions about future developments,
however, may change due to market changes or circumstances
arising that are beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Impairment of non-financial 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 flows are
derived from the strategic plans for the next five years and do
not include restructuring activities that the Group is not yet
committed to or significant 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-inflows and the growth rate used for extrapolation
purposes. These estimates are most relevant to goodwill and
other intangibles with indefinite useful lives recognised by the
Group.
The key assumptions used to determine the recoverable
amount for the different CGUs are disclosed and further
explained in the notes.
31
WEBSTEP | ANNUAL REPORT 2021
Note 4 Financial risks and financial instruments
The Group’s principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of these
financial liabilities is to finance the Group’s operations.
The Group’s principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly
from its operations.
The Group is exposed to market risk, credit risk, and liquidity risk. The Group’s Executive Directors oversee the management of
these risks. A description of the different risks is given below.
Market risk
The Group has a good order backlog and list of sales prospects, with competencies that are highly attractive in the market. The
outlook is robust for the market for IT consultancy services, however there is always a risk that macroeconomic factors can cause
a downturn in the economy and reduced demand for the Group's services. The business implications of the COVID-19 outbreak
have been limited for Webstep so far and the prospect of further, grave business implications seem diminishing as the outbreak
seems to have entered it's end phase.
In addition, market risk comprises interest rate risk, foreign currency risk and market price risk which are treated separately below.
Market risk - currency risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities in Sweden (when revenue or expense is denominated in a foreign currency) and the Group’s net investment in the Swedish
subsidiary.
The Group has not assessed it as necessary to enter into hedging of these risks due to materiality of the exposure.
The following tables demonstrate the sensitivity to a reasonably possible change in SEK exchange rates, with all other variables
held constant. The impact on the Group’s profit before tax is due to changes in applied rate for translation of the profit, while the
change in pre-tax equity is due to change in the fair value of monetary assets and liabilities. The Group’s exposure to foreign
currency changes for all other currencies is not material.
Currency sensitivity
Change in SEK rate
Effect on profit before tax
Effect on pre-tax equity
NOK 000's
NOK 000's
2021
10 %
340
8,580
(10 %)
(340)
(8,580)
2020
10 %
794
8,833
(10 %)
(794)
(8,833)
Market risk - market price risk
Consistent deliveries over time in the different market segments according to established group policies have secured a
low-volatility price structure that has proven stable over time. The variable salary model for the majority of the consultants also
reduces market risk exposure as the salary expenses to a large extent correlate with revenues.
Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due
causing financial loss to the Group. The Group’s exposure to credit risk is mainly related to its outstanding trade debtors (see Note
14). Other counterparty credit risk exposure to the Group is related to its cash deposits with financial institutions. The table below
WEBSTEP | ANNUAL REPORT 2021
provides an overview of financial assets exposed to credit risk at year-end 2021 and 2020. Liquidity and credit risk management is
performed on a monthly basis and is evaluated in board meetings.
NOK 000's
2021
2020
Trade and other receivables
144,200
119,800
Cash and cash equivalents
46,690
39,724
Total
190,889
159,524
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group engages with
large and regular customers and has had low historical losses on receivables. In response to the COVID-19 pandemic, the Group is
monitoring the economic environment and is taking actions to limit its exposure to customers that are severely impacted. In
accordance with IFRS 9, receivables are recognised and carried at their anticipated realisable value, which implies that a provision
for a loss allowance on lifetime expected credit losses of the receivable is recognised. A provision for loss allowance for expected
credit losses is performed at each, statutory reporting date and is based on a multifactor and holistic analysis depending on several
considerations. The table below shows the aging of trade debtors and information about credit risk exposure using a provision
matrix. Increase in expected credit loss during 2020 is mainly related to an extraordinary provision for loss on recevables (NOK 1.9
million) to an individual customer in the travel industry.
Aging trade debtors
Day past due
NOK 000's
Not due
<30 days
30-60 days
>60 days
Total
As of December 31 2021
Trade debtors (note 14)
93,720
36,271
3,009
749
133,749
Expected credit loss rate (percent)
0.74%
Expected credit loss (NOK 000's)
988
As of December 31 2020
Trade debtors (note 14)
82,099
23,242
4,103
1,264
110,708
Expected credit loss rate (percent)
2.40%
Expected credit loss (NOK 000's)
2,736
Cash deposits
Credit risk from balances with financial institutions is managed by the Group’s treasury function. The Group limits its
counterparty credit risk by maintaining its cash deposits with financial institutions with high credit ratings as displayed below.
Financial institution
Country
Rater
Report date
Rating (LT)
Sparebank 1 SR-bank ASA
Norway
Fitch
16.02.2022
A
SEB AB (publ)
Sweden
Moody's
20.12.2021
Aa2
33
WEBSTEP | ANNUAL REPORT 2021
Liquidity risk
Liquidity risk arising from the Group not being able to meet its financial obligations as they fall due, is considered low. The Group’s
approach to manage liquidity risk is through proper liquidity planning to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation. Executive management has monitoring controls in place to ensure that the Group has
sufficient liquidity.
2021
Maturity profile of liabilities
NOK'000
Carrying
amount
Total
Contractual maturity
< 1 year
1 - 5 years
> 5 years
Debt to credit institutions
0
0
0
0
0
Lease liabilities (note 24)
61,536
72,422
14,464
44,593
13,365
Trade and other payables
15,745
15,745
15,745
0
0
Tax payable (note 10)
14,599
14,599
14,599
0
0
Social Taxes and VAT
72,114
72,114
72,114
0
0
Other short-term debt
89,814
89,814
89,814
0
0
Total 31 December 2021
253,808
264,694
206,736
44,593
13,365
2020
Maturity profile of liabilities
NOK'000
Carrying
amount
Total
Contractual maturity
< 1 year
1 - 5 years
> 5 years
Debt to credit institutions
0
0
0
0
0
Lease liabilities (note 24)
34,807
38,783
11,750
26,898
135
Trade and other payables
20,862
20,862
20,862
0
0
Tax payable (note 10)
9,923
9,923
9,923
0
0
Social Taxes and VAT
60,525
60,525
60,525
0
0
Other short-term debt
83,604
83,604
83,604
0
0
Total 31 December 2020
209,721
213,697
186,664
26,898
135
Categories of financial instruments
NOK'000
2021
2020
Trade receivables
132,761
107,972
Other receivables
11,439
11,827
Cash and short-term deposits
46,690
39,724
Financial assets measured at amortised cost
190,889
159,524
Debt to credit institutions
0
0
Trade payables
15,745
20,862
Other payables
72,114
60,525
Other short-term debt
89,814
83,604
Financial liabilities measured at amortised cost
177,673
164,991
WEBSTEP | ANNUAL REPORT 2021
The methods and assumptions used to estimate the fair value of debt instruments are described in note 2.
Carrying amount is a reasonable approximation of fair value, and has been applied accordingly.
Note 5 Revenue from contracts with customers
In the following table, the major revenue lines are disaggregated by geographical areas as disclosed in our segment note (note 6).
Figures are in local currencies and do not include eliminations except Group.
2021 Segments (in 000' )
Norway (NOK)
Sweden (SEK)
Group (NOK)
Type of goods or service
IT-related consulting services
624,847
83,155
705,690
Subcontractors
45,763
23,029
68,821
Other
271
392
512
Total revenue from contracts with customers
670,881
106,576
775,023
Timing of revenue recognition
Goods and services transferred at a point in time
670,610
106,184
774,510
Services transferred over time
150
-
Total revenue from contracts with customers
670,760
106,184
774,510
2020 Segments (in 000' )
Norway (NOK)
Sweden (SEK)
Group (NOK)
Type of goods or service
IT-related consulting services
529,754
75,611
605,717
Subcontractors
56,742
27,403
84,145
Other
150
122
125
Total revenue from contracts with customers
586,646
103,135
689,987
Timing of revenue recognition
Goods and services transferred at a point in time
586,496
103,014
689,862
Services transferred over time
150
-
-
Total revenue from contracts with customers
586,646
103,014
689,862
35
WEBSTEP | ANNUAL REPORT 2021
Set out below, is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment
information (Note 6):
2021
2020
Revenue (in 000' NOK)
Norway
Sweden
Norway
Sweden
External customer
670,610
103,900
586,496
103,366
Inter-segment
150
2,358
150
2,614
Inter-segment adjustments and eliminations
(150)
(2,358)
(150)
(2,614)
Total revenue from contracts with customers
670,610
103,900
586,496
103,366
Contract balances:
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
NOK 000'
12/31/2021
12/31/2020
Receivables which are included in Trade receivables
129,315
101,932
Contract assets
3,446
6,041
Contract liabilities
0
838
The contract assets primarily relates to revenues accrued, but not invoiced. The contract assets are transferred to Trade
receivables when the rights to receive payment become unconditional.
The contract liabilities primarily consists of advance considerations received from customers, before revenue is earned. Revenue
is recognised as (or when) the Group fulfils its performance obligation(s) under the contracts. and accrued expenses related to
supply of goods and services, not yet recorded in Accounts Payable.
Changes in the contract assets and the contract liabilities balances during the period are as follows:
Contract assets (NOK 000')
2021
2020
At January 1
6,041
2,418
Additions
3,446
6,041
Transfers from contract assets recognised at the beginning of the period to receivables
(6,041)
(2,418)
Impairment losses and allowances recognised in the period
0
0
At December 31
3,446
6,041
Contract liabilities (NOK 000')
2021
2020
At January 1
838
57
Invoiced in advance for the period
0
838
Revenues recognised that was included in the contract liability balance at the beginning of
the period
(838)
(57)
Current contract liabilities at December 31
0
838
WEBSTEP | ANNUAL REPORT 2021
Note 6 Segment information
The Group provides IT related high-end consulting services. Operating segments are reported by country of operation. The Chief
Operating Decision-Maker (CODM), who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the steering committee consisting of the CEO and the CFO. The CODM examines the Group's
performance by country of operation. Segment performance is evaluated based on the profit or loss measure "Earnings before
interest and tax" (EBIT) and is measured consistently with profit or loss in the consolidated financial statements. Assets and
liabilities are not allocated to segments.
The Group has currently two reportable segments: Norway and Sweden, and revenue breakdown for Oslo (Norway), Regional
Offices (Norway) and Subcontractors (Norway and Sweden).
2021
Norway
Sweden
Elimination*
Total
Revenues Oslo
280,998
Revenues Regional Offices
343,525
Revenues Sweden
83,489
Revenues Subcontractors
45,763
23,058
Other
595
103
Total revenue (IT-related consulting services)
670,881
106,651
(2,508)
775,023
Total operating expenses less depreciation and impairment
609,783
101,825
(2,508)
709,100
EBIT
61,097
4,826
65,923
EBIT margin (% of total revenue)
9.1 %
4.5 %
8.5 %
2020
Norway
Sweden
Elimination*
Total
Revenues Oslo
219,805
Revenues Regional Offices
312,514
Sweden
78,439
Subcontractors
56,742
27,403
Other
(2,415)
265
Total revenue (IT-related consulting services)
586,646
106,105
(2,764)
689,987
Total operating expenses less depreciation and impairment
545,059
97,688
(2,764)
639,983
EBIT
41,587
8,417
0
50,004
EBIT margin (% of total revenue)
7.1 %
7.9 %
7.2 %
*Elimination consists of hiring of consultants from Sweden to Norway and management fee from Sweden to Norway.
Major customers
The Group does not disclose a breakdown per customer, as sales revenues for any customer do not exceed 10% of the total
revenue in the Group.
37
WEBSTEP | ANNUAL REPORT 2021
Geographical analysis of assets
Analysis of non-current assets by geographical location
2021
Norway
Sweden
Elimination*
Total
RIght-of-use assets
45.8
16.8
62.5
Research and development
3.0
3.0
Fixed assets
10.2
0.1
10.4
Total non-current assets operating assets 2020
59.0
16.9
0.0
75.9
2020
Norway
Sweden
Elimination*
Total
RIght-of-use assets
24.2
10.6
34.8
Research and development
4.5
4.5
Fixed assets
6.3
0.2
6.5
Total non-current assets operating assets 2020
35.1
10.8
0.0
45.8
Asset location
2021
2020
Norway
59,021
35,087
Sweden
16,910
10,753
Non-current segment assets
75,932
45,840
Other intangible assets
380,546
385,288
Non-current financial assets
0
10
Deferred tax asset
1,619
998
Trade receivables
132,761
107,972
Other receivables
11,439
11,827
Cash and short-term deposits
46,690
39,724
Consolidated total assets
648,986
591,660
Non-current assets for this purpose consist of right-of-use assets, research and development and fixed assets.
Note 7 Salaries, remuneration and audit fees
Salaries and personnel expenses (NOK'000)
2021
2020
Salaries
465,896
418,523
Social security costs
77,726
63,629
Pensions
21,722
18,763
Share-based compensation
2,878
1,375
Other benefits and refunds
15,442
10,861
Total salaries and personnel expenses
583,665
513,151
Number of employees, average FTEs
478
410
WEBSTEP | ANNUAL REPORT 2021
Total
remuneration
Remuneration to executive management NOK'000
Base salary
Variable pay
Other**
Pension
Total remuneration to executive management 2021
15,000
2,840
480
18,320
626
Total remuneration to executive management 2020*
5,211
1,370
49
6,630
107
*Structural changes during the last year has led to an expansion of the Executive Management from 2021. Previous periods the
executive management team was defined as consisting of the CEO and CFO.
**Other consist of e.g. health insurance plans, travel expenses, car allowance and telephone/mobile communication, etc.
2021
2020
Remuneration to board members and nomination committee
Compensation
Compensation
Chairman of the board - Trond Klethagen Johannessen (from 7 May 2020)
410
326
Chairman of the board - Klaus-Anders Nysteen (until 6 May 2020)
0
123
Board member - Siw Ødegaard
288
246
Board member - Trygve Christian Moe
257
149
Board member - Toril Nag
233
239
Board member - Kjetil Bakke Eriksen
247
0
Nomination committee - Bjørn Ivar Danielsen (board member until 5 May 2021)
19
250
Nomination committee - Petter Tusvik
17
17
Nomination committee - Trude Sleire (until 28 April 2021)
6
17
Nomination committee - John Morten Bjerkan (until 28 April 2021)
9
27
Total remuneration to board members and nomination committee
1,487
1,394
Board remuneration
Compensation to board members is not performance-related. Compensation to the Board is determined by the Annual General
Meeting, and the accrued cost for 2021 and 2020 is based on the decision made by the Annual General Meetings. The
compensation is paid in arrears.
Determination of remuneration to executive management
The Company's executive management comprises the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), Regional
Managers, Directors Communication and marketing and Group Advisor. Remuneration to executive management is mainly fixed
salary as well as performance based bonus. CEO and CFOs bonus is decided by the remuneration committee and regional
managers bonus is calculated by pre-determined KPIs, in line with the Remuneration Policy.
Bonuses for 2020 were accrued for in the consolidated statement of comprehensive income for 2020 and paid in Q1 2021. The
CEO was paid a bonus of NOK 0.62 million. The CFO received a bonus of 0.75 million.
The CEO and the CFO were entitled to bonuses for 2021 which were accrued for in the consolidated statement of comprehensive
income for 2021 and paid in Q1 2022. The CEO received a bonus of NOK 0.7 million. The CFO received a bonus of NOK 0.15 million.
The executive management is entitled to participate in the Long-term incentive programme as described in note 22.
The accrued bonuses are included in the table above.
39
WEBSTEP | ANNUAL REPORT 2021
Arne Norheim stepped down as CEO 30 November 2020, and Liv Annike Kverneland served as Interim CEO from 1 December 2020
until 14 February 2021. Mr. Norheim was employed by the Company until 31 May 2021, and received compensation for being
available during this period.
Main principles for the determination of remuneration for the executive management of Webstep ASA
The board of directors has established a remuneration committee. Chairman of the board Trond K. Johannessen serves as chair of
the committee. Toril Nag and Kjetil Bakke Eriksen serves as members . The remuneration committee functions as an advisory body
to the board of directors, with the purpose of ensuring a thorough and independent preparation of matters regarding remuneration
to the Company's executive management.
The main principle for the Company's remuneration policy is that the executive management shall be offered competitive terms
when their total remuneration package is taken into account. Such package may consist of elements such as base-salary, bonus,
share and option schemes, benefits in kind and pension arrangements. The Company shall seek to offer a remuneration level that is
considered competitive and on market terms, compared to the level offered by its peers, and which seeks to satisfy the Company's
need to recruit and keep highly qualified personnel in the executive management.
The current guidelines have been prepared in accordance with the provisions of section 6-16a of the Norwegian Public Limited
Companies Act, approved 28 April 2021 at the Annual General Meeting.
The executive management receives base salary which constitutes approximately 70-80% of the total remuneration package.
The executive management is offered contribution in kind such as coverage of phone and phone expenses, private broadband,
company health services, insurances, car allowance and coverage of travel expenses.
The executive management participates in the Company's defined contribution pension scheme in accordance with mandatory law.
The company's CEO receives a fixed car allowance at NOK 15,000 per month.
The executive management may be offered performance-based bonuses in addition to their fixed remuneration. Such
performance-based bonus shall be agreed on an individual basis if applicable. The criteria for any performance-based bonus shall
be determined by the board of directors and shall be linked to measurable factors, such as the achievement of pre-determined KPIs.
The Company's CEO and CFO performance-based profit may constitute up to 40% and 35% respectively, and shall be determined by
the board of directors. Department managers the performance-based bonus is linked to the following KPIs
- Revenue compared to budget/forecast
- Number of employees compared to budget/forecast
- Operating revenue compared to budget/forecast
The executive management may be offered Company shares and options to shares as a part of the total remuneration package.
The executive management, and other managers as decided by the board of directors, are included in Websteps Long-term
incentive program approved at the Annual General Meeting 2019. The program is further described in note 22.
The executive management are included in Websteps share purchase program for leading personnel and board members and
Employee share purchase program as further described in note 22.
The other Group companies shall follow the main principles for remuneration of executives as described herein and guidelines for
determination of salary and other remuneration to executive personnel in Webstep.
Audit fees *
2021
2020
Statutory audit fees
1,052
1,031
Audit-related assistance
0
84
Total fee
1,052
1,116
* VAT is not included
WEBSTEP | ANNUAL REPORT 2021
Note 8 Pension costs
All companies within the Group has defined contribution plans for all of its employees, governed by the local employment laws. The
Group pays a contribution to the plan based on a fixed percentage of the salary, limited to 12 times the base amount (G). The total
pension premium charge in 2021 is NOK 21,7 million (2020: NOK 18.8 million).
The Norwegian companies within the Group are bound to have mandatory occupational pension scheme pursuant to the
Norwegian law of Occupational pension scheme. The Group's pension scheme meets the requirements of this Act.
Note 9 Financial items
Finance income
NOK'000
2021
2020
Interest income
98
154
Other finance income (including foreign exchange effects)
22
102
Total finance income
120
256
Interest income primarily comprises interest received on bank deposits.
Finance expense
NOK'000
2021
2020
Interest expense
(2,987)
(3,033)
Other finance expense (including foreign exchange effects)
(646)
(131)
Total finance expense
(3,633)
(3,163)
Interest expense primarily comprises interest and expenses paid on revolving credit facility (Note 21) and estimated interest on
leasing liabilities (Note 24).
41
WEBSTEP | ANNUAL REPORT 2021
Note 10 Taxes
Consolidated statement of profit or loss
2021
2020
Current income tax
14,384
10,838
Unprovided income tax charge from previous year
252
0
Deferred tax
(720)
(490)
Income tax expense reported in the statement of profit or loss
13,916
10,348
Reconciliation of tax expense and the accounting profit multiplied by the Group’s tax rate for 2021 and 2020:
Reconciliation of tax base
2021
2020
Accounting profit before tax
62,411
47,097
Permanent differences
1,147
461
Change in temporary differences
3,288
1,908
Tax base for the year
66,846
49,466
Tax payable (22%)
14,706
10,882
Prepaid tax
(30)
(913)
Differences in tax rates on foreign subsidiary
(77)
(46)
Tax payable in the balance sheet
14,599
9,923
Deferred tax
2021
2020
Fixed assets
1,131
1,461
Receivables
988
2,736
Provisions, not yet tax deductible
6,036
335
Statutory tax provisions in Sweden
(8,010)
(8,515)
Total
144
(3,983)
Net deferred tax asset/(liability) (22%)
32
(876)
Effect of difference in tax rates Sweden (20,6%/22%)
101
119
Total adjusted for differences in tax rates
133
(757)
Reflected in the statement of financial position as follows:
Deferred tax assets
1,619
998
Deferred tax liabilities
(1,486)
(1,755)
Deferred tax liabilities, net
133
(757)
Effective tax rate:
Expected income tax
13,730
10,361
Permanent differences
252
101
Effect of change in tax rate and other
(67)
(115)
Income tax expense*
13,916
10,348
* Income tax expense in relation to income before tax
22.3 %
22.0 %
WEBSTEP | ANNUAL REPORT 2021
The Group's R&D initiatives have been approved by the Research Council of Norway (Forskningsrådet) to qualify for a government
R&D tax incentive scheme (SkatteFUNN) with an amount of NOK thousand 383 for 2021. The amount recognised as an expected
public refund in 2020 was NOK 485 thousand. NOK 485 thousand were recognised as income in 2020, but an approved adjustment
to one of the applications increased the final amount, paid, to 793 NOK thousand whereof 308 NOK thousand was recognised as
income in 2021.
Note 11 Intangible assets and goodwill
Cost,
NOK 000's
Goodwill
Norway
Goodwill
Sweden
R&D
Total
At 1 January 2020
313,575
64,889
7,573
386,037
Additions
0
0
0
0
Disposals
0
0
0
0
Exchange adjustment
0
6,824
0
6,824
At 31 December 2020
313,575
71,713
7,573
392,861
Additions
0
0
0
0
Disposals
0
0
0
0
Exchange adjustment
0
(4,742)
0
(4,742)
At 31 December 2021
313,575
66,971
7,573
388,119
Depreciation and impairment
At January 1 2020
0
0
(1,515)
(1,515)
Impairment
0
0
Depreciation charge for the year
0
0
(1,515)
(1,515)
At 31 December 2020
0
0
(3,029)
(3,029)
Impairment
0
0
Depreciation charge for the year
0
0
(1,515)
(1,515)
At 31 December 2021
0
0
(4,544)
(4,544)
Net book value
At 31 December 2020
313,575
71,713
4,544
389,832
At 31 December 2021
313,575
66,971
3,029
383,575
Useful life
Infinite
Infinite
5 years
Depreciation method
NA
NA
Straight line
Goodwill includes the value from acquisition of Webstep AS in 2011 and Webstep AB in 2012, where NOK 313.5 million and NOK
58.6 million was added to goodwill respectively. Goodwill is not amortized, but tested yearly for impairment.
Capitalized R&D comprises investments in the strategic initiative Webstep Internet of Things (IoT), where a total of NOK 3.0 million
is recognised at balance date. The reclassification and recognition as an intangible asset is based on the management's
assessment of future economic benefits from the projects and that the criteria in IAS 38.57 is met.
R&D activities that have been recognised as costs in the consolidated statement of comprehensive income in 2021 amount to NOK
2.0 million (NOK 3,0 million in 2020).
43
WEBSTEP | ANNUAL REPORT 2021
Impairment testing
Goodwill acquired through business combinations has been allocated to two individual cash generating units (CGU), which are also
defined as reportable segments according to note 6.
Cash generating unit
NOK'000
2021
2020
Norway
313,575
313,575
Sweden
66,971
71,713
380,546
385,288
Goodwill is tested for impairment at least annually, or when there are indications of impairment. The COVID-19 pandemic is
identified as an impairment indicator for the CGUs. The impairment test is conducted for each cash generating unit, by evaluating
the present value of future cash flows, based on cash flow projections five years ahead. The recoverable amount is set to the
estimated value in use. The value in use is the net present value of the estimated cash flow before tax, using a discount rate
reflecting the timing of the cash flow and the expected risk.
Key assumptions used in value in use calculations and sensitivity to changes in assumptions:
The calculation of value in use for goodwill related to the acquisition of Webstep AS and Webstep AB is most sensitive to the
following assumptions:
• Discount rates
• EBITDA
• Growth rates used to extrapolate cash flows beyond the forecast period
The discount interest is based on weighted average cost of capital (WACC). A discount rate of 7.5 per cent after tax is used for both
CGU's (Norway and Sweden). This is based on a risk free interest rate of 1.4 per cent for Norway and 0 per cent for Sweden. The
risk premium is calculated based on market statistics for comparable companies. The cash flow forecast takes into account both
historical results, expected future growth rates, and market conditions. These budgets and forecast calculations generally cover a
period of five years. For Norway and Sweden, the underlying model calculates annual cash flows per department, based on
periodised employee development, utilization rate, expected trend in hourly rate, sales / management / overhead changes, wage
growth and cost growth. The annualized compound growth rate over the next 4 year period is 2% for each CGUs. The
EBITDA-margin in both the Norwegian CGU and the Swedish CGU is expected to be in line with historical levels.
Based on the impairment tests performed, there are no indications that impairment is required for any of the CGUs.
WEBSTEP | ANNUAL REPORT 2021
Note 12 Fixed assets
Cost,
NOK'000
Equipment, fixtures
and furniture
Right-of-use
assets
Total
At 1 January 2020
22,055
44,170
66,225
Additions
3,974
5,856
9,830
Disposals
0
0
0
Exchange adjustment
0
784
784
Cost at 31 December 2020
26,029
50,811
76,840
Cost at 1 January 2021
26,029
50,811
76,840
Additions
7,750
38,801
46,551
Disposals
0
(16,172)
(16,172)
Exchange adjustment
0
(920)
(920)
Cost at 31 December 2021
33,779
72,520
106,299
Depreciation and impairment
At 1 January 2020
(16,138)
(7,014)
(23,152)
Disposals
0
0
0
Impairment
0
0
0
Depreciation charge for the year
(3,401)
(8,989)
(12,390)
Exchange adjustment
0
0
Other
0
0
At 31 December 2021
(19,539)
(16,003)
(35,542)
Disposals
0
15,913
15,913
Impairment
0
0
0
Depreciation charge for the year
(3,884)
(9,881)
(13,766)
Exchange adjustment
0
0
Other
0
0
At 31 December 2021
(23,423)
(9,972)
(33,395)
Net book value
At 31 December 2020
6,490
34,808
41,298
At 31 December 2021
10,355
62,548
72,903
Useful life
3 - 5 year
1-5 year
Depreciation method
Straight line
Amortization
45
WEBSTEP | ANNUAL REPORT 2021
Note 13 Financial assets – non-current vs current
The only non-current, financial asset is a deposit.
Financial assets,
NOK'000
2021
2020
Other long term deposit
0
10
Total
0
10
Note 14 Trade and other receivables
Trade and other receivables
NOK'000
2021
2020
Trade receivables - net of related parties
133,749
110,709
Provision for bad debt
(988)
(2,736)
Trade Receivables net of provision
132,761
107,972
Prepayments and other receivables
11,439
11,827
Receivables from related parties
0
0
Payables to related parties
0
0
Total trade receivables and prepayments
144,200
119,800
Of which long-term receivables from related parties
0
0
Short-term Receivables and prepayments
144,200
119,800
Specification of receivables
NOK'000
2021
2020
Trade receivables
129,315
101,932
Accrued income
3,446
6,041
Other receivables
0
0
Trade and other receivables
132,761
107,972
Prepaid costs
10,585
7,693
Prepaid public duty debt
478
3,777
Prepaid rent
376
358
Prepayments
11,439
11,827
Total receivables and prepayments
144,200
119,800
Due dates and fair value of trade and other receivables
NOK'000
2021
2020
Due within one year*)
144,200
119,800
After one year **)
0
0
Fair Value
144,200
119,800
WEBSTEP | ANNUAL REPORT 2021
*) For receivables due within one year, fair value is equal to nominal value.
**) Receivables that are due later than one year are discounted and stated as fair
value.
Group has a bad debt provison of NOK 988 thousand in 2021 down from NOK 2,736 thousand in 2020. The decrease is
mainly related to an extraordinary provision made in 2020 for a loss on recevables (NOK 1.9 million) to an individual
customer in the travel industry. The extraordinary provision of NOK 1,9 million, made in 2020, was settled during 2021 as
a loss approximately equal to the provision.
NOK'000
Total
Not due
<30 days
30-60
days
>60 days
2021
133,749
93,720
36,271
3,009
749
2020
110,709
82,100
23,242
4,103
1,264
Trade receivables at year end were NOK 133.7 million (NOK 110,7 million).
Note 15 Cash and short-term deposits
Cash and Cash Equivalents,
NOK'000
2021
2020
Cash in bank
46,690
39,724
Cash equivalents
0
0
Total Cash and Cash Equivalents
46,690
39,724
Utilized bank overdraft
0
0
Net Cash and Cash Equivalents/Bank overdraft
46,690
39,724
Of which Restricted Cash:
Guarantees for leases and credits from suppliers
1,149
1,230
Taxes withheld
744
642
Other restricted cash
0
0
Total Restricted Cash
1,893
1,871
For further details on the Group's cash reporting and cash
pooling system, see note 17.
47
WEBSTEP | ANNUAL REPORT 2021
Note 16 Shareholders capital and largest shareholders
Share capital
The Company has only one share class and all shares have equal voting rights.
2021
2020
Authorised
No. of
thousands
No. of
thousands
Ordinary shares of NOK 1 each
27,322
26,967
Ordinary shares
No. of
thousands
No. of
thousands
Issued and fully paid:
At 1 January
26,967
26,967
Issued
355
0
At 31 December
27,322
26,967
Treasury shares
No. of
thousands
No. of
thousands
At 1 January
(60)
(294)
Sale of treasury shares
6
234
At 31 December
(54)
(60)
Foreign currency translation reserve
NOK 000's
NOK 000's
At 1 January 2020
8,320
8,320
Foreign currency translation
7,892
7,892
At 31 December 2020
16,213
16,213
Foreign currency translation
(5,929)
-5,929
At 31 December 2021
10,284
10,284
2021
2020
Share capital
27,322
26,967
Treasury shares
(54)
(60)
Share premium
172,776
167,131
Retained earnings
183,365
169,973
Non-controlling interest
0
0
Shareholders equity inclusive currency translation
393,692
380,184
WEBSTEP | ANNUAL REPORT 2021
Statement of changes in equity
Note
Issued
capital
Treasury
shares
Share
premium
Foreign
currency
translati
on
reserve
Retained
earnings
Total
earned
equity
Non-cont
rolling
interests
Total
equity
NOK 000's
At 1 January 2020
26,967
-293
156,910
8,320
179,741
371,644
-
371,644
Profit for the period
-
-
-
-
36,749
36,749
-
36,749
Other comprehensive
income/(loss)
-
-
-
7,892
-
7,892
-
7,892
Sales of treasury shares
-
234
5,110
-
-
5,344
-
5,344
Share incentive program
-
-
1,232
1,232
-
1,232
Dividends
26
-
-
-
-
-42,677
-42,677
-
-42,677
At 31 December 2020
26,967
-59
162,020
16,212
175,045
380,184
-
380,184
Profit for the period
-
-
-
-
48,495
48,495
-
48,495
Other comprehensive
income/(loss)
-
-
-
-5,929
-
-5,929
-
-5,929
Sales of treasury shares
-
6
111
-
-
117
-
117
Share incentive program
-
-
-
-
2,878
2,878
-
2,878
Dividends
26
-
-
-
-
-43,052
-43,052
-
-43,052
Share issue
355
10,644
10,999
10,999
At 31 December 2021
27,322
-53
172,775
10,283
183,366
393,692
-
393,692
49
WEBSTEP | ANNUAL REPORT 2021
Top 20 shareholders 31 December 2021
Shareholder name
Shares
Ownership
Voting rights
Embro Eiendom AS
8,159,382
29.86%
29.92%
VERDIPAPIRFONDET ALFRED BERG GAMBA
1,556,645
5.70%
5.71%
VERDIPAPIRFONDET DNB SMB
1,261,862
4.62%
4.63%
SALT VALUE AS
1,157,687
4.24%
4.25%
J.P. MORGAN BANK LUXEMBOURG S.A.
1,041,345
3.81%
3.82%
JAKOB HATTELAND HOLDING AS
1,000,000
3.66%
3.67%
J.P. MORGAN BANK LUXEMBOURG S.A.
900,000
3.29%
3.30%
HOLMEN SPESIALFOND
699,576
2.56%
2.57%
VERDIPAPIRFONDET NORDEA NORGE VERD
664,317
2.43%
2.44%
Danske Invest Norge Vekst
542,000
1.98%
1.99%
Goldman Sachs International
416,571
1.52%
1.53%
INTERTRADE SHIPPING AS
400,000
1.46%
1.47%
Danske Bank A/S
320,000
1.17%
1.17%
BLUEBERRY CAPITAL AS
317,007
1.16%
1.16%
HAUSTA INVESTOR AS
300,000
1.10%
1.10%
ESPEDAL & CO AS
255,560
0.94%
0.94%
IVAR LØGE AS
250,000
0.92%
0.92%
VERDIPAPIRFONDET NORDEA AVKASTNING
225,383
0.82%
0.83%
MP PENSJON PK
224,000
0.82%
0.82%
Pictet & Cie (Europe) S.A.
222,603
0.81%
0.82%
Other shareholders
7,354,576
26.92%
26.97%
Total number of shares excluding treasury shares
27,268,514
99.80%
100.00%
Treasury shares as of 31 December 2021
53,694
0.20%
Total shares issued
27,322,208
100.00%
WEBSTEP | ANNUAL REPORT 2021
Shareholding by board members, management and their related parties as of 31 December 2021
Trond K. Johannessen
56,925
0.21%
0.21%
Trygve Christian Moe (TCM Consulting AS)
23,925
0.09%
0.09%
Kjetil Bakke Eriksen (Suelo AS)
18,925
0.07%
0.07%
Siw Ødegaard (Kvinnesiden AS)
13,025
0.05%
0.05%
Toril Nag
3,570
0.01%
0.01%
Save Asmervik
12,340
0.05%
0.05%
Jacob Cardell (Nominee)
20,020
0.07%
0.07%
Liv Annike Kverneland (LAK Invest AS and
privately held)
41,290
0.15%
0.15%
Terje Orvedal (Illari AS)
9,143
0.03%
0.03%
Joar Krohn (Kronoko Holding AS and privately
held)
99,320
0.36%
0.36%
Geir Jåthun Hindenes (GJH Invest AS and
privately held)
17,093
0.06%
0.06%
Dagfinn Haslebrekk
6,665
0.02%
0.02%
Arnt Roger Aasen (Aravi AS and privately held)
26,032
0.10%
0.10%
Otto Backer Solberg
18,627
0.07%
0.07%
Rolf Helle (Xerxes AS and privately held)
41,247
0.15%
0.15%
Trond K. Johannessen and Trygve Christian Moe are employed by Embron Group AS, which is owned by J.C. Broch AS.
Webstep ASA holds 53,694 treasury shares. These shares have no voting rights nor dividend rights.
Note 17 Interest bearing loans and borrowings
The Group has a NOK 110 million Revolving Credit Facility ("RCF") with SpareBank 1 SR-Bank ASA. The RCF may be utilised by each
member of the Group having access to the cash pooling account system related to the RCF. The accounts included in the cash
pooling structure are presented as a net figure for the Group: As cash and short term receivables if the net balance is positive, or
debt to credit institutions if the net balance is negative.
The term of the RCF is two years, after which it is subject to renewal. The facility was renewed in 2021. The total payable interest
rate is based on 3 months NIBOR in addition to an agreed margin of 2.25 per cent per annum. The interest calculation is based on
the net of cash and overdraft. The annual charge for the credit facility is 0.5 per cent of the granted credit. Under the RCF, the
Company has pledged security over the shares, inventory, insurance payouts and accounts receivable in Webstep AS and negative
pledge over the shares in Webstep AB.
The right-of-use-assets are recognised at the estimated net present value of the leasing liabilities as calculated at the date of initial
recognition or cost according to contract.
Contracts with options for extensions that would, with reasonable certainty be exercised, are estimated at net present value including the
optional rental period.
Contracts with penalties if options for extensions not are exercised and where the certainty for exercising the options is assessed as not
reasonable, the estimated or actual penalty amounts are provided for and treated as a part of the rental cost of the contracts
decomposed in depreciation, installment and interest.
51
WEBSTEP | ANNUAL REPORT 2021
In addition to the lease liabilities presented above, the Group is committed to pay variable lease payments for its office leases
related to future inflation/index adjustments in Norway and Sweden which is not included in the initial recognition of lease
liabilities. When the inflation/index adjustment is known, the present value of the change to the future lease payments is added to
the lease liability and right-of-use asset.
Sensitivity of assumptions to the estimates
The estimates of the value of right-to-use assets and leasing liabilities relies on the applied interest rates and the duration and
nature of the contracts. All contracts have a duration of maximum 5 years with options for extensions with one exception, a
contract with 10 years duration. If extensions are viewed as reasonably probable, the extension period is embedded in the
calculation of the estimate. Changes in interest rates are regarded as having the most significant impact on the estimates either
impacting the incremental borrowing rate applied on office rentals estimates or the leasing amount of the company cars. A
sensitivity analysis of possible effects of changes to interest rates are given in the tables below:
Effect on incremental borrowing rates
A test on sensitivity on interest assumptions has been performed by varying NIBOR by +/- 200 basis points (BPS) compared to
applied NIBOR 3 month of 1,85% on the Group's incremental borrowing rate applied estimating value on office rentals.
Changes in interest rate
Office rentals ('000 NOK)
Applied
+200 BPS
-200 BPS
Applied NIBOR 3 month December 31st
1.85%
3.85%
(0.15%)
Estimated value December 31st 2021
55,772
53,635
60,484
Deviation from applied estimate: Amount
2,137
(4,712)
Deviation from applied estimate: Percent
3.8%
(8.4%)
A similar test on interest assumptions have been performed by varying the implicit rate on company car leasing contracts by
adjusting the implicit interest rate by +/- 200 BPS.
Changes in leasing amount
Company cars ('000 NOK)
Applied
+200 BPS
- 200 BPS
Average implicit rate December 31st
3,6%
5,6%
1,6%%
Estimated value December 31st 2021
5,764
5,879
5,649
Deviation from applied estimate: Amount
115
(115)
Deviation from applied estimate: Percent
2.0%
(2.0%)
Covenant conditions: Book equity for the Group shall consist of at least 30 per cent of total capital, measured quarterly. Ratio of
NIBD / EBITDA maximum 3, measured quarterly, rolling 12 months. See note 21 for further details.
Webstep AB has a local revolving credit facility of SEK 5 million which was unutilised 31 December 2021.
WEBSTEP | ANNUAL REPORT 2021
NOK'000
2021
2020
Non-current borrowings
Debt to credit institutions
0
0
Lease liabilities
49,507
24,082
Current borrowings
Debt to credit institutions
0
0
Lease liabilities
12,029
10,724
Total borrowings
61,537
34,807
NOK'000
2021
2020
Booked value of assets pledged as security
Shares
432,119
432,119
Fixed assets
10,355
6,490
Receivables
132,761
107,972
Cash
46,690
39,724
Total
621,925
586,306
Other financial liabilities at amortised cost, other than interest-bearing loans and borrowings
NOK'000
2021
2020
Trade payables
15,745
20,862
Other payables
72,114
60,525
Other short-term debt
89,814
83,604
Total financial liabilities
239,210
199,798
Total current
239,210
199,798
Total non-current
0
0
Other short-term debt mainly consists of; 1) accrued salaries for the past month, for payment
to employees in accordance with the salary model, 2) accrued holiday pay as required by law, for payment to
employees in June the following year.
53
WEBSTEP | ANNUAL REPORT 2021
Changes in liabilities arising from financing activities
Year ended 2020
1 Jan 2020
Cash flows
Changes
foreign
exchange
rate
Other
31 Dec 2020
Debt to credit institutions non-current
0
0
0
0
0
Lease liabilities non-current and current (note 24)
37,156
(8,989)
784
5,856
34,807
Debt to credit institutions current
0
0
0
0
0
Total liabilities from financing activities
37,156
(8,989)
784
5,856
34,807
Year ended 2021
1 Jan 2021
Cash flows
Changes
foreign
exchange
rate
Other
31 Dec 2021
Debt to credit institutions non-current
0
0
0
0
0
Lease liabilities non-current and current (note 24)
34,807
(10,920)
(920)
38,570
61,537
Debt to credit institutions current
0
0
0
0
0
Total liabilities from financing activities
34,807
(10,920)
(920)
38,570
61,537
Note 18 Trade and other payables
NOK 000's
2021
2020
Trade and other payables
15,745
20,862
Social Taxes and VAT
72,114
60,525
Accrued vacation pay
44,470
39,332
Accrued expenses including salaries payable
44,795
43,100
Other current payables (note 19)
550
1,172
Total Trade and Other Payables
177,674
164,991
Terms and conditions of the above financial liabilities:
Trade payables are non-interest bearing and are normally settled on 30-day terms
Social Taxes and VAT are normally settled six times per year ( Norway) or monthly (Sweden)
Accrued vacation pay is paid in June (Norway)
Salaries payable are normally settled monthly
For explanations on the Group’s liquidity risk management processes, refer to Note 21
WEBSTEP | ANNUAL REPORT 2021
Note 19 Other short-term debt
NOK 000's
2021
2020
Salaries payable, vacation pay, bonus etc.
84,967
79,792
Other accrued expenses
4,298
2,639
Received prepayments of revenues
0
838
Other
550
335
Total other short-term debt
89,814
83,604
Note 20 Related party disclosure
The consolidated financial statements of the Group include:
Country of
in-corporation
Business Address
% equity interest
Name
2021
2020
Webstep AS
Norway
c/o Rebel, Universitetsgata 2, 0164 Oslo
100%
100%
Webstep AB
Sweden
Kungsgatan 44, 111 35 Stockholm
100%
100%
Webstep ASA is the ultimate parent of the Group, and sole owner of Webstep AS and Webstep AB. Balances and transactions
between the Company and its subsidiaries, which are related parties to the Company, have been eliminated in the consolidation
and are not disclosed in this Note. The Group does not have any material transactions with related parties, except for
remuneration to management (note 7).
Note 21 Capital management
Capital management
For the purpose of the Group's capital management, capital includes issued capital, treasury shares, share premium and all other
equity reserves attributable to the equity holders of the parent.
The Group is financed by equity with a revolving credit facility to finance fluctuations in net working capital.
The primary objective of the Group’s capital management is to maximize shareholder value. The policies shall ensure that the
Group complies with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order
to support its business objectives. The policies shall ensure sufficient, financial flexibility. The objectives for capital management
are regarded achieved as of December 31 2021.
The Group manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk
characteristics of its activities. In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to
shareholders, return capital to shareholders or issue capital securities. Capital structure is reported monthly and measured,
amongst other criterias, against covenants.
No changes have been made to the objectives, policies and processes from the previous years. However, they are under constant
review by the board of directors.
The Group monitors equity ratio (equity to total assets) and the ratio of Net Interest Bearing Debt (NIBD) to Earnings Before Interest
Tax Depreciation and Amortization (EBITDA) as part of the capital management as to ensure the Group is complying with current
55
WEBSTEP | ANNUAL REPORT 2021
covenants. The defintions and requirements are listed below. There have been no breaches of the financial covenants of any
interest-bearing loans and borrowing in the current period.
Group equity ratio
NOK'000
31 Dec 2021
31 Dec 2020
Total equity
393,692
380,184
Total assets
648,986
591,660
Group equity ratio
0.61
0.64
As of January 1 2019 the Group has applied IFRS 16 and recognised right-to-use assets in the balance sheet. The recognition
affects total assets. The covenants with the financial institution are based on "frozen GAAP" as of the date of entering the
agreements in 2017. To measure Group equity ratio according to the covenants, the total assets in 2020 and equity have to be
reduced by the recognised amount of right-to-use assets and effect to equity, as specified in the table below.
Group equity ratio according to covenants
NOK'000
31 Dec 2021
31 Dec 2020
Total equity as stated in the financial statement
393,692
380,184
=Applicable total equtiy according to current covenants
393,692
380,184
Total assets as stated in the financial statement
648,986
591,660
-Right-of-use assets (see note 24)*
0
(34,807)
=Applicable total assets according to current covenants
648,986
556,854
*Previous clause on "Frozen Gap" changed
Applicable group equity ratio according to current covenants
0.61
0.68
The covenant requires a Group NIBD/EBITDA ratio of minimum 3. The requirement was met year end 2021 and the Group has been
in compliance with the requirements during all of 2021.
NIBD to EBITDA ratio
NOK'000
2021
2020
NIBD (Net Interest Bearing Debt)
Cash and cash equivalents (minus indicates positive amount)
(46,690)
(39,724)
Restricted cash
1,893
1,871
Debt to credit institutions
0
0
Leasing liabilities (non-current and current)
61,537
34,807
NIBD
16,740
(3,046)
EBITDA (Earnings Before Interest Tax Depreciation and Amortization)
2021
2020
Operating profit/loss
65,923
50,004
+Depreciation and amortization
15,273
13,916
=EBITDA
81,197
63,920
Ratio NIBD/EBITDA
0.21
(0.05)
WEBSTEP | ANNUAL REPORT 2021
NIBD to EBITDA ratio according to covenant
NOK'000
2021
2020
NIBD (Net Interest Bearing Debt)
Cash and cash equivalents (minus indicates positive amount)
(46,690)
(39,724)
Restricted cash
1,893
1,871
Debt to credit institutions
0
0
Leasing liabilities (non-current and current)
61,537
34,807
-Reversal of leasing liabilities according to "frozen GAAP"*
(34,807)
=NIBD according to covenant
16,740
(37,852)
*Previous clause on "Frozen Gap" changed
EBITDA (Earnings Before Interest Tax Depreciation and Amortization)
2021
2020
Operating profit/loss
65,923
50,004
+Depreciation and amortization
15,273
13,916
-Reversal of depreciation of right-to-use assets (note 24)*
(8,989)
-Reversal of interest expense portion of right-to-use assets (note 24)*
(1,128)
=EBITDA
81,197
53,803
*Previous clause on "Frozen Gap" changed
Ratio NIBD/EBITDA according to covenant
0.21
(0.70)
57
WEBSTEP | ANNUAL REPORT 2021
Note 22 Share based payments
Share based payment programs
Employee share purchase program ("ESPP")
An employee share purchase programme was implemented in November 2018, and similar programmes has been carried out
yearly since 2018. In December 2021 each of the employees in the Norwegian entities, including executive management, were
invited to acquire shares with a market price of NOK 30,000 with a 25 per cent discount. 281 employees participated in the
program, and costs of NOK 2.1 million were included in salaries and personnel expenses. The share capital was increased 21
december 2021 to issue new shares related to the ESPP.
Share investment programme for management employees and board members
A share investment programme for management employees and board members was implemented in June 2021. The participants
were invited to acquire shares in the company for an amount of between NOK 50,000 and NOK 200,000 each with a discount of
21.7 %, and for up to NOK 4,200,000 in aggregate. The shares acquired were subject to a lock-up period of two years, and the
reduced offer price reflected the value-reducing effect of the lock-up period. 12 employees and 5 board members participated in the
program. The share capital was increased 22 June 2021 to issue new shares related to the programme.
Long-term incentive program ("LTIP")
Under the Long-term incentive programme, share options of the parent are granted to senior executives of the Group. The exercise
price of the share options is equal to the market price of the underlying shares on the date of grant. The share options vest if the
senior executive remains employed during the vesting period.
The fair value of the share options is estimated at the grant date using the Black-Scholes option pricing model, taking into account
the terms and conditions on which the share options were granted.
515,876 options were granted 18 November 2019, whereof 46,884 were terminated during 2020 and 23,461 were terminated during
2021.
The options will vest, or have vested, in the following tranches:
- 111,381 options vested 18 November 2020
- 111,381 options vested 18 November 2021
- 222,769 options vest 18 November 2022
546,000 options were granted 24 November 2020, whereof 52,000 were terminated during 2021.
The options will vest in the following tranches:
- 123,500 options vested 24 November 2021
- 123,500 options vest 24 November 2022
- 247,000 options vest 24 November 2023
98,000 options were granted 10 February 2021, the options will vest in the following tranches:
- 24,500 options vest 10 February 2022
- 24,500 options vest 10 February 2023
- 49,000 options vest 10 February 2024
26,000 options were granted 26 May 2021, the options will vest in the following tranches:
- 6,500 options vest 26 May 2022
- 6,500 options vest 26 May 2023
- 13,000 options vest 26 May 2024
650,000 options were granted 25 November 2021, the options will vest in the following tranches:
- 162,500 options vest 25 November 2022
- 162,500 options vest 25 November 2023
- 325,000 options vest 25 November 2024
WEBSTEP | ANNUAL REPORT 2021
Exercise price
- Exercise price for options granted 18 November 2019 is NOK 19.90
- Exercise price for options granted 24 November 2020 is NOK 21.13
- Exercise price for options granted 10 February 2021 is NOK 21.82
- Exercise price for options granted 26 May 2021 is NOK 31.05
- Exercise price for options granted 25 November 2021 is NOK 36.64
The potential dilution through the LTIP accounts for 424,501 shares. 5,865 of the vested shares have been exercised.
The share options can be exercised up to five years after the grant date. Therefore, the contractual term of each option granted is
five years. In the event the Company is not capable of delivering shares following an exercise of options, the Company shall fulfill
its obligations through a cash-out.
NOK'000
2021
2020
Expense arising from equity-settled share-based payment
transactions related to the Long-term incentive programme
2,878
1,232
Social security tax provisions
1,747
27
Granted instruments:
Option
Option
Quantity
774,000
546,000
Contractual life*
5
5
Strike price*
34.78
22.73
Share price*
35.34
23
Expected lifetime*
3.25
3.25
Expected volatility*
35.48%
34.28%
Risk-free interest rate*
1.33%
0.33%
Dividend yield
0
0
Model used
Black-Schole
s
Black-Schole
s
Fair value per instrument*
9.55
5.74
*Weighted average parameters at grant of instrument
The expected life of the share options is according to IFRS-2, shorter than the time from grant until expiry. Due to the taxation of
options and “non-transferability”, earlier exercise is expected . These are current expectations and are not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility for the company and
peers over a period similar to the expected life of the options is indicative of future trends, which may not necessarily be the actual
outcome.
59
WEBSTEP | ANNUAL REPORT 2021
Expenses
The expenses recognized for equity settled share-based payment transactions under the programs during the year are presented in
the table below:
NOK'000
2021
2020
Expenses related to the Employee Share Purchase Programme
(ESPP)
2,060
1,069
Expenses related to the Long-term Incentive Programme (LIP)
2,878
1,232
Total share based payment expenses in the period
4,938
2,300
Social security tax expense for the period
1,747
0
Social security tax accrual for the period
1,780
27
Number of discounted shares sold through the Employee Share
Purchase Programme (ESPP)
232,103
234,074
Discounted share price
26.6
NOK/share
18.3
NOK/share
Weighted average fair value of each discounted share sold
through the ESPP
8.88
4.60
Movements during the year (LTIP)
The following table illustrate the number and weighted average exercise prices (WAEP) of, and movements in, share options during
the year:
Long-term incentive programme
2021
2021
2020
2020
Number of
instruments
Weighted
Average
Strike Price
Number of
instruments
Weighted
Average
Strike Price
Outstanding at 1 January
1,014,992
20.66
515,876
21.50
Granted
774,000
34.58
546,000
22.76
Exercised
5,865
19.90
0
Released
0
Adjusted
0
Performance Adjusted
0
Cancelled
0
Terminated
(75,461)
21.85
(46,884)
21.50
Expired
0
Outstanding at 31 December
1,707,666
1,014,992
22.18
Vested at 31 December
340,397
20.36
117,246
21.50
The weighted average remaining contractual life
4 years
5 years
The weighted average exercise prices for options outstanding
26.91
22.18
The following key employees, as listed in note 7, were granted share options as a part of the LTIP:
WEBSTEP | ANNUAL REPORT 2021
Number of share options
Title
Total share
options
Granted
2021
Granted
2020
Save Asmervik
CEO
296,884
198,000
52,000
Liv Annike Kverneland
CFO
148,884
50,000
52,000
Jacob Cardell
COO Sweden
148,884
50,000
52,000
Terje Orvedal
Head of Consulting Oslo
148,884
50,000
52,000
Joar Krohn
Regional Manager Bergen
148,884
50,000
52,000
Geir Jåthun Hindenes
Regional Manager Stavanger
148,884
50,000
52,000
Dagfinn Haslebrekk
Regional Manager Trondheim
76,000
76,000
Arnt Roger Aasen
Communications Officer
74,461
25,000
26,000
Otto Backer Solberg
Communications Officer
74,461
25,000
26,000
The options were granted on the 18th of November 2019, 24 November 2020, 10 February 2021, 26 May 2021 and 25 November
2021. A total of 255,112 shares to key employees have vested per 31 December 2021. None of the vested shares have been
exercised.
Note 23 Earnings per share
The Company had one share class and a total of 27,268,514 outstanding shares (excl. treasury shares) 31 December 2021.
In 2021 the Long-term Incentive Programme as described in note 22 had dilutive effects.
Basic earnings per share calculations are based on the weighted average number of shares outstanding during the period, while
diluted earnings per share calculations are performed using the average number of shares and dilutive shares equivalents
outstanding during each period.
NOK'000
2021
2020
Profit for the year
48,495
36,749
Average number of shares outstanding
27,000
26,691
Average number of outstanding shares, fully diluted
27,330
26,696
Basic earnings per share (NOK/Share)
1.80
1.38
Diluted earnings per share
1.77
1.38
Average number of shares outstanding
27,000
26,691
Average dilutive effects
330
5
Warrants
0
0
Average number of shares outstanding adjusted for dilutive effects
27,330
26,696
Dilutive effect of options issued 18 November 2019
189,373
15,954
Dilutive effect of options issued 24 November 2020
195,394
Dilutive effect of options issued 10 February 2021
36,828
Dilutive effect of options issued 26 May 2021
2,906
Dilutive effect of options issued 25 November 2021
61
WEBSTEP | ANNUAL REPORT 2021
Note 24 Rent and lease agreements
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to
use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as
follows:
• Office rents 1 to 10 years
• Company cars and other equipment 1 to 3 years
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase
option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
The Group has applied it's incremental borrowing rate for all leases except where rates are implicit in the contracts for company
cars.
The weighted, average incremental borrowing rate applied at December 2021 is 4,70%.
WEBSTEP | ANNUAL REPORT 2021
Right-of-use assets
The Group's right-of-use assets are identified as office rentals and rental of company cars in Sweden.
Right-of-use assets,
NOK'000
Company
cars
Offices
Sweden
Offices
Norway
Total
Acquisition cost 1 January 2021
5,290
10,467
35,053
50,810
Addition of right-of-use assets
5,260
4,677
28,864
38,801
Disposal of right-of-use assets
(1,894)
(2,229)
(12,050)
(16,173)
Currency exchange differences
(313)
(607)
0
(920)
Acquisition cost 31 December 2021
8,343
12,308
51,867
72,518
Accumulated depreciation 1 January 2021
2,166
3,012
10,825
16,003
Accumualated depreciation on disposals
(1,917)
(2,229)
(11,768)
(15,913)
Depreciation for the period
1,267
1,563
7,050
9,881
Accumulated depreciation 31 December 2021
1,516
2,347
6,107
9,971
Carrying amount of right-of-use assets 31 December 2021
6,827
9,961
45,759
62,548
Acquisition cost 1 January 2020
4,441
4,675
35,053
44,169
Addition of right-of-use assets
487
5,369
0
5,856
Currency exchange differences
362
423
0
784
Acquisition cost 31 December 2020
5,290
10,466
35,053
50,809
Accumulated depreciation 1 January 2020
1,003
1,470
4,541
7,014
Depreciation for the period
1,164
1,542
6,284
8,989
Accumulated depreciation 31 December 2020
2,167
3,012
10,825
16,003
Carrying amount of right-of-use assets 31 December 2020
3,123
7,455
24,228
34,807
Lower of remaining lease term or economic life
1-3 years
1-3 years
1-5 years
Depreciation method
Amortization
Amortization
Amortization
Expenses in the period related to practical expedients and variable payments:
NOK'000
Total
Short-term lease expenses
225
Low-value assets lease expenses
128
Variable lease expenses in the period (not included in the lease liabilities)
1,891
Total lease expenses in the period related to practical expedients and variable payments
2,244
63
WEBSTEP | ANNUAL REPORT 2021
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to
terminate.
Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce
inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease
payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the
lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion
of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change
in an index or rate used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
The Group’s lease liabilities are included in Interest-bearing loans and borrowings.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value.
Lease payments on short-term leases and leases of lowvalue assets are recognised as expense on a straight-line basis over the
lease term.
Lease liabilities
Undiscounted lease liabilities and maturity of cash
outflows
NOK '000
Company
cars
Offices
Sweden
Offices
Norway
Total
Less than 1 year
1,479
2,271
10,714
14,464
1-2 years
2,164
2,628
11,446
16,238
2-3 years
2,586
2,666
9,619
14,871
3-4 years
2,327
5,123
7,450
4-5 years
957
5,077
6,034
More than 5 years
353
13,012
13,365
Total undiscounted lease liabilities at 31 December 2021
6,229
11,202
54,991
72,422
The future cash outflows to which the Group is potentially exposed that are not reflected in the measurement of lease liabilities,
includes
Extension options
Total
Kongens gate 16, Trondheim
Yearly, callable options until 30.04.2029
6,324
Kongsgata 52-54, Stavanger
Option until 31.08.2029
5.264
Thormøhlensgate 47, Bergen
Option until 31.12.2031
13,551
Total extension options
19,880
The first two contracts have termination clauses, with penalties, which are reflected in the measurement of the lease liabilities if
options are not exercised.
WEBSTEP | ANNUAL REPORT 2021
Summary of the lease liabilities in the financial statements
Statement of:
Company
cars
Offices
Sweden
Offices
Norway
Total
Total lease liabilities 1 January 2021
Financial position
3,123
7,455
24,228
34,806
New leases liabilities recognised in the year
Financial position
5,260
4,677
28,633
38,570
Cash payments for lease liabilities
Cash flows
(2,306)
(1,563)
(7,050)
(10,920)
Currency exchange differences
FInancial position
(313)
(607)
(920)
Total lease liabilities 31 December 2021
Financial position
5,764
9,962
45,811
61,537
Current lease liabilities
Financial position
1,345
1,906
8,779
12,029
Non-current lease liabilities
Financial position
4,419
8,056
37,032
49,508
Cash outflows for the principal portion of the lease liabilities
Cash flows
(1,267)
(1,563)
(7,050)
(9,880)
Cash outflows prepayment of lease liabilities
Cash flows
(1,039)
(1,039)
Cash outflows Interest expense portion of the lease liabilities
Cash flows/profit or
loss
(107)
(288)
(848)
(1,243)
Total cash outflows for leases recognised as leases
Cash flows
(2,413)
(1,851)
(7,898)
(12,162)
Cash outflows recognised related to practical expedients and
variable payments
(2,244)
Total cash outflows for leases
(14,406)
The right-of-use-assets are recognised at the estimated net present value of the leasing liabilities as calculated at the date of initial
recognition or cost according to contract.
Contracts with options for extensions that would, with reasonable certainty be exercised, are estimated at net present value
including the optional rental period.
Contracts with penalties if options for extensions not are exercised and where the certainty for exercising the options is assessed as not
reasonable, the estimated or actual penalty amounts are provided for and treated as a part of the rental cost of the contracts
decomposed in depreciation, installment and interest.
In addition to the lease liabilities presented above, the Group is committed to pay variable lease payments for its office leases
related to future inflation/index adjustments in Norway and Sweden which is not included in the initial recognition of lease
liabilities. When the inflation/index adjustment is known, the present value of the change to the future lease payments is added to
the lease liability and right-of-use asset.
Sensitivity of assumptions to the estimates
The estimates of the value of right-to-use assets and leasing liabilities relies on the applied interest rates and the duration and
nature of the contracts. All contracts have a duration of maximum 5 years with options for extensions with one exception, a
contract with 10 years duration. If extensions are viewed as reasonably probable, the extension period is embedded in the
calculation of the estimate. Changes in interest rates are regarded having the most significant impact on the estimates either
impacting the incremental borrowing rate applied on office rentals estimates or the leasing amount of the company cars. A
sensitivity analysis of possible effects of changes to interest rates are given in the tables below:
Effect on incremental borrowing rates
A test on sensitivity on interest assumptions have been performed by varying NIBOR by +/- 200 basis points (BPS) compared to
applied NIBOR 3 month of 1,85% on the Group's incremental borrowing rate applied estimating value on office rentals.
65
WEBSTEP | ANNUAL REPORT 2021
Office rentals ('000 NOK)
Applied
+200 BPS
-200 BPS
Applied NIBOR 3 month December 31st
1.85%
3.85%
(0.15%)
Estimated value December 31st 2021
55,772
53,635
60,484
Deviation from applied estimate: Amount
2,137
(4,712)
Deviation from applied estimate: Percent
3.8%
(8.4%)
A similar test on interest assumptions have been performed by varying the implicit rate on company car leasing contracts by
adjusting the implicit interest rate by +/- 200 BPS.
Changes in leasing amount
Company cars ('000 NOK)
Applied
+200 BPS
- 200 BPS
Average implicit rate December 31st
3,6%
5,6%
1,6%%
Estimated value December 31st 2021
5,764
5,879
5,649
Deviation from applied estimate: Amount
115
(115)
Deviation from applied estimate: Percent
2.0%
(2.0%)
Note 25 Contingencies and legal claims
The Group has not been involved in any legal or financial disputes in 2021, where an adverse outcome is considered more likely
than remote.
Note 26 Distribution made and proposed
NOK'000
2021
2020
Cash dividends on ordinary shares declared and paid:
Final dividends
43,052
42,677
Dividends per share
1.60
1.60
Proposed dividends on ordinary shares:
Proposed dividends
46,489
43,052
Dividends per share
1.70
1.60
Note 27 Events after the balance sheet date
Since 31 December 2021 and until the date of these financial statements, the board of directors is not aware of any matter or
circumstance not otherwise dealt with in this report that has significantly or may significantly affect the operations of the
consolidated entity.
The condemnable invasion of Ukraine and the sanctions against Russia incorporated in Norwegian Law in March 2022, are not
expected to have a direct impact on Webstep’s business activities, but the consequences of the acts of war are uncertain. Webstep
is following the developments closely to detect any direct or indirect consequences that may follow.
WEBSTEP | ANNUAL REPORT 2021
67
WEBSTEP | ANNUAL REPORT 2021
Financial statements -
Parent company
WEBSTEP | ANNUAL REPORT 2021
Financial statements – Parent company
Statement of comprehensive income
NOK 000's
Note
2021
2020
Sales Revenues
5
150
150
Total revenues
150
150
Salaries and personnel expenses
3, 4, 13
(15,354)
(19,783)
Depreciation and impairment
6
(28)
(28)
Other operating expenses
3
(5,627)
(3,755)
Total operating expenses
(21,008)
(23,566)
Operating profit (loss)
(20,858)
(23,416)
Finance income and expense
Finance income from group companies
61,083
46,540
Interest income from group companies
8
601
474
Other interest income
98
152
Other finance income
5
0
Interest expense from group companies
8
(932)
(1,174)
Other interest expenses
(1,743)
(1,264)
Net financial items
59,112
44,728
Profit before tax
38,254
21,312
Income tax expense
11
(8,427)
(4,689)
Profit for the year
29,827
16,623
Total comprehensive income for the year
29,827
16,623
Attributable to:
Dividends
(46,489)
(85,729)
Change in retained earnings
76,316
69,106
Total
29,827
(16,623)
69
WEBSTEP | ANNUAL REPORT 2021
Statement of financial position
NOK 000's
Note
2021
2020
Non-current assets
Deferred tax assets
11
392
-
Total intangible assets
392
-
Property, plant and equipment
6
87
50
Total fixed assets
87
50
Investments in subsidaries
7, 10
432,119
432,119
Loans to group companies
8
2,935
9,073
Other non-current receivables
0
10
Total non-current assets
435,533
441,252
Trade receivables
8
150
150
Other receivables
8
63,522
48,381
Cash and short-term deposits
2, 10
31,116
22,651
Total current assets
94,788
71,181
Total assets
530,321
512,434
Share capital
12, 13
27,322
26,967
Treasury shares
13
(54)
(60)
Share premium
172,779
162,024
Total paid-in equity
200,047
188,932
Retained earnings
87,611
101,394
Total retained earnings
87,611
101,394
Total equity
287,658
290,326
Deferred tax
11
0
1
Total non-current liabilities
0
1
Trade and other payables
8
225
246
Tax payable
11
8,820
4,691
Social Taxes and VAT
2
532
1,213
Dividend
46,489
43,052
Other short-term debt
9
4,431
8,057
Current debt to group companies
8
182,166
164,848
Total current liabilities
242,664
222,107
Total liabilities
242,664
222,108
Total equity and liabilities
530,321
512,434
Webstep ASA
Oslo, 5 April 2022
Trond Klethagen Johannessen
Save Asmervik
Toril Nag
Chair of the board
Chief Executive Officer
Board member
Siw Ødegaard
Trygve Christian Moe
Kjetil Bakke Eriksen
Board member
Board member
Board member
WEBSTEP | ANNUAL REPORT 2021
Statement of change in equity
Issued
capital
Treasury
shares
Share
premium
Retained
earnings
Total
earned
equity
Non-control
ling
interests
Total
equity
NOK 000's
At 1 January 2021
26,967
(60)
162,024
101,394
290,326
0
290,326
Profit for the period
0
0
0
29,827
29,827
0
29,827
Other comprehensive income/(loss)
0
0
0
0
0
0
0
Total comprehensive income for the period
0
0
0
29,827
29,827
0
29,827
Sale of treasury shares
0
6
111
0
117
0
117
Share incentive program
0
0
0
2,878
2,878
0
2,878
Shares issued
355
0
10,644
0
10,999
0
10,999
Dividends provided for the period
0
0
0
(46,489)
(46,489)
0
(46,489)
At 31 December 2021
27,322
(54)
172,778
87,611
287,657
0
287,658
71
WEBSTEP | ANNUAL REPORT 2021
Statement of cash flow
NOK 000's
Note
2021
2020
Operating activities
Profit/ (loss) before tax
38,254
21,312
Adjustments for:
Income tax expense
(4,691)
(5,485)
Depreciation of property, plant and equipment
28
28
Net change in trade receivables
0
0
Net change in other receivables
253
(295)
Net change in trade creditors
77
99
Net change in social taxes and VAT
(680)
95
Net change in other liabilities
(3,616)
1,737
Net change in intercompany balances
(99)
(872)
Net cash flow from operating activities
29,527
16,619
Investing activities
Purchase of property and equipment
(65)
0
Investment in subsidiary
0
0
Net cash flow from financing activities
(65)
0
Financing activities
Proceeds from borrowings
0
0
Repayment of borrowings
0
0
Change in bank overdraft
8
0
0
Change in intercompany balances
8
8,062
24,697
Net proceeds from equity
10,999
0
Sales of treasury shares/employment incentive plan
2,995
6,576
Payment of dividends
(43,052)
(42,677)
Net cash flow from financing activities
(20,996)
(11,405)
Net increase/(decrease) in cash and cash equivalents
8,465
5,214
Cash and cash equivalents at 1 January
22,651
17,437
Cash and cash equivalents at 31 December
31,116
22,651
A NOK 110 million Revolving Credit Facility (“RCF”) with SpareBank 1 SR-Bank ASA was entered into by the Company as a part of
the IPO process in 2017. At balance date NOK 0 million of the RCF was utilised, leaving NOK 110 million unutilised.
WEBSTEP | ANNUAL REPORT 2021
Notes to the financial statements – Parent company
Note 1 General information
The Company and the Group
Webstep ASA, the parent company (the Company) of the
Webstep Group (the Group) is a limited liability company
incorporated and domiciled in Norway, with its head office
Rebel, Universitetsgata 2, 0164 Oslo, Norway. The annual
report for Webstep ASA (the Company) is prepared according
to the Norwegian Accounting Act 1998 § 3-9 and Regulations
on simplified IFRS as enacted by the Ministry of Finance on 21
January 2008. In all material aspects, Norwegian Simplified
IFRS requires that the IFRS recognition and measurement
criteria (as adopted by the European Union) are complied with,
but disclosure and presentation requirements (the notes)
follow the Norwegian Accounting Act and Norwegian Generally
Accepted Accounting Standards. Simplified IFRS The Company
has adopted the following simplified IFRS recognition and
measurement criteria: Dividend and group contribution is
accounted for in accordance with the Norwegian Accounting
Act, deviating from IAS 10, IAS 12 and IAS 13.
Management’s assessment of accounting principles
The management has used estimates and assumptions that
have impacted assets, liabilities, income, expenses and
information about potential obligations, particularly relating to
depreciation of property, plant and equipment, assessment of
goodwill and acquisitions. Future events may cause changes in
estimates. Estimates and the underlying assumptions are
continuously assessed. Changes in accounting estimates are
recognised in the accounting period these changes occur. If
the changes also apply to future periods, the impact will be
distributed over the current and future periods.
Subsidiaries and investments in associates
Subsidiaries and investments in associates are valued by the
cost method in the parent company accounts. The investment
is valued as cost of acquiring shares in the subsidiary,
providing that write down is not required. Write down to fair
value will be carried out if the reduction in value is caused by
circumstances which may not be regarded as incidental and
deemed necessary by generally accepted accounting
principles. Write downs are reversed when the cause of the
initial write down are no longer present. Dividends and other
distributions are recognised in the same year as appropriated
in the subsidiary accounts. Dividends from other companies
are recognised when the shareholders’ rights to receive
dividend has been determined by the General Meeting. If
dividends exceed withheld profits after acquisition, the
exceeding amount represents reimbursement of invested
capital, and the distribution will be subtracted from the value of
the acquisition in the balance sheet. Group contribution
received from subsidiaries are recognised if it exceeds
withheld profits after acquisition. Group contribution is
recognised at gross value before tax at the time of recognition.
Reimbursement of invested capital will reduce the value of the
acquisition in the balance sheet. Group contribution will then
be recognised at net value after tax. Group contribution to
subsidiaries increases the value of the investment. Group
contribution paid is recognised at net value net after tax.
Sales revenues from contracts
Revenues from services are recognised at the time of
execution. The Company has no significant contract balances
other than intercompany.
Balance sheet classification
Current assets and current debt comprise assets and debt due
within one year. Other entries are classified as fixed assets
and/or long-term creditors. Current assets are valued at the
lower of acquisition cost and fair value. Short term creditors
are recognised at nominal value. Fixed assets are valued at the
cost of acquisition, in the case of non-incidental reduction in
value the asset will be written down to the fair value amount.
Fixed assets with limited lifetime are depreciated. Long term
debt is recognised at historical nominal value.
Trade and other receivables
Trade receivables and other current receivables are recorded in
the balance sheet at nominal value less provisions for doubtful
debts. Provisions for doubtful debts are calculated based on
individual assessments. In addition, for the remainder of
accounts receivables outstanding balances, a general
provision is carried out based on expected loss.
Leasing
IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining
whether an Arrangement contains a Lease, SIC-15 Operating
Leases-Incentives and SIC-27 Evaluating the Substance of
Transactions Involving the Legal Form of a Lease. The
standard sets out the principles for the recognition,
measurement, presentation and disclosure of leases and
requires lessees to recognise most leases on the balance
sheet. No contracts, fulfilling the requirements of contracts in
IFRS 16, have been identified in the Company as a lessee.
Foreign currency translation
Foreign currency transactions are translated using the year end
exchange rates.
Property, plant and equipment
Property, plant and equipment is capitalised and depreciated
over the estimated useful economic life of the asset. Direct
maintenance costs are expensed as incurred, whereas
improvements and upgrading are assigned to the acquisition
cost and depreciated along with the asset. If carrying value of
a non-current asset exceeds the estimated recoverable
amount, the asset is written down to the recoverable amount.
73
WEBSTEP | ANNUAL REPORT 2021
The recoverable amount is the greater of the net selling price
and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value.
Provisions
A provision is recognised in the balance sheet when the Group
has a legal or constructive obligation because of a past event,
and it is probable that an outflow of resources will be required
to settle the obligation, and a reliable estimate of the amount
can be made. If the effect is material, the provision is
determined by discounting the expected future cash flows at a
pre-tax rate that reflects the current market assessments of
the time value of money and, where appropriate, the risks
specific to the liability.
Intangible assets
Intangible assets acquired separately are measured at initial
recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and
accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not
capitalised and the related expenditure is reflected in profit or
loss in the period in which the expenditure is incurred. The
useful lives of intangible assets are assessed as either finite or
indefinite Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the method are
reviewed at least at the end of each reporting period. Changes
in the expected useful life or the expected pattern of
consumption of future economic benefits are considered to
modify the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates.
Pensions
The Company has a Defined Contribution Pension plan. Annual
premium is recognised on a continuous basis and classified as
payroll costs.
Government grants
For contributions received accounted for as government grants
related to income under IAS 20, the accounting policy of the
Group is to recognize such grants when there is reasonable
assurance that the conditions attaching to the grant will be
complied with and that the grants will be received. The grants
are recognized as income unless directly related to specific
items of expense.
Income tax
Tax expenses in the profit and loss account comprise both tax
payable for the accounting period and changes in deferred tax.
Deferred tax is calculated at 22 per cent based on existing
temporary differences between accounting profit and taxable
profit together with tax deductible deficits at the year end.
Temporary differences both positive and negative, are
balanced out within the same period. Deferred tax assets are
recorded in the balance sheet to the extent it is more likely than
not that the tax assets will be utilised. To the extent that group
contribution is not registered in the profit and loss, the tax
effect of group contribution is posted directly against the
investment in the balance.
Cash flow statement
The cash flow statement is presented using the indirect
method. Cash and cash equivalents include cash, bank
deposits and other short term, highly liquid placement with
original maturities of three months or less.
Equity
Financial instruments are classified as debt or equity in
accordance with the underlying financial reality. Interest,
dividend and profit or loss related to a financial instrument
classified as debt, will be presented as cost or income.
Dividend payments to holders of financial instruments
classified as equity will be booked against equity. Own equity
instruments that are reacquired (treasury shares) are
recognised at cost and deducted from equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue or ‘s
cancellation of the Company’s own equity instruments.
Transaction costs related to an equity transaction will be
booked against equity, net of taxes.
Share-based payments
Employees, including senior executives of the Company,
receive remuneration in the form of share-based payments,
whereby employees render services as consideration for equity
instruments (equity-settled transactions). Employees in the
Norwegian companies of the Group have been granted shares
at discounted prices, within the limit for such grants according
to Norwegian tax legislation (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an
appropriate valuation model. The cost is recognised in
employee benefits expense, together with a corresponding
increase in equity, over the period in which the service and the
performance conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent
to which the vesting period has expired and the Group's best
estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement of profit
or loss for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share. The discounts granted to employees in the
Norwegian entities are recognised as a cost in salaries and
personnel cost in the profit and loss statement. A total share
value of 25,000 NOK per employee, measured at the market
share price on the granting day, is the threshold given by the
tax authorities in Norway for discounted shares which are
tax-free discounts for the employee.
WEBSTEP | ANNUAL REPORT 2021
Note 2 Bank deposits
Webstep ASA has restricted cash of NOK 642 thousand to
cover taxes withheld.
Note 3 Salaries, remuneration and audit fees
Salaries and personell expenses (NOK'000)
2021
2020
Salaries
11,758
17,455
Social security cost
2,699
1,808
Pensions
318
324
Other benefits and refunds
578
196
Total salaries and personal expenses
15,354
19,783
Number of employees, average FTEs
6
6
Total
remuneration
Remuneration to executive management NOK'000
Base salary
Variable pay
Other**
Pension
Total remuneration to executive management 2021
8,481
952
339
9,772
266
Total remuneration to executive management 2020*
5,211
1,370
49
6,630
107
*Structural changes during the last year has led to an expansion of the Executive Management from 2021. Previous periods the
executive management team was defined as consisting of the CEO and CFO.
**Other consist of e.g. health insurance plans, travel expenses, car allowance and telephone/mobile communication, etc.
2021
2020
Remuneration to board members and nomination committee
Compensation
Compensation
Chairman of the board - Trond Klethagen Johannessen (from 7 May 2020)
410
326
Chairman of the board - Klaus-Anders Nysteen (until 6 May 2020)
0
123
Board member - Siw Ødegaard
288
246
Board member - Trygve Christian Moe
257
149
Board member - Toril Nag
233
239
Board member - Kjetil Bakke Eriksen
247
0
Nomination committee - Bjørn Ivar Danielsen (board member until 5 May 2021)
19
250
Nomination committee - Petter Tusvik
17
17
Nomination committee - Trude Sleire (until 28 April 2021)
6
17
Nomination committee - John Morten Bjerkan (until 28 April 2021)
9
27
Total remuneration to board members and nomination committee
1,487
1,394
75
WEBSTEP | ANNUAL REPORT 2021
Board remuneration
Compensation to board members is not performance-related. Compensation to the Board is determined by the Annual General
Meeting, and the accrued cost for 2021 and 2020 is based on the decision made by the Annual General Meetings. The
compensation is paid in arrears.
Determination of remuneration to executive management
The Company's executive management comprises the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), Directors
Communication and marketing and Group Advisor. Remuneration to executive management is mainly fixed salary as well as
performance based bonus. CEO and CFOs bonus is decided by the remuneration committee and regional managers bonus is
calculated by pre-determined KPIs, in line with the Remuneration Policy.
Bonuses for 2020 were accrued for in the consolidated statement of comprehensive income for 2020 and paid in Q1 2021. The
CEO was paid a bonus of NOK 0.62 million. The CFO received a bonus of 0.75 million.
The CEO and the CFO were entitled to bonuses for 2021 which were accrued for in the consolidated statement of comprehensive
income for 2021 and paid in Q1 2022. The CEO received a bonus of NOK 0.7 million. The CFO received a bonus of NOK 0.15 million.
The executive management is entitled to participate in the Long-term incentive programme as described in note 22.
The accrued bonuses are included in the table above.
Arne Norheim stepped down as CEO 30 November 2020, and Liv Annike Kverneland served as Interim CEO from 1 December 2020
until 14 February 2021. Mr. Norheim is employed by the Company until 31 May 2021, and received compensation for being available
during this period.
Main principles for the determination of remuneration for the executive management of Webstep ASA
The main principle for the Company's remuneration policy is that the executive management shall be offered competitive terms
when their total remuneration package is taken into account. Such package may consist of elements such as base-salary, bonus,
share and option schemes, benefits in kind and pension arrangements. The Company shall seek to offer a remuneration level that is
considered competitive and on market terms, compared to the level offered by its peers, and which seeks to satisfy the Company's
need to recruit and keep highly qualified personnel in the executive management.
The current guidelines have been prepared in accordance with the provisions of section 6-16a of the Norwegian Public Limited
Companies Act, approved 28 April 2021 at the Annual General Meeting.
The executive management receives base salary which constitutes approximately 70-80% of the total remuneration package.
The executive management is offered contribution in kind such as coverage of phone and phone expenses, private broadband,
company health services, insurances, car allowance and coverage of travel expenses.
The executive management participates in the Company's defined contribution pension scheme in accordance with mandatory law.
The company's CEO receives a fixed car allowance at NOK 15,000 per month.
The executive management may be offered performace-based bonuses in addition to their fixed remuneration. Such
performance-based bonus shall be agreed on an individual basis if applicable. The criteria for any performance-based bonus shall
be determined by the board of directors and shall be linked to measurable factors, such as the achievement of pre-determined KPIs.
The Company's CEO and CFO performace-based profit may constitute up to 40% and 35% respectively, and shall be determined by
the board of directors.
The executive management may be offered Company shares and options to shares as a part of the total remuneration package.
The executive management, and other managers as decided by the board of directors, are included in Websteps Long-term
incentive program approved at the Annual General Meeting 2019. The program is further described in note 13.
The executive management are included in Websteps share purchase program for leading personnel and board members and
Employee share purchase program as further described in note 13.
WEBSTEP | ANNUAL REPORT 2021
The other Group companies shall follow the main principles for remuneration of executives as described herein and guidelines for
determination of salary and other remuneration to executive personnel in Webstep.
Audit fees:
2021
2020
Statutory audit fees
359
343
Audit-related services
0
53
Non-audit related services
0
0
Other services recognised on equity
0
0
Total fees*
359
396
* VAT is not included
Note 4 Pension costs
The Group has an occupational pension scheme in accordance with the Act on Required Occupational Pensions. The Company has
defined contribution plans for all of its employees, governed by the employment laws. The pension premium charge was TNOK 318
in 2021.
Note 5 Revenue by segment
NOK ‘000
2021
2020
Per business area
Managerial services
150
150
Other
Total
150
150
Geographical distribution / Segment distribution
Sweden
150
150
Norway
0
0
Total
150
150
Services for NOK 150 thousand are charged Webstep AB in 2021.
77
WEBSTEP | ANNUAL REPORT 2021
Note 6 Fixed assets
Equipment,
fixtures and
furniture
Total
NOK'000
Cost 1. January
141
141
Additions
65
65
Cost at 31. December
206
206
Depreciation and impairment 31. December
(119)
(119)
Net book value 31. December
87
87
Depreciation charge for the year
28
28
Useful life
3 - 5 year
Depreciation method
Straight line
Note 7 Subsidiaries, associated companies etc.
Company
Acquired
Office
Ownership
Profit and loss 2021
Equity at 31.12
Net book value at 31.12
Webstep AS*
10-05-2011
Oslo
100 %
61,083
92,287
359,025
Webstep AB**
19-11-2012
Stockholm
100 %
3,796
13,446
73,094
Total
64,879
105,733
432,119
*According to NGAAP
**According to SGAAP
Note 8 Intercompany receivables and payables
NOK ‘000
2021
2020
Intercompany receivables
Receivable group contribution Webstep AS
61,083
46,540
Other receviables Webstep AS and AB
4,721
10,074
Receivable Webstep AB
150
150
Total intercompany receivables
65,955
56,764
Intercompany payables
Trade payables Webstep AS
0
99
Payables cash pool Webstep AS
182,166
164,848
Other payables Webstep AS
0
0
Total intercompany payables
182,166
164,947
WEBSTEP | ANNUAL REPORT 2021
The Company has received a group contribution of NOK 61,1 million from Webstep AS in 2021. The group contribution is
recognised as a receivable at 31 December 2021.
Interest income of NOK 601 thousand is recognised as a receivable from Webstep AS in 2021.
Webstep ASA has not purchased any goods or services from related parties in 2021 of material amount.
As the ultimate owner of the cash pool is Webstep ASA, the net position of the cash pool is reflected in the balance sheet of the
Company, and any deposits generated by the Norwegian subsidiary are classified as liabilities to Group companies. Cash on the
group account is recognised as cash in Webstep ASA and is offset by a group receivable/payable depending on the individual
balances on the individual bank account comprising the cash pool. The impact on the Statement of Cash Flows of the change is
that "Change in bank overdraft" and "Change in intercompany balances" in the chapter "Financing activities" are netted to reflect
the underlying legal and economic reality of the cash pool.
Services for NOK 150 thousand are charged Webstep AB in 2021. Interest cost of NOK 0,9 million is charged on the cash pool
agreement to Webstep AS in 2021.
Note 9 Other current payables
NOK ‘000
2021
2020
Other current payables
Accrued interest cost
0
0
Provision salaries and holiday pay
1,985
7,324
Other accruals
2,446
733
Total
4,431
8,057
79
WEBSTEP | ANNUAL REPORT 2021
Note 10 Pledges and guarantees
NOK ‘000
2021
2020
Pledged liabilities
Non-current debt to credit institutions
0
0
Revolving credit facility SR-Bank
0
0
The revolving credit facility is part of the Group's cash pooling system with a credit limit of NOK 110 million. Net drawn on the group
facility at 31 December 2021 was NOK 0 million.
The Company has no loans with payments due past 5 years.
Booked value of assets pledged as security:
NOK'000
2021
2020
Shares in Webstep AS
359,025
359,025
Fixed assets
87
50
Receivables
66,457
57,454
Bank deposits
744
642
Total pledged assets
426,313
417,170
WEBSTEP | ANNUAL REPORT 2021
Note 11 Taxes
NOK ‘000
2021
2020
Current year tax base:
Accounting profit before tax
38,254
21,312
Permanent differences
52
(0)
Share issuance cost recognised on equity
0
0
Group contribution recognised as income, taxable
(61,083)
(46,540)
Change in temporary differences
1,785
9
Tax base before group contribution
(20,992)
(25,219)
Received group contribution including tax
61,083
46,540
Tax base for the year
40,091
21,321
Tax payable (22%/23%)
8,820
4,691
Tax payable in the balance sheet
8,820
4,691
Income tax expenses for the year
Tax payable
8,757
4,691
Tax unprovided for previous periods
63
0
Changes in deferred tax
(393)
(2)
Total income tax expenses for the year
8,427
4,689
Temporary differences
Fixed assets including goodwill
8
5
Provisions, not yet taxable
(1,788)
0
Net temporary differences at 31.12
(1,780)
5
Deferred tax assets/deferred tax (22%)
(392)
1
Effective tax rate
Expected income tax
8,416
4,689
Permanent differences (22%)
11
(0)
Effect of change in tax rate and other
0
0
Income tax expense
8,427
4,689
Effective tax rate *
22%
22%
* Income tax expense in relation to income before tax
81
WEBSTEP | ANNUAL REPORT 2021
Note 12 Share capital and shareholders
Share capital:
Number of shares
Face value
Net book value
Ordinary shares
27,322,208
NOK 1
27,322
Shareholder name
Shares
Ownership
Voting rights
Embro Eiendom AS
8,159,382
29.86%
29.92%
VERDIPAPIRFONDET ALFRED BERG GAMBA
1,556,645
5.70%
5.71%
VERDIPAPIRFONDET DNB SMB
1,261,862
4.62%
4.63%
SALT VALUE AS
1,157,687
4.24%
4.25%
J.P. MORGAN BANK LUXEMBOURG S.A.
1,041,345
3.81%
3.82%
JAKOB HATTELAND HOLDING AS
1,000,000
3.66%
3.67%
J.P. MORGAN BANK LUXEMBOURG S.A.
900,000
3.29%
3.30%
HOLMEN SPESIALFOND
699,576
2.56%
2.57%
VERDIPAPIRFONDET NORDEA NORGE VERD
664,317
2.43%
2.44%
Danske Invest Norge Vekst
542,000
1.98%
1.99%
Goldman Sachs International
416,571
1.52%
1.53%
INTERTRADE SHIPPING AS
400,000
1.46%
1.47%
Danske Bank A/S
320,000
1.17%
1.17%
BLUEBERRY CAPITAL AS
317,007
1.16%
1.16%
HAUSTA INVESTOR AS
300,000
1.10%
1.10%
ESPEDAL & CO AS
255,560
0.94%
0.94%
IVAR LØGE AS
250,000
0.92%
0.92%
VERDIPAPIRFONDET NORDEA AVKASTNING
225,383
0.82%
0.83%
MP PENSJON PK
224,000
0.82%
0.82%
Pictet & Cie (Europe) S.A.
222,603
0.81%
0.82%
Other shareholders
7,354,576
26.92%
26.97%
Total number of shares excluding treasury shares
27,268,514
99.80%
100.00%
Treasury shares as of 31 December 2021
53,694
0.20%
Total shares outstanding
27,322,208
100.00%
WEBSTEP | ANNUAL REPORT 2021
Shareholding by board members, management and their related parties as of 31 December 2021
Trond K. Johannessen
56,925
0.21%
0.21%
Trygve Christian Moe (TCM Consulting AS)
23,925
0.09%
0.09%
Kjetil Bakke Eriksen (Suelo AS)
18,925
0.07%
0.07%
Siw Ødegaard (Kvinnesiden AS)
13,025
0.05%
0.05%
Toril Nag
3,570
0.01%
0.01%
Save Asmervik
12,340
0.05%
0.05%
Jacob Cardell (Nominee)
20,020
0.07%
0.07%
Liv Annike Kverneland (LAK Invest AS and privately held)
41,290
0.15%
0.15%
Terje Orvedal (Illari AS)
9,143
0.03%
0.03%
Joar Krohn (Kronoko Holding AS and privately held)
99,320
0.36%
0.36%
Geir Jåthun Hindenes (GJH Invest AS and privately held)
17,093
0.06%
0.06%
Dagfinn Haslebrekk
6,665
0.02%
0.02%
Arnt Roger Aasen (Aravi AS and privately held)
26,032
0.10%
0.10%
Otto Backer Solberg
18,627
0.07%
0.07%
Rolf Helle (Xerxes AS and privately held)
41,247
0.15%
0.15%
Trond K. Johannessen and Trygve Christian Moe are employed by Embron Group AS, which is owned by J.C. Broch
AS.
Webstep ASA holds 53,694 treasury shares. These shares have no voting rights nor dividend rights.
83
WEBSTEP | ANNUAL REPORT 2021
Note 13 Share based payments
Employee share purchase program ("ESPP")
An employee share purchase programme was implemented in November 2018, and similar programmes has been carried out
yearly since 2018.
In December 2021 each of the employees in the Norwegian entities, including executive management, were invited to acquire
shares with a market price of NOK 30,000 with a 25 per cent discount. 281 employees participated in the program, and costs of
NOK 2.1 million were included in salaries and personnel expenses for the Group whereof 6 employees in the Company acquired
5,070 shares with an expense charged to the Company of NOK 45 thousand.The share capital was increased 21 december 2021 to
issue new shares related to the ESPP.
Share investment programme for management employees and board member
A share investment programme for management employees and board members was implemented in June 2021. The participants
were invited to acquire shares in the company for an amount of between NOK 50,000 and NOK 200,000 each with a discount of
21.7 %, and for up to NOK 4,200,000 in aggregate. The shares acquired were subject to a lock-up period of two years, and the
reduced offer price reflected the value-reducing effect of the lock-up period. 12 employees and 5 board members participated in
the program, whereof 5 employees in the Company acquired 40,162 shares. The share capital was increased 22 June 2021 to issue
new shares related to the programme.
Long-term incentive program ("LTIP")
Under the Long-term incentive programme, share options of the parent are granted to senior executives of the Group. The exercise
price of the share options is equal to the market price of the underlying shares on the date of grant. The share options vest if the
senior executive remains employed during the vesting period.
The fair value of the share options is estimated at the grant date using the Black-Scholes option pricing model, taking into account
the terms and conditions on which the share options were granted.
140,690 options were granted to senior executive of the Company 18 November 2019 and will vest, or have vested, in the following
tranches:
- 35,173 options vested 18 November 2020
- 35,173 options vested 18 November 2021
- 70,345 options vest 18 November 2022
156,000 options were granted to senior executive of the Company 24 November 2020 and will vest or have vested, in the following
tranches:
- 39,000 options vested 24 November 2021
- 39,000 options vest 24 November 2022
- 78,000 options vest 24 November 2023
98,000 options were granted 10 February 2021, the options will vest in the following tranches:
- 24,500 options vest 10 February 2022
- 24,500 options vest 10 February 2023
- 49,000 options vest 10 February 2024
200,000 options were granted 25 November 2021 and will vest in the following tranches:
- 50,000 options vest 25 November 2022
- 50,000 options vest 25 November 2023
- 100,000 options vest 25 November 2024
Exercise price
- Exercise price for options granted 18 November 2019 is NOK 19.90
- Exercise price for options granted 24 November 2020 is NOK 21.13
- Exercise price for options granted 10 February 2021 is NOK 21.82
- Exercise price for options granted 25 November 2021 is NOK 36.64
WEBSTEP | ANNUAL REPORT 2021
The potential dilution through the LTIP in total accounts for 424,501 shares. 5,865 of the vested shares for the Group have been
exercised, whereof none of the vested shares in the Company has been exercised.
The share options can be exercised up to five years after the grant date. Therefore, the contractual term of each option granted is
five years. In the event the Company is not capable of delivering shares following an exercise of options, the Company shall fulfil its
obligations through a cash-out.
(Amounts in NOK 1000)
2021
2020
Expense arising from equity-settled share-based payment transactions related to the
LTIP
1,068
249
Social security tax provisions
434
5
Granted instruments:
Option
Option
Quantity
298,000
156,000
Contractual life*
5
5
Strike price*
34.78
22.7
Share price*
35.34
23
Expected lifetime*
3.25
3.25
Expected volatility*
35.48%
34.28%
Risk-free interest rate*
1.33%
0.33%
Dividend yield
0
0
Model used
Black-Scholes
Black-Scholes
Fair value per instrument*
9.55
5.74
*Weighted average parameters at grant of instrument
The expected life of the share options is according to IFRS-2, shorter than the time from grant until expiry. Due to the taxation of
options and “non-transferability”, earlier exercise is expected . These are current expectations and are not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility for the company and
peers over a period similar to the expected life of the options is indicative of future trends, which may not necessarily be the actual
outcome.
Expenses
The expenses recognized for equity settled share-based payment transactions under the programs during the year are presented in
the table below:
NOK '000
2021
2020
Expenses related to the Saving Shares Plan (SPP)
0
Expenses related to the Employee Share Purchase Programme (ESPP)
45
30
Expenses related to the Long-term Incentive Programme (LIP)
1068
249
Total share based payment expenses in the period
1113
279
Social security tax expense for the period
429
0
Social security tax accrual for the period
434
5
Number of discounted shares sold through the Employee Share Purchase Programme (ESPP)
5,070
6,564
Discounted share price
26.6 NOK/share
18.3 NOK/share
Weighted average fair value of each discounted share sold through the ESPP
8.88
4.6
85
WEBSTEP | ANNUAL REPORT 2021
Movements during the year (LTIP)
The following table illustrate the number and weighted average exercise prices (WAEP) of, and movements in, share options during
the year:
Long-term incentive programme
2021
2021
2020
2020
Number of
instruments
Weighted
Average Strike
Price
Number of
instruments
Weighted
Average Strike
Price
Outstanding at 1 January
296,690
140,690
0
Granted
298,000
27.04
156,000
23.1
Exercised
0
0
Released
0
0
Adjusted
0
0
Performance Adjusted
0
0
Cancelled
0
Terminated
0
0
Expired
0
0
Outstanding at 31
December
594,690
296,690
23.1
Vested at 31 December
109,344
0
0
The weighted average remaining contractual life
4.5 years
5 years
The range of exercise prices for options outstanding
22.18
The following key employees, as listed in note 3, were granted share options as a part of the LTI programme
Number of share options
Title
Total share
options
Granted 2021
Granted 2020
Save Asmervik
CEO
296,884
198,000
52,000
Liv Annike Kverneland
CFO
148,884
50,000
52,000
Jacob Cardell
COO Sweden
148,884
50,000
52,000
Terje Orvedal
Regional Manager Oslo
148,884
50,000
52,000
Joar Krohn
Regional Manager Bergen
148,884
50,000
52,000
Geir Jåthun Hindenes
Regional Manager Stavanger
148,884
50,000
52,000
Dagfinn Haslebrekk
Regional Manager Trondheim
76,000
76,000
Arnt Roger Aasen
Director MarCom
74,461
25,000
26,000
Otto Backer Solberg
Director Communication
74,461
25,000
26,000
The options were granted on the 18th of November 2019, 24 November 2020, 10 February 2021, 26 May 2021 and 25
November 2021. A total of 255,112 shares to key employees have vested per 31 December 2021. None of the vested
shares have been exercised.
WEBSTEP | ANNUAL REPORT 2021
Annual statement on
corporate governance
87
WEBSTEP | ANNUAL REPORT 2021
Annual statement on corporate governance
Webstep considers good corporate governance to be a
prerequisite for value creation and trustworthiness, and for
access to capital. The board of directors of Webstep has
established a set of governance principles in order to ensure a
clear division of roles between the board of directors, the
executive management and the shareholders. The principles
are based on the Norwegian Code of Practice for Corporate
Governance.
Webstep ASA (“Webstep” or the “Company” and together with
its subsidiaries the “Group”) is a publicly listed company and is
subject to annual corporate governance reporting requirements
under section 3-3b of the Norwegian Accounting Act and the
Norwegian Code of Practice for Corporate Governance, cf.
section 4.4 of the continuing obligations for issuers of shares
pursuant to Oslo Rule Book II – Issuer Rules. The Accounting
Act may be found (in Norwegian) at www.lovdata.no. The
Norwegian Code of Practice for Corporate Governance, which
was last revised on 14 October 2021, may be found at
www.nues.no .
The annual statement on corporate governance for 2021
follows below. The statement has been approved by the board
of directors on 5 April 2022.
1. Implementation and reporting on corporate governance
The board of directors is committed to contribute to a good
and trust-based relationship between Webstep and its
shareholders, the capital market, and other stakeholders.
The Company’s overall principles for corporate governance
were approved by the board of directors in 2017 as part of the
preparations for the listing of the Company’s shares on the
Oslo Stock Exchange. The principles were revised in 2019 to
reflect the changes in the revised version of The Norwegian
Code of Practice for Corporate Governance and in 2021 to
reflect the implementation of the Market Abuse Regulation
(MAR) in Norway. The development of, and improvements in,
the Company's corporate governance principles are ongoing
and important processes that the board of directors intends to
focus on.
The Company reports in accordance with the Norwegian Code
of Practice for Corporate Governance (the code) issued by the
Norwegian Corporate Governance Board, latest edition of 14
October 2021.
The board of directors’ annual statement on how Webstep has
implemented the code is set out below. The presentation
covers each section of the code, and deviations from the code,
if any, are specified under the relevant section.
2. Business
The Company's business objective is stated in the Company’s
articles of association section 3 and reads as follows: "The
company's objective is to own companies that offer services
and products within the area of information technology, as well
as conducting business associated therewith.” Webstep’s
articles of association are available on the Company’s website.
The board of directors has defined objectives, strategies and
risk profiles for the Company's business activities, such that
the Company creates value for its shareholders in a
sustainable manner. These objectives, strategies and risk
profiles are evaluated annually.
The Company has established guidelines and principles which
are used to integrate considerations to human rights, employee
rights and social matters, the external environment and
anti-corruption efforts in its business strategies, its day-to-day
operations and in relation to its stakeholders.
3. Equity and dividends
Equity
As of 31 December 2021, the Group had a consolidated equity
of NOK 393.7 million, which corresponds to an equity ratio of
60.7 per cent. Consolidated equity adjusted for proposed
dividends, will be NOK 347.2 million. Webstep ASA had an
equity of NOK 287.7 million, corresponding to an equity ratio of
54.2 per cent. Neither the Company, nor the Group has any
long-term liabilities except leasing liabilities related to office
space. The Company and the Group have sufficient levels of
working capital. Further, the Company has a Revolving Credit
Facility (RCF) of NOK 110 million and the Swedish subsidiary,
Webstep AB, has a RCF of SEK 5 million. Both facilities were
unutilized at year end. The board of directors considers that
the Group has a capital structure that is appropriate to its
objectives, strategy and risk profile.
Board authorizations
The annual general meeting on 28 April 2021 granted the board
of directors an authorization to increase the share capital by up
to NOK 5,393,400 to be used to give the board of directors
financial flexibility in connection with financing further growth,
to issue shares as consideration in connection with acquisition
of other companies, businesses or assets or to finance such
acquisitions. The authorization is valid until the annual general
WEBSTEP | ANNUAL REPORT 2021
meeting in 2022, but no longer than 30 June 2022, and
includes share capital increases with share contribution in
other assets than cash etc. and in connection with mergers.
The preferential rights of the existing shareholder to subscribe
for new shares pursuant to Section 10-4 of the Norwegian
Public Limited Companies Act (the "Companies Act") may be
deviated from with respect to the mentioned authorization.
The annual general meeting also granted the board of directors
authorization to increase the share capital in connection with
the long-term incentive program and a new share savings
program for the management and the board of directors (see
section 12). However, this authorization was replaced with a
new authorization at an extraordinary general meeting 23
November 2021. The new authorization may be used to
increase the Company's share capital in connection with the
group's at any time applicable option programmes, share
purchase programmes and any other incentive programs for
members of the executive management and other leaders,
other employees and board members. The authorization is up
to NOK 2,696,700 and it is valid until the annual general
meeting in 2023, but no longer than to and including 27 April
2023. The authorization for two years is a deviation from the
code which recommends a maximum duration until next year’s
annual general meeting. A two-year authorization corresponds
better with the vesting schedule of the options which is the
reason why the board decided to deviate from the code. The
authorization comprises share capital increases against
contribution in kind and the right to incur specific obligations
on behalf of the Company, cf. section 10-2 of the Norwegian
Public Limited Companies Act. The preferential rights of the
existing shareholder to subscribe for new shares pursuant to
Section 10-4 of the Norwegian Public Limited Companies Act
(the "Companies Act") may be deviated from with respect to
the mentioned authorization.
The annual general meeting on 28 April 2021 further granted
the board of directors an authorization to acquire own shares
with a maximum aggregate value of NOK 2,696,700.
Repurchase of own shares, followed by termination of such
shares, could be an important tool for optimizing the
Company's capital structure. Further, such authorization will
also give the Company the opportunity to use its own shares in
a potential share incentive scheme and as consideration, partly
or in whole, in connection with acquisition of businesses. The
highest amount that may be paid per share is NOK 100 and the
lowest amount is NOK 1. Acquisition and sale of shares may
be carried out in the form the board of directors deems
appropriate, however, not by subscription of own shares. The
authorization is valid until the annual general meeting in 2022,
but no longer than 30 June 2022.
Dividend
The Company’s ambition is to distribute at least 75 per cent of
the Group’s consolidated net profit. When deciding the annual
dividend level, the board of directors will take into
consideration expected cash flow, capital expenditure plans,
financing requirements and appropriate financial flexibility. For
the fiscal year 2021, the board of directors has proposed a
dividend payment of NOK 1.70 per share, representing 156 per
cent of the annual net profit for the Company, and 96 per cent
of the net profit for the Group.
The board of directors has not been granted any authorization
to approve the distribution of dividends.
4. Equal treatment of shareholders and transactions with
close associates
Webstep ASA has one share class, and all shares have equal
rights in the Company. Webstep’s Corporate Governance Policy
states that all shareholders shall be treated on an equal basis,
unless there is just cause for treating them differently.
Share issues without pre-emption rights for existing
shareholders
In the event of an increase in share capital through issuance of
new shares, a decision to deviate from existing shareholders'
pre-emptive rights to subscribe for shares shall be justified.
Where the board of directors resolves to issue shares and
deviate from the pre-emptive rights of existing shareholders
pursuant to an authorization granted to the board of directors
by the general meeting, the justification will be publicly
disclosed in a stock exchange announcement issued in
connection with the share issuance.
Transactions in treasury shares
Any transactions carried out by the Company of treasury
shares shall be carried out on the Oslo Stock Exchange, and in
any case at the prevailing stock exchange prices. In the event
that there is limited liquidity in the Company's shares, the
Company will consider other ways to ensure equal treatment of
shareholders. Any transactions by the Company of treasury
shares are subject to notification requirements and shall be
publicly disclosed in a stock exchange announcement.
5. Freely negotiable shares
The Company does not limit any party’s ability to own, trade or
vote for shares in the Company. The articles of association do
not impose any restriction on the negotiability of the shares.
6. General meetings
The Company's annual general meeting will take place on 28
April 2022. The Company’s financial calendar is published via
Oslo Stock Exchange and in the investor relations section of
the Company’s website. Minutes from the general meetings are
published as soon as practicable via the stock exchange’s
89
WEBSTEP | ANNUAL REPORT 2021
reporting system (www.newsweb.no, ticker WSTEP) and in the
investor relations section of the Company’s website.
Notice, registration and participation
The board of directors shall ensure that the Company's
shareholders can participate at the Company's general
meetings.
The board of directors shall ensure that the notice to the
general meeting and any supporting documents, including the
recommendation by the nomination committee, as well as
information on the resolutions to be considered at the general
meeting are made available on the Company's website no later
than 21 days prior to the date of the general meeting. The
resolutions and any supporting documentation shall be
sufficiently detailed, comprehensive and specific allowing
shareholders to understand and form a view on all matters to
be considered at the general meeting. Deadlines for
shareholders to give notice of their attendance at the general
meeting shall be set as close to the date of the general
meeting as possible. Pursuant to the Company's articles of
association, the time limit may not expire earlier than three
days before the meeting. Documents relating to matters to be
dealt with by the general meeting, including documents which
by law shall be included in or attached to the notice of the
general meeting, do not need to be sent to the shareholders if
such documents have been made available on the Company's
website. A shareholder may nevertheless request that
documents relating to matters to be dealt with at the general
meeting, is sent to him/her.
The board of directors shall ensure that the shareholders are
able to vote separately on each individual matter, including on
each candidate nominated for election to Webstep's board of
directors and other corporate bodies.
The board of directors shall ensure that the members of the
board of directors, the chairman of the nomination committee
and, if deemed necessary, the Company’s auditor are present at
the annual general meeting. At the annual general meeting 28
April 2021, four members of the board of directors were not
present, which is a deviation to the Code. At the time of the
General Meeting, there were still restrictions on physical
attendance due to the pandemic.
Participation without attendance
The Public Companies Act allows the board of directors to
choose whether to hold a general meeting as a physical
meeting or as an electronic meeting. If a general meeting is
held as a physical meeting, there are several methods for
shareholders to attend and vote at the meeting without being
present in person. Shareholders who are unable to attend the
general meeting in person shall be given the opportunity to
vote. The board of directors shall ensure that the Company
designs the form for the appointment of a proxy to make voting
on each individual matter possible and should nominate a
person who can act as a proxy for shareholders. Furthermore,
the form provided by the Company for shareholders to appoint
a proxy should be drawn up so that separate voting
instructions can be given for each matter to be considered by
the meeting and each of the candidates nominated for
election. Additionally, it should be made clear by instructions
on the form how the proxy should vote in the absence of
specific voting instructions on one or more matters and in the
event of changes to proposed resolutions and new
resolutions.
Shareholders have the right to attend by electronic means
unless the board of directors finds that there is sufficient cause
for it to refuse to allow this.
Chairperson of the meeting
The code stipulates that the board of directors should ensure
that the general meeting is able to elect an independent
chairperson. It is for the board of directors to propose how this
can be achieved, however it is for the general meeting to
determine who will chair the meeting. The Company deviated
from the requirement to have an independent chairperson at
the annual general meeting in 2021, as the general meeting
elected the chairman of the board of directors to chair the
meeting.
7. Nomination committee
The Company's articles of association § 8 provides for a
nomination committee composed of two to three members.
The current nomination committee comprises Bjørn-Ivar
Danielsen (chair, elected at the annual general meeting 28 April
2021) and Petter Tusvik (elected 24 April 2018 and re-elected
7 May 2020).
The instructions for the nomination committee were adopted
by the general meeting on 14 September 2017.
Responsibilities
The nomination committee shall recommend:
(i) Candidates for the election of members, including the
chairman, to (a) the board of directors and (b) the nomination
committee, respectively; and
(ii) Remuneration of the members of (a) the board of directors
and (b) the nomination committee, respectively.
No directors or members of executive management are
represented on the nomination committee. The current
nomination committee is independent of the board of
directors. None of the two members are members of the board
of directors.
WEBSTEP | ANNUAL REPORT 2021
The chief executive officer and other members of the executive
management should not be elected as members of the
nomination committee. The board of directors is committed to
ensure that the composition of the nomination committee
should be such that the interests of shareholders in general are
represented. The Company's guidelines for the nomination
committee include rules for rotation of the members.
The objectives, responsibilities and functions of the
nomination committee shall be in compliance with rules and
standards applicable to the Group and which are described in
the Company's "Instructions for the nomination committee".
The general meeting shall adopt the guidelines for the
nomination committee. The Company shall provide
information regarding the composition of the nomination
committee, the members of the nomination committee and
deadlines for submitting proposals to the nomination
committee.
Tasks
The nomination committee’s tasks are set out in the articles of
association and include: to nominate new board members to
the general meeting, propose remuneration to the board
members at the general meeting, propose remuneration to the
members of the nomination committee, and nominate new
members of the nomination committee to the general
meeting.
The nomination committee shall justify why it is proposing
each candidate separately.
The remuneration of the committee is determined by the
general meeting. The general meeting may issue further
guidelines for the nomination committee’s work.
Pursuant to the Code, the composition of the nomination
committee must take account of the interests of shareholders
in general.
The nomination committee has published guidelines available
on the Company's website for how shareholders may submit
proposals to the nomination committee for candidates for
election to the board of directors and other appointments.
These guidelines include information regarding deadlines for
proposals and other relevant information.
8. Board of directors, composition and independence
The articles of association state that the board of directors
shall consist of between three and ten members and are
elected to a two year-term unless otherwise decided by the
general meeting. The board of directors currently consists of
five shareholder-elected directors and three employee-elected
observers. The term of office will expire at the annual general
meeting 2022 for all five directors.
The Company’s corporate governance documents state that
when considering members to the board of directors,
emphasis should be placed on the joint composition of the
board of directors with respect to expertise, capacity and
diversity appropriate to attend to the Company's goals, main
challenges and the common interests of all shareholders.
Details on background, experience and independence of
directors are presented on the Company’s website. The Group
and the majority of the employees have agreed that the
employees shall have the right to appoint three observers to
the board of directors of the Company instead of having a
corporate assembly.
Three out of five shareholder-elected directors are independent
of the Company’s executive management, significant
commercial partners or substantial shareholders. The board of
directors does not include any members from the executive
management of the Company. The chairperson of the board of
directors was elected by the annual general meeting on 7 May
2020 and is employed by the Company’s largest shareholder.
Thirteen board meetings were held in 2021. Each board
member’s attendance at board meetings is recorded by the
Company.
Members of the board of directors are encouraged to own
shares in the Company. However, caution should be taken not
to let this encourage a short-term approach which is not in the
best interests of the Company and its shareholders over the
longer term.
9. The work of the board of directors
The board of directors has overall responsibility for managing
the Group and for supervising the chief executive officer and
the Group’s activities.
The board of directors establishes annual plans for its work,
with particular emphasis on objectives, strategy and
implementation. The board of directors has issued instructions
for its own work as well as for the executive management with
particular emphasis on clear internal allocation of
responsibilities and duties.
The principal tasks of the board include determining the
Company’s strategy and monitoring how it is implemented. The
work of the board also includes control functions needed to
ensure acceptable management of the Company’s assets.
The board appoints the Company’s chief executive officer.
Instructions which describe the rules of procedure for the
board’s work and its consideration of matters have been
adopted by the board together with an instruction of the duties
and obligations of the chief executive officer towards the
board. The division of responsibility between the board and the
chief executive officer is specified in greater detail in the
instructions. The chief executive officer is responsible for the
Company’s executive management. Responsibility for ensuring
that the board conducts its work in an efficient and correct
manner rests with the chair of the board.
91
WEBSTEP | ANNUAL REPORT 2021
The board establishes an annual plan for its meetings and
evaluates its work and expertise once a year. The annual plan
specifies topics for board meetings, including reviewing and
following up the Company’s goals and strategy, budgets,
reporting of financial information, the notice for the general
meeting with associated documentation, and the board’s
meeting with the auditor.
The board of directors has established an audit committee
amongst its members and adopted instructions for the work of
the audit committee. Throughout 2021 and currently the
committee comprised Siw Ødegaard as the leader and Trygve
C. Moe as member. Siw Ødegaard is independent of the
Company. Trygve C. Moe is employed by the Company’s largest
shareholder. As long as at least 50 per cent of the committee’s
members are independent, the Company considers this to be
compliant with the independence requirement in the code.
Pursuant to section 6-43 of the Companies Act, the audit
committee shall:
● inform the board of the results of the statutory audit
and explain how the audit contributed to accounting
reporting with integrity and the audit committee's role
in that process,
● prepare the board's follow-up of the financial reporting
process and make recommendations or proposals to
ensure its integrity,
● monitor the systems for internal control and risk
management;
● have regular contact with the Company’s auditor
regarding the audit of the annual accounts; and
● review and monitor the independence of the
Company’s auditor, including in particular the extent
to which services other than auditing provided by the
auditor or the audit firm represent a threat to the
independence of the auditor.
The Company has established a remuneration committee that
consists of two members from the board of directors. The
members of the remuneration committee are and shall be
independent of the Company’s executive management. The
members of the remuneration committee are appointed by the
board of directors for a period of two years, or until they resign
their position as a member of the board of directors. The
committee currently consists of Trond K. Johannessen as the
leader and Toril Nag and Kjetil Bakke Eriksen (from February
2021) as members.
The remuneration committee is a preparatory and advisory
committee for the board that shall prepare matters for the
board’s consideration and decisions regarding the
remuneration of, and other matters pertaining to the
Company’s management. The recommendations of the
remuneration committee shall cover all aspects of
remuneration to the management, including but not limited to
salaries, allowances, bonuses, options and benefits-in-kind.
The board of directors has adopted separate instructions for
the remuneration committee setting out further details on the
duties, composition and procedures of the committee.
The board of directors evaluates its own work and that of the
chief executive and reports its findings to the nomination
committee.
In order to ensure a more independent consideration of
matters of a material character in which the chairman of the
board is, or has been, personally involved, the board's
consideration of such matters will be chaired by another
member of the board.
According to the code, the instructions of the Board of
Directors should state how the board of directors and
executive management shall handle agreements with related
parties, including whether an independent valuation must be
obtained. The instructions were updated April 5 2022 to reflect
this requirement, and hence this was a deviation to the code in
2021.
Members of the board and executive personnel shall make the
Company aware of any material interests that they may have in
items to be considered by the board of directors.
10. Risk management and internal control
The board of directors is responsible for ensuring that the
Company has sound and appropriate internal control systems
and systems for risk management, and that these systems are
proportionate to and reflect the extent and nature of the
Company's activities. Having effective internal control systems
and systems for risk management in place may prevent the
Group from situations that can damage its reputation or
financial standing.
Furthermore, effective and proper internal control and risk
management are important factors when building and
maintaining trust, to reach the Company's objectives, and
ultimately create value. Having in place an effective internal
control system means that the Company is better suited to
manage commercial risk, operational risk, the risk of breaching
legislation and regulations as well as other forms of risk that
may be material to the Company. As such, there is a correlation
between the Company's internal control systems and effective
risk management. The internal control systems shall also
address the organization and execution of the Company's
financial reporting, as well as cover the Company's corporate
values, ethical guidelines and principles of corporate social
responsibility. The internal control systems shall also
encompass the Company’s guidelines for how it integrates
considerations related to stakeholders into its creation of
value.
WEBSTEP | ANNUAL REPORT 2021
Webstep shall comply with all laws and regulations that apply
to the Group's business activities. The Company has in place
processes and routines for internal control over financial
reporting and risk management.
Through its business activities, Webstep manages various
risks and uncertainties of operational, market and financial
character, such as risk of disagreements and legal disputes
with its customers related to possible cost of delays or project
errors that is always present in the consultancy business.
The Company identifies and manages risks on an ongoing
basis. The main risk factors and how they are managed is
described in the board of directors’ report.
The organization comprises a relatively large number of
employees and projects. The Group’s management model is
based on an appropriate delegation of authority, clearly defined
market and operating parameters, in addition to effective
internal control.
Overall goals and strategies are established and further
developed through a periodic update of the Company’s
strategy. Risk management is in place with clear routines for
handling operational and project risks. Furthermore, processes
are established to identify, evaluate and report risk in a
systematic manner for the Group's activities.
Financial risk is managed in accordance with the Company’s
financial strategy, which is described under the section
“Financial risk and risk management” in the board of directors’
report.
The board is responsible for seeing to that the Group's
organization, financial reporting and asset management are
subject to satisfactory controls. Overall policies, governing
processes and routines have been established for day-to-day
management. The board periodically reviews the Company’s
governing documents. The board reviews annually the most
important risk areas and the internal controls established to
mitigate these risks.
Reporting
Pursuant to the corporate governance policy, the board of
directors shall annually review the Company's most important
areas of risk exposure and the internal control arrangement in
place for such areas. The review shall pay attention to any
material shortcomings or weaknesses in the Company's
internal control and how risks are being managed. In the
annual report, the board of directors shall describe the main
features of the Company's internal control and risk
management systems as they are connected to the Company's
financial reporting. This shall cover the control environment in
the Company, risk assessment, control activities and
information, communication and follow-up. The board of
directors is obligated to ensure that it is updated on the
Company's financial situation and shall continually evaluate
whether the Company's equity and liquidity are adequate in
relation to the risk from the Company's activities and take
immediate action if the Company's equity or liquidity at any
time is shown to be inadequate. The Company's management
shall focus on frequent and relevant reporting of both
operational and financial matters to the board of directors,
where the purpose is to ensure that the board of directors has
sufficient information for decision-making and is able to
respond quickly to changing conditions. Board meetings shall
be held frequently, and management reports shall be provided
to the board as a minimum on a monthly basis. Financial
performance shall be reported on quarterly basis.
The administration prepares periodic reports on business and
operational developments to the board, which are discussed at
the board meetings. These reports are based on
management’s reviews of the various parts of the business and
include status of key performance indicators, update of market
development, operational issues, financial results and
highlights of organizational issues.
Financial position and results are followed up in monthly
accounting reports, compared to the previous year, budgets
and forecasts. Reporting also includes non-financial key
performance indicators related to each business area.
The interim reports and annual financial statements are
reviewed by the audit committee ahead of the discussions in
the board meeting. Financial risk management and internal
control are also addressed by the board’s audit committee. The
latter reviews the external auditor’s findings and assessments
after the interim and annual financial audits. Significant issues
in the auditor’s report, if any, are reviewed by the board of
directors.
The Company has not established a separate internal audit
function, but the board of directors is considering the need for
such function on an ongoing basis.
11. Remuneration of the board of directors
The remuneration to the board of directors is described in note
7 to the financial statements. The Company considers that the
remuneration reflects the board of director’s responsibility,
expertise, time commitment and the complexity of the
Company’s activities.
Directors’ fees are determined by the general meeting on the
basis of recommendations from the nomination committee.
These fees have been based on the board’s responsibility,
expertise and the complexity of the business, and have not
been related to results. The directors have not been awarded
share options.
Members of the board of directors and/or companies with
which they are associated should not take on specific
assignments for the Company in addition to their appointment
93
WEBSTEP | ANNUAL REPORT 2021
as a member of the board.There has been a deviation to the
code in 2021, as Kjetil Eriksen, former CEO of the Group, took
on a special assignment for a limited period of time to support
the CEO-transition. The cost of this assignment was NOK 75
thousand.
An overview of shares owned by the directors and their close
associates is included in note 16 to the consolidated financial
statements.
12. Remuneration of executive personnel
The Company’s guidelines for determining remuneration to the
chief executive officer and other executive management should
at all times support prevailing strategy and values in the
Company.
The Company’s guidelines for the remuneration of executive
management are described in note 7 to the consolidated
financial statements. This note also provides further details
about remuneration in 2021 for the executive management.
The guidelines are presented annually to the annual general
meeting and include the main principles for the Company's
remuneration policy. The guidelines also help to ensure
convergence of the financial interests of the shareholders and
the executive management.
The guidelines specify the main principles for the Company’s
remuneration policy for the executive management and aim to
ensure that the interests of shareholders and executive
management coincide.
The current guidelines have been prepared in accordance with
the provisions of section 6-16a of the Norwegian Public
Limited Companies Act, approved 28 April 2021 at the Annual
General Meeting.
In 2019 a long-term incentive program for the Company’s
executive management was approved by the annual general
meeting and implemented in November 2019. The program
consists of share options which will be granted on an annual
basis over the three years. The program continued in 2021 and
is further described in note 13 to the financial statements.
A share investment programme for management employees
and board members was implemented in June 2021. The
participants were invited to acquire shares in the company for
an amount of between NOK 50,000 and NOK 200,000. The
program is further described in note 13 to the financial
statements.
13. Information and communication
The Company has established an overall communications
policy, which states that the communication activities shall be
characterized by transparency, honesty, consistency and right
timing.
Furthermore, the Company has an IR policy, which states that
all communication with the financial community shall be on an
equal treatment basis and in compliance with applicable laws
and regulation. Webstep shall continually provide its
shareholders, the Oslo Stock Exchange and the securities
market and financial market in general with timely and precise
information about Webstep and its operations.
The CEO and CFO are responsible for the main dialogue with
the investor community, hereunder the Company’s
shareholders.
Information to the stock market is published in the form of
annual and interim reports, stock exchange announcements
and investor presentations. All information considered to be
relevant and significant for valuing the Company’s shares will
be distributed and published in English via Oslo Stock
Exchange disclosure system, www.newsweb.no, and via the
Company’s website https://investor.webstep.com.
Webstep has implemented a system ensuring that all
information distributed to the Company’s shareholders will be
published on the Company’s web site at the same time as it is
sent to shareholders.
The Company publishes a financial calendar with an overview
of dates for important events, such as the annual general
meeting, interim financial reports, public presentations and
payment of dividends, if applicable. The information is
available in English.
Unless there are applicable exemptions, and these are invoked,
Webstep shall promptly disclose all inside information (as
defined by the Norwegian Securities Trading Act). In any event,
Webstep will provide information about certain events, e.g.
proposals and resolutions by the board of directors and the
general meeting concerning dividends, mergers/demergers or
changes to the share capital, the issuing of subscription rights,
convertible loans and all agreements of major importance that
are entered into by Webstep and related parties.
In the Company's Corporate Governance Policy, separate
guidelines have been drawn up for handling of inside
information. The Company also has in place a policy regarding
the members of the board of directors who are entitled to
publicly speak on behalf of the Company on various subjects.
In addition to the board of directors' dialogue with the
Company's shareholders at the general meetings, the board of
directors should make suitable arrangements for shareholders
to communicate with the Company at other times. This will
enable the board of directors to develop an understanding of
the matters regarding the Company that are of a particular
concern or interest to its shareholders. Communications with
the shareholders should always be in compliance with the
provisions of applicable laws and regulations and in
accordance with the principle of equal treatment of the
Company's shareholders. Shareholders can get in contact with
WEBSTEP | ANNUAL REPORT 2021
the Company through the IR contact information which is
made available on the Company´s website. Further,
shareholders can subscribe to e-mail alerts to receive news
from the Company when made public.
14. Takeovers
The board has established main principles for responding to
possible takeover bids.
In the event of a take-over bid being made for the Company, the
board will follow the overriding principle of equal treatment for
all shareholders and will seek to ensure that the Company’s
business activities are not disrupted unnecessarily. The board
will strive to ensure that shareholders are given sufficient
information and time to form a view of the offer.
The board will not seek to prevent any take-over bid unless it
believes that the interests of the Company and the
shareholders justify such actions. The board will not exercise
mandates or pass any resolutions with the intention of
obstructing any take-over bid unless this is approved by the
general meeting following the announcement of the bid.
If a take-over bid is made, the board will issue a statement in
accordance with statutory requirements and the
recommendations in the code.
In the event of a take-over bid, the board will obtain a valuation
from an independent expert.
Any transaction that is in effect a disposal of the Company’s
activities will be submitted to the general meeting for its
approval.
15. Auditor
The board of directors ensures that the Company’s auditor, EY,
submits the main features of the plan for the audit of the
Company to the audit committee annually.
During the financial year 2021, the Company's auditor has:
● Presented the main features of the audit work.
● Attended the board meeting where the annual report for
the previous accounting year was considered, reviewed
possible significant changes in accounting principles,
assessed significant accounting estimates, and
considered all cases where possible disagreements
arose between auditor and executive management.
● Conducted a review together with the board of the
Company’s internal control procedures and systems,
including the identification of weaknesses and proposals
for improvements.
● Held a meeting with the board without the presence of
the executive management.
● Confirmed that the requirements for the auditor’s
independence were fulfilled and provided an overview of
services other than auditing which have been rendered to
the Company.
The board has not established guidelines for the Company’s
use of the auditor for substantial assignments other than
ordinary auditing services.
The board reports annually to the annual general meeting on
the auditor’s overall fees, broken down between audit work and
other services. The annual general meeting approves the
auditor’s fees for the parent company.
95
WEBSTEP | ANNUAL REPORT 2021
WEBSTEP | ANNUAL REPORT 2021
Statement by the Board of directors and CEO
We confirm to the best of our knowledge that:
The consolidated financial statements for 2021 have been prepared in accordance with IFRS as adopted by the EU, as well as
additional information requirements in accordance with the Norwegian Accounting Act, and that the financial statements for the
parent company for 2021 have been prepared in accordance with the Norwegian Accounting Act and generally accepted
accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the
Company’s and the Group’s assets, liabilities, financial position and results for the period viewed in their entirety, and that the Board
of Directors’ report gives a true and fair view of the development, performance and financial position of the Company and the
Group, and includes a description of the material risks that the Board of Directors, at the time of this report, deem might have a
significant impact on the financial performance of the Group.
Webstep ASA
Oslo, 5 April 2022
Trond Klethagen Johannessen
Save Asmervik
Toril Nag
Chair of the board
Chief Executive Officer
Board member
Siw Ødegaard
Trygve Christian Moe
Kjetil Bakke Eriksen
Board member
Board member
Board member
97
WEBSTEP | ANNUAL REPORT 2021
WEBSTEP | ANNUAL REPORT 2021
Auditor’s report
99
WEBSTEP | ANNUAL REPORT 2021
Auditor’s report
WEBSTEP | ANNUAL REPORT 2021
101
WEBSTEP | ANNUAL REPORT 2021
WEBSTEP | ANNUAL REPORT 2021
103
WEBSTEP | ANNUAL REPORT 2021
WEBSTEP | ANNUAL REPORT 2021
Appendix
105
WEBSTEP | ANNUAL REPORT 2021
Appendix
Alternative performance measure
Webstep discloses alternative performance measures as a
supplement to the financial statements prepared in accordance
with IFRS. Webstep believes that the alternative performance
measures provide useful supplemental information to
management, investors, equity analysts and other stakeholders.
These measures are commonly used and are meant to provide
an enhanced insight into the financial development of
Webstep's business operations and to improve comparability
between periods.
● EBITDA is short for Earnings before Interest and other
financial items, Taxes, Depreciation and Amortization and
is a term commonly used by equity analysts and investors.
● EBIT is short for Earnings before Interest and other
financial items and Taxes and is a term commonly used by
equity analysts and investors.
● EBIT per employee is Earnings before Interest and other
financial items and Taxes and is a term commonly used by
the equity analysts and investors.
● NIBD is short for Net Interest Bearing Debt and is defined
as interest bearing debt minus unrestricted cash and cash
equivalents.
● Group equity ratio is defined as the total consolidated
equity of the Group divided by total assets. The covenant
requires a Group equity ratio of minimum 0.3.
● NIBD/EBITDA is calculated as Net Interest Bearing Debt
divided by Earnings before Interest and other financial
items, Taxes, Depreciation and Amortization (EBITDA). The
ratio is one of the debt covenants of the Company and it is
based on the rolling twelve months EBITDA. If the Company
has more cash than debt, the ratio can be negative. The
covenant requires a Group NIBD/EBITDA ratio of maximum
3.
WEBSTEP | ANNUAL REPORT 2021
Group departments
Webstep has 9 regional offices in major cities in Norway and Sweden. Webstep believes in the power of local business and the
decentralized model is based on strong local presence. The regional offices provide expertise and capacity to local clients, while
leveraging the full organizational capacity.
Oslo
Universitetsgata 2
NO-0164 Oslo
Tel:+47 400 03 325
Bergen
Thormøhlensgate 47
NO-5006 Bergen
Tel:+47 400 03 325
Stavanger
Kongsgata 5
NO-4005 Stavanger
Tel:+47 400 03 325
Trondheim
Kongens gate 16
NO-7011 Trondheim
Tel:+47 400 03 325
Sørlandet
Skippergata 19
NO-4611 Kristiansand S
Tel:+47 400 03 325
Haugalandet
Haraldsgata 90,
NO-5528 Haugesund
Tel:+47 400 03 325
Stockholm
Kungsgatan 44
111 35 Stockholm
Tel +46 (8) 21 40 70
Malmö
Skomakaregatan 4
211 34 Malmö
Tel +46 (8) 21 40 70
Uppsala
Bredgränd 6
753 20 Uppsala
Tel +46 (8) 21 40 70
107
