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2

INTERIM REPORT Q2 2016

STRONG GROWTH IN BOTH PRODUCT REVENUE AND EBIT

ALASTAIR SORBIE, CEO & PAUL SMITH, CFOJuly 21, 2016

APRIL–JUNE 2016 (SECOND QUARTER)

● License revenue amounted to SKr 190 million (Q2 '15: SKr 181 million), an increase of 10 percent, currency adjusted.

● Maintenance revenue was SKr 300 million (Q2 '15: SKr 287 million), an improvement of 9 percent currency adjusted.

● Consulting revenue amounted to SKr 421 million (Q2 '15: SKr 396 million), an increase of 10 percent currency adjusted.

● Net revenue totaled SKr 923 million (Q2 '15: SKr 867 million), an improvement of 11 percent currency adjusted.

● Adjusted EBITDA was SKr 118 million (Q2 '15: SKr 96 million). EBIT amounted to SKr 107 million (Q2 '15: SKr 64 million).

● Cash flow after investments was SKr -9 million (Q2 '15: SKr -8 million).

● Earnings per share after full dilution amounted to SKr 3.21 (Q2 '15: SKr 1.83).

3

FINANCIAL AND OPERATIONAL HIGHLIGHTSSTRONG GROWTH IN BOTH PRODUCT REVENUE AND EBIT

JANUARY–JUNE 2016 (SIX MONTHS)

● License revenue amounted to SKr 292 million (YTD '15: SKr 296 million), an increase of 3 percent currency adjusted.

● Maintenance revenue was SKr 596 million (YTD '15: SKr 578 million), an improvement of 7 percent currency adjusted.

● Consulting revenue amounted to SKr 825 million (YTD '15: SKr 770 million), an increase of 11 percent currency adjusted.

● Net revenue totaled SKr 1,734 million (YTD '15: SKr 1,649 million), an improvement of 9 percent currency adjusted.

● Adjusted EBITDA was SKr 174 million (YTD '15: SKr 159 million). EBIT amounted to SKr 108 million (YTD '15: SKr 115 million).

● Cash flow after investments was SKr 37 million (YTD '15: SKr 64 million).

● Earnings per share after full dilution amounted to SKr 3.18 (YTD '15: SKr 3.33).

4

FINANCIAL AND OPERATIONAL HIGHLIGHTSSTRONG GROWTH IN BOTH PRODUCT REVENUE AND EBIT

20%

34%

46%

REVENUE MIX R12

License Maintenance Consulting

5

FINANCIAL OVERVIEWA GROWING BUSINESS

margin

92%

margin

76%

margin

22%

300

400

500

600

700

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 R12

LICENSES

400

600

800

1,000

1,200

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 R12

MAINTENANCE

800

1,000

1,200

1,400

1,600

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15R12

CONSULTING

0

100

200

300

400

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 R12

EBIT

-100

0

100

200

300

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 R12

CASH FLOW AFTER INVESTMENTS

LICENSE SALES

● IFS continues to be selected thanks to its ability to deliver

solutions to its target sectors and global projects with a lower

cost of ownership than its larger competitors.

● IFS offers a flexible and modern solution that is easy to

implement, especially for businesses that need a reliable and

cost-effective solution in a dynamic and challenging market.

MAINTENANCE REVENUE

● Strong loyalty of customers who continue to contribute to the

future growth by extending their use of IFS Applications.

● Improving cost efficiencies from IFS’s global support initiative.

● ‘Churn’ in the customer base remains very low.

6

PRODUCT REVENUEA STRONG CUSTOMER BASE

60%

65%

70%

75%

80%

Q1

'12

Q3 Q1

'13

Q3 Q1

'14

Q3 Q1

'15

Q3 Q1

'16

MAINTENANCE MARGIN (R12)

0

500

1,000

1,500

2,000

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15R12

PRODUCT REVENUE

CONSULTING REVENUE

● As a trend, product revenue is set to grow faster than consulting revenue.

● Larger proportion of services being delivered from the partner ecosystem.

● Over time, customers will increasingly contract with partners, resulting in a slow down in

the growth of IFS delivered services revenue.

PARTNER PROGRAM—INCREASING MOMENTUM

● Offer customer choice and greater global reach for international projects.

● Create go-to-market alliances and thereby increase market penetration.

● New partners signed and deepened co-operation with existing ones such as Accenture.

● Offer greater business scalability and better manage peaks in demand.

7

CONSULTING REVENUEINCREASED PARTNERING ACROSS THE GROUP

MARKET OUTLOOK—THE ANALYSTS’ VIEW

Despite experiencing some headwind, the ERP market’s performance

remains solid. Industry analysts such as Gartner have revised their

estimates slightly downwards and expect the ERP market’s development

to remain positive, with a growth in the 6 percent range in 2016.

8

MARKET UPDATESECOND QUARTER

INVEST IN A STRATEGY TO:

● Deliver global projects on time and on budget with a lower TCO.

● Focus on specific sectors that see sustained long-term investment.

● Work close with customers, to share ideas and have an ‘open’ customer-centric R&D

organization.

● Have an ‘open’ technology that seeks to enable customers to benefit from new

innovations and not aim to achieve ‘lock-in.’

● Grow the business organically and profitably, using the cash generated to undertake

complimentary M&A.

9

THE STRATEGY CONTINUESTO BE THE INTELLIGENT ALTERNATIVE

2009 2010 2011 2012 2013 2015 2016

LATINIFSDEFENCE

10

CUSTOMER WINS IN THE PAST TWELVE MONTHS Aerospace and Defense

NG Bailey Group Tomra Sorting

Robertson Fuel System Swedish Orphan Biovitrum (SOBI) Reliance Comfort

Affinity Flying Training Services Skanska UK

Tomra Systems Rol

Synergy Health RS Connect

Babcock Marine Division VolkerWessels Telecom Industrial Manufacturing

Roxtec International The Binding Site Group Speed Wrench

General Dynamics – IS&T VR Track

AAR Supply Chain Saueressig

Valeo Foods (Batchelors) Swedavia

General Dynamics – OTS Energy and Utilities ACR II Aluminium Group

Cooperatief

Shawcor

Volac International Turner & Co (Glasgow)

Saab Allinq

Aludium South Asia Textile Ind.

W. M. Mendis Distilleries Urbanismo de Recife

TAE Borås Energi och Miljö

Aluminum Precision Prod. TC Thomas Consulting

Warren Distribution Wennstrom Fuel Systems

Terma Caruna

Alyaf Industrial Co. UTC CCS Manufacturing Polska

Whitford Wilhelmsen Ships Service

Asset Intensive Jacopa

Andersen Steel Vítkovice Steel

Whitworths Xenex Disinfection Services

Hecla Mining Company Mälarenergi

Anstee Ware Group Völkl Sports

Willamette Valley Co. Other

SSAB Europa MPK - Łódź Spółka

ASMET spółka z ograniczoną

odpowiedzialnością

Whirley Industries

William Grant & Sons Evry Norge

Unimin Corporation Ragn-Sells Group IT

Bemis Manufacturing Co. Wingroup Retail and Wholesale Foundation Garments

Automotive Satluj Jal Vidyut Nigam Ltd

(SJVNL)

BRC Industrial (Saudi)

Wren Living AG Thames Holdings Q-TC

AKO Group Service Stream

Cappelen Holding Oil and Gas Bellman & Symfon Europe SII - Sté informatique ind.

Autohaus Jacob Fleischhauer Statnett

Circor International Bibby Offshore

Gosiger Holdings Sunshine Healthcare Lanka

CalsonicKansei North America Svenska Kraftnät

Durham Manufacturing BW Offshore Norway

Plaček Technogroup IT-Service

Mianyang Fulin Precision

Machining Co.

Türksat Uydu Haberleşme Kablo

TV ve İşletme

Figeac Aéro

Dixie Electric Rusta Tiga Pilar Sejahtera Food

Öhlins Racing Umeå Energi

General Dynamics - IS&T Floatel International

Singer Sri Lanka Tubes International

Rancon Automobiles Växjö Energi

Gislaved Gummi Maersk Supply Service

Systembolaget Vektis

Terex Advance Mixer High Tech Huber

Songa Offshore Service Providers

Toyota Lanka Axis Communications

IMI Critical Engineering Wood Group Mustang Norway

Anticimex

Zakład Metalowy Plast-Met Cimcorp

IV Produkt Process Manufacturing APM Terminals Mgmt

Construction and Contracting HIMA Paul Hildebrandt

J & E Hall Bronco Wine Company

Auto Windscreens

Arkon Prima Indonesia Jotron

Janoschka Kippenheim Brugarolas

Avinor

Barnhart Crane & Rigging Co. Kitron

JLA Group Instituto Butantan

Grey Matter

CCN Yatirim Holding Lab126 (A2Z Dev’t Center)

Kosan Crisplant LGC

Idex énergies

CMC-TNRSP (Tamilnadu Road

Sector Projects)

Mafelec

Lakeside Process Controls National Paints Holdings

IP-Only Telecom Networks

Heerema Fabrication Group Particle Measuring Sys

Loram Maint. of Way New Pig Corporation

J Tomlinson

HKC - Hala Ken Consulting Sartorius

Mahin Group Oxford Biomedica

Lassila & Tikanoja

11

STRONG UNDERLYING BUSINESSHIGHLY-COMPETITIVE CONTRACTS IN TARGET SECTORS

FIGEAC AÉRO INDUSTRIAL MANUFACTURING FRANCE

HIMA HIGH-TECH MANUFACTURING GERMANY

The French aeronautical manufacturer Figeac Aéro has

decided to implement IFS Applications to replace its

current portfolio of business systems. The agreement

includes licenses and services valued at approximately

€ 1.5 million.

The world's leading independent provider of solutions for

safety-critical applications will implement

IFS Applications 9 as its central enterprise resource

management (ERP). The contract includes licenses and

services worth approximately € 3.1 million.

12

FINANCIAL OVERVIEW

2ND QUARTER JULY–JUNE FULL YEAR

SKr million 2016 2015 2015/16 2014/15 2015

Net revenue 923 867 3,474 3,244 3,389

whereof License revenue 190 181 678 613 682

Maintenance and support revenue 300 287 1,192 1,110 1,174

Consulting revenue 421 396 1,579 1,508 1,524

Gross earnings 508 480 1,881 1,724 1,842

whereof Licenses 173 171 627 576 646

Maintenance and support 232 209 910 819 875

Consulting 99 98 342 328 324

EBIT 107 64 307 295 314

EBIT margin 12% 7% 9% 9% 9%

Earnings before tax 103 63 295 288 306

Earnings for the period 78 47 205 235 214

Cash flow after investment operations -9 -8 169 170 196

13

CASH FLOW

2ND QUARTER JULY–JUNE FULL YEAR

SKr million 2016 2015 2015/16 2014/15 2015

159 134 547 516 544

Change in working capital -94 -90 63 -109 2

Cash flow from current operations 65 44 610 407 546

Cash flow from investment operations -74 -52 -441 -237 -350

Cash flow after investment operations -9 -8 169 170 196

Cash flow from financing operations -65 -119 -90 -163 -151

Cash flow for the period -74 -127 79 7 45

547 540 408 370 489

7 -5 -7 31 -1

480 408 480 408 533

Cash flow before change in working capital

Cash and cash equivalents at the beginning of the period

Exchange rate differences in cash and cash equivalents

Cash and cash equivalents at the end of the period

14

OUTLOOK

FOR 2016, IFS EXPECTS

GROWTH IN BOTH

PRODUCT REVENUE AND EBIT.

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RIGHTS RESERVED. THIS DOCUMENT MAY CONTAIN STATEMENTS OF POSSIBLE FUTURE FUNCTIONALITY FOR IFS’S PRODUCTS AND TECHNOLOGY. SUCH

STATEMENTS ARE FOR INFORMATION PURPOSES ONLY AND SHOULD NOT BE INTERPRETED AS ANY COMMITMENT OR REPRESENTATION. THE NAMES OF ACTUAL

COMPANIES AND PRODUCTS MENTIONED HEREIN MAY BE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.

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