Q2 2014Presentation 25 July 2014Finnur Oddsson, CEO

Overview

» Nýherji Strategy

» Icelandic IT survey

» Key results for the second quarter and first half of 2014

» Finances

» Outlook

Nýherji – IcelandProduct and solution sales / Managed and technical services

TM SoftwareOwn software products and consulting in specialized solutions

Iceland - Sweden Consulting company in the field of business software for financial services companies

Nýherji and its subsidiaries

Smarter IT Solutions

for Businesses

Product and Solutions

Managed Services

Icelandic IT Survey

34% set to invest more over coming 12 months

» More moderate investment plans than last year

» CEOs to invest more than IT executives

» Nýherji clients more likely to invest than potential clients

2013-2014

Changes in IT consumption pattern emerging

» More people using cloud solutions» Smaller businesses rather than

large ones » 33% intend to use more

» 68% use smart solutions» 40% foresee an increase» 5% do not plan to use

Cloud Solutions

Key Results

ISK 125 million profit in first six months

» Net profit in Q2 amounted to ISK 69m and ISK 125m over the first six months» [Q2 2013: Net loss of ISK 862m; 1H 2013: Net loss of ISK 1,012m]

» Goods and services sold in Q2 totalled ISK 2,853m and ISK 5,712m in the first six months » [Q2 2013: ISK 2,815m; 1H 2013: ISK 5,470m]

» EBITDA in Q2 amounted to ISK 207m and ISK 398m over the first six months » [Q2 2013: 161m, 1H 2013: 183m]

» Gross profit in Q2 amounted to ISK 749m and ISK 1,502m over the first six months» [Q2 2013: ISK 664m; 1H 2013: ISK 1,228m]

» Positive results from all the companies in the group in the first half of the year

» TM Software records 86% growth in foreign revenue year-on-year

» Nýherj’s equipment rental unit sold to Sonik Tækni ehf.

» Interest-bearing short-term liabilities refinanced, working capital ratio 1.28 at the end of June

Operating Results

Nýherji TM Software

» Results of parent company exceeded estimates

» Good performance of technical services

» Sale of IT and technical hardware below estimates...

» ... but steep growth in the sale of PC, audio-visual and network hardware

» Equipment rental unit sold to Sonik Tækni

» Good outlook

» 19% rise in revenues in Q2

» 28% rise in revenues over the first six months

» Tempo sold to over 100 countries and 86% rise in revenues

» Foreign revenues 43% of total income

» Revenues totalled ISK 781 million over the first six months of the year

» Good outlook

Operating Results

Applicon ehf. Applicon A/B

» Revenues up 10%

» Earnings up from last year, exceeding estimates

» Revenues totalled ISK 561 million in the first six months

» Good outlook

» Performance below estimates but significantly better than last year

» Plans to increase personnel in August

» Consultancy services well used

» Revenues totalled ISK 524 million

» Decent outlook for the second half of the year

Finances

Lykiltölur úr rekstri á fyrri árshelmingi 2014

RevenuesISK 5,712m

EBITDAISK 398m

EBITDA% 7%

Working capital ratio1.28

Equity ratio14,6%

DSO34 days

DPO 20 days

Inventory turnover

5,6

Operating cost/revenues

21.9%

Cash from operations

ISK 88m

Payroll /revenues

39%

Gross profit% 26,3%

Rekstrarreikningur - Fyrri árshelmingur 2014

ISK million1H

20141H

2013

Goods and services sold 5,712 5,470

Cost of goods and services sold (4,210) (4,242)

Gross profit 1,502 1,228

Operating expenses (1,252) (1,192)

EBIT 250 36

Net financial expenses (82) (154)

Income tax (36) 20

Loss from discontinued operations (26) (914)

Net profit (loss) for the period 125 (1,012)

EBITDA 398 183

Rekstrarreikningur - F2 2014

ISK millionQ2

2014Q2

2013*

Goods and services sold 2,853 2,815

Cost of goods and services sold (2,104) (2,152)

Gross profit 749 664

Operating expenses (616) (580)

EBIT 134 84

Net financial expenses (52) (77)

Income tax (17) (9)

Loss from discontinued operations (872)

Net profit (loss) for the period 69 (862)

EBITDA 207 161

* Previous years’ comparative figures adjusted for discontinued operations

Efnahagur

ISK million 30.06.2014 31.12.2013

Fixed assets 2,912 3,049

Current assets 2,515 2,989

Total assets 5,427 6,031

Equity 790 665

Long-term liabilities 2,674 2,090

Short-term liabilities 1,963 3,276

Total equity and liabilities 5,427 6,031

Sjóðstreymi

ISK million2014

1.1 – 30.62013

1.1. – 30.6

Cash from operations 88 62

Investing activities (69) (164)

Financing activities (183) 52

(Decrease) in cash (164) (50)

Effect of foreign exchange changes on cash (5) (5)

Cash at beginning of year 451 218

Cash at end of period 282 163

Outlook

Going forward

» Good outlook for all the companies in the group and moderate growth in revenue and results expected» Units that yielded negative results have been sold» Investment in software development continues to yield increase in foreign

revenue» Interesting new opportunities with Applicon IS and SE» Icelandic businesses in need of IT investment

» Considerable competition domestically and abroad

» Continued focus on simplifying structure and streamlining to strengthen services, improve results and boost the capital position

» Share capital increased by up to 10 million shares » Sale to employees in a non-public offering» Authority to increase share capital by up to ISK 150 m.

Disclaimer

Forward-looking statements contained in this presentation may be based on management’s current estimates and expectations, and not on facts that may be verified after its publication. Such statements are inherently uncertain.

We therefore caution the reader that there are a variety of factors that could cause business conditions and results to differ materially from what is contained in our forward-looking statements, and that we do not undertake to update any forward-looking statements.

These forward-looking statements speak only as of the date of this presentation and are qualified in their entirety by this cautionary statement.