Untitled

Annual report 2021

Mercell Holding ASA

Mercell at a glance 3

Highlights 2021 5

Message from the CEO 7

Board of directors report 9

Group overview 9

Operational review 11

Financial review 14

Parent company and allocation of prots 17

Share information 17

Corporate Governance 18

Risks and uncertainty factors 18

Outlook 21

Declaration by the board of directors and CEO 22

Sustainability at Mercell 23

Material sustainability topics 25

Governance and sustainability 26

People and society 28

Climate and Environment 32

Corporate Governance report 33

Consolidated nancial statements 39

Consolidated statement of comprehensive income 40

Consolidated statement of nancial position 41

Consolidated statement of changes in equity 42

Consolidated statement of cash ows 43

Notes to the consolidated nancial statements 44

Key performance indicators (KPI) 101

Parent company nancial statements 105

Auditor’s report 122

Content

Mercell at a glance

A leading SaaS-platform for public e-tendering

Mercell is a leading marketplace for public eTendering and

eProcurement, with a total base of close to 30 000 customers

in both the pre-award and post-award markets.

We have established

a unique market position

Mercell’s unique marketplace simplies the

tender and procurement process and makes it

easy and secure for buyers to nd relevant sup-

pliers for their tenders and purchasing needs.

We also ensure that suppliers nd relevant

business opportunities and offer tools for digital

receipt and handling of purchases from public

and private buyers. Mercell delivers services in

15 countries with an aim to become the leading

software-as-a-service (SaaS) platform for

eTendering and eProcurement in Europe.

· Positioned to be a consolidator in the European

eTendering and eProcurement market

· Scalable and protable business model with

proven organic and M&A growth ability

· Multiple growth opportunities through new

sales, upselling, cross-selling, and geographical

expansion

Norway

25%

Sweden

28%

Denmark

19%

Finland

12%

Netherlands

Other

ARR split 2021

NOK 793m

Mercell leading player

Mercell foothold

Mercell – Annual report 20215

Highlights 2021

Continued ARR growth

· ARR of NOK 793 million per year-end 2021, +44 per

cent year-on-year with organic growth of 18 per cent

· Solid underlying growth in pre-award and at devel-

opment in post-award, with renewed growth expected

from 2022 onwards in the post-award segment

Focus on platform development and

integrating acquisitions

· Focus on integrating acquisitions and developing a

common Mercell platform

· New platform and improved functionalities expected to

support growth going forward

· Customer upgrading to the new Mercell Source-to-

Contract, Mercell Tender Finder and Mercell Source-to-

Pay solutions set to pick up speed through 2022

· R&D IT-spend passed the peak and set to decline 10-15

per cent to NOK 200 - 210 million in 2022

Improving revenue and EBITDA

· Reported revenue +126 per cent to NOK 706 million

in 2021

· Reported EBITDA of NOK 105 million, with the EBITDA-

margin improving from -8 per cent to 15 per cent

· Adjusted EBITDA of NOK 173 million, with adjusted

EBITDA-margin improving from 22 per cent to 24 per

cent

· EBITDA expected in continue improving in 2022

Cash ow and nancial position

set to improve in 2022

· Solid free cash ow to equity expected from 2022

onwards

· Cash position of NOK 96.7 million at year-end 2021

sufcient to fund organic growth plans

· Solid equity ratio of 47 per cent, with net interest-bear-

ing debt at NOK 1.5bn

Ambitious long-term strategy

· Current focus on enabling continued strong and

protable growth in the existing businesses

· On track for more than doubling of ARR in existing

markets in 2020-2025

· M&A strategy put on hold in the current market

Mercell – Annual report 2021 6

Key gures

IFRS accounting standard 2021 2020

Total revenue 706 296 311 906

Operating costs -533 402 -242 793

M&A cost and special items -67 889 -92 837

EBITDA 105 005 -23 724

EBITDA-margin 15% -8%

Adjusted EBITDA 172 894 69 113

Adjusted EBITDA-margin 24% 22%

Depreciation, amortization, impairment -188 678 -52 011

Operating prot/loss, EBIT -83 672 -75 735

Net nancial items -32 797 -78 539

Prot/loss before tax -116 469 -154 275

Annual recurring revenue, ARR 793 552

ARR, pre-award buyers 320 145

ARR, pre-award suppliers 381 327

ARR, post-award 92 79

No. of buyer customers 3 726 2 427

No. of supplier customers 25 636 26 588

Adjusted EBITDA excludes M&A costs and special cost items. Organic growth excludes ARR acquired over the past year.

ARR development annually (NOKm) ARR development quarterly (NOKm)

210

552

793

202120202019201820172016

850

235

299

338

552

634

749

772

793

2021

2020

Mercell – Annual report 20217

We are rather deploying our resources into protable

growth of the existing asset base, where we see healthy

ARR increases in line with the 15-20 per cent average

annual growth rates we have outlined for 2020-2025.

Over the past year and a half, we have used the capital

market to raise signicant amounts of equity and debt in

connection with the acquisition of Mercell Commerce –

formerly Visma Commerce – in 2020 and the acquisitions

of Negometrix and CTMS in the Netherlands, Ibistic in

Denmark and Cloudia in Finland in 2021.

However, the current valuation of our own shares is a

clear indication that the market no longer values neither

the acquired companies nor our legacy business near the

price levels we have paid. In this environment it would

be challenging to nd additional acquisition targets that

would prove accretive for our shareholders, and the best

thing for us to do is to make sure that we deliver on the

protable growth opportunities we see for our existing

portfolio.

On this backdrop we see continued revenue growth and

improving EBITDA-margins from 2021 to 2022, and we

expect to remain on track towards our long-term EBITDA-

margin target of 40 per cent +. Our efforts to build a

common platform is costly both in terms of both operating

costs and capital expenditures into software development,

although we have passed the peak and look for a decline

in the total IT-spending of 10-15 per cent next year. We

expect to generate positive free cash ow to equity from

2022 onwards, which will strengthen our nancial exibil-

ity signicantly over the years to come.

Having increased our annual recurring revenue (ARR) base

almost eight-fold over the past three years - from less

than NOK 100 million at the end of 2018 to almost NOK

800 million at the end of 2021 - we have become one of

the largest software-as-a-service companies in the Nordic

market. In that period, we have completed 12 acquisitions

operating on different platforms in different markets.

Looking into 2022 we will be working to bring existing and

new customers onto a common product platform that will

offer increased functionality for our customers as well as

more cost-efcient production for us.

The rst customers have already been upgraded to our

new Mercell Source-to-Contract solution for pre-award

Although we continued growing also in 2021, we changed our modus

operandi during the year. Having fueled our growth with signicant

acquisitions during 2020 and the rst half of 2021, we put M&A activity on

hold in the second half of the year and will refrain from making any major

acquisitions also in 2022.

Message from the CEO

Focus on protable

growth

Message from the CEO

Mercell – Annual report 2021 8

buyers, and to our new Mercell Tender Finder solution

for pre-award suppliers. Both these solutions comprise

signicantly broader and improved workow solutions

compared to the legacy systems in each of the geo-

graphical markets, and will offer us strong sales points

and new revenue streams from both existing and new

customers. We have particularly high hopes for growth in

the pre-award supplier markets. The acquisitions of the

market leaders on the buyer-side in the Netherlands and

Finland open opportunities to develop the supplier-side

of these markets, and we have high ambitions to ‘export’

our successful Scandinavian model and build leading and

protable supply-side positions in both countries.

We also look forward to reviving growth in the post-award

markets in the years to come. The upgrades of existing

customers will take longer in the post-award market, but

once the new platform is up and running, we see a major

opportunity to begin cross-selling post-award products

and services to our large customer bases in the pre-award

markets.

Terje Wibe

CEO

Mercell Holding

“Our focus now is to make

sure that we deliver on

the protable growth

opportunities we see for

our existing portfolio”.

Mercell – Annual report 20219

Board of directors report

Group overview

Mercell is a leading provider of eTendering, tender notication and bid manager solutions,

offering an online marketplace for thousands of buyers and suppliers in the pre-award

market. These services provide workstream support for the entire pre-award value

chain from identication of purchasing needs through to tender awards and contract

management, and ensure efcient, compliant, and transparent tendering processes. The

system is an ISO 27001 certied SaaS system (Software as a Service), allowing public

buyers to manage the whole tender process in full compliance with EU Directives and

national legislation for conducting electronic tender processes. The Group also offers

eProcurement solutions in the post-award market, including eCommerce/eCatalogues,

invoicing and payment services, and spend analysis.

Board of directors report

From sourcing to payment (S2P)

Pre-award solutions Post-award solutions

Target group

Buyers Suppliers Buyers and suppliers

Core value

proposition

Tender process and

contract management

tools

Customized tender

notications, bid manager

and value-added services

Contract management

and eProcurement:

· eCommerce

· eCatalogue

· Invoice & Payment

· Spend analytics

Share of ARR

YE 2021

220

40%

48% 12%

220

40%

48%

12%

220

40% 48%

12%

Source: Company data

Business overview by market and customer type, and share of ARR

Mercell – Annual report 2021 10

Board of directors report

Mercell’s annual recurring revenue (ARR) amounted to

NOK 793 million at the end of 2021, with revenue gen-

erated from three customer groups: pre-award buyers,

pre-award suppliers, and buyers in the post-award market.

The company had 3726 buyer customers at the end

of 2021, accounting for 40 per cent of ARR. This was a

sharp increase from the end of 2020, reecting mainly the

acquisitions of Negometrix in the Netherlands and Cloudia

in Finland who historically have operated only on the buy-

side of the pre-award market.

The number of suppliers was 25636, accounting for 48

per cent of ARR, with buyer customers in the post-award

market accounting for the remaining 12 per cent of ARR.

At the end of 2021, Mercell delivered its services in 15

European countries. The Nordic countries account for

approximately 84 per cent of ARR, with Sweden at 28

per cent, Norway at 25 per cent, Denmark at 19 per cent,

and Finland at 12 per cent of ARR after the acquisition of

Cloudia in May 2021. The Netherlands accounted for 9 per

cent after the acquisition of Negometrix in February 2021.

The remaining 7 per cent mainly reect operations in the

Baltic region, and the foothold positions the company

has in Germany, France, Spain, Iceland and in the UK and

Ireland.

Mercell is present across the entire procurement value chain

Identify

tender area

Sourcing and

plan tender

Create &

publish tender

Evaluate &

award

contract

Procurement &

goods handling

Invoice

approval &

automation

Payment

(ERP)

Spend

Management

Contract

management

Source to contract (pre-award) Purchase to pay (post-award)

Mercell – Annual report 202111

Operational review

European public procurements amount to around 14 per cent of EU’s GDP, or a staggering

EUR 2tn annually. EU has set out minimum harmonised public procurement rules to govern

the way public authorities purchase goods, works and services, to save taxpayers’ money

and secure equal treatment, non-discrimination, and transparency. Mercell’s products

ensure efcient, compliant, and transparent tendering processes, in alignment with the

EU regulations and national law, and EU’s own compliance scoreboards show that the

countries in which Mercell is market leader also are the market in best compliance with EU

regulations.

Software-as-a-Service licenses account for 95 percent of

Mercell’s revenue, with the remainder based on transac-

tions or other non-recurring revenues. Approximately 40

per cent of ARR stems from pre-award buyers, 48 per cent

from pre-award suppliers, and the remaining 12 per cent

from post-award customers. The share of pre-award buyer

revenue has increased in 2021 with the acquisitions of the

buy-side companies Negometrix in the Netherlands and

Cloudia in Finland.

Acquisitions

Mercell made four acquisitions during 2021, adding ARR

of NOK 162 million measured as the acquisition targets’

ARR at the time of acquisition. NOK 61 million of the

acquired ARR reects the acquisition of Negometrix in

February 2021, NOK 18 million the acquisitions of Ibistic

and CTM Solutions in May, and NOK 83 million the acquisi-

tion of Cloudia in June.

Negometrix is the largest private provider of e-procure-

ment software solutions in the Netherlands, with an

established foothold in the emerging US market, and an

integrated technology hub in Bulgaria. The company has

historically focused on the buyer-side of the pre-award

market, and the future development of the supplier-side

of the market represents a large growth opportunity for

Mercell.

The acquisition of CTM Solutions was a bolt-on acqui-

sition in the same market. Having acted as an agent for

Mercell, CTMS was the second largest private player after

Negometrix in the Netherlands, and the company has now

been integrated into Negometrix.

The small acquisition of Danish Ibistic further strength-

ened the post-award offering in the Nordic region.

The acquisition of the Finnish market leader Cloudia in

June 2021 marked a milestone in Mercell’s consolidation

of the Nordic market, leaving the company with market

leading positions across Sweden, Norway, Denmark, and

Finland.

Cloudia is the leading Finnish e-Procurement platform,

with a SaaS platform covering the entire procurement life-

cycle for the buyers with modules for sourcing, planning,

contract and supplier management. The customer base

includes 95 of the 100 largest Finnish municipalities and

10 of the largest cities. Mercell sees the development of

the supplier-side of the market as a major growth opportu-

nity going forward.

ARR acquired through the acquisition of Cloudia was

initially estimated at NOK 104 million. This was however

revised down by NOK 21 million to NOK 83 million

following a thorough invoice review after completion of

the acquisition. The company is considering its options

with regards to compensation for the lower ARR and does

not expect that the earn-out arrangements related to the

Cloudia-acquisition will lead to any payments.

Mercell has a stated vision to become the preferred e-ten-

dering and procurement platform in Europe, and believes

its position across multiple geographical markets, across

both buyers and suppliers, and across both the pre-award

and post-award markets makes the company a natural

consolidator in this market.

However, acquisitive growth requires funding at competi-

tive cost of capital, and in the current market environment

the company nds it challenging to nd accretive acqui-

sitions that create value for the shareholders. Mercell will

refrain from making any signicant acquisitions in 2022

and rather deploy its resources into protable growth in

the existing markets.

Board of directors report

Mercell – Annual report 2021 12

Organic growth

The ARR of NOK 793 million at the end of 2021 was an

increase of 44 per cent from NOK 552 million at the end of

2020. As explained above, a signicant part of this reects

acquisitions. Organic growth was 18 per cent in local

currencies, which fell within the stated ambition to grow

existing ARR by 15-20 per cent annually in 2020-2025.

New sales amounted to NOK 61 million in 2021, whereas

upselling and price optimization lifted ARR by NOK 112

million. Churn and contraction amounted to NOK 72

million, and organic growth was hence NOK 101 million.

Adverse currency effects reduced ARR by NOK 21 million,

reecting mainly a stronger NOK/SEK.

ARR development 2021 (NOKm)

Source: Company data

The net ARR increase of Udbudsvagten has been allocated to New sales/upsell

ARR in the pre-award buyer segment increased from NOK

145 million to NOK 320 million in 2021, mainly driven by

the acquisitions of Negometrix and CTM Solutions in the

Netherlands and Cloudia in Finland. Excluding acquired

ARR, the ARR for the segment increased by 18 per cent in

2021.

ARR in the pre-award suppliers segment increased from

NOK 327 million to NOK 381 million in 2021, with ARR

increasing by 16 per cent excluding acquired ARR. As the

company outlined on its Capital Markets Update in May

2021, the development of the supply-side business is

expected to be the strongest driver for organic growth in

the years to come. The acquisitions of Cloudia in Finland

and Negometrix in the Netherlands secured Mercell

leading positions in the pre-award buyer market in these

countries, which opens an opportunity to develop signi-

cant pre-award supplier businesses in these markets.

ARR in the post-award segment increased from NOK 79

million to NOK 92 million in 2021, although ARR increased

by only 1 per cent excluding the acquisition of Ibistic in

May. This reects slower than expected platform consol-

idation process and lack of implementation capacity, and

the company expects renewed growth with the introduc-

tion of a new post-award offering in 2022.

Platform integration

Following the string of acquisitions of the past couple of

years, Mercell currently operates and maintains a wide

range of different platforms for both buyers and suppliers

in both the pre-award and post-award markets.

The company is investing into product development to move

towards a common platform suite with new products and

increased functionality for the customers. The work to con-

solidate the services on a common platform is being done

in a gradual and timely manner, through iterative interactions

with the customers, and continuous innovation to ensure

quality and usability. In addition to migrating the existing

solutions to a common platform, Mercell is developing new

services or modules and expanding existing services.

The new product families for the three business areas

are Mercell Source-to-Contract for pre-award buyers,

Mercell Tender Finder for pre-award suppliers, and Mercell

Procure-to-Pay for the post-award market.

Pre-award buyers

Mercell began onboarding the rst selected customers

to the new Mercell Source-to-Contract in 2021. This is

based on Negometrix’ NX4 platform, with customers in

the Netherlands as a natural starting point. More than 100

public buyers have been upgraded in this market, with

good customer feedback.

The company has also initiated customer upgrades in

Denmark and expects to scale the onboarding process

in more markets in 2022. The upgrading program starts

with buyer customers with relatively modest functionality

requirements and will move on to customers with more

complex needs as the company closes all functionality

gaps from the different platforms currently in use.

The Source-to-Contract platform will include value-adding

functionality which today is available only in individual

markets, such as the Contract Lifecycle Management

module from the Finnish market, the Intake Management

functionality from the Netherlands, and the Digital

Signature solutions which are mandatory in Norway.

ARR development year (NOKm)

112

-72

-21

162

552

793

ARR YE'21

Acquisitions

(ARR at time of

aquisition)

Other/

Currency

Churn/

contraction

Upsell

New sales

ARR YE'20

Board of directors report

Mercell – Annual report 202113

Pre-award suppliers

Mercell is also moving forward with the Mercell Tender

Finder for pre-award suppliers. Compared with the current

solutions, this will offer greatly improved ‘Google-like’

search and ltering solutions, and other ‘best-of-breed’

advantages that will make it much easier for suppliers

to nd relevant business opportunities. This expands

the scope of the offering from relatively simple tender

notications to a range of supply-side workow solutions,

which strengthens the value proposition and introduces

new upselling products.

Mercell has upgraded some 100 Norwegian customers

to the Mercell Tender Finder and see greatly improved

supplier engagement compared to the legacy solutions.

Tech touch updating has been successfully tested, and the

company is preparing for mass upgrades. Danish custom-

ers will begin to upgrade during the rst half of 2022, and

the company plans to introduce the solutions to suppliers

in the Netherlands in the second half of the year.

Post-award

The post-award e-procurement business was added

through a string of acquisitions in 2020, extending the

product offering to include solutions for procurement and

order management, invoicing, payment and accounting,

and spend analytics.

2021 was a transition year for the post-award segment,

with integration of the acquired companies and work to

start building the new Mercell Procure-to-Pay solution

based on Tricom technology. The rst customers will be

upgraded early 2022.

Many pre-award buyer customers have shown strong inter-

est in Mercell’s post-award solutions and data analytics

functionality, and the company expects cross-selling of

the post-award solution to start picking up after launch of

the Mercell Procure-to-Pay.

Organization

The number of employees amounted to 692 at the end

of 2021, comprising 41 per cent women and 59 per cent

men. Full time employees represented 91 per cent of

the workforce, with temporary employees 9 per cent. Of

temporary employees, 12 per cent were women and 88

per cent were men at the end of 2021. No employees

in Mercell work part time unless they have initiated or

proposed it themselves. No employees were on parental

leave during the year.

Sickness absence in the Group in 2021 was 2 per cent.

During 2021 there have been no accidents or injuries

related to the operations.

While the overall share of female employees decreased

from 42 per cent in 2020 to 41 per cent in 2021, the share

of female managers increased from 14 per cent to 37

per cent in 2021. This was mainly driven by acquisitions

throughout the year as well as a strong focus on increas-

ing the number of women in management positions. At

the end of 2021, the Board of Directors consisted of ve

members, two of whom are women (40 per cent).

Salary mapping of 2021 of women’s salaries compared to

those of their male colleagues in the same job category,

show that women’s compensation as percentage of those

of men’s, is 80 per cent. For female managers, compensa-

tion as percentage of those of men’s is 84 per cent.

The work for equality is overseen by the executive

management and is integrated throughout all relevant

processes. Focus and allocation of responsibilities is

on the agenda for respective management teams below

executive management, who have meetings on a weekly

basis. HR has a particular responsibility to challenge the

organization to improve equality in relevant decision-mak-

ing processes, such as recruitment, policy development,

remuneration, succession planning, and the composition

of functional teams.

Mercell is continuously making efforts to improve equality

throughout the company. A key goal is to continue grow-

ing Mercell into a well-functioning organization making

correct decisions based on a variety of perspectives.

We seek to enable diversity and prevent discrimination

through an inclusive culture.

Board of directors report

Mercell – Annual report 2021 14

Financial review

The consolidated nancial statements of the Group for the year ended 31 December

2021 have been prepared in accordance with International Financial Reporting Standards

(“IFRS”) as adopted by The European Union (“EU”).

Mercell reported a revenue increase of 126 per cent to NOK 706.3 million for 2021. EBITDA

amounted to NOK 105.0 million, compared to an EBITDA-loss of NOK 23.7 million in 2020.

Adjusted for M&A cost and special items in both periods, EBITDA increased to NOK

172.9 million in 2021 from NOK 69.1 million in 2020. The adjusted EBITDA-margin hence

increased from 22 per cent in 2020 to 24 per cent in 2021.

Consolidated nancial key gures

NOK 1 000 2021 2020

Total revenue 706 296 311 906

Operating costs -533 402 -242 793

M&A costs and special items -67 889 -92 837

EBITDA 105 005 -23 724

EBITDA-margin 15% -8%

Adjusted EBITDA 172 894 69 113

Adjusted EBITDA-margin 24% 22%

Depreciation, amortization, impairment -188 678 -52 011

Operating prot/loss, EBIT -83 672 -75 735

Net nancial items -32 797 -78 539

Prot/loss before tax -116 469 -154 275

Note: See KPI for an overview of M&A cost and other special items

Prot and loss

(Figures for 2020 in brackets)

Revenue

Revenue for the full year 2021 increased by 126 per cent

to NOK 706.3 million (311.9). The increase over the past

year mainly reects the acquisitions of Negometrix in the

Netherlands in February, Ibistic in Denmark and CTMS in

the Netherlands in May, and Cloudia in Finland in June.

The company did not execute any acquisitions in the

second half of the year.

Split by product group, pre-award buyers accounted for

NOK 265.3 million (37 per cent), pre-award suppliers for

NOK 351.0 million (50 per cent), and post-award buyers for

NOK 90.0 million (13 per cent). Compared with 2020 the

increase was strongest for the pre-award buyer segment,

which primarily reects the acquisitions of Negometrix

and Cloudia in 2021.

SaaS licence revenue accounted for 95 per cent of total

revenue, reecting 95 per cent of the pre-award buyer

revenue, 97 per cent of the pre-award supplier revenue,

and 87 per cent of revenue from post-award buyers.

Mercell is the clear market leader in Sweden, Norway,

Denmark, Finland and the Netherlands. The Nordics

accounted for 84 per cent of revenue in 2021, with

Sweden at 32 per cent, Norway at 24 per cent, Denmark

at 21 per cent, and Finland at 8 per cent. The Netherlands

accounted for 9 per cent, and other markets for 7 per cent

of revenue. Please see note 2.2 for more details.

Note that revenue splits by product and geography differ

from similar splits for ARR, as the latter to a greater degree

Board of directors report

Mercell – Annual report 202115

absorbs the impact of acquisitions carried out through

2020 and 2021.

Operating costs and EBITDA

Operating costs amounted to NOK 601.3 million in 2021

(335.6). Personnel costs remained the largest cost area,

accounting for NOK 304.4 million (187.0). Cost of goods

sold amounted to NOK 24.1 million (5.6), and other

operating expenses to NOK 242.4 million in 2021 (94.3).

M&A cost amounted to NOK 30.4 million (48.8), reecting

the acquisitions of Cloudia, Negometrix, Ibistic and CTMS.

EBITDA hence amounted to NOK 105.0 million in 2021,

compared to a loss of NOK 23.7 million in 2020. The

EBITDA-margin hence improved from a negative 8 per cent

in 2020 to a positive 15 per cent in 2021.

The number of employees increased to 692 at the end

of 2021 from 456 in 2020. The increase reects both

acquisitions and organic growth, although the number of

employees attened out towards the end of 2021.

Adjusted EBITDA

In addition to M&A costs of NOK 30.4 million (48.8), the

operating costs included other special items of NOK 37.5

million in 2021 (44.1).

Adjusted for M&A costs and other special items the

EBITDA improved from NOK 69.1 million to NOK 172.9

million, with the adjusted EBITDA-margin improving from

22 per cent to 24 per cent.

The main parts of the special items reect advisory

fees and contingent remuneration arising from business

combinations (earn-out). Please see the section on KPIs

at the end of this report for a further description of M&A

costs and other special items.

Mercell sees upside potential in the EBITDA-margin in

the years to come, with increasing scale economies

and improved efciency. Operations in well-established

pre-award markets such as Norway and Sweden show sig-

nicantly higher margin levels than the overall Group. This

supports the company’s ambitions for continued margin

improvement as the company and its market mature over

the years to come.

Depreciation and amortization

Depreciation and amortization amounted to NOK 173.9

million (52.0) for the full year 2021, in addition to impair-

ments of NOK 14.8 million (0). The increase mainly

reects the effect of the acquisitions during 2021, and

primarily reect amortization of intangible assets.

Operating prot (EBIT)

The operating loss (EBIT) for 2021 was NOK 83.7 million,

compared to an operating loss of NOK 75.7 million

in 2020. The increased loss reects higher operating

expenses and higher depreciation and amortization due to

the acquisitions.

Net nancials

Net nancial cost was NOK 32.8 million for the full year

(-78.6), with higher interest cost primarily reecting

funding cost for acquisitions and renancing being offset

by increased foreign exchange gains.

Financial income amounted to NOK 65.0 million (30.7),

whereas nancial expenses amounted to NOK 97.8 million

(109.2). Please see note 4.5 for more details.

Results

Loss before tax was NOK 116.5 million (-154.3), whereas

net loss after tax was NOK 113.2 million (-146.3).

Cash ow

Cash ow from operating activities

Net cash ow from operating activities was NOK 89.1

million in 2021 (20.8), primarily driven by changes in

operating items including nancial liabilities, and changes

in contract liabilities related to SaaS subscriptions. These

reect the nature of the business model, with upfront

subscription payments and recognition of revenue over

the period of the contract.

Cash ow from investing activities

For the full year 2021, cash ow from investing activities

was a negative NOK 1320.0 million (-2223.7), of which

development of software and other intangibles accounted

for NOK 165.0 million (54.2), purchase of property, plant,

and equipment for NOK 1.7 million (3.5), and acquisitions

for NOK 1153.2 million (2166.0). The latter reects the

acquisitions of Negometrix in the rst quarter and CTMS,

Ibistic and Cloudia in the second quarter. The acquisition

of Cloudia accounted for roughly 80 per cent of the total

cash ow spent on acquisitions. Please refer to note 6.2.

The investments in development of software and other

intangibles reects a rapid pace of innovation and devel-

opment of new products, and the ongoing work to move

towards a common platform suite. The platform capex

of NOK 160.6 million in 2021 was in the low end of the

previously indicated software capex range of NOK 160-180

million for the full year.

Board of directors report

Mercell – Annual report 2021 16

The company received government grants (SkatteFUNN)

of NOK 4.4 million in 2021.

Including R&D expenses charged to the P&L, the company

spent approximately NOK 234 million on R&D in 2021. This

is expected to decline to NOK 200-210 million in 2022,

split between R&D opex of NOK 85-90 million and NOK

115-120 million in capitalized R&D. The R&D intensity is

expected to decline signicantly in the following years as

measured by R&D spending in percent of revenue.

Cash ow from nancing activities

Cash ow from nancing activities was NOK 1 002.7

million (2 506.9), of which net proceeds from share issues

of NOK 838.6 (1750.4) and proceeds from long-term debt

of NOK 495.4 million (1 252.4) were the main contributors.

The company repaid NOK 40.4 million in debt during the

year (312.1).

Net change in cash and cash equivalents

Net change in cash and cash equivalents was NOK -228.2

million (304.1) including foreign exchange effects, and

cash and cash equivalents decreased to NOK 96.7 million

at the end of the year (328.0).

The company expects signicantly higher cash ow from

operations in the rst quarter 2022, reecting customer

payments of invoices issued in the fourth quarter. As per

mid-February 2022 the company has a cash balance of

approximately NOK 120 million. The company’s projec-

tions for operating cash ow and capital requirements for

investments show that the organic growth plans for the

existing business are fully funded, and that the company

will generate a solid positive free cash ow to equity from

2022 onwards. This will in turn strengthen the nancial

position for accretive M&A at a later stage, or open for

distribution to the shareholders in the form of future

dividends or share buy-backs.

Financial position

Assets

Total non-current assets amounted to NOK 4 213.5 million

(3 037.8). Goodwill accounted for NOK 3 045.8 million

(2 114.8). Intangible assets accounted for NOK 1033.6

million (811.4). The increases reect the acquisitions

made during the year, with the main portion relating to the

acquisition of Cloudia in the third quarter 2021.

Current assets amounted to NOK 279.5 million at the end

of 2021 (446.2). Short-term receivables amounted to NOK

182.8 million (118.2), of which NOK 180.9 million in trade

receivables (118.0). Cash and cash equivalents amounted to

NOK 96.7 million (328.0). All of this was held as bank depos-

its, of which NOK 91.9 million unrestricted cash and NOK 4.8

million restricted cash due to withholding payroll taxes.

The company has carried out a reallocation of the

Purchase Price Allocation (PPA) related to the acquisitions

of Cloudia, in which the value of customer contracts has

been reduced by EUR 4 million and goodwill increased

correspondingly. The value of the goodwill has been

conrmed in a subsequent impairment test. Current

assets stood at NOK 279.5 million (446.2), comprising of

trade and other receivables of NOK 180.9 (118.0), con-

tract assets of NOK 1.9 million (0.1), and cash and cash

equivalents of NOK 96.7 million (328.0).

Equity and liabilities

Total equity amounted to NOK 2125.8 million (1617.9),

with the increase mainly reecting share issues to fund

acquisitions, partly offset by the losses in the period. The

company carried out a private placement raising gross

proceeds of approximately NOK 400 million in connection

with the Cloudia acquisition in June 2021 and raised gross

proceeds of approximately NOK 434 million in connection

with the Negometrix acquisition in February. Please see

the statement of changes in Equity for more information.

Total liabilities amounted to NOK 2367.3 million (1.866.0).

Non-current liabilities were NOK 1758.5 (1301.4), mainly

consisting of interest-bearing liabilities of NOK 1578.2

(1144.2). The increase during 2021 mainly reects a tap

issue increasing a bond maturing in December 2025 from

SEK 1.1 billion to SEK 1.6 billion as part of the acquisition

nancing of Cloudia. Please see note 4.2 for more infor-

mation. Other non-current liabilities include deferred tax

liabilities of NOK 174.3 million, and other items totalling

NOK 6.1 million. Net interest-bearing debt was NOK

1578.2 million at the end of 2021 (1144.2).

In July Mercell entered into an agreement for a NOK

100 million Super Senior Revolving Credit Facility with

Danske Bank, maturing in three years with a twelve-month

extension option. The purpose of the facility is to nance

general corporate needs and potential acquisitions. The

company has not yet drawn on this facility.

Current liabilities amounted to NOK 608.7 million (564.6),

of which NOK 23.2 million in current interest-bearing

liabilities (15.7). Trade and other payables amounted to

NOK 100.2 million, contract liabilities to NOK 360.7 million

(235.7) and other current nancial liabilities to NOK 124.7

million (224.5).

Board of directors report

Mercell – Annual report 202117

Parent company and allocation of prots

Mercell Holding ASA is the parent company in the Group,

and supplier and performs services for the Group’s other

companies. Mercell Holding ASA had total operating

income of NOK 67.1 million (60.7). Operating costs

amounted to NOK 211.7 million (97.4), generating an oper-

ating loss of NOK 144.6 million (36.8). Net nancial items

amounted to NOK 13.3 million (-70.0). Result before tax

was hence NOK -131.3 million (-106.8). Mercell Holding

ASA did not recognize any tax expense for the year, and

the net result for 2021 was hence also NOK -131.3 million

(-106.8). The Board of Directors proposes to the Annual

General Meeting that the net loss of the parent company

is charged to ‘Other equity’, and that no dividend is

distributed for 2021. Mercell Holding ASA had total assets

of NOK 4339.5 million (2958.4). Non-current assets

accounted for NOK 4295.8 million (2823.2), mainly

investments in subsidiaries. Current assets amounted to

NOK 43.7 million (135.2), of which cash and cash equiva-

lents of NOK 5.9 million (120.9). Equity amounted to NOK

2488.6 million (1715.7), corresponding to an equity ratio

of 57 per cent.

Share information

Mercell was on 9 July transferred from the Euronext Growth trading platform to the main list on the Oslo Stock Exchange.

At the end of 2021 Mercell had 502.8 million shares outstanding.

The 20 largest shareholders hold 71 per cent of the shares.

20 largest shareholders 23 March 2022

# of shares Ownership

VIKING VENTURE (16 AS, 16B AS, 16C AS, 16D AS) 53067864 10.6%

STATE STREET BANK AND TRUST COMP 42300000 8.4%

CITIBANK, N.A. 31188588 6.2%

SKANDINAVISKA ENSKILDA BANKEN AB 29247857 5.8%

THE BANK OF NEW YORK MELLON SA/NV 27876876 5.5%

MORGAN STANLEY & CO. INT. PLC. 19427248 3.9%

VERDIPAPIRFONDET DNB NORGE 18798861 3.7%

J.P. MORGAN SECURITIES LLC 16885955 3.4%

MYRLID AS 13200000 2.6%

MORGAN STANLEY & CO. LLC 12719925 2.5%

BARCLEYS CAPITAL SEC.LTD FIRM 12570843 2.5%

NORDNET BANK AB 11618690 2.3%

UBS SECURITIES LLC 10536769 2.1%

EUROCLEAR BANK S.A./N.V. 9649682 1.9%

GRIEG HOLDINGS II AS 9567947 1.9%

BANQUE DE LUXEMBOURG S.A. 7504567 1.5%

UBS AG 7294878 1.5%

ABG SUNDAL COLLIER ASA MEGLERKONTO INNLAND 7189885 1.4%

CAMIVEO AS 7023897 1.4%

THE BANK OF NEW YORK MELLON SA/NV 7015578 1.4%

Top 20 shareholders 354685910 70.5%

Other shareholders 148105281 29.5%

Total number of shares 502791191 100.0%

Board of directors report

Mercell – Annual report 2021 18

Corporate Governance

Mercell has established principles and procedures for

sound Corporate Governance, including risk management

and internal controls, rules of procedure for the Board

of Directors and management, and equal treatment of

shareholders. The company has formalized its frame-

work according to the Norwegian Code of Practise for

Corporate Governance. Please see Corporate Governance

Report for further details.

Risks and uncertainty factors

Liquidity risk

Mercell had a cash position of NOK 96.7 million at the end

of 2021. The company has secured funding for its M&A

activities mainly through equity issues generating gross

proceeds of approximately NOK 836 million, and through

an increase of the outstanding bond from SEK 1.1 billion

to SEK 1.6 billion.

Mercell’s SaaS business model is built on pre-paid

software subscriptions. The company expects signi-

cantly higher cash ow from operating activities in the rst

quarter 2022 compared to the fourth quarter 2021.

Mercell has carried out a string of acquisitions over the

past years. However, the company did not make any acqui-

sitions in the second half of 2021 and does not intend

to execute any major acquisitions in 2022. Based on the

current cash position, and projections for the operating

cash ow and capital requirements for the existing busi-

ness, it is the Board of Directors’ view that the company

will have ample liquidity to support the operational and

nancial goals for the existing business activities going

forward. The projections show a solid positive free cash

ow generation and further strengthening of the nancial

position from 2022 onwards.

Interest rate risk

The company is exposed to changes in interest rate levels

via long-term debt with oating interest rates. The main

portion of this is in the form of a SEK bond which was

increased from SEK 1.1 billion to SEK 1.6 billion through

a bond tap issue in the second quarter 2021. The interest

rate is STIBOR +6 per cent p.a., with quarterly interest

payments and maturity in December 2025. The Group

does not currently hedge the base STIBOR interest rate.

Net interest expenses amounted to NOK 95.4 million in

2021, excluding interest expense on lease liabilities.

Foreign exchange risk

Mercell is exposed to changes in exchange rates, both in

the calculation of Annual Recurring Revenue (ARR) and for

transactions and translation into the reporting currency

NOK. The risk exposure mainly relates to net investments

in foreign subsidiaries with functional currencies in SEK,

DKK, EUR, GBP, and USD, as well as to the SEK denom-

inated debt with interest payable in SEK. In 2021, the

company reported net foreign exchange gains of NOK

64.0 million, mainly reecting unrealized gains on the SEK

denominated debt. The Group does not hedge currency

exposure with the use of nancial instruments at the

current time but monitors the net exposure over time.

Credit risk

Mercell’s main customers are public buyers and suppliers

to these buyers, and Mercell’s products and services are

mainly subscription-based SaaS products with upfront

payments.

Market and operational risks

Mercell is a marketplace matching buyers and suppliers

on platforms for e-tendering and e-procurement. The

company’s customer base mainly consists of public

customers on the buy-side and a wide variety of suppliers

on the supply-side of the platforms. The level of activity on

the platforms therefore depends on public spending levels,

which may uctuate over time.

Mercell’s revenue is to a great extent based on recurring

subscription fees from both buyers and suppliers, and

there is a risk that lower customer activity levels could

affect the attractiveness of the platform and the compa-

ny’s ability to retain existing customers and/or attract new

customers.

Board of directors report

Mercell – Annual report 202119

The company has seen continuous organic growth in the

total number of paying buyers and suppliers as well as

organic growth in revenue per customer over the past

years. The company sees limited risk that sudden shifts in

customer behaviour should materially affect the nancial

performance.

The company considers M&A activities to be an integral

part of the company’s growth plans and has completed

nine acquisitions over the past two years.

The largest of these was the acquisition of Visma

Commerce in the fourth quarter 2020, which accounted

for approximately 36 per cent of ARR at the end of 2020.

Although the integration of such a large operation into

Mercell could pose operational challenges, the company

has seen positive effects on the operational and nancial

performance for both the existing and the acquired opera-

tions since the consolidation. Mercell has strengthened its

organization considerably over the past year to ensure the

capacity required to handle a growing organization, which

increased further with the acquisition of Negometrix in

the rst quarter 2021 and the acquisitions of Ibistic, CTM

Solutions and Cloudia in the second quarter of the year.

Acquisitions in the post-award market in 2020 led the

company into a market space with other characteristics

and a different competitive landscape. While this may

entail increased risk, the company has so far not seen any

issues which should indicate that these acquisitions have

increased the overall risk in the company.

The company may be impacted by other events affecting

the safety, security, and availability of human resources.

As per the end of 2021, eight of the company’s employees

were of Ukrainian nationality. Depending on the devel-

opment of the war in the Ukraine and the associated

sanctions and travel restrictions there may be elevated

risk related to the safety, security, and availability of these

employees.

Subscription revenues risks

Mercell’s revenue is to a great extent based on recurring

subscription fees from both buyers and suppliers, and

there is a risk that lower customer activity levels could

affect the attractiveness of the platform and the compa-

ny’s ability to retain existing customers and/or attract new

customers. The Group operates in markets with uctu-

ating user satisfaction and demand for products and/or

services.

The Group has a subscription-based revenue model with

more than 90 per cent recurring revenue. Consequently,

the Group’s business operations depend highly on

renewed subscription by its existing customer base.

Should one or more of such customers decide not to

renew their subscriptions with the Group, this may result in

a material adverse effect on the Group’s results of opera-

tions. The demand for the Group’s services is affected by

a number of factors, including awareness of technologies,

availability of competing or substitute products and/or

services, ease of adoption and use, features, experience

and reliability of the Group’s services.

Any inability to retain and develop the Group’s customer

base may result in a material adverse effect on the Group’s

business, results of operations, nancial position, cash

ows and/or prospects.

During 2020, the company saw organic growth in the

number of paying buyers and suppliers as well as organic

growth in revenue per customer. The company sees

limited risk that sudden shifts in customer behavior should

affect the nancial performance signicantly.

Merger and acquisition risks

Mercell considers merger and acquisition (M&A) activities

to be an integral part of the company’s growth plans. The

Group’s future growth and performance will partly depend

on the ability to manage growth effectively, including

the ability to successfully integrate acquired assets,

businesses or companies. If the Company or another

member of the Group acquires a company, it must be

able to integrate into the Group, inter alia, the acquired

company’s personnel, operations, technology and nancial

set-up. There is no guarantee that such integration will

not encounter difculties whereby the contemplated

effects will not be achieved. In addition, key personnel

of the acquired company may decide to resign instead

of working for the Group. These difculties could disrupt

the ongoing business, distract the Group’s management

and employees and increase its expenses and negate the

desired effect of the acquisition.

For the above reasons and for other reasons, the acquisi-

tion of assets, businesses and companies and their inte-

gration into the Group may not be as nancially successful

as expected, obtain the intended synergies or growth as

expected, or the acquisitions could require additional

costs, risks or time to fully integrate the acquired assets

into the Group. Any failure of successfully integrating

Board of directors report

Mercell – Annual report 2021 20

acquired businesses or assets into the Group may have a

material adverse effect on the Group’s business, pros-

pects, liquidity, nancial condition and results of operation.

Technology risks

Mercell operates in markets that are highly susceptible to

technological developments and new technological solu-

tions for eTendering are constantly developing within the

markets that the company operates. Such technological

developments have resulted in, and will likely continue to

result in, substantial improvements in equipment functions

and performance throughout the industry. As a result, the

Mercell’s future success and protability will be dependent

in part upon its ability to improve existing services and

solutions, address the increasingly sophisticated needs of

its customers and anticipate major changes in technology

and industry standards and respond to technological

developments on a timely basis.

Mercell is in the process of developing a new pre-award

platform to be included as an integral part of its service

offering for eTendering and procurement services.

The Group has incurred, and is expected to continue to

incur, signicant expenses related to the development,

implementation and launch of the new platform, and the

costs related to the development, implementation and

launch of the platform could be higher than what has been

estimated by the Group. Additionally, the Group’s devel-

opment, implementation and launch of the new platform

could be delayed because of numerous reasons associ-

ated with the development, implementation and launch

of a new platform, several of which could be outside the

Group’s control, and any delay. Furthermore, there is a

risk that the platform, when launched, may not meet the

market’s demand, criteria and/or expectations for such

product. Thus, there is a risk that the Group’s resources

spent on the new pre-award platform may not be success-

ful or completed in accordance with the Group’s budgets,

plans and/or expectations. If the development, implemen-

tation and/or launch of the new pre-award platform is not

successful or completed in accordance with the Group’s

budgets, plans and/or expectations, it could have a mate-

rial adverse effect on the Group’s business, prospects,

liquidity, nancial condition and/or results of operation.

IT risks

Mercell relies heavily on information technology (“IT”)

systems in order to achieve its business objectives. The

Group relies upon industry accepted security measures

and technology such as access control systems to

securely maintain condential and proprietary information

maintained on its IT systems, and market standard virus

control systems. However, as a tech company, Mercell

is constantly exposed to external threats associated

with data security and is under constant pressure from

different external players. There is a risk of virus attacks,

attempts at hacking, social manipulation, and phishing

scams, as well as theft of intellectual property or sensi-

tive information belonging to the Group or its business

partners.

The Group’s portfolio of hardware and software products,

solutions and services and its enterprise IT systems may

be vulnerable to damage or disruption caused by circum-

stances beyond its control, such as catastrophic events,

power outages, natural disasters, computer system or

network failures, cyber-attacks or other malicious soft-

ware programmes.

The failure or disruption of the Group’s IT systems to

perform as anticipated for any reason could disrupt the

Group’s business and result in decreased performance,

signicant remediation costs, transaction errors, loss of

data, processing inefciencies, downtime, litigation, and

the loss of suppliers or customers. A signicant disruption

or failure could have a material adverse effect on the

Group’s business operations, nancial performance and

nancial conditions.

Board of directors report

Mercell – Annual report 202121

Outlook

Mercell has grown into the leading platform for public

e-tendering and one of the largest B2B SaaS companies in

the Nordic region. From a starting point of less than NOK

100 million at the end of 2019, the company has in just

three years grown annual recurring revenues (ARR) to NOK

793 million through a combination of acquisitions and

organic growth.

Mercell has established clear market leadership in

Sweden, Norway, Denmark, Finland, and the Netherlands.

These markets hold great opportunities for organic growth

through the roll-out of a common platform across all

markets, opening up of the pre-award supplier markets

in Finland and the Netherlands, and a structured sales

strategy across all markets.

As described on the Capital Markets Update in May 2021,

Mercell sees potential for 15-20 per cent average annual

growth in ARR in its existing business from 2020 to 2025.

While this target was given before the acquisition of

Cloudia it holds true also for the current portfolio. The

company is so far on track, with 18 per cent organic ARR

growth in local currencies in 2021.

The growth must be expected to vary between quarters

and years depending on product launches and market

introductions.

The supplier segment holds particularly strong growth

potential, as Mercell is in the process of introducing new

and innovative product solutions in this segment. Over

time, the company also expects to see revived growth

in the post-award market after the introduction of a new

common platform.

The company expects continued revenue growth and

improving EBITDA in 2022, and retains its longer-term

EBITDA-margin target of 40 per cent +.

Mercell has a stated vision to become the preferred e-ten-

dering and procurement platform in Europe, and believes

its position across multiple geographical markets, across

both buyers and suppliers, and across both the pre-award

and post-award markets makes the company a natural

consolidator in this market.

However, acquisitive growth requires funding at competi-

tive cost of capital, and in the current market environment

it is challenging to nd accretive acquisitions that create

value for all shareholders. Mercell will therefore refrain

from making any signicant acquisitions in 2022 and

rather deploy its resources into protable growth in the

existing markets.

Combined with lower investments into software devel-

opment, this will enable Mercell to generate solid free

cash ow from 2022 onwards, and further strengthen its

nancial position.

Board of directors report

Mercell – Annual report 2021 22

Declaration by the board of directors and CEO

Mercell Holding ASA’s consolidated nancial statements for the period 1 January to 31

December 2021 have been prepared and presented in accordance with IFRS as adopted by

the EU. The separate nancial statements for Mercell Holding ASA for the period 1 January

to 31 December 2021 have been prepared in accordance with the Norwegian Accounting

Act and Norwegian accounting standards. We conrm to the best of our knowledge that the

consolidated and separate nancial statements for the period 1 January to 31 December

2021 have been prepared in accordance with applicable accounting standards and give a

fair view of the assets, liabilities, nancial position and prot or loss taken as a whole.

We also conrm that, to the best of our knowledge, full year 2021 gives a true and fair view

of important events in the accounting period and their inuence on the annual report, as

well as the principal risks and uncertainties facing the business in the next accounting

period.

The Board of Directors conrms that the nancial statements have been prepared under a

going concern assumption, and the Group’s liquidity position, solidity and ongoing cash ow

from operations support the assessment that this assumption is realistic.

The Board of Directors of Mercell Holding ASA

Oslo, 24 March 2022

Sign.

Joar Welde

Chair of the Board

Helge Nielsen

Board Member

Anne Lise Waal

Board Member

Berit Lid Scharff

Board Member

Erik Fjellvær Hagen

Board Member

Terje Wibe

CEO

Board of directors report

Mercell – Annual report 202123

Sustainability

at Mercell

The world is facing considerable challenges, including reaching net zero

greenhouse emissions by 2050 and developing a global society in line with

UN sustainability goals. Everyone has a role to play and must contribute

by building on their relative strengths. For Mercell this means underlining

the role that our core business of providing EU compliant e-procurement

software and services plays in contributing to sustainable growth ambitions,

by enabling transparency, traceability, and fair competition. The importance

of public procurement in driving sustainable development is highlighted in

the EU green deal, its green public procurement guidelines and strategy for

a circular economy. Mercell’s systems and services enable procurement to

play its important role.

Sustainability at Mercell

Mercell – Annual report 2021 24

6 92

Number of employees

41%

Share of women

in Mercell

Countries where we

have employees

Number of critical

concerns reported in

our whistleblower line

Mercell also contributes by doing business in a responsible

and sustainable way, in line with laws and regulations.

As a member of the UN Global Compact we support the

implementation of the ten sustainability principles related

to human rights, labor, environment and anti-corruption, as

well as the UN sustainability goals. These principles inform

our governing policies on ethical behavior and are reected

in our values: Growth, Curiosity, Courage and Trust.

This ESG report provides an overview of Mercell’s material

topics related to environment, people and economy,

related risks and opportunities, and how our governance

processes are structured to handle impacts and risks. We

have started the process of reporting according to inter-

nationally renowned ESG standards, and this 2021 report

has been inspired by the GRI standards update (2021).

The report, including the materiality assessment has been

reviewed and veried by the Board of Directors.

As a publicly listed company with more than 500 employ-

ees, Mercell will be subject to the upcoming EU Taxonomy

Regulation and the Sustainable Finance Disclosure

Regulation (SFDR) as these become part of Norwegian

law, expectedly in 2022 (“Lov om bærekraftig nans”).

Developments in these regulations, as well as the ongoing

development in the EU of a proposal for a Corporate

Sustainability Reporting Directive (CSRD), are continuously

monitored, and Mercell will continue to prepare throughout

2022. In this ESG report we have started to incorporate

some expected requirements in these regulatory frame-

works, such as assessment of double materiality and

reporting of KPIs. Moreover, Mercell aims to extend its

future ESG reports to include its annual assessment of

risks related to fundamental human rights and decent

working conditions, in accordance with the Norwegian

Transparency Act, as this comes into effect in 2022.

Sustainability at Mercell

Mercell – Annual report 202125

Material sustainability topics

Mercell has conducted a reassessment and update of the

materiality analysis presented in the 2020 annual report.

The reassessment has been inspired by the GRI Material

Topics 2021 standard and builds on SASB material topic

framework for software and IT services within the technol-

ogy and communication sector.

Emphasis has been to represent the company’s actual

and potential, negative and positive impacts on people

and society, environment and economy, and describe

sustainability topics that pose material risks and oppor-

tunities related to Mercell business model and nancial

development.

The assessment has been informed by stakeholder

perspectives through interviews with Mercell employees,

review of sector developments and best practice from

peers. The materiality assessment has also been informed

by the 2021 ERM risk assessment.

There are no major changes to the material topics from

2020. Sustainable supply chain has been renamed

responsible supply chain, to underline the importance of

due diligence and respect of human rights. The impor-

tance of work environment has been added to employee

well-being to emphasize Mercell’s obligation to ensure

decent work-environment in line with international labor

obligations, for all our employees.

Material topic Material impacts, risks and opportunities

Governance

Work against

corruption

Potential of negatively impacting the economy related to risk of corruption and bribery incidents in our business

transactions.

Risk of sanctions and loss of reputation related to perceived or actual incidents of bribery and conict of interest.

Competitive

behavior

Risk of behavior that distort competition .

Risk of sanctions and loss of reputation related to perceived or actual incidents of exercise of inuence to distort

competition .

Responsible

supply chain

Suppliers or sub-suppliers could engage in practices that violate human rights or cause damage to the environment.

Opportunity to inuence suppliers to adopt responsible practice.

Reputation risk of being associated with non-responsible suppliers and risk of sanctions related to insufcient due

diligence practices.

People and society

Data security

and privacy as

a human right

Loss or misuse of personal information related in our systems could have a negative impact on human right to

privacy.

Risk of disqualications, nes and loss of trust in case of privacy non-compliance.

Diversity and

equal opportunities

Discrimination at work could have negative impact on people’s sense of belonging, dignity and opportunities.

Opportunity to attract and retain high-quality talent by fostering an inclusive work environment.

Reputation risk related to lack of diversity in management positions.

Employee

well-being and

work environment

Our respect of workers right and quality of work environment impact employee health, quality of life and sense of

engagement.

Opportunity to attract and retain high-quality talent by having a strong people-focus.

Climate and environment

Green energy

operations

Greenhouse gas emissions from energy use, travel and cloud storage, and waste from operations negatively impact

the environment and should be reduced.

Sustainability at Mercell

Mercell – Annual report 2021 26

Governance and sustainability

Responsible business conduct and

group policy commitments

All Mercell’s activities shall be compliant with legal

requirements and relevant international conventions

on responsible business conduct. Commitments to

responsible business conduct and ethical behavior are

reected in the Group Code of Conduct, which applies to

all employees and business associates across all entities.

These guidelines specify goals to minimize the impact of

activities on the environment, ensure safe and inclusive

work culture based on diversity and equal opportunity,

respect the fundamental human right to data privacy,

combat all forms of corruption and bribery and respect all

relevant laws, including competition laws. Ethical guide-

lines are communicated to all new employees and are

available online.

Risk management and role of the board

The Group Code of Conduct as well as the supplier code of

conduct have both been approved by the board of direc-

tors. The board is also responsible for monitoring group

exposure to all risks, including sustainability related risks,

and ensuring that internal control systems are proportion-

ate to, and reect the nature of risks.

All executives, country managers and leaders are respon-

sible for managing sustainability related risks within

their domain. The code of conduct and Mercell’s general

approach to risk management species that ethical con-

siderations and risk of non-compliance should be included

in all business assessments before entering into any new

market, product or business relationship. Leaders are

responsible for implementing appropriate policies, proce-

dures and systems to ensure that such requirements are

met. The CFO coordinates and reports on the assessment

of overall risk exposure, through the compliance function.

The most important risks, including sustainability related

risks, are assessed and reported to the board of directors

at least annually, as part of the company’s enterprise risk

management system.

Mercell is growing with the acquisition of new companies,

representing different approaches to sustainability and

different maturity levels. To ensure that sustainability is

understood and respected in a similar fashion across all

entities and functions, Mercell is constantly working to

build a unied approach to sustainability and compliance.

The company strives to be open about its successes, as

well as challenges on this journey

Responsible supply chain

Mercell is committed to reducing its negative impact on

the environment, people and society throughout its value

chain. During 2021 the company adopted a Supplier Code

of Conduct, rooted in UN global compact’s ten principles

for sustainable development. This requires all suppliers

and its sub-suppliers to adhere to applicable laws and

standards and our minimum standard of conduct, includ-

ing respect of labor rights and work environment, not

engaging in corruption, fraud or prohibited business con-

duct, and working to minimize the negative impact on the

environment. All suppliers are expected to take a system-

atic approach to responsible business conduct and ensure

that requirements are integrated into its operations.

Compliance with the requirements shall be part of supplier

assessments performed before entering into any contract

and the ethical code is communicated to all suppliers and

is part of the contractual obligation. 30 supplier audits

were conducted in 2021, with a particular focus on privacy

and information security. Dialogue with suppliers about

challenges faced when meeting the requirements is

encouraged, to enable corrective action and improvement.

Mercell respects the human rights of anyone associated

with our operations, as embedded in the Group Code of

Conduct and our commitment to the UN Global Compact.

An important way to respect human rights is to secure

decent working conditions in the company, and with

suppliers. Suppliers are required to apply a systematic

approach to ensure compliance with applicable labor

rights and standards. As a professional software provider,

the risks of modern slavery and human trafcking in

Mercell’s value chain are considered low. In line with the

upcoming Norwegian Transparency Act the company will

regularly assess, and report risks related to human rights

and decent work conditions in its value chain and continue

to address these in a systematic manner.

Anti-corruption and competition law

The Group Code of Conduct states our zero tolerance for

Sustainability at Mercell

Mercell – Annual report 202127

corruption, including bribery, facilitation payments and

trading in inuence. All leaders, employees, suppliers and

business associates are expected to adhere to these prin-

ciples. As a dominant rm, Mercell has a special respon-

sibility not to distort competition and shall play its part in

combating illegal practices, such as price-xing, market

sharing, output limitation or bid rigging, abuse of market

power and any anti-competitive or monopoly practices, as

stated in our ethical codes.

The current risk of corruption is considered to be relatively

low, and no incidents or concerns related to corruption

was reported in 2021. Risk of corruption could increase

with the expansion into geographical areas and acquisi-

tion of companies with different perceptions and cultures

regarding appropriate business conduct. Compliance with

laws and regulation is assessed as part of due diligence

and all new entities are made familiar with the Group

policy on corruption.

Sustainability considerations in board

composition and executive remuneration

Our Corporate Governance Code stipulates that the board

shall comprise sufcient diversity and competence to

meet Mercell strategy and create long term value. This

implies sufcient understanding and knowledge of ESG

impacts and risks. ESG results are not a distinct part of

the remuneration structure for executive management but

are implied in the principle that performance-related remu-

neration should be linked to strategy and long-term value

creation. For more information about our processes and

structures related to board and executive remuneration we

refer to the section on corporate governance.

Whistleblowing

Mercell aspires to foster a culture where people feel

condent about speaking up. Any employee in need of

advice on any matter relating to our Code of Conduct, or

wishing to report a concern, is encouraged to speak to

their line manager, the Group Compliance Director or any

member of the Mercell Group Management team. There

is an anonymous whistle blowing portal in place, mercell.

integrityline.com, which can be accessed through the

website. No reports of critical concern were registered

in 2021. Information about the integrity line is regularly

communicated to make sure that all employees and other

stakeholders are aware of the right and obligation to

report concerns.

Stakeholder dialogue

Mercell’s ability to create sustainable long-term value

depends on its ability to listen to and respect the views of

stakeholders over time. Dialogue with stakeholders is a

part of ongoing business operations, and the company is

striving to become more open and utilize various plat-

forms to interact and respond to the opinions and perspec-

tives of our clients, shareholders, employees, business

partners, authorities and society in general. Stakeholder

perspectives have been included in the assessment of

material sustainability topics.

Key activities going forward

· Clarify key strategic opportunities and risks related to sustainable development, including exposure to

climate risks and our contribution to UN sustainability goals.

· Further develop and strengthen the group compliance function, including reviewing existing group policies

and procedures to ensure that sustainability assessments and requirements are adequately integrated into

key operational and decision-making processes in a universal manner across all entities and functions

· Continuously strengthen training programs related to privacy, information security, ethical business conduct,

anti-corruption and competitive behavior

· Collect data on KPIs in line with GRI standard and ensure that all entities report regularly on key KPIs and

risks. Targets will be considered for key KPIs.

Sustainability at Mercell

Mercell – Annual report 2021 28

People and society

Employee wellbeing and work environment

Mercell should be an attractive place to work, and the

company is committed to creating and maintaining a good

and inclusive working environment that respects labor

rights and personal wellbeing. 692 people work at Mercell,

in 17 different countries. All employees must treat each

other with respect and understanding and deliver feedback

and challenge in an appropriate and respectful manner.

The company does not accept any form of harassment or

discrimination, and all entities and suppliers are required

to have a systematic approach to the management of

Health, Safety, Security and Environment (HSSE), in line

with our code of conduct. The turnover rate in 2021 was

15.14 per cent (excl. contractors).

Employees per country

Employment Satisfaction

Mercell Benchmark (tech industry)

Mercell conducted an employment satisfaction survey

in November 2021, with a response rate of 78 per cent.

The report shows that overall satisfaction is good and the

company scores slightly higher than industry average on

most areas. 84 per cent report that they enjoy their job

and 90 per cent are willing to make an extra effort for the

company. 93 per cent of Mercell’s leaders report to be

motivated at their work, and 65 per cent of the leaders are

perceived to be good or excellent. 84 per cent report clarity

in how team contributes to overall goals. Mercell exceeds

industry benchmark when it comes to involvement in

decisions (84 per cent) and regular follow-up (81 per cent).

The survey highlighted that Mercell needs to improve its

internal communication as well as recovery time after

periods with heavy workload. Mercell will follow up on

the identied areas of improvement and take actions to

further improve work environment and wellbeing.

100

120

140

UAE

Vietnam

Germany

Ukraine

Romania

Latvia

Spain

Estonia

Bulgaria

Lithuania

Netherlands

Finland

Norway

Sweden

Denmark

Organisational and

social work environment

Engagement

Sustainability at Mercell

Mercell – Annual report 202129

The Covid-19 pandemic has impacted how Mercell’s

employees work. Home ofces have, in certain periods,

been used to a large extent and Mercell has strived to

facilitate good and healthy home ofce solutions. The

company has regularly informed employees about rec-

ommendations regarding covid-19 and initiated activities

focused on health for employees (mini competitions

counting steps). Sick leave has naturally risen during the

pandemic, but it looks like the situation is getting back to

normal.

Diversity and equal opportunities

Being open and inclusive is key to attracting and

retaining the best people across different perspectives,

backgrounds, genders and nationalities. The company’s

commitment to an inclusive work culture, based on diver-

sity, equal employment opportunity and fair treatment of

all employees is underlined in the Group Code of Conduct.

The company does not accept any form of harassment or

discrimination based on race, color, religion, gender, sexual

orientation, national origin, age, or disability in our own

operations or with our suppliers. Guidelines emphasize the

importance of cultural sensitivity, and the importance of

considering that what is acceptable in one culture may not

be in another.

Number of employees and share of women 2019-2021

Women Men

Mercell works to reect diversity in society and among

its customers, and maintain a balance in age, gender and

cultural background among its employees. The technology

industry is known to have a male overrepresentation

and Mercell is satised to have a relatively good gender

balance, with a stable share of 40 per cent women in the

workforce (41 per cent in 2021 compared to 42 per cent

in 2020). The representation of women in management

positions is also good. 37 per cent of managers are

199

456

692

202120202019

45%

42%

41%

84%

Enjoy their job at Mercell

37%

Women in management

positions

2 out of 5

Women in Board of Directors

1 out of 6

Women in Executive

Management

Sustainability at Mercell

Mercell – Annual report 2021 30

women and 2 women were recruited to the Board of

Directors in 2021. Only 1 out of 6 executive leaders are

women. Mercell will continue to foster an environment and

development trajectory where women are included at all

levels of management.

There were no ofcial cases of discrimination reported

in 2021. Activities to assess the risk of discrimination in

our company has been started and a plan to strengthen

equality and inclusivity is under development. This work

includes analysis of pay conditions by reference to gender,

which has been conducted in several of our teams. The

results of our overall annual assessment of discrimination

and data on equality of pay will be reported regularly, in

line with legal requirements.

Mercell strives to have diversity in the workforce also

when it comes to age and nationalities and to foster a

culture of diversity, inclusion and learning. The company’s

workforce is spread across the age spectrum, with most

of the staff (66 per cent) between the age of 27 and 45.

International operations and growth into new geographical

areas gives Mercell the benet of an increasingly diverse

workforce. The employees spanned 28 different nationali-

ties in 2021 (compared to 20 in 2020).

Data Security and privacy as a human right

Mercell recognizes the fundamental right to data privacy

for all individuals and is committed to managing personal

data about its staff, customers, suppliers and business

partners in a professional, lawful and ethical way. Mercell

may only process personal data for legitimate purposes

and the data must be accurate and relevant for the

purpose for which it was collected, as well as properly

protected from inappropriate access or misuse. When it is

to be transferred to third parties, it must be appropriately

safeguarded. Non-compliance may cause harm to individ-

uals, nes or litigation, and put Mercell’s reputation at risk.

In 2021, Mercell conducted a GDPR transformation

program with help from independent experts to ensure

the highest level of data privacy in its operations across

all entities. In this work, Mercell has mapped all activities

which include processing of personal data and looked

at which internal systems that handle personal data in

accordance with article 30 in GDPR. Mercell has procured

a new compliance IT-system to ensure a robust and

systematic approach to compliance, also when it comes

to data security and privacy. The system will be updated to

include policies and processes from the GDPR transforma-

tion program.

Mercell has also created and updated many of its docu-

ments to fully comply with GDPR, including internal control

processes and documented compliance with GDPR, group

to include GDPR. Privacy statements have been updated

and the use of suppliers has been identied and reviewed.

Mercell has also developed a policy for handling devia-

tions and implemented a compliance system to ensure

overall control and compliance and to efciently handle

any incidents and made a template for conducting Data

Protection Impact Assessments (DPIA). The transforma-

tion program is still running, and some nal implementa-

tion will be done at the end of the program.

The Group CEO is responsible for the group information

security and privacy policies, and the Group CPTO

is responsible for implementation and overseeing

adherence. Mercell supplier code of conduct requires

Employees per age group (%)

Over 6556 – 6446 – 5536 – 4527 – 3518 – 26

Number of nationalities in work force

202120202019

Sustainability at Mercell

Mercell – Annual report 202131

its suppliers to demonstrate a high level of information

security. Mercell’s main businesses and platforms are

certied under the International Standard for Information

Security (ISO 27001).

All information security threats, and privacy incidents

have been assessed and handled continuously throughout

2021. In 2021, Mercell registered three privacy breaches

with data privacy authorizes, and was in dialogue with the

authorities regarding two other cases. One of the reported

incidents has been closed, and Mercell does not expect

any reactions from the Data Inspectorate related to the

other cases.

Key activities going forward

· Update compliance IT-system with updated

privacy policies

· Conduct groupwide training in the new privacy

policies

· Continue work to strengthen diversity

Sustainability at Mercell

Mercell – Annual report 2021 32

Climate and Environment

Green energy operations

Mercell supports the transition to a low-carbon and resource efcient economy to combat climate change and ensure

long-term competitiveness. The company has started the process of measuring the carbon footprint of its operations but

is still at an early stage. According to the GHG protocol, Mercell mainly has indirect emissions from electricity consump-

tion in ofce buildings and district heating and cooling (scope 2) as well as indirect emissions from business travels,

data storage and cloud services (scope 3).

Mercell’s main impact areas

Business

travel

Cloud

storage

Ofce

buildings

The next step for Mercell is to develop structures for

collecting data on energy consumption and business

travels across all entities. The table below shows the KPIs

we are working on and include numbers on emissions and

waste from our headquarters in Norway Mercell is aiming

to provide consolidated numbers on carbon emissions and

waste for the entire Group from next year.

Mercell has already taken steps to increase its energy

efciency. In 2020 Mercell moved headquarters in Norway

to premises with BREEAM certicate class Excellent. This

building also has energy classication A, which ensures

low energy consumption. ESG emission criteria were

also taken into consideration when choosing new ofces

in Denmark. For collaborating across entities Mercell

primarily uses electronic meetings. Some entities, such as

Sweden, have developed travel policies where environmen-

tal impact is taken into consideration.

As a technology company offering software-as-a-service,

Mercell has an environmental impact related to cloud

computing and data storage, as data centers require much

energy. Based on best practices for green technology,

Mercell will start to incorporate environmental concerns

into its cloud strategy.

KPIs - Environmental impact

Emissions

Electricity

(Norway HQ) 126 483 KWh 1.0 ton CO2

Heating (Norway HQ) 66 587 KWh 0.7 ton CO2

Travel (Norway HQ) 40 087 km 4.7 ton CO2

Total CO2 emissions (Norway HQ) 6.4 ton CO2

CO2 emissions per employee

(Norway HQ) 0.05 ton CO2

Total CO2 emissions (Mercell Group) In progress

CO2 emissions per employee

(Mercell Group) In progress

Waste

Total waste (Norway HQ) 2717 kg

Location based method

Key activities going forward

· Collect data on energy consumption and

business travels across all entities

· Establish a group travel policy to reduce the

company’s carbon footprint

· Develop a green server/cloud strategy

Sustainability at Mercell

Mercell – Annual report 202133

Corporate Governance report

1. Corporate Governance in

Mercell Holding ASA

The Company has, with effect from the listing on the Oslo

Stock Exchange, adopted and implemented a corporate

governance regime, with processes, procedures and tools

which follow the Public Companies Act, the Accounting

Act, the Auditors Act, the Securities Trading Act, the EU

Regulation No 596/2014 on Market Abuse (“MAR”), the

Issuer Rules for Oslo Børs as well as the Norwegian

Code of Practice for Corporate Governance, last updated

14 October 2021 (the “Corporate Governance Code”).

Neither the Board of Directors nor the General Meeting

have adopted any resolutions which are deemed to have a

material adverse effect on the Group’s corporate govern-

ance regime.

Mercell has established principles and procedures for

sound Corporate Governance, including risk management

and internal controls, rules of procedure for the Board

of Directors and management, and equal treatment of

shareholders. The Company’s “Corporate Governance

Policy”, the “Mercell - Code of Conduct” as well as the

“Mercell - Supplier Code of Conduct” have been approved

and adopted by the Board of Directors. The Company

is reporting in accordance with the Norwegian Code of

Practice for Corporate Governance.

2. Business

The Company’s business falls within the scope of busi-

ness as dened in its Articles of Association.

Mercell is a platform provider for public eTendering and

procurement in Europe, offering services to both the buyer

and the supplier side in a tendering and procurement

process. Buyers use Mercell to simplify the tendering

and procurement process, including for interaction with

suppliers. Suppliers in all industries use the Mercell tender

notication system to receive notication of relevant pub-

lic tenders and other relevant information about business

opportunities within the public sector.

The Company’s main products within the pre-award phase

of the procurement process are the tender notication

solution, bid delivery tool and the tender manager tool

(pre-award/source-to-contract). The Group has also

entered the post-award/purchase-to-pay market through

its acquisitions of Aksess Innkjøp, Truelink, Comcare,

Tricom in 2020 and Ibistic in 2021. Following these acqui-

sitions, Mercell now covers the full customer journey from

source to pay. The Group’s software offers a wide array of

functionality with a clear value proposition for its custom-

ers, both on the supplier side and on the buyer side.

As of 31 December 2021, the Group had 692 employees,

which included 81 contractors.

In accordance with the Norwegian Code of Practice for

Corporate Governance, Mercell is required to have clear

goals, strategies and risk prole for the business, so that

the company creates value for shareholders in a sustain-

able way, taking into consideration nancial, social and

environmental factors.

Mercell works proactively to ensure sustainability, integrity

and responsibility in its operations. In order to maintain

our nancial strength and achieve our ambitions as a plat-

form provider for public eTendering and procurement in

Europe, it is crucial that we understand and manage risks

related to environmental, social and governance areas.

Our internal governance structures enhance and ensure

that our operations manage related risks in an adequate

manner and in accordance with the short- and long- term

objectives and strategies as set out for our operations by

our Board of Directors and shareholders.

It is an objective of our Board of Directors to keep

oversight over sustainability in our operations, which

encompass strategy, operational model, reporting and

frameworks. Moreover, the Board of Directors keeps

oversight over management of risks, related frameworks,

controls and processes including environmental, social

and governance factors as drivers of existing risks. The

Board of Directors evaluates the Company’s objectives,

strategies and risk proles relating to nancial, social and

environmental objectives on an annual basis.

Sustainability considerations are integrated in internal

processes and business operations and tailored to diverse

local contexts and stakeholder expectations. The com-

pany is a signatory to the United Nations Global Compact

and is committed to its 10 principles, and draw on the

Mercell – Annual report 2021 34

Corporate Governance report

goals set out in the Paris Agreement to focus on relevant

factors that impact us or that we can have a signicant

impact on – by reducing the negative impact or increasing

the positive impact of our business activities as well as

our internal operations.

Mercell plays an important role in society through its

efforts to bring together vendors and project owners. Our

opportunity to create long-term value in a sustainable way

depends on the ability to listen to and respect the views

of our stakeholders over time, as through such dialogue

we are able to identify what society expects of us and how

we best can contribute to the better of society. Both the

nature and concept of Mercell’s business model provide

for signicant unrealized potential for our customers,

as well as their stakeholders respectively, to embed

and enhance sustainable choices and societal goals in

their tendering and procurement projects through strong

governance and clear, transparent incentives. Our digitized

processes and solutions also offer our own operations,

our customers as well as other stakeholders of our

products and services the prospect of a reduced impact of

inefciency in internal operations.

3. Equity and dividends

Equity and capital structure

The primary objective of the Group’s capital management

is to maximize value creation over time. The Group seeks

to optimize the capital structure by balancing risk and

return on equity against collateral for lenders, require-

ments for liquidity and investment capacity.

On 31 December 2021, the Company’s consolidated equity

was NOK 2126 million, which is equivalent to 47 per cent

of total assets. The Board of Directors considered the cap-

ital structure at year-end to be satisfactory in relation to

the Company’s existing business, but non-satisfactory to

fund new acquisitions in accordance with the Company’s

inorganic growth strategy to consolidate the European

market through acquisitions.

The Company has stated an intent to refrain from making

any major acquisitions in 2022. As such, the Company’s

capital structure is viewed as satisfactory for the existing

business.

Registered share capital increases in 2021:

· 9 November 2021: 540612 new shares were issued

in the Employment Share Ownership Program at a

subscription price of NOK 5.387432221, with a related

share capital increase of NOK 108122.40.

· 7 June 2021: Completion of a private placement raising

gross proceeds of NOK 400 million, increasing the share

capital of the Company with NOK 9248555 by issuance

of 46242775 new shares at a subscription price of NOK

8.65 per share

· 11 May 2021: In order to facilitate an exercise of

387345 options pursuant to the Company’s share

option program, the Company’s share capital was

increased with NOK 77469 by the issuance of 387345

new shares at a subscription price of NOK 1.50.

· 20 April 2021: In order to facilitate an exercise of

530570 options pursuant to the Company’s share

option program, the Company’s share capital was

increased with NOK 106114 by the issuance of 530570

new shares at a subscription price of NOK 1.50

· 11 February 2021: Completion of a private placement

raising gross proceeds of NOK 434 million increasing

the share capital of the Company with NOK 8272046

by issuance of 41360230 new shares at a price of NOK

10.5 per share.

In addition, the Company completed an issuance of SEK

500 million in additional bonds on 2 June 2021, under the

existing SEK 1100 million 5-year senior secured bond

issue. The new outstanding amount of the bond issue was

SEK 1600 million.

Dividend policy

The Company has not stated an explicit dividend policy.

The Company’s projections for operating cash ow

and capital requirements for investments show that

the organic growth plans for the existing business are

fully funded, and that the company will generate a solid

cash ow to equity from 2022 onwards. This will in turn

strengthen the nancial position for the company. Mercell

has not paid any dividends during the nancial years

ended 31 December 2020, 2019, or 2018.

Board authorizations

At the Annual General Meeting held on 22 April 2021 the

General Meeting resolved to grant the Board of Directors (i)

an authorization to increase the Company’s share capital

by up to NOK 18200000 in order to ensure exibility for

the Company going forward, related to nancing of further

growth, issuances of shares as consideration in connection

Mercell – Annual report 202135

with acquisitions of other companies, businesses or assets,

or in order to nance such acquisitions, or in general to

strengthen the Company’s equity and (ii) an authorization to

increase the Company’s share capital by up NOK 2730000

to be used to facilitate the completion and settlement of the

Company’s option and investment programs. The authoriza-

tions are valid until the Company’s annual General Meeting

in 2022, but no longer than to and including 30 June 2022.

NOK 11470386.4 of the authorizations remains after

deducting cumulative share capital increases since the

Annual General Meeting on 22 April 2021.

4. Equal treatment of shareholders and

transactions with related parties

Pre-emption rights to subscribe

According to the Norwegian Public Limited Liability

Companies Act, the Company’s shareholders have

pre-emption rights in share offerings settled in cash

contribution. Such pre-emption rights may, however, be

set aside, either by the General Meeting or by the Board

of Directors if the General Meeting has granted a board

authorization which allows for this. Any resolution to set

aside pre-emption rights shall be justied by the common

interests of the Company and the shareholders, and

such justication will be publicly disclosed through a

stock exchange notice from the Company. The Board of

Directors set aside the shareholders’ pre-emptive rights

in all share capital increases completed in 2021. For the

private placements completed in 2021 not relating to

exercise of employee options nor the Employment Share

Ownership Program, the justications for such deviations

were included in the relevant stock exchange notices

announcing the private placements. For the share capital

increase related to the exercise of employee options and

the Employment Share Ownership Program, the deviation

from the shareholders pre-emptive rights was required in

order for the Company to honor such obligations.

Trading in own shares

The board of directors does not hold any authorization to

acquire own (treasury) shares and the Company has as

such not acquired any own shares in 2021.

5. Freely negotiable shares

The Company has one class of shares in issue, and in

accordance with the Norwegian Public Limited Companies

Act, all shares in that class provide equal rights in the

Company. Each of the Shares carries one vote.

6. General meetings

The General Meeting is the highest authority of the

Company. All shareholders in the Company are entitled to

attend and vote at General Meetings of the Company and

to table draft resolutions for items to be included on the

agenda for a General Meeting.

The Annual General Meeting shall deal with and decide on

the approval of the annual accounts and the annual report,

including distribution of dividend, as well as any other

matters that are to be dealt with by the General Meeting

pursuant to applicable law.

The Board of Directors will make its best efforts with

respect to the timing and facilitation of general meetings

to ensure that as many shareholders as possible may

exercise their rights by participating in general meetings,

thereby making the general meeting an effective forum

for the views of shareholders and the Board of Directors.

Extraordinary general meetings (EGM) can be called by the

Board of Directors if deemed necessary or be requested

by the company’s auditor or shareholders representing at

least 5 per cent of the company’s share capital.

Notice

In accordance with Norwegian law, the annual general

meeting of shareholders is required to be held each

year on or prior to 30 June. For Norwegian public limited

liability companies listed on a regulated market, the

Norwegian Public Limited Liability Companies Act requires

that written notice of general meetings, which sets forth

the date and time of, the venue for and the agenda of the

general meeting, is sent to all shareholders with a known

address no later than 21 days before the date of the gen-

eral meeting, unless the articles of association stipulate a

longer deadline. The latter is currently not the case for the

Company.

The Annual General Meeting was held electronically on

22 April 2021 as a consequence of the covid-19 outbreak

and the related governmental restrictions. The Company

was at the time a private limited liability company, and the

notice was thus sent with one week notice.

Participation and execution

All shareholders who are registered as such on the

date of the general meeting have the right to attend and

exercise their voting rights at that meeting. The Articles

of Association stipulate that the Board of Directors may

resolve that shareholders who want to participate at the

general meeting have to notify the Company about this by

Corporate Governance report

Mercell – Annual report 2021 36

a deadline which shall not be less than three days prior to

the general meeting.

The shareholders may cast their votes in writing, including

through electronic communication, in a period prior to the

general meeting. The board of directors may establish

specic guidelines for such advance voting. It must be

stated in the notice of the general meeting which guide-

lines have been set. A shareholder may vote at the general

meeting either in person or by proxy appointed at its own

discretion.

The notice to the Annual General Meeting in 2021 included

sufcient details regarding the proposed resolutions

enabling shareholders to form a view on all matters con-

sidered at the general meeting. Furthermore, shareholders

could vote on each individual matter on the agenda,

including on each individual candidate nominated for

election. Shareholders who were prevented from attending

the meeting were given the opportunity to vote through

proxies or by advance voting.

The chairperson of the Board of Directors was appointed

as the chairman of the Annual General Meeting in 2021,

which is a deviation from the Corporate Governance

Code. However, at the time of the Annual General Meeting

in 2021, the Company was not listed on the Oslo Stock

Exchange and was not a public limited liability company.

The Board of Directors will propose that the Annual

General Meeting in 2022 is chaired by an independent

person.

7. Nomination committee

According to the Articles of Association, the Company

shall have a nomination committee consisting of between

two and three members as resolved by the general

meeting, and the majority of committee members shall be

independent of the Board of Directors and the Company’s

management. The members of the nomination commit-

tee are appointed for a two-year term. Eivind Bergsmyr

(chair) and Inge Støve were elected as members of the

Nomination Committee by the Annual General Meeting

in 2021 for a term of two years, until the Annual General

Meeting in 2023.

The nomination committee is responsible for nominating

candidates for the election of shareholder-elected Board

Members and the chairman of the Board of Directors,

nominating members to the nomination committee and

making recommendations for remuneration to these

members. The Annual General Meeting in 2021 approved

guidelines for the Nomination Committee.

8. Board of Directors: Composition

and Independence

Pursuant to the Company’s Articles of Association, the

shareholder elected members of the Company’s Board of

Directors shall consist of between four to seven members.

The members of the Board of Directors are elected for a

period of two years unless otherwise determined by the

general meeting.

On 31 December 2021, the Board of Directors consisted of

three men and two women. The following persons com-

prise the Company’s Board of Directors, whereby the three

rst board members were elected by the Annual General

Meeting in 2020, while Anne Lise Waal and Berit Lid Scharff

were elected by the Annual General Meeting in 2021:

· Joar Welde (chairperson).

Served since 2018, term expires in 2022;

· Erik Fjellvær Hagen (board member).

Served since 2018, term expires 2022;

· Helge Nielsen (board member).

Served since 2013, term expires 2022;

· Anne Lise Waal (board member).

Served since 2021, term expires 2023; and

· Berit Lid Scharff (board member).

Served since 2021, term expires 2023.

All members of the Board of Directors are considered

independent of the company’s executive management and

material business contacts. The company’s annual report

and website provides information showing the expertise

of the members of the Board of Directors. The Board of

Directors considers its composition to be diverse and

represent required competencies including nancial and

industrial experience. Board members are encouraged to

own shares in the company.

9. The work of the Board of Directors

The rules of procedure for the Board of Directors

The board of directors is responsible for the overall

management of the company and shall supervise the

Corporate Governance report

Mercell – Annual report 202137

company’s day-to-day management and the Company’s

activities in general. The Norwegian Public Limited Liability

Companies Act regulates the duties and procedures of the

Board of Directors.

In 2021, the board held six ordinary meetings and 26

extraordinary meetings.

The board of directors has adopted rules of procedure for

the board of directors and the duties and obligations of

the CEO towards the board of directors.

The Board of Directors evaluates its performance and

expertise annually.

The audit committee

The primary purpose of the audit committee is to act as

a preparatory and advisory committee for the Board of

Directors in monitoring the Group’s internal control of the

risk management and nancial reporting. This includes but

is not limited to:

· All critical accounting policies and practices;

· Quality, integrity and control of the Group’s nancial

statements and reports;

· Compliance with legal and regulatory requirements;

· Qualications and independence of the external

auditors; and

· Performance of the internal audit function and external

auditors.

The audit committee reports and makes recommenda-

tions to the board of directors, but the board of directors

retains responsibility for implementing such recommen-

dations. The audit committee shall comprise two or three

Board Members who are appointed for a two-year term.

The appointed members of the audit committee in the

company are Joar Welde (chair), Helge Nielsen and Berit Lid

Scharff. The composition of the Company’s audit commit-

tee is fully compliant with the requirements for qualica-

tions and competence in accounting and auditing set out

in the Norwegian Public Limited Companies Act and is also

compliant with the Corporate Governance Code.

The remuneration committee

The primary purpose of the remuneration committee is

to assist the Board of Directors in matters relating to the

remuneration of the Management, as well as reviewing

recruitment policies, career planning and management

development plans, and prepare matters relating to other

material employment issues in respect of the manage-

ment. The remuneration committee shall report and make

recommendations to the board of directors, but the board

of directors retains responsibility for implementing such

recommendations.

The Board of Directors has established a remuneration

committee comprising Joar Welde (chair), Erik Fjellvær

Hagen and Anne Lise Waal.

10. Risk management and internal control

The Group is exposed to a range of risks affecting its

nancial performance, including market risk, credit risk

and liquidity risk. The Group seeks to minimize potential

adverse effects of such risks through sound business

practice and risk management.

11. Remuneration of the Board of Directors

At the Annual General Meeting held on 22 April 2021, the

following remuneration was approved to the members of the

Board of Directors for the period from the Annual General

Meeting in 2021 to the annual General Meeting in 2022.

· The chairman of the Board of Directors shall receive

NOK 600000 for the period. All other Board Members

shall receive NOK 300000 for the period.

· The Company may compensate the Board Members

for any extraordinary tasks performed for the Company

beyond their directorship.

· For Board Members not having served through the entire

periods, the remuneration shall be adjusted pro rata

based on the relevant Board Member’s term of service.

The remuneration of the Board of Directors is not linked

to the Company’s performance and the Company has not

granted share options to the members of the Board of

Directors.

In the nancial year 2021, no members of the Board

of Directors and/or companies with which they are

associated carried out any specic assignments for the

Company in addition to their appointment as a member of

the Board of Directors.

Corporate Governance report

Mercell – Annual report 2021 38

The Company has directors’ and general manager liability

insurance which covers the cost of compensation claims

made against the Company’s directors and general

manager for alleged wrongful acts.

12. Remuneration of executive management

Remuneration to the members of management during

the nancial year 2021 comprised salary, bonus, pension,

share based options and other compensation, collectively

amounting to their total remuneration. The total remunera-

tion for the executive management for the scal year 2021

can be found in note 2.3 in the Company’s Annual Report

for the nancial year 2021. The Annual General Meeting

held on 22 April 2021 approved guidelines for determi-

nation of salary and other remuneration to executive

personnel in Mercell, which is available at the Company’s

websites.

13. Information and communications

Mercell’s spokespersons for investor communication are

the CEO and the CFO. Mercell’s communication with the

capital markets shall be based on transparency and fulll

the requirement of treating all market participants equally

when it comes to access to information. To ensure acces-

sibility, transparency, compliance, and outreach to and for

all stakeholders, a well-functioning and compliant Investor

Relation website (IR web) is a high priority in Mercell.

Relevant information regarding the pricing of the Mercell’s

securities shall be published on the company’s website, as

well as through the ofcial distribution channels of Oslo

Børs. Mercell integrates stock exchange releases, press

releases, reports and presentations and general meeting

documents with its IR web and will offer a subscription

alternative for Mercell’s investors through the home page

for such documents.

Mercell shall strive to integrate digital solutions to

increase the quality and efciency of the IR activities.

Social media is used selectively to support overall IR

strategy and to deliver capital market story to relevant

stakeholders.

The Board of Directors has established guidelines for

the Company’s reporting of nancial and other infor-

mation based on openness and taking into account the

requirement for equal treatment of all participants in the

securities market. Further, the Board of Directors has

established guidelines for the Company’s contact with

shareholders other than through general meetings.

14. Take-overs

To the extent known to the Company, there are no persons

or entities that, directly or indirectly exercise or could

exercise control over the Company. The Company is not

aware of any arrangements the operation of which may

at a subsequent date result in a change of control of the

Company.

The Articles of Association do not contain any provisions

that would have the effect of delaying, deferring or pre-

venting a change of control of the Company. The Shares

have not been subject to any public takeover bids during

the current or last nancial year.

The Board of Directors has prepared a set of main

principles for how it will act in the event of a take-over bid

in the Company’s Corporate Governance Policy which is

available at Mercell’s website.

15. Auditor

The company’s auditor, BDO AS, was appointed by the

annual general meeting and is regarded as independent

in relation to Mercell Holding ASA. The Board of Directors

receives an annual conrmation from the auditor that the

requirements regarding independence and objectivity have

been satised.

The Board of Directors requires the auditor to prepare an

annual plan for the implementation of the audit, which

is made known to the audit committee and the Board

of Directors. The Board of Directors further requires an

annual meeting with the auditor, in conjunction with the

approval of the annual report. This meeting includes an

opportunity for a review with the auditor, without the pres-

ence of the company’s day-to-day management. The Board

of Directors has separate guidelines for using the auditor

for services other than auditing. As a guiding principle,

the company’s auditor cannot be contracted if the service

rendered can be considered to compromise the auditor’s

independence in the eyes of an outside party. The Board

of Directors discloses the amount of remuneration to be

paid to the auditor, distributed between auditing and other

services, to the annual general meeting, which makes the

nal decision to approve the auditor’s remuneration. The

auditor shall attend the annualgeneral meeting.

Corporate Governance report

Mercell – Annual report 202139

Consolidated nancial statements

Consolidated nancial

statements

Consolidated statement of comprehensive income 40

Consolidated statement of nancial position 41

Consolidated statement of changes in equity 42

Consolidated statement of cash ows 43

Notes to the consolidated nancial statements 44

Section 1 General information, signicant

accounting policies, judgements,

estimates and assumptions 44

Note 1.1 Corporate information 44

Note 1.2 Basis for preparation 44

Note 1.3 General accounting policies 45

Note 1.4 Signicant accounting judgements,

estimates and assumptions 47

Section 2 Operating performance 48

Note 2.1 Operating Segments 48

Note 2.2 Revenue from contracts with customers 50

Note 2.3 Salary and personnel expenses 53

Note 2.4 Other operating expenses 56

Note 2.5 Trade and other receivables 57

Note 2.6 Trade and other current nancial liabilities 58

Note 2.7 Contract assets and liabilities 59

Section 3 Fixed assets 60

Note 3.1 Intangible assets 60

Note 3.2 Goodwill 63

Note 3.3 Property, plant and equipment 64

Note 3.4 Leases 65

Note 3.5 Impairment assessments 68

Section 4 Financial instruments and Capital

structure 71

Note 4.1 Overview of nancial instruments 71

Note 4.2 Interest-bearing liabilities 73

Note 4.3 Ageing of nancial liabilities 74

Note 4.4 Cash and cash equivalents 76

Note 4.5 Financial income and expenses 76

Note 4.6 Share capital and shareholders information

Note 4.7 Fair value disclosures 80

Note 4.8 Capital and Risk Management 81

Section 5 Tax 84

Note 5.1 Tax expense 84

Section 6 Group and related parties 87

Note 6.1 Group companies 87

Note 6.2 Business combination 88

Note 6.3 Share based payment 96

Section 7 Other information 99

Note 7.1 Earnings per share 99

Note 7.2 Subsequent events 100

Mercell – Annual report 2021 40

Consolidated nancial statements

Consolidated statement of comprehensive income

Mercell Holding ASA

1 January - 31 December

All amounts in NOK 1 000 Note 2021 2020

Revenues 2.2 706 296 311 906

Total operating revenue 706 296 311 906

Cost of goods sold 24 146 5 565

Salary and personnel expenses 2.3 304 393 187 015

Other operating expenses 2.4 242 374 94 300

M&A costs 6.2 30 379 48 751

Total operating expenses before depreciation and amortization 601 291 335 629

EBITDA 105 005 -23 723

Depreciation and amortization

3.1, 3.3, 3.4

173 864

52 012

Impairment losses 3.3 14 814 -

Operating prot or loss -83 672 -75 735

Financial income 4.5 64 991 30 665

Financial expense 4.5 97 788 109 205

Net nancial items -32 797 -78 539

Prot/loss before tax -116 469 -154 275

Tax expense 5.1 -3 234 -8 025

Prot/ loss for the period -113 235 -146 250

Other comprehensive income

Items which may subsequently be reclassied to prot or loss:

Translation differences in subsidiaries -185 538 8 476

Other comprehensive income or loss for the period -185 538 8 476

Total comprehensive income or loss for the period -298 772 -137 774

Net loss for the year attributable to:

Equity holders of the parent company -113 235 -146 250

Non-controlling interest - -

Total comprehensive income attributable to:

Equity holders of the parent company -298 772 -137 774

Non-controlling interest - -

Earnings per share

Basic earnings per share (NOK) 7.1 -0.237 -0.552

Diluted earnings per share (NOK) 7.1 -0.237 -0.552

Mercell – Annual report 202141

Consolidated nancial statements

Consolidated statement of nancial position

Mercell Holding ASA

All amounts in NOK 1 000 Note 31 Dec 2021 31 Dec 2020

Deferred tax assets 5.1 30 018 26 703

Goodwill 3.2, 3.5 3 045 761 2 114 806

Intangible assets 3.1, 3.5 1 033 642 811 442

Right-of-use assets 3.4, 3.5 62 551 58 329

Property, plant & equipment 3.3, 3.5 12 557 6 361

Other non-current assets 2.2 23 613 14 549

Other non-current receivables 2.3 5 388 5 600

Total non-current assets 4 213 531 3 037 789

Trade and other receivables 2.5 180 940 118 049

Contract assets 2.7 1 900 122

Cash and cash equivalents 4.4 96 691 327 984

Total current assets 279 531 446 155

Total assets 4 493 062 3 483 944

Share capital 100 533 82 720

Share premium 2 579 756 1 791 125

Other equity -554 494 -255 916

Total equity 4.6 2 125 795 1 617 930

Non-current interest-bearing liabilities 4.2 1 578 206 1 144 186

Deferred tax liabilities 5.1 174 250 151 462

Other non-current liabilities 6.3 5 474 4 526

Other non-current nancial liabilities 4.1 594 1 262

Total non-current liabilities 1 758 525 1 301 436

Current interest-bearing liabilities 4.2 23 187 15 713

Trade and other payables 2.6 100 188 88 705

Contract liabilities 2.7 360 685 235 682

Other current nancial liabilities 2.6 124 682 224 478

Total current liabilities 608 742 564 578

Total liabilities 2 367 267 1 866 014

Total equity and liabilities 4 493 062 3 483 944

The Board of Directors of Mercell Holding ASA

Oslo, 24 March 2022

Sign.

Joar Welde

Chair of the Board

Helge Nielsen

Board Member

Anne Lise Waal

Board Member

Berit Lid Scharff

Board Member

Erik Fjellvær Hagen

Board Member

Terje Wibe

CEO

Mercell – Annual report 2021 42

Consolidated nancial statements

Consolidated statement of changes in equity

Mercell Holding ASA

Paid-in equity Other equity

All amounts in NOK 1 000 Note

capital

premium

Cumulative

translation

differences

Retained

earnings Total equity

Equity as at 1 January 2021 82 720 1 791 125 17 126 -273 041 1 617 930

Net loss for the period - - - -113 235 -113 235

Other comprehensive income - - -185 538 - -185 538

Total comprehensive income - - -185 538 -113 235 -298 772

Issuance of share capital 4.6 17 812 820 759 - - 838 572

Transaction costs - -32 129 - - -32 129

Share-based payments - - - 195 195

Equity as at 31 December 2021 100 533 2 579 756 -168 412 -386 080 2 125 795

Equity as at 1 January 2020 44 596 190 715 8 650 -127 858 116 103

Net loss for the period - - - -146 250 -146 250

Other comprehensive income - - 8 476 - 8 476

Total comprehensive income - - 8 477 -146 249 -137 774

Issuance of share capital 4.6 38 124 1 712 272 - - 1 750 396

Transaction costs - -111 862 - - -111 862

Share based payments 6.3 - - - 1 066 1 066

Equity as at 31 December 2020 82 720 1 791 125 17 126 -273 041 1 617 930

Translation differences arise in connection with exchange-rate differences of consolidated foreign entities.

Mercell – Annual report 202143

Consolidated nancial statements

Consolidated statement of cash ows

Mercell Holding ASA

All amounts in NOK 1 000 Note 2021

Restated

2020

Cash ow from operating activities:

Prot/loss before tax -116 469 -154 275

Income tax paid 5.1 -3 127 -382

Depreciation and amortization 3.1, 3.3, 3.4 173 864 52 011

Impairment losses 3.1, 3.3, 3.4 14 814 -

Net nancial items 4.5 32 797 78 539

Extinguishment of government loan -3 922 -

Working capital adjustments:

Changes in trade and other receivables -25 409 -2 006

Changes in trade and other payables -689 19 027

Changes in contract liabilities 2.7 47 164 127 488

Changes in other non-current assets 2.2 -5 677 -6 179

Changes in other operating items 2.6 -24 205 -93 394

Net cash ows from operating activities 89 140 20 830

Cash ow from investing activities

Purchase of property, plant and equipment 3.3 -1 745 -3 496

Development of software and other intangible assets 3.1 -165 019 -54 225

Acquisition of subsidiaries, net of cash acquired 6.2 -1 153 219 -2 166 000

Net cash ows from investing activities -1 319 983 -2 223 721

Cash ow from nancing activities

Proceeds from share issue 4.6 838 572 1 750 396

Repayments of borrowings 4.3 -40 420 -312 142

Repayment of sellers credit including interest -150 612 -

Proceeds from long term debt 4.3 495 392 1 252 348

Transaction costs on issue of shares 6.2 -32 129 -111 862

Payments for the principal portion of the lease liability 3.4, 4.3 -20 826 -9 479

Payments of interest for the lease liability 3.4, 4.3 -4 570 -3 071

Interest paid 4.5 -82 323 -59 251

Other nancing activities -400 -

Net cash ows from nancing activities 1 002 684 2 506 939

Net change in cash and cash equivalents 4.4 -228 159 304 048

Foreign exchange effects on cash and cash equivalents -3 134 100

Cash and cash equivalents as at beginning of the period 4.4 327 984 23 836

Cash and cash equivalents as at 31 Dec 96 691 327 984

The cash ow for the year-ended 2020 have been restated due to adjustment in the presentation of sellers credit related to acquisitions in 2020. In the consolidated

statement of cash ows for 2020, the cash ow effect related to the sellers credit was included in operating activities as a part of changes in other operating items, and

was offset by a similar amount under investing cash outows related to acquisitions of subsidiaries. A more appropriate presentation would have been to present the

investing cash ows related to investments in subsidiaries net of the sellers credit.

Mercell – Annual report 2021 44

Consolidated nancial statements

Notes to the consolidated nancial statements

Section 1 General information, signicant accounting policies,

judgements, estimates and assumptions

Note 1.1 Corporate information

Mercell Holding ASA and its subsidiaries (collectively “the

Group”, or “Mercell”) is a publicly listed company on Oslo

Stock Exchange, with the ticker symbol MRCEL. Mercell

Holding ASA was admitted to trading on Oslo Stock

Exchange 9 July 2021. Mercell Holding ASA is incorpo-

rated and domiciled in Norway. The Company’s principal

ofces are located in Askekroken 11, N-0277 Oslo Norway.

Mercell is a digital platform for public

procurement,

where buyers and suppliers meet in a unique, web-based

marketplace. Mercell makes public procurement safe and

transparent and contributes to effective and fair competi-

tion in the full tender process.

The consolidated nancial statements of the Group for the

year ended 31 December 2021 were authorized for issue

in accordance with a resolution of the Board of Directors

on 24 March 2022.

Note 1.2 Basis for preparation

The consolidated nancial statements of the Group

comprise of the consolidated statement of comprehensive

income, nancial position, cash ow and changes in equity

and related notes.

The consolidated nancial statements of the Group for

the year ended 31 December 2021 have been prepared

in accordance with International Financial Reporting

Standards (“IFRS”) as adopted by The European Union

(“EU”).

The consolidated nancial statements have been prepared

on a historical cost basis. Further, the nancial statements

are prepared based on the going concern assumption. The

Group has not experienced signicant negative economic

impact on its business related to COVID-19.

All gures are presented in NOK thousands (000), except

when otherwise stated.

Mercell – Annual report 202145

Consolidated nancial statements

Note 1.3 General accounting policies

Mercell has selected a presentation in which the

description of accounting policies as well as estimates,

assumptions and judgmental considerations are disclosed

in the notes to which the policies relate. A summary of the

Group’s general accounting policies not disclosed in the

notes, are therefore summarized below:

Presentation and functional currency

The consolidated nancial statements are presented in

NOK, which is also the functional currency in the parent

company.

The functional currency is determined in each entity in the

Group based on the currency within the entity’s primary

economic environment. Transactions in foreign currency

are translated to functional currency using the exchange

rate at the date of the transaction. Monetary items in

foreign currency are at the end of the reporting period

translated to functional currency using the closing rate.

Differences arising on settlement or translation of mone-

tary items are recognised in prot or loss. Non-monetary

items that are measured in terms of historical cost in a

foreign currency are translated using the exchange rates

at the dates of the initial transactions.

For presentation purposes, balance sheet items are trans-

lated from functional currency to presentation currency by

using exchange rates at the reporting date. Items within

comprehensive income are translated from functional

currency to presentation currency by applying monthly

average exchange rates. If currency rates are uctuating

signicantly, transaction date exchange rates are applied

for signicant transactions. Translation differences are

recognised in other comprehensive income (“OCI”).

Basis of consolidation

The consolidated nancial statements comprise the

nancial statements of Mercell Holding ASA and its sub-

sidiaries as at 31 December 2021. References are made to

note 6.1 for consolidated subsidiaries.

The subsidiaries are consolidated when control is

achieved as dened by IFRS 10. Specically, the Group

controls an investee if, and only if, the Group has:

· Power over the investee (i.e., existing rights that give it

the current ability to direct the relevant activities of the

investee)

· Exposure, or rights, to variable returns from its involve-

ment with the investee

· The ability to use its power over the investee to affect its

returns

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 dis-

posed of during the year are included in the consolidated

nancial statements from the date the Group gains control

until the date the Group ceases to control the subsidiary.

Prot or loss and each component of other comprehen-

sive income (“OCI”) are attributed to the equity holders

of the parent of the Group. All intra-group assets and

liabilities, equity, income, expenses and cash ows

relating to transactions between members of the Group

are eliminated in full on consolidation.

Current versus non-current classication

The Group presents assets and liabilities in the state-

ment of nancial position based on current/non-current

classication.

An asset is current when it is:

· Expected to be realised or intended to be sold or

consumed in the normal operating cycle,

· Held primarily for the purpose of trading,

· Expected to be realised within twelve months after the

reporting period, or

· Cash or cash equivalent unless restricted from being

exchanged or used to settle a liability for at least twelve

months after the reporting period

· All other assets are classied as non-current.

Mercell – Annual report 2021 46

Consolidated nancial statements

A liability is current when:

· It is expected to be settled in the normal operating cycle,

· It is held primarily for the purpose of trading,

· It is due to be settled within twelve months after the

reporting period,

There is no unconditional right to defer the settlement

of the liability for at least twelve months after the report-

ing period The Group classies all other liabilities as

non-current.

Equity

Ordinary shares are classied as equity. Incremental costs

directly attributable to the issue of new shares (transac-

tion costs) are shown as a deduction from the proceeds.

Statement of cash ows

The consolidated statement of cash ows is prepared

using the indirect method.

Distribution to shareholders

The Group recognises a liability to make distributions to

equity holders when the distribution is authorised and the

distribution is no longer at the discretion of the Group.

As per the corporate laws of Norway, a distribution is

authorised when it is approved by the shareholders. A

corresponding amount is recognised directly in equity.

Government grants

Government grants are recognised when it is reasonably

certain that the company will meet the conditions stipu-

lated for the grants and that the grants will be received.

Grants are deducted from the cost which the grant is

meant to cover. Investment grants are capitalised and

recognised systematically over the asset’s useful life.

Investment grants are recognised as a deduction of the

asset’s carrying amount. References are made to note 2.3

and 2.6.

Changes in accounting policies

There are no new amended accounting standards or

interpretations issued by the IASB effective from 1

January 2021 that have a signicant impact on the Group’s

nancial statements of 2021.

Standards issued but not yet effective

The new and amended standards and interpretations that

are issued and relevant for the Group, but not yet effective,

up to the date of issuance of the Group’s nancial state-

ments are disclosed below. The Group intends to adopt

these new and amended standards and interpretations,

when they become effective. Adopting the standards not

yet effective are not expected to have any material impact

on the Group’s nancial performance or nancial position.

· Amendments to IFRS 3 - Reference to the Conceptual

Framework - effective in 2022 nancial statements

· Amendments: IFRS 9: Fees in the ’10 per cent’ test for

derecognition of nancial liabilities - effective in 2022

nancial statements

· Amendments to IFRS 16: Covid-19-Related Rent

Concessions beyond 30 June 2021 - effective in 2022

nancial statements

· Amendments to IAS 1: Classication of Liabilities as

Current or Non-current - effective in 2023 nancial

statements

· Amendments to IAS 8: Denition of Accounting

Estimates - effective in 2023 nancial statements

· Amendments to IAS 1: Disclosure of Accounting Policies

- effective in 2023 nancial statements

Mercell – Annual report 202147

Consolidated nancial statements

Note 1.4 Signicant accounting judgements, estimates and assumptions

The preparation of the consolidated nancial statements

in accordance with IFRS and applying the chosen account-

ing policies requires management to make judgments,

estimates and assumptions that affect the reported

amounts of assets, liabilities, revenues and expenses.

The estimates and associated assumptions are based on

historical experience and various other factors that are

believed to be reasonable under the circumstances. Actual

results may differ from these estimates. The estimates

and the underlying assumptions are reviewed on an

ongoing basis.

The key assumptions concerning the future and other key

sources of estimation uncertainty at the reporting date,

that have a signicant risk of causing a material adjust-

ment to the carrying amounts of assets and liabilities

within the next nancial year, are listed below. The Group

based its assumptions and estimates on parameters

available when the consolidated nancial 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 reected in the

assumptions when they occur.

Signicant estimates and assumptions:

· Value in use calculations in relation to impairment

testing of goodwill (note 3.5)

· Purchase price allocation in business combinations

(note 6.3)

· Capitalisation of internal development costs and useful

life of intangible assets (note 3.1)

· Measurement of deferred tax assets (note 5.1)

Mercell – Annual report 2021 48

Consolidated nancial statements

Section 2 Operating performance

Note 2.1 Operating Segments

Mercell provides workow services for public procurement

ofcers and their suppliers. The workow systems for

the public buyer cover the entire user journey from when

the need to purchase arises until the payment has been

performed. Mercell enables suppliers to nd relevant

tenders and submit bids to tenders, in addition to support-

ing the post-award workow process with e.g. catalogue

management and invoice management. These services

cover the entire procurement process and are divided into

three segments: pre-award buyer, pre-award supplier and

post-award. The three segments represent the Group’s

operating segments, which are monitored separately by

the chief operating decision maker (“CODM”), dened

as the Board of Directors, for the purposes of making

decisions about resource allocation and performance

assessment. Segment performance is evaluated based on

EBITDA. The CODM does not review segment assets and

segment liabilities and the information for segment assets

and segment liabilities are as such not presented.

Pre-award buyer and supplier

Our pre-award service is a marketplace matching pre-

award buyers and suppliers, with workow solutions

aimed at public buyers needing to create, publish, evaluate

bids and nally award tenders. In addition, we enable

suppliers to nd relevant tenders and to submit bids

for tenders. Our solutions in the pre-award market are

delivered on a marketplace matching buyers with relevant

suppliers, by making sure that the buyers conduct the

tender process fully compliant to the EU-directives, making

the process efcient, transparent, and secured. These

services simplify and streamline the entire sourcing to

contract – or sourcing to contract (S2C) phase, for both

sides of the platform.

Post-award

Our post-award services are cloud-based eProcurement

workow solutions covering the procure to pay (P2P)

process. The services enable public buyers to manage

contracts, call of on contracts using e-commerce solutions

and manage the invoice process. In addition, the buyer can

analyze their procurement operations using Mercell spend

analytics tools. Towards the suppliers we enable them

to upload catalogues of their products and services and

manage the ordering and invoice ow.

No operating segments have been aggregated to form the

reportable operating segments.

Other and Eliminations

The remaining of the Group’s activities and business

are shown in the “Other” column below. These activities

mainly relate to the administrative and nancial compo-

nents of the Group. The “Eliminations” column consists of

inter-segment transactions.

Transactions between the segments are made as a part

of the day-to-day operating business and the applicable

business terms. The management group monitors the

segments’ operating prot regularly and is using the infor-

mation to generate analyzes of the different segments’

performance as well as making decisions with regards to

allocation of resources.

Geographical markets

Reference is made to note 2.2 Revenue for information on

the Group’s geographical markets.

Information about major customers

The Group does not have any customers that amount to

10 per cent or more of the Group’s total revenues.

Mercell – Annual report 202149

Consolidated nancial statements

For the year ended 31 December 2021

All amounts in NOK 1 000

Pre-award

Buyers

Pre-award

Suppliers Post award Other Eliminations

Consolidated

IFRS

Revenues 265261 351043 89992 - - 706296

Total operating revenue 265261 351043 89992 - - 706296

Salary and personnel expenses 125440 138456 38007 - 2490 304393

Other costs 91406 96847 63417 36727 -21876 266520

M&A-cost - - - 30379 - 30379

Total operating expenses 216846 235303 101423 67105 -19386 601291

EBITDA 48415 115740 -11431 -67105 19386 105005

For the year ended 31 December 2020

All amounts in NOK 1 000

Pre-award

Buyers

Pre-award

Suppliers Post award Other Eliminations

Consolidated

IFRS

Revenues 78565 183354 49986 - - 311905

Total operating revenue 78565 183354 49986 - - 311905

Salary and personnel expenses 43300 100648 42932 - 136 187015

Other costs 27917 89034 14372 -31692 233 99863

M&A-cost - - - 48751 - 48751

Total operating expenses 71217 189682 57304 17059 368 335629

EBITDA 7349 -6327 -7318 -17059 -368 -23723

IFRS adjustments 8915 -1056 1071 2184 -11114 -

EBITDA (Pre-IFRS) -1566 -5271 -8389 -19243 10746 -23723

In the Group’s consolidated nancial statements for the year ended 31 December 2020, operating segments (pre-award

buyers, pre-award suppliers and post-award), were presented to the Board pre-IFRS adjustments. IFRS adjustments were

made as an adjustment in the “eliminations” column. In 2021, segment reporting is presented to the Board post-IFRS and

IFRS adjustments are reected in the Group’s operating segments. Following the tables above shows the differences

between presented EBITDA for operating segments in the Group’s annual report 2020 (pre-IFRS) and operating segments

presented post-IFRS.

Mercell – Annual report 2021 50

Consolidated nancial statements

Note 2.2 Revenue from contracts with customers

Mercell Group is a software platform provider for public

e-tendering in the Nordic region. The Group has a two-

sided SaaS platform that provides workow solutions to

both buyers and supplier resulting in signicant network

effects. Revenue comprise of license/subscription-based

revenue, which is almost exclusively recurring. Other

sources of revenue include consulting and training,

courses, seminars and integration and improvements

services.

The Group’s revenue from contracts with customers are

reported in three segments as describe in note 2.1: pre-

award buyers, pre-award suppliers and post-award.

Accounting policies

Revenue from contracts with customers is recognised

when control of the services are transferred to the

customer at an amount that reects the consideration to

which the Group expects to be entitled in exchange for

services. The Group has concluded that it is the principal

in all its revenue arrangements (and recognise revenue

gross).

The Group’s revenue mainly relates to license fees, which

are typical SaaS contracts consisting of a software

licensing model where software is licensed on a subscrip-

tion basis and centralized on Mercell’s platform. Revenue

from SaaS arrangements, where the customer cannot take

possession of the software licence and where the soft-

ware licence cannot be separated from its related hosting

services are considered as “right to access” licenses and

revenue is recognised over time (i.e. over the subscription

period).

Revenue from workshops/training and consultancy

services is recognised over time, because the customer

simultaneously receives and consumes the benets

provided by the Group.

The Group considers whether there are other promises in

the contract that are separate performance obligations

to which a portion of the transaction price needs to be

allocated (e.g., service type warranties). In determining the

transaction price for the sale of a service, the Group con-

siders the effects of variable consideration, the existence

of signicant nancing components, non-cash considera-

tion, and any consideration payable to the customer.

Variable consideration

If the consideration in a contract includes a variable

amount, the Group estimates the amount of consideration

to which it will be entitled in exchange for transferring the

services to the customer. The variable consideration is

estimated at contract inception and constrained until it is

highly probable that a signicant revenue reversal, in the

amount of cumulative revenue recognised, will not occur

when the associated uncertainty with the variable consid-

eration is subsequently resolved.

Mercell – Annual report 202151

Consolidated nancial statements

Specication of revenue from contracts with customers per segment 2021

All amounts in NOK 1 000

Pre-award

Buyers

Pre-award

Suppliers Post-award Total

SaaS license 251047 341225 78625 670896

Other services 14215 9818 11367 35400

Total revenue from contracts with customers 265261 351043 89992 706296

Geographical markets

Norway 44860 110512 10948 166320

Denmark 17911 47995 79044 144950

Sweden 63007 164947 - 227954

Finland 47321 6114 - 53435

Baltics 4807 18846 - 23654

UK 13483 1189 - 14672

Netherlands 66163 105 - 66268

Other 7710 1334 - 9044

Total revenue from contracts with customers 265261 351043 89992 706296

Timing of revenue recognition

Services transferred at a point in time - - - -

Services transferred over time 265261 351043 89992 706296

Total revenue from contracts with customers 265261 351043 89992 706296

Inter-segment revenue - - - -

Segment revenue as presented in note 2.1 265261 351043 89992 706296

Specication of revenue from contracts with customers per segment 2020

All amounts in NOK 1 000

Pre-award

Buyers

Pre-award

Suppliers Post-award Total

SaaS license 74441 174904 45765 295111

Other services 4125 8449 4221 16795

Total revenue from contracts with customers 78566 183353 49986 311905

Geographical markets

Norway 28761 78375 6873 114009

Denmark 12219 50271 43112 105603

Sweden 12668 28268 - 40936

Finland 466 4958 - 5424

Baltics 4133 18313 - 22446

UK 10389 343 - 10732

Netherlands 4092 8 - 4101

Other 5837 2818 - 8654

Total revenue from contracts with customers 78565 183354 49986 311905

Timing of revenue recognition

Services transferred at a point in time - - - -

Services transferred over time 78565 183354 49986 311905

Total revenue from contracts with customers 78565 183354 49986 311905

Inter-segment revenue - - - -

Segment revenue as presented in note 2.1 78565 183354 49986 311905

Mercell – Annual report 2021 52

Consolidated nancial statements

SaaS license fee

The Group’s performance obligation is satised over time

(as “right to access” licenses). The customer receives the

right to access Mercell’s intellectual property throughout

the license period for which revenue is recognized over the

license period. The software is run on Mercell’s platform

and the customer may only access the software through a

network (cloud). The customer cannot take possession of

the software/code and is not able to run the software on

its own server.

Other services

Other services mainly consist of workshops/training and

consultancy services provided by the Group in connection

with the SaaS license. Generally, these services are not

included in the license fee. Revenue is recognised over

time because the customer simultaneously receives

and consumes the benets provided by the Group. The

Group recognises revenue normally on the basis of hours

incurred.

Contract balances

Contract assets relate to revenue earned from ongoing

services. The Group presents its trade receivables arising

from contracts with customers separately from contract

assets and other receivables. The Group does not have

signicant amount of contract assets.

Contract liabilities relate to consideration received in

advance for SaaS license. The SaaS license is normally

pre-paid by the customer for 12 months. As such, the

balance of account at the end of the year represents the

Group’s deferred revenue related to performance obliga-

tions that will be satised within 12 months. The Group

contract liabilities is disclosed in note 2.7.

Signicant nancing components

As most of the customers only pays in advance 12 months

or less, the Group does not have any signicant nancing

components.

Contract costs (accounting policies)

Under IFRS 15, the incremental costs of obtaining a

contract (i.e., costs that would not have been incurred if

the contract had not been obtained) is recognized as an

asset if the Group expects to recover them either directly

through reimbursement or indirectly through the margin

inherent in the contract. For costs incurred exceeding the

expected inherent margin, only the recoverable amount

is capitalised as an asset and the remaining amount

expensed as incurred.

Contract costs recognized as an asset is amortized on a

systematic basis that is consistent with the transfer to the

customer of the services to which the asset relates. Those

services could be provided under a specic contract or a

specically anticipated (i.e. future) contract.

The amortization period for capitalized sales commission

in the Group is determined based on the anticipated con-

tract to which the costs relates to (i.e., the initial contract

term plus any expected renewals periods).

The Group has incremental costs to obtain contracts such

as sales commissions. Sales commissions is recognised

as an asset and amortized on a straight-line basis over the

anticipated contract period. The Group has determined

that the anticipated contract period is normally ve years.

In the statement of nancial position, costs of obtaining a

contract is presented separately from any contract assets

or contract liabilities. The costs are presented under the

line other non-current assets. In the income statement, the

costs are classied as other operating expenses.

Costs to obtain a contract

All amounts in NOK 1 000 2021 2020

Balance as of 1 January 14 549 8 369

Costs to obtain contracts during the year 14 139 9 180

Amortization for the period -5 075 -3 000

Balance as of 31 December 23 613 14 549

Mercell – Annual report 202153

Consolidated nancial statements

Note 2.3 Salary and personnel expenses

Accounting policies

Salary and personnel expenses comprise of all types of remuneration to personnel employed by the Group (i.e. not

contracted manpower) and are expensed when incurred. Ordinary salaries can be both xed pay and hourly wages and

is earned and paid periodically. Holiday pay is earned on the basis of ordinary pay and is normally paid in the holiday

months of the following year. The employer’s national insurance contribution (social security) is calculated and expensed

for all payroll related costs including pensions. Pension contributions are earned on a monthly basis.

Norwegian entities within the Group has a dened contribution pension plan for its employees which satises the statu-

tory requirements in the Norwegian law on required occupational pension (“lov om obligatorisk tjenestepensjon”).

The scheme is a dened contribution plan. Contributions are paid to pension insurance plans and charged to the income

statement in the period to which the contributions relate. Once the contributions have been paid, there are no further

payment obligations.

Specication of the Group’s salary and personnel expenses

All amounts in NOK 1 000 2021 2020

Salaries 190 437 142 485

Social security costs 47 365 16 083

Pension costs 25 685 14 561

Other employee expenses 40 906 13 885

Salary and personnel expenses 304 393 187 015

Numbers of FTEs 594 382

To offset revenue losses and nance salary costs during the COVID-19 pandemic, the Mercell Group received govern-

ment support in the US during the third quarter. A government assisted loan was also partly forgiven (50 per cent) in

2021 in Finland. The total amount of approximately NOK 4.9 million has been presented as a reduction in salary and

personnel expenses in accordance with IAS 20.

Mercell – Annual report 2021 54

Consolidated nancial statements

Remuneration to Management 2021

All amounts in NOK 1 000 Salary Bonus Pension

Share based

options

Other

compensation

Total

remuneration

Terje Wibe (CEO) 3 000 2 000 109 164 134 5 407

Fredrik Eeg (CFO) 1 650 1 000 85 259 23 3 017

Arild Nilsen (CPO) 2 200 1 000 102 107 139 3 549

Geir Henning Pettersen (CTO)

938 - 60 6 15 1 018

Lars Vangen Jordet (CCO) 1 500 1 000 85 231 12 2 829

Katy Agahd (Head of HR)

770 - 50 7 20 847

Guro Becker (Head of HR)

433 96 33 - 9 571

Total 10 491 5 096 524 773 353 17 237

Geir Henning Pettersen left his position as CTO 30 September 2021. Compensation is only reected for the period of time that the executive served as a part of the

Group management.

Katy Agahd left her position as Head of HR 9 August 2021. Compensation is only reected for the period of time that the executive served as a part of the Group management.

Guro Becker joined the Group management 9 August 2021. Compensation is only reected for the period of time that the executive served as a part of the Group management.

Jacob Møller served as Head of M&A and as a part of the Group management in 2021. The Group insourced these

management services through Ploot Invest AS. Ploot Invest AS charged NOK 3.5 million for the management services in

2021. In 2020, Ploot Invest AS charged NOK 1.2 million for management services related to the position as Head of M&A

(from September until year end 2020).

The CEO and CPO are entitled to severance pay equal to up to nine months base salary if the Company terminates their

employment.

Remuneration to Management 2020

All amounts in NOK 1 000 Salary Bonus Pension

Share based

options

Other

compensation

Total

remuneration

Terje Wibe (CEO) 2 400 4 800 192 856 - 8 248

Fredrik Eeg (CFO) 1 500 2 400 120 1 416 45 5 482

Arild Nilsen (CPO) 2 120 2 400 170 569 51 5 310

Geir Henning Pettersen (CTO) 1 092 2 400 87 82 34 3 695

Lars Vangen Jordet (CCO) 625 450 31 1 293 - 2 399

Katy Agahd (Head of HR) 1 132 306 91 82 - 1 611

Total 8 869 12 756 691 4 299 131 26 745

Share based options are reported on an expensed basis. References are made to note 6.3.

One external consultant is included in the share-based option program.

Mercell – Annual report 202155

Consolidated nancial statements

Remuneration to Board 2021

All amounts in NOK 1 000 Board remuneration

Joar Welde (Chairman of the Board) 720

Helge Nielsen (Member of the Board) 460

Erik Fjellvær Hagen (Member of the Board) 300

Anne Lise Waal (Member of the Board)

227

Berit Lid Scharff (Member of the Board)

227

Inge Arne Støve (Member of the Board)

260

Bjørn-Thor Epland (Member of the Board)

233

Ole-Bjørn Gjerde (Member of the Board)

233

Total compensation to Board of Directors 2 660

Anne Lise Waal joined the Board 23 April 2021.

Berit Lid Scharff joined the Board 23 April 2021.

Inge Arne Støve left his position in the Board 23 April 2021.

Bjørn-Thor Epland left his position in the Board 23 April 2021.

Ole-Bjørn Gjerde left his position in the Board 23 April 2021.

Remuneration to Board 2020

All amounts in NOK 1 000 Board remuneration

Joar Welde (Chairman of the Board) 200

Helge Nielsen ((Member of the Board) 125

Inge Arne Støve (Member of the Board) 125

Bjørn-Thor Epland (Member of the Board) 125

Ole-Bjørn Gjerde (Member of the Board) 125

Erik Fjellvære Hagen (Member of the Board) 125

Total compensation to Board of Directors 825

A loan of NOK 4 million has been granted to the CEO’s holding company Camiveo AS. The loan is interest calculated in

2021 and has a balance equal to NOK 4.3 million (NOK 4.2 million) as of 31 December 2021 included accrued interest.

The amount is recognised as a non-current receivable.

Mercell – Annual report 2021 56

Consolidated nancial statements

Note 2.4 Other operating expenses

Other operating expenses are recognised when they occur and represent a broad range of operating expenses incurred

by the Group in its day-to-day activities. Other operating expenses consist of expenses that are not classied on the lines

for cost of goods, salary and personnel expenses, depreciation and amortisation.

Other operating expenses

All amounts in NOK 1 000 2021 2020

Audit and accounting services 15 098 9 680

Consulting fees 147 293 34 351

Ofce equipment 918 5 254

IT costs 39 507 9 684

Other operating expenses 39 558 35 330

Other operating expenses 242 374 94 299

Auditor fees

All amounts in NOK 1 000 2021 2020

Statutory auditing services 5 215 1 932

Other assurance services 784 415

Technical preparation accounts and tax papers 47 525

Other services 477 1 193

Total remuneration to the auditor 6 522 4 065

The amounts above are excluding VAT. All technical preparation and other services from BDO were made before Mercell

Holding ASA was listed on the Oslo Stock Exchange.

Mercell – Annual report 202157

Consolidated nancial statements

Note 2.5 Trade and other receivables

Accounting policies

The Group’s trade receivables consist solely of amounts receivable from revenue from contracts with customers. Trade

receivables are generally on terms of 30 days. Other receivables consist mainly of prepaid expenses and government

grant receivables related to SkatteFUNN.

Trade receivables are nancial assets which are initially recognized at transaction price determined under IFRS 15 and in

later periods measured at amortised cost using the effective interest rate method adjusted for an allowance for expected

credit losses.

The Group recognises an allowance for expected credit losses (ECLs) for its nancial assets. ECLs are based on the

cash ows that the Group expects to receive. For trade receivables, the Group applies a simplied approach in calculat-

ing ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on

lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit

loss experience, adjusted for forward-looking factors specic to the debtors (or Group’s of debtors) and the economic

environment.

All amounts in NOK 1 000 31 Dec 2021 31 Dec 2020

Trade receivables from customers at nominal value - external 156 528 92 905

Allowance for expected credit losses -4 296 -2 022

Trade receivables 152 232 90 883

Goverment grant (SkatteFUNN) 4 400 4 750

Other receivables and prepaid expenses 24 308 22 416

Other receivables 28 708 27 166

Total trade and other receivables 180 940 118 049

Allowance for expected credit losses

At the beginning of the period 2 022 -

Provision for expected credit losses 2 274 2 022

At the end of the period 4 296 2 022

Set out below is the information about the credit risk exposure on the Group’s trade reveivables:

Days past due

All amounts in NOK 1 000 Not due < 30 days 31-90 days Over 90 days Total

31 December 2021

Trade receivables 105 212 27 796 14 550 4 675 152 232

31 December 2020

Trade receivables 53 602 26 485 7 231 3 564 90 883

For details regarding the Group’s procedures on managing credit risk, reference is made to note 4.8

Mercell – Annual report 2021 58

Consolidated nancial statements

Note 2.6 Trade and other current nancial liabilities

Accounting policies

Trade payables and other current nancial liabilities are present contractual obligations arising from a result of past

events where settlement is expected to result in an outow of resources (payment).

Trade payables and other current nancial liabilities are measured at fair value of their transaction price upon initial

recognition and subsequently at amortized cost. Trade payables and other current liabilities are expected to be settled

within the normal operating cycle within twelve months after the reporting period.

All amounts in NOK 1 000 31 Dec 2021 31 Dec 2020

Trade payables 26 989 26 407

Public duties payable 49 218 45 598

Tax payable 23 980 16 700

Trade and other payables 100 188 88 705

Salary payable and vacation accruals 40 661 30 446

Accrued expenses 35 597 26 015

Other current liabilities 48 424 168 017

Other current nancial liabilities 124 682 224 478

Other current liabilities as of 31 December 2021 consist of contingent consideration of NOK 30.6 million related to the

acquistions of Negometrix and Ibisitc.

Other current liabilities as of 31 December 2020 includes a sellers credit including interest of NOK 158 million related to

the acquisition of Visma Commerce and contingent consideration of NOK 3 million related to the acquisition of Comcare.

For trade and other payables ageing analysis, reference is made to note 4.3

Mercell – Annual report 202159

Consolidated nancial statements

Note 2.7 Contract assets and liabilities

Accounting policies

Contract assets

A contract asset is initially recognized for revenue earned from rendering of services because the receipt of consider-

ation is conditional on successful completion of the services. Upon completion of the services and acceptance by the

customer, the amount recognized as contract assets is reclassied to trade receivables.

As the Group’s contracts with customer are generally prepaid 12 months or less in advance, the Group does not have a

signicant amount of contract assets.

Contract liabilities

A contract liability is recognized if a payment is received or a payment is due (whichever is earlier) from a customer

before the Group transfers the related goods or services. Contract liabilities are recognized as revenue when the Group

performs under the contract (i.e., transfers control of the related goods or services to the customer).

Contract liabilities relate to consideration received in advance for revenue from contracts with customers. Revenue is

recognized when the group fulls the performance obligations in the contract. Contract liabilities are shown in the table

below:

All amounts in NOK 1 000 31 Dec 2021 31 Dec 2020

Contract liabilities related to SaaS license 360 685 235 682

Total 360 685 235 682

Current contract liabilities 360 685 235 682

Non-current contract liabilities - -

Changes in contract liabilities related to performance obligations

Amounts included in contract liabilities at the beginning of the year 235 682 108 194

New contract liabilities 720 122 314 271

Contract liabilities from acquired business 75 778 125 122

Performance obligations satised in the period -670 896 -311 906

At 31 December 360 685 235 682

The Group’s contract liabilities are mainly related to revenue from SaaS subscription which are generally prepaid 12

months or less in advance. The Group’s contract liabilities are classied as current as the related performance obliga-

tions will be satised generally within 12 months. References are made to note 2.2. for further descriptions.

Mercell – Annual report 2021 60

Consolidated nancial statements

Section 3 Fixed assets

Note 3.1 Intangible assets

Accounting policies

The Group’s intangible assets mainly comprise of

technology, customer relationships and other intangible

assets acquired through the acquisition of subsidiaries.

Additionally, intangible assets comprise capitalized

development costs related to development of Mercell’s

platform and other solutions part of the Group’s intellec-

tual property.

Intangible assets acquired

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

on the date of acquisition. Following initial recognition,

intangible assets are carried at cost less any accumulated

amortization and accumulated impairment losses.

Capitalization of internal development costs

Development expenditures on an individual project, which

represents new applications/technology, are recognized

as an intangible asset when the Group can demonstrate:

· The technical feasibility of completing the intangible

asset so that the asset will be available for use or sale

· Its intention to complete and its ability and intention to

use or sell the asset

· How the asset will generate future economic benets

· The availability of resources to complete the asset

· The ability to measure reliably the expenditure during

development

Other costs are classied as research and are expensed

as incurred.

Following initial recognition of the development expend-

iture as an asset, the asset is carried at cost less any

accumulated amortization and accumulated impairment

losses. Amortization of the asset begins when the asset

is available for use and is amortized over the period of

expected future benet.

Signicant accounting estimates,

assumptions and judgements

Capitalization of internal development costs

Initial capitalization of costs is based on management’s

judgement that technological and economic feasibility is

conrmed, usually when a product development project

has reached a dened milestone according to an estab-

lished project management model. In determining the

amounts to be capitalized, management makes assump-

tions regarding the expected future cash generation of

the project, discount rates to be applied and the expected

period of benets. The assessment of when product devel-

opment is capitalized is highly subjective, as the outcome

of these projects may be uncertain.

Useful lives of intangibles assets

Intangible assets with nite useful lives are amortized

over the useful economic life and assessed for impair-

ment whenever there is an indication that the intangible

asset may be impaired. The amortization period and the

amortization method for an intangible asset with a nite

useful life are reviewed at least at the end of each report-

ing period. The initial assessment and review of economic

useful lives requires management to make estimates and

assumptions on the Group’s IP, technological develop-

ments and competition in the future.

Changes in the expected useful life or the expected

pattern of consumption of future economic benets

embodied in the asset are considered to modify the amor-

tization period or method, as appropriate, and are treated

as changes in accounting estimates. The amortization

expense on intangible assets is recognized in the state-

ment of comprehensive income in the line for depreciation

and amortization.

Mercell – Annual report 202161

Consolidated nancial statements

All amounts in NOK 1 000

Internally

developed

software

Technology

Customer

relationship

Other intangible

assets

allocated from

acquisition

Total

Acquisition cost 1 January 2020 181 854 11 567 36 424 1 069 230 914

Additions 54 225 - - - 54 225

Additions through acquisitions - 100 635 572 452 32 489 705 576

Disposals - - - - -

Translation differences - 455 3 504 -354 3 605

Acquisition cost 31 December 2020 236 079 112 656 612 380 33 204 994 320

Additions

152 029

Additions through acquisitions - 73 692 195 422 11 266 280 379

Disposals - - - - -

Translation differences - -10 018 -38 751 -1 619 -50 387

Acquisition cost 31 December 2021 388 108 176 330 769 051 42 851 1 376 340

Acc.amortization and impairments 1 January 2020 140 609 1 280 2 424 81 144 394

Year's amortization 20 458 4 489 10 998 2 715 38 661

Year's impairments - - - - -

Translation differences - -84 -41 -52 -178

Acc.amortization and impairments 31 December 2020 161 067 5 686 13 381 2 744 182 878

Year's amortization 33 662 32 343 75 660 4 416 146 082

Year's impairments

14 814 - - - 14 814

Translation differences - -297 -745 -34 -1 076

Acc.amortization and impairments 31 December 2021 209 543 37 732 88 296 7 126 342 697

Carrying amount 31.12.2020 75 012 106 970 598 999 30 460 811 442

Carrying amount 31.12.2021 178 564 138 598 680 756 35 725 1 033 642

Economic life 5 years 5 years 5-10 years

4-7 years,

Indenite

Depreciation method Linear Linear Linear Linear

Reference is made to note 3.5 for impairment assessments related to internally developed software.

Other intangible assets allocated from business combination include brand and backlog. Brand has indenite useful life.

Mercell – Annual report 2021 62

Consolidated nancial statements

Internally developed software

The Group performs a range of research and development

projects related to the Mercell’s platform and various

solutions. Research and development expenses that were

not capitalized are included in the consolidated statement

of comprehensive income as other operating expenses.

Internally development software includes received gover-

nant grants (SkatteFUNN).

Acquisitions during 2021 and 2020.

Technology, customer relationships and other intangible

assets allocated from business combination during 2020

are acquired through business combination of Aksess

Innkjøp, Truelink, Tricom, Comcare and Visma Commerce.

Technology, customer relationships and other intangible

assets allocated from business combination during 2021

are acquired through business combination of Negometrix,

CTM Solution, Ibistic and Cloudia. References are made to

note 6.2.

Technology

The economic life of technology is assumed to be 5 years.

Customer relationship

The economic life of customer relationship is assumed to

range between 5-10 years. This is based on historical data

such as churn and sales pattern.

Other intangible assets

Other intangible assets allocated from business combina-

tion include brand and backlog. The economic life of other

intangible assets is assumed to range between 4-7 years,

except from brands which has indenite useful live. The

determined range in economic life for backlog is depend-

ing on the secured ARR revenue from the current portfolio

for customers based on their contract expiry dates.

Reference is made to note 3.5 for impairment assess-

ments and impairment testing of intangible assets with

indenite useful life.

Mercell – Annual report 202163

Consolidated nancial statements

Note 3.2 Goodwill

Accounting policies

Goodwill is an intangible asset which may not individually

be recognised as an intangible asset due to the require-

ments in IAS 38. The value of goodwill is primarily related

to synergies, assembled workforce and their competency

to generate and commercialize new technology as well

as high growth expectations. Goodwill also arises due to

the requirement to recognise deferred tax liabilities for the

difference between the assigned values and the tax bases

of assets acquired and liabilities assumed in a business

combination at amounts that do not reect fair value.

Goodwill is initially measured at cost (being the excess

of the aggregate of the consideration transferred and the

amount recognised for the net identiable assets acquired

and liabilities assumed).

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 (CGUs) that are

expected to benet from the combination, irrespective

of whether other assets or liabilities of the acquiree are

assigned to those units.

For the group’s principles related to impairment of Goodwill, see below.

All amounts in NOK 1 000 Goodwill

Acquisition cost 1 January 2020 234 692

Additions through acquisitions 1 864 589

Translation differences 15 526

Acquisition cost 31 December 2020 2 114 806

Additions through acquisitions 1 069 077

Translation differences -138 122

Acquisition cost 31 December 2021 3 045 761

Acc. Impairment 1 January 2020 -

Year's impairment -

Translation differences -

Acc. Impairment 31 December 2020 -

Year's impairment -

Translation differences -

Acc. Impairment 31 December 2021 -

Carrying amount 31.12.2020 2 114 806

Carrying amount 31.12.2021 3 045 761

References are made to note 6.2 for goodwill arising on business combination in 2020 and 2021. For impairment testing

and assessment of goodwill, reference is made to note 3.5.

Mercell – Annual report 2021 64

Consolidated nancial statements

Note 3.3 Property, plant and equipment

Accounting policies

Property, plant and equipment (“PP&E”) is stated at cost, net of accumulated depreciation and accumulated impairment

losses, if any. Such cost includes the cost of replacing part of the PP&E and borrowing costs for similar construction

projects if they meet the recognition criteria. The gain or loss arising from the disposal or retirement of an asset is

determined as the difference between the sales proceeds and the carrying amount of the asset.

All amounts in NOK 1 000

Motor

vehicles

Furniture and

equipment Total

Acquisition cost 1 January 2020 - 10 778 10 778

Additions through acquisition - 3 106 3 106

Additions - 3 496 3 496

Disposals - - -

Translation differences - - -

Acquisition cost 31 December 2020 - 17 379 17 379

Additions through acquisition 1 823 8 578 10 402

Additions 0 2 046 2 046

Disposals 0 -302 -302

Translation differences -70 -182 -252

Acquistion cost 31 December 2021 1 753 27 521 29 274

Acc.dep. & write-downs 1 January 2020 - 9 463 9 463

Year's depreciation - 1 556 1 556

Year's impairments - - -

Acc.dep. & write-downs 31 December 2020 - 11 019 11 019

Year's depreciation 228 5 470 5 698

Year's impairments - - -

Acc.dep. & write-downs 31 December 2021 228 16 489 16 717

Carrying amount 31.12.2020 0 6 360 6 360

Carrying amount 31.12.2021 1 525 11 032 12 557

Economic life 5 years 5-8 years

Depreciation method Linear Linear

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. The useful lives and

methods of depreciation of PP&E are reviewed at each nancial year end and adjusted prospectively, if appropriate.

The Group assess, at each reporting date, whether there is an indication that property, plant and equipment may be

impaired. If such indication exists, the Group estimates the asset’s recoverable amount. The recoverable amount is the

higher of an asset’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an

individual asset, unless the asset does not generate cash inows that are largely independent of those from other assets

or groups of assets. No indicators for impairment of property, plant and equipment were identied in 2021.

Right-of-use assets are presented in note 3.4. References are made to note 3.5 for impairment considerations.

Mercell – Annual report 202165

Consolidated nancial statements

Note 3.4 Leases

Accounting policies

The Group account for its leases according to IFRS 16

Leases.

The Group as a lessee recognises its leases in the

nancial position as a lease liability with a corresponding

right-of use asset, except for leases with a lease term

of twelve months or less or leases where the underlying

asset is considered to have a “low value”. Lease contracts

is only accounted for in accordance with IFRS 16 to the

extent that the contract conveys the Group the right to

control the use of an identied asset for a period of time in

exchange for consideration. Leases held by subsidiaries

acquired through a business combination are recognised

at acquisitions date.

The lease liability is initially measured at the present value

of the lease payments for the right to use the underlying

asset during the lease term, that are not paid at the

commencement date. The lease payments are discounted

using the Group’s incremental borrowing rate. The lease

term represents the non-cancellable period of the lease,

together with periods covered by an option to extend the

lease when the Group is reasonably certain to exercise

this option, and periods covered by an option to terminate

the lease if the Group is reasonably certain not to exercise

that option. The lease liability is subsequently measured

by increasing the carrying amount to reect interest on

the lease liability, reducing the carrying amount to reect

the lease payments made and remeasuring the carrying

amount to reect any reassessment or lease modica-

tions, or to reect adjustments in lease payments due to

an adjustment in and index or rate.

The right-of-use asset is initially measured at cost being

the corresponding amount of the initial measurement of

the lease liability. The right-of-use asset is subsequently

measured at cost less accumulated depreciation and

impairment losses, applying the same policies for impair-

ment as for property, plant and equipment (Note 3.5).

The Group uses its incremental borrowing rate (IBR) to

measure the lease liability. The IBR is the rate of interest

that the Group would have to pay to borrow over a similar

term, and with a similar security, the funds necessary to

obtain an asset of a similar value to the right-of-use asset

in a similar economic environment. The Group estimates

the IBR using observable inputs (such as market interest

rates) when available and is required to make certain

entity-specic estimates (such as the subsidiary’s stand-

alone credit rating). The Group uses a revised discount

rate when lease payments are updated for a change in the

lease term or a revised assessment of a purchase option.

The Group leased assets

The Group leases several assets, mainly ofce buildings

and cars. Other assets consist of rent of server and col-

location/racks. Leases of ofce buildings generally have

lease terms between 2 and 9 years, while motor vehicles

and collocation/racks generally have lease terms between

2 and 5 years. The Group also leases some ofce spaces,

cars, hardware and other equipment that are expensed as

incurred as they are either considered short term or of low

value. For leases of ofce buildings, non-lease compo-

nents (i.e., service elements) are excluded from the lease

payments. The Group has chosen the practical expedient

to not separate non-lease components from the lease

payments for motor vehicles and other leased assets.

Mercell – Annual report 2021 66

Consolidated nancial statements

The Group’s right-of-use assets are recognised in the consolidated statement of nancial position separately from PPE

and presented in the table below:

Right-of-use assets

All amounts in NOK 1 000

Ofce

Buildings

Motor

vehicles

Other

assets Total

Balance as at 1 January 2020 20263 643 1700 22605

Additions 28214 693 346 29253

Additions through acquisitions 16625 119 - 16744

Deprecation -9292 -420 -1978 -11690

Translation differences 1219 10 187 1416

Carrying amount 31 December 2020 57030 1044 255 58329

Additions

1834

1252

5656

8742

Additions through acquisitions 19948 383 - 20331

Disposals -424 - - -424

Remeasurement -880 80 - -800

Deprecation -18710 -844 -2605 -22159

Translation differences -1184 -97 -187 -1468

Carrying amount 31 December 2021 57615 1817 3118 62551

Remaining lease term or useful life 2-9 years 2-5 years 2-5 years

Depreciation plan Straight-line Straight-line Straight-line

The Group presents its lease liabilities under non-current interest-bearing liabilities the statement of nancial position.

The Group’s liabilities are presented in the table below:

Change in the lease liabilities

All amounts in NOK 1 000 Total

Balance as at 1 January 2020 22 765

New leases recognised during the period (Additions) 29 253

New leases recognised during the period (Additions through acquisitions) 17 009

Cash payments -12 550

Accretion of interest 3 071

Translation differences 1 430

Total lease liabilities 31 December 2020 60 979

New leases recognised during the period (Additions) 9 125

New leases recognised during the period (Additions through acquisitions) 20 324

Disposals -611

Remeasurement -800

Cash payments -25 645

Accretion of interest 4 571

Translation differences -1 642

Total lease liabilities 31 December 2021 66 301

Mercell – Annual report 202167

Consolidated nancial statements

Classication non-current vs current

All amounts in NOK 1 000 2021 2020

Current lease liabilities in the nancial position 23 187 15 713

Non-current lease liabilities in the nancial position 43 114 45 266

Maturity of lease liabilities

For undiscounted lease liabilities and maturity of cash outows, see note 4.3

Summary of other lease expenses recognised in prot or loss

All amounts in NOK 1 000 2021 2020

Operating expenses in the period related to short-term leases 538 303

Operating expenses in the period related to low value assets 728 548

Total lease expenses included in other operating expenses 1 266 851

Extension, termination and purchase options

The Group has several lease contracts of ofce buildings that include extension and termination options. Management

applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or

terminate the lease. That is, they consider all relevant factors that create an economic incentive for it to exercise either

the renewal or termination.

As of 31 December 2021, the Group has evaluated that it is reasonable to exercise extension options related to leases of

two ofce buildings. The Group has also evaluated that it is reasonable to not exercise one termination option related to

lease of one ofce building. The Group does not have any lease contracts that includes purchase options.

Set out below are the undiscounted potential future rental payments relating to periods following the exercise date of

extension and termination options to that are not included in the lease term:

Undiscounted potential future rental payments

All amounts in NOK 1 000 2021

Periods covered by extension options expected not to be exercised 6 732

Periods covered by termination options expected to be exercised 17 484

Total undiscounted potential future rental payments as of 31.12.2021 24 216

Mercell – Annual report 2021 68

Consolidated nancial statements

The Group as a lessor

The Group has one sublease arrangements of ofce buildings. Subleases where the Group is the intermediate lessor,

are considered nance leases when the head leases and the subleases have corresponding or similar terms. At initial

recognition, the right-of-use asset held the under sublease are derecognised and the net investment in the lease are

recognised in the nancial position as a receivable. Any differences between the net investment and the right-of-use

asset held by the Group are recognised immediately in the prot or loss.

Net investment held under sublease

All amounts in NOK 1 000 2021 2020

Ofce buildings 152 266

Note 3.5 Impairment assessments

Accounting policies

At the end of each reporting period, the Group reviews

for both external and internal indicators of impairment

of property, plant and equipment (“PP&E”), right-of use

assets, intangible assets and goodwill. Impairment indi-

cators will typically be changes in market developments,

competitive situations and technological developments.

Goodwill and intangible assets that have an indenite

useful life are tested annually for impairment and when

circumstances indicate that the carrying amount may be

impaired.

For the purpose of impairment testing, assets, except

goodwill, are grouped together into the smallest group of

assets that generates independent cash ows (cash-gen-

erating units, CGUs). Goodwill is allocated to the cash-gen-

erating units that is expected to benet from the synergies

of the combination.

An impairment loss is regcognised in the consolidated

statement of comprehensive income if the carrying

amount of an asset (CGU) exceeds its recoverable

amount. An asset’s recoverable amount is the higher of

an asset’s fair value fair value less costs of disposal and

value in use.

Recoverable amounts of each CGU are estimated based

on value in use calculations. In assessing value, the

estimated future cash ows are discounted to their

present value using a pre-tax discount rate that reects

current market assessments of the time value of money

and the risks specic to the assets. Estimated cash ows

are based on management’s experience and market

knowledge for the given period.

Impairment losses recognised in respect of cash-generat-

ing units are rst allocated to reduce the carrying amount

of any goodwill. Any remaining amount is then allocated

to reduce the carrying amounts of the other assets in the

unit on a pro rata basis. Impairment losses are reversed

if the loss no longer exist for intangible and xed assets.

Impairment losses relating to goodwill cannot be reversed

in future periods.

Impairment assessment of PP&E, right

of use assets and intangible assets

The Group considers the relationship between its market

capitalization and its book value, among other factors,

when reviewing for indicators of impairment. Signicant

non-budgeted churn, signicant reduction in prices,

development of new solutions or technological changes,

material deviations in budgeted ARR growth or budgeted

margins are some of the nancial indicators being

considered as indications of impairment. If such indica-

tions exist, impairment testing is performed. Based on an

Mercell – Annual report 202169

Consolidated nancial statements

overall assessment of the relevant factors, no indicators of

impairment have been identied as at 31 December 2021.

The Group identied two R&D projects (internally

developed software) in the second quarter that were

discontinued:

After the acquisition of Negometrix, the Group’s approach

within the pre-award buy side domain has recently shifted

from building a new platform from scratch, to basing its

common platform on a modied and enhanced version of

the Negometrix NX4 platform. The Group identied that

previously capitalized costs amounting to NOK 9.2 million

were to be discontinued and therefore impaired.

The Group initiated a project to develop a common

eProcurement platform in 2020. During the project one of

the modules in Comcare was decided to be replaced by

a module in Tricom. The Group identied that previously

capitalized costs amounting to NOK 5.6 million were to be

discontinued and therefore be impaired.

Impairment testing of goodwill and intangible

assets with indenite useful lives

Goodwill and intangible assets with indenite useful

lives are as a minimum tested annually even though no

indications exist. The Group performed its annual impair-

ment test of goodwill and intangible assets with indenite

useful lives in December 2021.

The CGUs are equal to the dened operating segments in

accordance with note 2.1: Pre-award supplier, Pre-award

buyer and Post-award. The carrying amounts of each CGU

are disclosed below.

Goodwill and brand with indenite expected life specied on cash-generating units

Carrying amount of goodwill Carrying amount of brand

CGU 2021 2020 2021 2020

Pre-award supplier 1 891 890 1 570 961 6 154 6 558

Pre-award buyer 927 891 333 137 13 333 3 099

Post-award 225 981 210 708 2 410 1 805

Total 3 045 761 2 114 806 21 896 11 463

The majority of the goodwill presented in the table above

derives from the acquisitions of Visma Commerce in

December 2020 and Cloudia Oy in June 2021, which are

expected to have a positive development. For more details,

reference is made to note 6.2.

Recoverable amounts of each CGU are estimated based

on value-in-use calculations. In assessing value-in-use,

the estimated future cash ows are discounted to their

present value using a pre-tax discount rate that reects

current market assessments of the time value of money

and the risks specic to the asset. Management approved

forecasts have been applied for the rst four years while a

declining growth rate has been assumed from year ve to

year ten. A terminal value, estimated by a Gordons growth

formula, has been applied for the period following year 10.

All forecasts have been analyzed on a CGU basis and on a

combined basis.

The recoverable amounts of all the above CGUs have been

determined from value in use calculations based on cash

ow projections from formally approved budgets cover-

ing a four year period to 31 December 2025. Operating

margins have been based on past experience and future

expectations in the light of anticipated economic and mar-

ket conditions. Discount rates are based on the Group’s

beta adjusted to reect management’s assessment of

specic risks related to the cash generating unit. Growth

rates beyond the rst four years are based on economic

data pertaining to the region concerned.

Mercell – Annual report 2021 70

Consolidated nancial statements

The key assumptions applied to determine the

recoverable amounts are summarised below:

Discount rate

The discount rate reects the current market assessment

of the risks specic to the CGU. The discount rate for the

Group is estimated based on the weighted average cost of

capital (WACC). The main components of the WACC are

the risk-free rate, the market equity premium, the CGU’s

Beta, interest cost of debt, expected debt/enterprise value

ratio and the corporate tax rate. The pre-tax discount rate

is determined by an iterative computation so that value in

use determined using pre-tax cash ows and a pre-tax dis-

count rate equals value in use determined using post-tax

cash ows and a post-tax discount rate (WACC).

Terminal revenue growth rate

The terminal growth rate is the estimated long-term rate

of growth in the economy where the business operates,

aligned with long term global ination targets.

Long term Cash EBITDA margin

The long term cash EBITDA margin is determined from

an analysis of historical levels before tax, adjusted for

expected changes to salary, other expenses, capital

expenditures and changes to working capital.

The key assumptions used to determine the recoverable amount for each CGU is presented below:

31 December 2021

CGU

Pre-tax

discount rate

Terminal

revenue

growth rate

Long term

cash EBITDA

margin

Pre-award supplier 10.1% 1.5% 35.4%

Pre-award buyer 10.3% 1.5% 33.2%

Post-award 10.4% 1.5% 22.7%

The recoverable amount of the cash generating units

are higher than their carrying amount and no impairment

loss has been recognised in the current or prior period.

Pre-award supplier is expected to have the largest revenue

potential among the segments as a consequence of

the acquisitions, synergy effects and as a result of the

initiatives which are put in place. The segment is expected

to benet from a combination of new sales, up-sale/cross-

sales, price optimization and churn mitigating initiatives.

The growth is expected to be lowest in Post-award due to

a potential lower market maturity and a more competitive

environment.

Sensitivity analysis

Future events could cause the key assumptions to

deviate from the amounts used in the forecast period.

Management believes that no reasonably possible change

in the key assumptions would cause the carrying amount

of Pre-award supplier and Pre-award buyer to exceed its

recoverable amount.

A sensitivy analysis is presented below for Post-award as

the risk related to changes in key assumptions is consid-

ered to be higher for this CGU. The following changes in

key assumptions, in isolation, would result in the recov-

erable amount being approximately equal to the carrying

amount:

· Increase in pre-tax discount rate by 2.47 per cent

· Decrease in long term Cash EBITDA margin by 6.01 per

cent

· Terminal revenue growth rate could be reduced to 0 per

cent, and still not lead to impairment.

Mercell – Annual report 202171

Consolidated nancial statements

Section 4 Financial instruments and Capital structure

Note 4.1 Overview of nancial instruments

Classication of nancial instruments

The Groups’ nancial instruments are grouped in the following categories:

Financial Assets at amortised cost

Financial assets at amortised cost includes mainly trade and other receivables and cash and cash equivalent.

Trade and other receivables are part of the Group’s business model with the sole objective to collect contractual cash

ows. Additionally, the contractual terms of the nancial assets give rise on specied dates to cash ows that are solely

payments of principal and interest on the principal amount outstanding, thereby passing the “SPPI test”, constituting debt

instruments measured at amortised cost.

Financial Liabilities at amortised cost

Financial liabilities at amortised cost includes the Group’s interest-bearing liabilities, trade and other payables and other

nancial liabilities

Initial recognition and subsequent measurement

The Group’s nancial assets and liabilities are initially recognised at fair value plus directly attributable transaction

expenses. Subsequently, these instruments are measured at amortised cost using the effective interest method (EIR).

Gains and losses are recognised in prot or loss upon impairment, when the instruments are derecognised as well as

through the EIR amortisation process. 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 as nance costs in the

consolidated statement of comprehensive income.

The Group’s nancial assets at amortised cost includes trade receivables. Trade receivables do not contain a signicant

nancing component and are measured at the transaction price determined under IFRS 15 Revenue from contracts with

customers.

Impairment of nancial assets

Financial assets valued at amortised cost are subsequently impaired by recognising an allowance for expected credit

losses (ECLs). The Group’s nancial assets consist mainly of trade and other receivables and hence, the Group applies a

simplied approach in calculating ECLs where the Group does not track changes in credit risk but instead recognises a

loss allowance based on lifetime ECLs at each reporting date. The Group bases its ECLs on its historical losses, adjusted

for forward-looking factors specic to the debtors (or Group of debtors) and the economic environment.

Derecognition of nancial instruments

A nancial asset is derecognized when the rights to receive cash ows from the asset have expired, the Group has

transferred its rights to receive cash ows from the asset or The Group has assumed an obligation to pay the received

cash ows in full under a “pass-through” arrangement.

Mercell – Annual report 2021 72

Consolidated nancial statements

A nancial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an

existing nancial liability is replaced by another from the same lender on substantially different terms or the terms of

an existing liability are substantially modied, such an exchange or modication is treated as the derecognition of the

original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in

the consolidated statement of comprehensive income.

31 December 2021

All amounts in NOK 1 000

Financial

instruments at

amortised cost Total

Trade and other receivables 180 940 180 940

Other non-current receivables 5 388 5 388

Cash and cash equivalents 96 691 96 691

Total nancial assets 283 019 283 019

Interest-bearing liabilities 1 601 394 1 601 394

Other nancial liabilities 125 276 125 276

Trade and other payables 100 188 100 188

Total nancial liabilities 1 826 857 1 826 857

31 December 2020

All amounts in NOK 1 000

Financial

instruments at

amortised cost Total

Trade and other receivables 118 049 118 049

Other non-current receivables 5 600 5 600

Cash and cash equivalents 327 984 327 984

Total nancial assets 451 634 451 634

Interest-bearing liabilities 1 159 899 1 159 899

Other nancial liabilities 225 739 225 739

Trade and other payables 88 705 88 705

Total nancial liabilities 1 474 344 1 474 344

Mercell – Annual report 202173

Consolidated nancial statements

Note 4.2 Interest-bearing liabilities

Specication of the Group’s interest-bearing liabilities

All amounts in NOK 1 000 31 Dec 2021 31 Dec 2020

Interest-bearing bond debt 1 518 402 1 098 920

Other interest-bearing debt 16 690 -

Lease liability (note 3.4) 43 114 45 266

Non-current interest-bearing liabilities 1 578 206 1 144 186

Lease liability, due within 12 months (note 3.4) 23 187 15 713

Current interest-bearing liabilities 23 187 15 713

In December 2020, the Group signed a SEK 2 billion callable open bond issue and completed an initial bond issue of SEK

1.1 billion for the nancing of the acquisition of Visma Commerce. The bond carries an interest of STIBOR + 6 per cent,

payable on a quarterly basis and matures in December 2025. The bond was also used to renance Mercell’s previous out-

standing EUR 14.5 million and SEK 153 million senior secured oating rate note issuance, which originally had maturity

on 6 May 2023.

In June 2021, the Company completed a tap issue of SEK 500 million additional bonds for the nancing of the Cloudia

acquisition. The issuance was completed under the existing SEK 1.1 billion ve-year senior secured bond issue with

identical terms.

On 6 July 2021, the Company entered into an agreement for a NOK 100 million Super Senior Revolving Credit Facility (the

“SSRCF”) with Danske Bank, Norway Branch as lender. As at 31 December 2021 no part of this facility had been utilised.

The Group’s listed interest-bearing debt is presented in the table below:

Interest-bearing bond debt

All amounts in NOK 1 000 Interest rate Maturity 31 Dec 2021 31 Dec 2020

Interest bearing debt - MSEK 1 100 + carried interest 6.00% 08.12.2025 1 034 212 1 098 920

Interest bearing debt - MSEK 500 + carried interest 6.00% 08.12.2025 484 191 -

Total interest-bearing bond debt 1 518 402 1 098 920

Covenant requirements

The Group have no maintenance covenants for its interest-bearing debt. As of 31 December 2021, there are two incur-

rence tests that regulates the Groups ability to distribute dividends and issue new debt.

If the Company utilizes the SSRCF in Danske Bank covenant requirements take effect. The covenants requirements

are measured by leverage ratio, where the leverage ratio is dened by the ratio of Total Net Debt to EBITDA. EBITDA is

measured under the same terms as in the bond agreement. The Company shall ensure that the leverage ratio does not

exceed 8.00:1.00 for the period ending 31.12.2022.

For reconciliation of changes in liabilities incurred as a result of nancing activities, see note 4.3.

For undiscounted liabilities and maturity of cash outows, see note 4.3.

Mercell – Annual report 2021 74

Consolidated nancial statements

Assets pledged as security for secured liabilities

The Group’s bond debt is secured in (i) stocks in Material Group Companies

(i.e. subsidiaries which has 10 per cent

of total EBITDA or income including possible additional entities that are necessary to ensure that the sum of all the

Material Group Companies include in total at least 80 per cent of total EBITDA and income) with exception of issuer, (ii)

in bank accounts belonging to Material Group Companies, (iii) in Accounts Receivables (factoringpant) to Material Group

Companies, (iv) in internal loans that have a duration of at least 12 months and minimum SEK 20 million and (v) guaran-

ties from Material Group Companies.

Material Group Companies as of 31 December 2021 consists of Mercell Midco AS, Mercell Norge AS, Mercell Commerce AS, Mercell Commerce AB, Mercell Svenska

AB, Mercell CTM AB, Udbudsvagten A/S, Mercell A/S, Ibistic International A/S, Cloudia Oy and Mercell Nederland BV.

Note 4.3 Ageing of nancial liabilities

Contractual undiscounted cash ows from nancial liabilities, including interest payments is presented below:

31 December 2021

All amounts in NOK 1 000

Less than

1 year 1-2 years 2-3 years 3-4 years

More than

5 years Total

Interest-bearing debt 96 068 96 068 96 331 1 675 268 - 1 963 735

Trade and other current nancial liabilities 124 682 - - - - 124 682

Lease liabilities 24 514 10 848 7 266 5 287 21 042 68 957

Total nancial liabilities 245 263 106 916 103 598 1 680 555 21 042 2 157 374

31 December 2020

All amounts in NOK 1 000

Less than

1 year 1-2 years 2-3 years 3-4 years

More than

5 years Total

Interest-bearing debt 66 917 66 917 66 917 67 100 1 166 917 1 434 767

Trade and other current nancial liabilities 224 478 - - - - 224 478

Lease liabilities 19 353 17 183 7 620 5 577 25 870 75 603

Total nancial liabilities 310 747 84 100 74 537 72 677 1 192 787 1 734 847

Mercell – Annual report 202175

Consolidated nancial statements

Reconciliation of changes in liabilities incurred as a result of nancing activities:

Cash ow effects

All amounts in NOK 1 000

1 January

2021

Repayments

of borrowings

and lease

liabilities

Proceeds

from

borrowings

Addition of

borrowings

from

aquisitions

Foreign

exchange

movement

New

leases Other

December

2021

Non-current interest-bearing debt 1098920 -40420 495392 54395 -84952 - 11757 1535092

Non-current lease liability (note 3.4) 45266 - - - -1642 29449 -29960 43114

Non-current interest-bearing liabilities 1144186 -40420 495392 54395 -86594 29449 -18202 1578206

Non-current interest-bearing debt - - - - - - - -

Non-current lease liability (note 3.4) 15713 -21074 - - - - 28549 23187

Non-current interest-bearing liabilities 15713 -21074 - - - - 28549 23187

Cash ow effects

All amounts in NOK 1 000

1 January

2020

Repayments

of borrowings

and lease

liabilities

Proceeds

from

borrowings

Addition of

borrowings

from

aquisitions

Foreign

exchange

movement

New

leases Other

December

2020

Non-current interest-bearing debt 148562 -312126 1252348 - 5152 - 4984 1098920

Non-current lease liability (note 3.4) 16036 - - - 1430 46263 -18462 45266

Non-current interest-bearing liabilities 164598 -312126 1252348 - 6582 46263 -13478 1144186

Current-interest-bearing debt 16 -16 - - - - -

Current lease liability (note 3.4) 6729 -9479 - - - - 18462 15713

Current interest-bearing liabilities 6745 -9495 - - - - 18462 15713

The “other” column includes the effect of reclassication of non-current portion of the lease liabilities and accrued

interest and amortization.

Mercell – Annual report 2021 76

Consolidated nancial statements

Note 4.4 Cash and cash equivalents

Accounting policies

Cash and cash equivalents in the statement of nancial position comprise cash at banks and short-term deposits with

a maturity of three months or less, which are subject to an insignicant risk of changes in value. For the purpose of the

consolidated statement of cash ows, cash and cash equivalents consist of cash and short-term deposits, as dened

above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.

All amounts in NOK 1 000 31 Dec 2021 31 Dec 2020

Bank deposits, unrestricted 91 863 326 534

Bank deposits, restricted 4 828 1 450

Total in the statement of nancial position 96 691 327 984

Cash at banks earns interest at oating rates based on daily bank deposit rates. Short-term deposits are made for

varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and

earn interest at the respective short-term deposit rates.

The amount included in “Bank deposits, restricted” consists only of withholding payroll taxes.

The Group has a Cash Pool arrangement in Danske Bank where most of the subsidiaries are included.

Note 4.5 Financial income and expenses

Accounting policies

Interest income and interest expenses on interest-bearing debt and receivables is calculated using the effective interest

method.

Foreign currency gains or losses are reported as gain or loss on foreign exchange within in nance income or nance

expense.

Interest expenses on lease liabilities represents the interest rate implicit in the lease used to measure the lease liabilities

recognized in the statement of nancial position.

Mercell – Annual report 202177

Consolidated nancial statements

All amounts in NOK 1 000 2021 2020

Finance income

Interest income 971 1 290

Foreign exchange gains 64 021 29 375

Total nancial income 64 991 30 665

Finance expenses

Interest expenses 95 405 62 322

Interest expense on lease liabilities 4 570 3 071

Foreign exchange losses - 34 133

Other nance expenses -2 187 9 679

Total nancial expenses 97 788 109 205

Foreign exchange currency gain/loss

Foreign exchange currency gain/loss relates mainly to the Group’s SEK 1.6 million bond debt.

Interest income and expenses

Interest income represents mainly interest income on cash deposits, and interest expenses represents mainly interest

expenses on external nancing and lease liabilities, measured and classied at amortised cost in the statement of

nancial position.

Note 4.6 Share capital and shareholders information

On 11 February 2021 Mercell carried out a private placement raising gross proceeds of approximately NOK 434282

thousand in new equity through issuance of 41360 thousand shares at a subscription price of NOK 10.50 per share.

On 20 April and 11 May 2021, the share capital increased due to the exercise of share options. There were in total issued

918 thousand new shares at a strike price of NOK 1.5 per share.

On 5 June 2021 Mercell carried out a private placement raising gross proceeds of approximately NOK 400000 thousand

in new equity through issuance of 46242 thousand new shares at a subscription price of NOK 8.65 per share.

On 9 November 2021, the share capital increased due to new shares subscribed in the Employment Share Ownership

Program. There were in total issued 541 thousand new shares at a subscription price of NOK 5.4 per share.

As of 31 December 2021, the Company had 502664 thousand shares outstanding.

Mercell – Annual report 2021 78

Consolidated nancial statements

The share capital in Mercell Holding ASA consists of the following

Share capital in Mercell Holding ASA

Number of

shares issued

and fully paid

Par value per

share (NOK)

Carrying

amount

At 1 January 2020 222 981 653 0.2 44 596 331

Issuance of share capital 7 July 2020 66 700 000 0.2 13 340 000

Issuance of share capital 31 July 2020 110 670 0.2 22 134

Issuance of share capital 3 December 2020 123 810 000 0.2 24 762 000

At 31 December 2020 413 602 323 0.2 82 720 465

Issuance of share capital 11 February 2021 41 360 230 0.2 8 272 046

Issuance of share capital 20 April 2021 530 570 0.2 106 114

Issuance of share capital 11 May 2021 387 345 0.2 77 469

Issuance of share capital 5 June 2021 46 242 775 0.2 9 248 555

Issuance of share capital 9 November 2021 540 612 0.2 108 122

At 31 December 2021 502 663 855 0.2 100 532 771

Shareholders in Mercell Holding ASA at 31 December 2021 Total shares Ownership Voting rights

STATE STREET BANK AND TRUST COMP 42 300 000 8% 8%

CITIBANK, N.A. 31 061 034 6% 6%

SKANDINAVISKA ENSKILDA BANKEN AB 29 247 857 6% 6%

BARCLAYS CAPITAL SEC. LTD FIRM 27 531 921 5% 5%

VIKING VENTURE 16B AS 25 912 103 5% 5%

THE BANK OF NEW YORK MELLON SA/NV 25 349 288 5% 5%

VIKING VENTURE 16 AS 21 291 748 4% 4%

VERDIPAPIRFONDET DNB NORGE 16 812 196 3% 3%

J.P. MORGAN SECURITIES LLC 16 289 141 3% 3%

UBS SECURITIES LLC 15 000 000 3% 3%

MORGAN STANLEY & CO. LLC 14 773 417 3% 3%

MORGAN STANLEY & CO. INT. PLC. 14 242 622 3% 3%

BANQUE DE LUXEMBOURG S.A. 10 541 567 2% 2%

NORDNET BANK AB 10 151 870 2% 2%

GRIEG HOLDINGS II AS 9 567 947 2% 2%

EUROCLEAR BANK S.A./N.V. 8 716 968 2% 2%

MYRLID AS 8 600 000 2% 2%

CAMIVEO AS 7 023 897 1% 1%

UBS AG 6 970 000 1% 1%

GLABELLA AS 6 542 397 1% 1%

Other shareholders 154 737 882 31% 31%

Total 502 663 855 100% 100%

Mercell – Annual report 202179

Consolidated nancial statements

Shareholders in Mercell Holding ASA at 31 December 2020 Total shares Ownership Voting rights

MORGAN STANLEY & CO. LLC 57 958 354 14.01% 14.01%

VIKING VENTURE 16B AS 41 463 436 10.02% 10.02%

VIKING VENTURE 16 AS 34 070 142 8.24% 8.24%

STATE STREET BANK AND TRUST COMP 25 402 720 6.14% 6.14%

SKANDINAVISKA ENSKILDA BANKEN AB 17 117 857 4.14% 4.14%

VERDIPAPIRFONDET NORGE SELEKTIV 15 769 009 3.81% 3.81%

GRIEG HOLDINGS II AS 14 567 947 3.52% 3.52%

VERDIPAPIRFONDET DNB NORGE 13 974 398 3.38% 3.38%

MYRLID AS 11 206 878 2.71% 2.71%

JPMORGAN CHASE BANK, N.A., LONDON 9 174 897 2.22% 2.22%

GOLDMAN SACHS & CO. LLC 8 522 661 2.06% 2.06%

STATE STREET BANK AND TRUST COMP 8 392 179 2.03% 2.03%

HSBC TRINKAUS & BURKHARDT AG 7 493 000 1.81% 1.81%

CAMIVEO AS 7 023 897 1.70% 1.70%

THE BANK OF NEW YORK MELLON SA/NV 6 451 756 1.56% 1.56%

VERDIPAPIRFONDET DNB SMB 6 145 035 1.49% 1.49%

HMH INVEST AS 5 840 000 1.41% 1.41%

DANSKE BANK A/S 4 800 000 1.16% 1.16%

VIKING VENTURE 16C AS 4 453 334 1.08% 1.08%

GLABELLA AS 4 357 512 1.05% 1.05%

Other shareholders 109 417 311 26.01% 26.01%

Total 413 602 323 100% 100%

Shares owned by members of the board and senior executives as 31 December 2021

Name Title 31 Dec 2021 31 Dec 2020

Terje Wibe (Camiveo AS) CEO 7 023 897 7 023 897

Fredrik Eeg (Mineo AS) CFO 400 000 -

Arild Nilsen (Vikas Invest AS) CPO 400 000 -

Helge Nielsen (Helida AS) Board member 2 000 000 2 000 000

Ole-Bjørn Gjerde (Kvasshovd AS) Board member

- 2 010 000

Inge Arne Støve (Nero Invest AS) Board member

- 500 000

Ole-Bjørn Gjerde left his position in the Board 23 April 2021.

Inge Arne Støve left his position in the Board 23 April 2021.

The board of directors is granted an authorisation to increase the Company’s share capital by up to NOK 2730000 in

connection with the Company’s share option program. The authorisation is valid until the Company’s annual general

meeting in 2022, but no longer than to and including 30 June 2022. During 2021 the Company has issued capital of

NOK211059. In addition, the board of directors is granted an authorisation to increase the Company’s share capital by

up to NOK 18200000 in order to nance further growth. The authorisation is valid until the Company’s annual general

meeting in 2022, but no longer than to and including 30 June 2022. During 2021 the Companyhas issuedcapital of

NOK9248555.

Mercell – Annual report 2021 80

Consolidated nancial statements

Note 4.7 Fair value disclosures

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 on 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 for the asset or liability, or

· In the absence of a principal market, in the most advan-

tageous market for the asset or liability

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 par-

ticipants act in their economic best interest. A fair value

measurement of a non-nancial asset takes into account a

market participant’s ability to generate economic benets

by using the asset in its highest and best use or by selling

it to another 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 sufcient data are

available to measure fair value, maximizing the use of

relevant observable inputs and minimizing the use of

unobservable inputs.

All assets and liabilities for which fair value is measured

or disclosed in the nancial statements are categorized

within the fair value hierarchy, described as follows, based

on the lowest level input that is signicant 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 signicant to the fair value measure-

ment is directly or indirectly observable

· Level 3 — Valuation techniques for which the lowest

level input that is signicant to the fair value measure-

ment is unobservable

Fair value disclosures

Management has assessed that the fair values of cash

and short-term deposits, non-current loans from credit

institutions, trade and other receivables, trade payables

and other current liabilities approximate their carrying

amounts largely due to the short-term maturities of these

instruments and the current risk-free interest rates.

The interest-bearing debt as of 31 December 2021

includes a NOK 1600 million bond issue which is traded

publicly on Oslo Børs.

The fair values of the Group’s interest-bearing debt are

determined by using the DCF method using a discount

rate that reects the issuer’s borrowing rate as at the end

of the reporting period. The fair values of the Group’s

interest-bearing debt are in most cases similar to carrying

amount, as the interest rates are oating and as the

own non-performance risk as at 31 December 2021 was

assessed to be insignicant.

Set out below is information on fair value of the Group’s interest bearing bond debt:

All amounts in NOK 1 000 Date

Carrying

amount Fair value Level 1 Level 2 Level 3

Liabilities disclosed at fair value

Interest-bearing bond debt 31.12.2021 1 518 402 1 582 588 X

Interest-bearing bond debt 31.12.2020 1 098 920 1 147 850 X

Mercell – Annual report 202181

Consolidated nancial statements

Note 4.8 Capital and Risk Management

Capital management

The primary objective of the Group’s capital management

is to maximize value creation over time. The Group seeks

to optimize the capital structure by balancing risk and

return on equity against collateral for lenders, require-

ments for liquidity and investment capacity.

The Group manages its capital structure and adjusts in

light of changes in economic conditions and the require-

ments of the nancial covenants. The Group considers a

solid equity ratio to be important to achieving its strategic

goals in the future. Management regularly uses the ratio

between net interest-bearing debt / earnings before inter-

est, tax and depreciation & amortization (NIBD/EBITDA) to

assess the Group’s nancial exibility, as well as the ability

to assume new debt. NIBD and EBITDA are also key ratios

related to incurrence tests for the Group’s non-current

interest-bearing debt . See note 4.2 for further information.

Net interest-bearing debt (NIBD) corresponds to the

sum of “Non-current interest-bearing liabilities”, “Current

interest-bearing liabilities” and “Cash and cash equiva-

lents” in the statement of nancial position. The equity

ratio corresponds to the carrying amount of “Total equity”

divided by the “total equity and liabilities” in in the consol-

idated statement of nancial position. The NIBD was NOK

1505 million (NOK 994 million) and EBITDA was NOK 105

million (NOK -24 million) as at 31.12.2021.

Financial risk

The Group’s principal nancial liabilities, comprise

interest-bearing debt, lease liabilities, and trade and other

payables. The main purpose of these nancial liabilities

is to nance the Group’s operations. The Group’s principal

nancial assets include trade and other receivables,

cash and short-term deposits that derive directly from

its operations. The Group do not hold derivative nancial

instruments.

The Group is exposed to a range of risks affecting its

nancial performance, including market risk, credit risk

and liquidity risk. The Group seeks to minimise potential

adverse effects of such risks through sound business

practice and risk management.

Risk management is carried out by Group management

under policies approved by the Board. The Board reviews

and agrees policies for managing each of these risks,

which are summarised below:

Market risk

Market risk is the risk that the fair value or future cash

ows of a nancial instrument will uctuate because

of changes in market prices. Market risk for the Group

comprises two types of risk: interest rate risk and currency

risk. Financial instruments affected by market risk include

interest bearing debt, cash and cash and cash equivalents,

trade receivables, lease liabilities and trade and other

payables.

Interest rate risk

Interest rate risk is the risk that the fair value of future

cash ows of a nancial instrument will uctuate because

of changes in market interest rates. The Group’s exposure

to the risk of changes in market interest rates relates

primarily to the Group’s interest-bearing debt which

have base interest rates in STIBOR. The Group does

not currently hedge the base interest rates. The current

interest rate environment is low and the Group may enter

into contracts to offset some of the risk depending on the

future expected interest rates.

Interest rate sensitivity

The sensitivity to a possible change in interest rates

related to the Group’s interest-bearing debt, with all other

variables held constant, on the Group’s prot before tax,

is illustrated below. In calculating the sensitivity analyses,

the Group assumes that the sensitivity of the relevant

statement of prot or loss item is the effect of the

assumed changes in respective nancial risks.

Mercell – Annual report 2021 82

Consolidated nancial statements

Interest rate sensitivity (STIBOR 3 months)

All amounts in NOK 1 000

Increase /

decrease in

basis points

Effect on prot

after tax (+/-) Effect on equity

31 December 2021 +/- 100 11 844 11 844

31 December 2020 +/- 100 8 572 8 572

Interest-bearing liabilities

All amounts in NOK 1 000 31 Dec 2021 31 Dec 2020

Interest-bearing bond debt (note 4.2) 1 518 402 1 098 920

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash ows of an exposure will uctuate because of changes

in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates as the Group has

foreign subsidiaries. The Group has investments in foregin subsidiaries which has functional currency in SEK, DKK, EUR

and GBP. In addition, the Group interest-bearing debt is denominated in SEK. Interest is accumulated and payed quarterly.

As these payments are in SEK, this represents a risk of exposure to foreign currency.

The Group does not hedge currency exposure with the use of nancial instruments at the current time, but monitors the

net exposure over time.

Foreign currency sensitivity

The following table illustrates the sensitivity for a hypothetical increase or decrease in the foreign exchange rates related

to the Group’s interest-bearing debt in the period, holding all other variables constant:

Foreign currency sensitivity

All amounts in NOK 1 000 Date Change in FX rate

Effect on prot

before tax

Effect on equity

(after tax)

Increase / decrease in NOK/SEK 31 Dec 2021 +/- 10% 151 840 118 435

Increase / decrease in NOK/SEK 31 Dec 2020 +/- 10% 109 892 85 716

10 per cent is used as it is considered to be a reasonable uctuation in SEK/ NOK based on calculations on previous

years variance.

Mercell – Annual report 202183

Consolidated nancial statements

Liquidity risk

Liquidity risk is the risk that the Group will encounter

difculty in meeting obligations associated with nancial

liabilities that are settled by delivering cash or another

nancial asset. The Group monitors its risk to a shortage

of funds by monitoring its working capital, overdue trade

receivables and establishing credit facilities.

The Group’s objective is to maintain a balance between

continuity of funding and exibility through the use of

credit facilities and bond debt to nance working capital

and capital investments, without incurring any signicant

economical losses.

For overview of ageing of nancial liabilities refer to note

4.3.

Credit risk

Credit risk is the risk that a counterparty will not meet

its obligations under a nancial instrument or customer

contract, leading to a nancial loss. The Group is exposed

to credit risk from its operating activities (primarily trade

receivables). As the counterparty to Cash and cash equiva-

lents is respectable banks the credit risk associated is

considered to be small.

The Group manages its credit risks by trading only with

creditworthy third parties. It is the Group’s policy that all

customers wishing to trade on credit terms are subject to

credit verication procedures, which include an assess-

ment of credit rating and review of prior payment issues.

The Group ensures that the outstanding amounts do not

exceed the set credit limits as means of mitigating the risk

of nancial loss from defaults.and receivable balances are

monitored on an ongoing basis. In addition, the Group’s

customers are mainly public sector entities. As a result,

the risk that counterparties do not have the nancial ability

to meet their obligations is considered low in the markets

in which the group operates.

The maximum exposure to credit risk at the reporting

date is the carrying value of each class of nancial assets

disclosed in note 4.1

No agreements have been entered into for set-off/netting

of nancial instruments.

Mercell – Annual report 2021 84

Consolidated nancial statements

Section 5 Tax

Note 5.1 Tax expense

Accounting policies

Income tax expense

Income tax expense consist of current income tax and

change in deferred tax.

Current income tax

Current income tax is measured at the amount expected

to be recovered from or paid to the taxation authorities.

Current income tax relating to items recognized directly in

equity is recognized in equity (OCI) and not in the state-

ment of prot or loss.

Deferred tax

Deferred tax assets and deferred tax liabilities are cal-

culated based on the differences between the basis for

tax assets and liabilities and their carrying amounts for

nancial reporting purposes at the reporting date, with the

exception of:

· initial recognition of goodwill, initial recognition of an

asset or liability in a transaction which is not a business

combination, and is not at the time of the transaction,

affects neither the accounting prot nor taxable prot or

loss

· taxable temporary differences associated with invest-

ments in subsidiaries, when the timing of the reversal

of the temporary differences can be controlled and it is

probable that the temporary differences will not reverse

in the foreseeable future

Deferred tax assets are recognized to the extent that it

is probable that taxable prot will be available against

which the deductible temporary differences, and the carry

forward of unused tax credits and unused tax losses can

be utilized.

The carrying amount of deferred tax assets is reviewed

at each reporting date and reduced to the extent that it

is no longer probable that sufcient taxable prot will be

available to allow all or part of the deferred tax asset to be

utilized. Unrecognized deferred tax assets are re-assessed

at each reporting date and are recognized to the extent

that it has become probable that future taxable prots will

allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax

rates that are expected to apply in the year when the asset

is realised or the liability is settled, based on tax rates (and

tax laws) that have been enacted or substantively enacted

at the reporting date.

Deferred tax relating to items recognised outside prot

or loss is recognised outside prot or loss. Deferred tax

items are recognised in correlation to the underlying

transaction either in OCI or directly in equity. Deferred tax

assets and deferred tax liabilities are offset if a legally

enforceable right exists to set off current tax assets

against current tax liabilities and the deferred taxes relate

to the same taxable entity and the same taxation authority.

Mercell – Annual report 202185

Consolidated nancial statements

Reconciliation Deferred tax assets

All amounts in NOK 1 000

Deferred tax assets recognised in balance sheet 01.01.2020 15 535

Additions from acquisitions 4 752

Tax recognized in the income statement 6 415

Deferred tax assets recognised in balance sheet 31.12.2020 26 703

Deferred tax assets recognised in balance sheet 01.01.2021 26 703

Additions from acquisitions -855

Tax recognized in the income statement 4 170

Deferred tax assets recognised in balance sheet 31.12.2021 30 018

Reconciliation Deferred tax liabilities

All amounts in NOK 1 000

Deferred tax liabilities recognised in balance sheet 01.01.2020 10 019

Additions from acquisitions 144 191

Tax recognized in the income statement -3 398

Translation differences 650

Deferred tax liabilities recognised in balance sheet 31.12.2020 151 462

Deferred tax liabilities recognised in balance sheet 01.01.2021 151 462

Additions from acquisitions 54 052

Tax recognized in the income statement -23 243

Translation differences -8 020

Deferred tax liabilities recognised in balance sheet 31.12.2021 174 250

Current income tax expense

All amounts in NOK 1 000 2021 2020

Tax payable recognised in the income statement 24 180 1 789

Change deferred tax/deferred tax assets (ex. OCI effects) -27 413 -9 814

Total income tax expense -3 234 -8 025

Mercell – Annual report 2021 86

Consolidated nancial statements

Deferred tax assets

All amounts in NOK 1 000 2021 2020

Property, plant and equipment 7 652 4 653

Property, plant and equipment (IFRS 16) 3 756 2 386

Other current assets -74 146 10 837

Liabilities 47 384 31 636

Losses carried forward (including tax credit) 584 883 397 222

Basis for deferred tax assets: 569 530 446 734

Calculated deferred tax assets 125 297 98 281

- Deferred tax assets not recognised 95 279 71 579

Net deferred tax assets recognised in balance sheet 30 018 26 703

Deferred tax liabilities

All amounts in NOK 1 000 2021 2020

Property, plant and equipment (including leased assets) 777 936 665 232

Other current assets 46 092 15 989

Liabilities 553 296

Basis for deferred tax liabilities: 824 581 681 518

Deferred tax liabilities recognised in balance sheet 174 250 151 462

Reconciliation of income tax expense

All amounts in NOK 1 000 2021 2020

Income tax expense at corporate income tax rate in Norway (22%) -25 624 -33 940

Effect of tax rates outside Norway 2 068 907

Non-taxable and non-deductible items -9 484 1 513

Deferred tax assets not recognised current year 29 806 23 495

Recognised income tax expense -3 234 -8 025

Mercell – Annual report 202187

Consolidated nancial statements

Section 6 Group and related parties

Note 6.1 Group companies

The following subsidiaries are included in the consolidated nancial statements 31 December 2021:

Consolidated entities Country Ownership Registered ofce

Mercell Suomi OY Finland 100% Et. Esplanadi 22, Helsinki

Mercell Latvia SIA

Latvia

100%

Dzirnavu iela 37-41, LV-1010 Riga

Mercell Estonia OÜ Estonia 100% Rävala 15, 10143 Tallinn

UAB Mercell Lithuania Lithuania 100% Zirmuny g. 139, Vilnius

Mercell Danmark A/S Denmark 100% Klosterbakken 12, 5000 Odense C

Mercell Svenska AB

Sweden

100%

Kampegatan 6, 41104 Goteborg

Mercell Norge AS Norway 100% Askekroken 11, 0277 Oslo

Mercell Midco AS Norway 100% Askekroken 11, 0277 Oslo

Udbudsvagten A/S Denmark 100% Øster Allé 48, 2100 København Ø

Licitio A/S Denmark 100% Øster Allé 48, 2100 København Ø

EU-Supply LTD United Kingdom 100% 10 Queen Street Place, London EC4R 1AG

EUS Holdings LTD United Kingdom 100% 10 Queen Street Place, London EC4R 1AG

Mercell CTM AB Sweden 100% Sveavägen 159, 113 46 Stockholm

Mercell A/S Denmark 100% Havneparken 1, 7100 Vejle

Mercell Commerce AB Sweden 100% Lindhagensgatan 94, 112 18 Stockholm

Mercell Commerce AS Norway 100% Karenslyst allé 56, 0277 Oslo

Mercell Nederland BV Nederland 100% Rijnzathe 32, 3454 PV Utrecht, Netherlands

Mercell US Inc USA 100% 228 East 45th Street, Suite 9E, New York, N.Y. 10017, USA

Negometrix Bulgaria

Bulgaria

100%

9 Shipchenski Prohod Blvd., .1, Slatina region, Geo Milev r.c, Soa,

Bulgaria

Commerce Hub BV Nederland 100% Rijnzathe 32, 3454 PV Utrecht, Netherlands

Ibistic International A/S

Denmark

100%

Årshugade 88, i Sal, 2100 København Ø

Ibistic Technologies A/S Denmark 100% Årshugade 88, i Sal, 2100 København Ø

Ibistic Technologies AS Norway 100% Askekroken 11, 0277 Oslo

CTM Solutions BV Nederland 100% Van Baerlestraat 13 A, 1071 AM in Amsterdam, the Netherlands

Cloudia Oy

Finland

100%

Ludviginkatu 3 A, FI-00130, Helsinki, Finland

Cloudia DMCC Dubai 100% Platinum Tower, Ofce 3106, Cluster I, Jumeirah Lake Towers, Dubai,

United Arab Emirates

SafeTag Group AS Norway 100% Askekroken 11, 0277 Oslo

TrueDevelop Sp. z o.o

Poland

67%

Mazowiecka 11 app. 49 00-052 Warszawa

Mercell – Annual report 2021 88

Consolidated nancial statements

The following subsidiaries are included in the consolidated nancial statements 31 December 2020:

Consolidated entities Country Ownership Registered ofce

Mercell Suomi OY

Finland

100%

Et. Esplanadi 22, Helsinki

Mercell Latvia SIA Latvia 100% Dzirnavu iela 37-41, LV-1010 Riga

Mercell Estonia OÜ Estonia 100% Rävala 15, 10143 Tallinn

UAB Mercell Lithuania Lithuania 100% Zirmuny g. 139, Vilnius

Mercell Danmark A/S

Denmark

100%

Klosterbakken 12, 5000 Odense C

Mercell Svenska AB Sweden 100% Kampegatan 6, 41104 Goteborg

Mercell Norge AS Norway 100% Askekroken 11, 0277 Oslo

Mercell Midco AS Norway 100% Askekroken 11, 0277 Oslo

Backup Team Aps Denmark 100% Øster Allé 48, 2100 København Ø

Udbudsvagten A/S Denmark 100% Øster Allé 48, 2100 København Ø

eLuence A/S Denmark 100% Øster Allé 48, 2100 København Ø

Licitio A/S Danmark 100% Øster Allé 48, 2100 København Ø

EU-Supply LTD United Kingdom 100% 10 Queen Street Place, London EC4R 1AG

EUS Holdings LTD United Kingdom 100% 10 Queen Street Place, London EC4R 1AG

EU-Supply Holding AB Sweden 100% Sveavägen 159, 113 46 Stockholm

DK lial av EU-Supply Holding AB Danmark 100% Algade 44, 4000 Roskilde

Akses Innkjøp AS Norway 100% Furulund 40, 8230 Sulitjelma

Truelink A/S

Denmark

100%

Havneparken 1, 7100 Vejle

Tricom ApS Denmark 100% Holmbladsgade 133, 2300 København S

Comcare A/S Denmark 100% Ørestads Boulevard 108, 2300 København S

Mercell Commerce AB Sweden 100% Lindhagensgatan 94, 112 18 Stockholm

Mercell Commerce AS

Norway

100%

Karenslyst allé 56, 0277 Oslo

SafeTag Group AS Norway 100% Askekroken 11, 0277 Oslo

Note 6.2 Business combination

Accounting policies

A business combination is as a transaction or other event in which the Group obtains control of one or more businesses.

A business consists of inputs and processes applied to those inputs that have the ability to create outputs. Determining

whether a particular set of assets and activities is a business should be based on whether the integrated set is capable

of being conducted and managed as a business by a market participant.

Business combinations are accounted for according to IFRS 3 using the acquisition method, also called purchase price

allocation (PPA). The cost of an acquisition is measured as the aggregate of the consideration transferred, which is

measured at acquisition date fair value according to IFRS 13, and the amount of any non-controlling interests in the

acquiree. Acquisition-related costs are expensed as incurred and included in other operating expenses.

When the Group acquires a business, it assesses the nancial assets and liabilities assumed for appropriate classica-

tion and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at

Mercell – Annual report 202189

Consolidated nancial statements

the acquisition date.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at tihe acquisition date.

Contingent consideration classied as an asset or liability that is a nancial instrument and within the scope of IFRS 9

Financial Instruments: Classication, is measured at fair value with the changes in fair value recognised in the statement

of comprehensive income.

Goodwill arises in a business combination when the fair value of consideration transferred exceeds the fair value of iden-

tiable assets acquired less the fair value of identiable liabilities assumed. Goodwill acquired in a business combination

is allocated to each of the Group’s cash-generating units that are expected to benet from the combination irrespective

of whether other assets or liabilities of the acquiree are assigned to those units, and tested subsequently for impairment.

Reference is made to note 3.2 for an overview of the Group’s goodwill and note 3.5 gives an overview of the Group’s

CGUs and annual impairment testing of the CGU to which goodwill is allocated.

Signicant accounting estimates, assumptions and judgements

In a business combination, the assets acquired and liabilities assumed are valued at fair value at the time of acquisition.

The various assets and liabilities are valued on the basis of different models, requiring estimates and assumptions to be

made. Goodwill is the residual in this type of purchase price allocation. Errors in estimates and assumptions can lead to

an error in the split of the value between the various assets and liabilities incl. goodwill, but the sum of the total excess

values will always be consistent with the purchase price paid.

The useful lives of the intangible assets acquired in a business combination are assessed as either nite or indenite

and may in some cases involve considerable judgements. Intangible assets acquired with nite useful lives are amor-

tised 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 amortisation method for an intangible asset with a nite useful life

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 benets embodied in the asset are considered to modify the amortisation period or

method, as appropriate, and are treated as changes in accounting estimates.

Acquisitions during 2021

Acquisition

Main business

activity

Date of business

combination

Proportion of voting

equity acquired

Acquiring

entity

Negometrix B.V. Pre-award buyer 10 Feb 2021 100% Mercell Holding ASA

CTMS B.V. Pre-award buyer 11 May 2021 100% Mercell Holding ASA

Ibistic International A/S Post-award 11 May 2021 100% Mercell Holding ASA

Cloudia Oy Pre-award buyer 08 Jun 2021 100% Mercell Holding ASA

Mercell – Annual report 2021 90

Consolidated nancial statements

Negometrix B.V.

On 10 February 2021, The Group acquired 100 per cent

of the voting shares of Negometrix B.V., a Netherland-

based company providing e-tendering solutions in the

Netherlands, with an established foothold in the US market

and an integrated technology hub in Bulgaria.

The transaction is recorded as a business combination

in accordance with IFRS 3. The acquisition date for

accounting purposes corresponds to the date when

Mercell Holding ASA obtained control of the legal entities,

10 February 2021. For tax and economic purposes, the

effective date was 10 February 2021.

The acquisition-date fair value of the total consideration

transferred was NOK 273.6 million in cash and estimated

contingent consideration of NOK 15.7 million (not yet paid).

Transaction costs of NOK 5.8 million were expensed and

are included in M&A costs. From the date of acquisition,

Negometrix has contributed NOK 59.9 million of revenue

and NOK 6.5 million to the net prot before tax.

CTMS B.V.

On 11 May 2021, the Group acquired 100 per cent of the

shares in CTM Solution B.V, a Netherland-based software-

as-a-service distributor company providing e-procurement

software that includes sourcing, tendering, and contract

management.

The transaction is recorded as a business combination in

accordance with IFRS 3. The acquisition date for account-

ing purposes corresponds to the date when Mercell

Holding ASA obtained control of the legal entities, 11 May

2021. For tax and economic purposes, the effective date

was 11 May 2021.

The acquisition-date fair value of the total consideration

transferred was NOK 17.9 million in cash. Transaction

costs of NOK 1.1 million were expensed and are included

in M&A costs. From the date of acquisition, CTMS has

contributed NOK 4.7 million of revenue and NOK -77.2

thousand to the net prot before tax.

In relation to the acquisition of CTMS, there are no

conditional earnout liability included in the purchase price.

However, pursuant to the terms of the share purchase

agreement, a conditional earnout amount is payable by

the Group conditional upon the retainment of key employ-

ees, which is regarded as remuneration and matures 12

months from the closing of the acquisition. Assuming that

all conditions are met, the total earnout amount will be

EUR 0.5 million. If none of the relevant conditions are met,

the total earnout amount will be zero. As at 31 December

2021, all conditions are met and a total amount of EUR 0.5

million has been accrued.

Ibistic International A/S

On 11 May 2021, the Group acquired 100 per cent of

the shares in Ibistic International A/S, an Danish-based

software-as-a-service distributor company which provides

invoice and expense management.

The transaction is recorded as a business combination in

accordance with IFRS 3. The acquisition date for accounting

purposes corresponds to the date when Mercell Holding

ASA obtained control of the legal entities, 11 May 2021. For

tax and economic purposes, the effective date was 11 May

2021.

The acquisition-date fair value of the total consideration

transferred was NOK 37.5 million in cash, deferred payment

and estimated contingent consideration of NOK 8.3 million

(not yet paid). Transaction costs of NOK 0.8 million were

expensed and are included in M&A costs. From the date

of acquisition, Ibistic has contributed NOK 14.9 million of

revenue and NOK 3.1 million to the net prot before tax.

Cloudia Oy

On 08 June 2021, the Group acquired 100 per cent of the

shares in Cloudia Oy, a Finland-based software-as-a-ser-

vice distributor company that provides sourcing, contract,

and supplier management.

The transaction is recorded as a business combination in

accordance with IFRS 3. The acquisition date for account-

ing purposes corresponds to the date when Mercell

Holding ASA obtained control of the legal entities, 8 June

2021. For tax and economic purposes, the effective date

was 08 June 2021.

The acquisition-date fair value of the total consideration

transferred was NOK 905.9 million in cash. Transaction

costs of NOK 22.8 million were expensed and are included

in M&A costs. From the date of acquisition, Cloudia has

contributed NOK 47.9 million of revenue and NOK 6.1

million to the net prot before tax.

Mercell – Annual report 202191

Consolidated nancial statements

In relation to the acquisition of Cloudia Oy, a conditional

earnout amount is payable by the Group conditional upon

satisfaction of retention and performance targets for key

employees for 2021. This element is regarded as remuner-

ation and accrued over the vesting period, lasting one year

from the aquisition date. Assuming that all conditions are

met, the total earnout amount will be EUR 10 million, paid

in Shares during 2022 (based on the Share price at the

time of the share issue). If none of the conditions are met,

the total earnout amount will be zero.

Based on the Group’s forecast as of 31 December 2021,

the conditions will not be met. An amount of NOK 34.2

million that have been accrued as salary and personnel

expenses in the second and third quarter of 2021 are

reversed in the fourth quarter.

Based on the Group’s forecast as of 31 December 2021,

the conditions will not be met. An amount of NOK 34.2

million that have been accrued as salary and personnel

expenses in the second and third quarter of 2021 are

reversed in the fourth quarter.

Based on a provisional purchase price allocation (PPA),

the below table illustrates the fair values of the identi-

able assets in Negometrix, CTMS, Ibistic and Cloudia at

acquisition dates:

Acquisitions during 2021

10 Feb 2021

Negometrix B.V.

11 May 2021

CTMS B.V.

11 May 2021

Ibistic

International A/S

08 Jun 2021

Cloudia Oy

Technology 30 803 - 2 443 40 445

Brand 1 683 - 688 8 895

Customer relationship 60 246 7 084 18 208 109 884

Deferred tax assets 1 403 - 51 19 668

Other non-current assets 3 387 678 420 4 156

Total non-current assets 97 522 7 762 21 811 183 048

Current assets

Accounts receivables 17 433 1 129 3 929 12 858

Other current assets 2 244 - 279 1 389

Cash and cash equivalents 14 971 9 313 846 25 831

Total current assets 34 647 10 442 5 054 40 078

Total assets 132 169 18 203 26 865 223 125

Deferred tax liability 13 516 1 063 2 486 30 585

Other non-current liabilites 8 675 - 1 347 40 160

Total non-current liabilities 22 191 1 063 3 833 70 745

Accounts payable 2 047 4 930 661 1 033

Other current liabilities 38 959 5 089 9 567 74 271

Total current liabilities 41 005 10 018 10 229 75 304

Total liabilities 63 196 11 081 14 062 146 049

Total identiable net assets at fair value 68 973 7 122 12 803 77 076

Purchase consideration 273 677 17 919 37 526 905 928

Goodwill arising on acquisition 204 705 10 796 24 723 828 851

Purchase consideration

Cash consideration paid 257 967 17 919 20 760 905 928

Deferred consideration - - 8 476 -

Estimated contingent consideration (not yet paid) 15 700 - 8 290 -

Total consideration 273 667 17 919 37 526 905 928

Mercell – Annual report 2021 92

Consolidated nancial statements

Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance

with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of

expected synergies arising from the acquisition and assembled workforce, which is not separately recognised.

None of the goodwill recognised is deductible for income tax purposes.

Analysis of cash ows on acquisition

Negometrix

B.V CTMS B.V.

Ibistic

International A/S Cloudia Oy

Net cash acquired (included in the cash ow from investing activities) 14 971 9 313 846 25 831

Cash paid (included in the cash ow from investing activities) 257 967 17 919 22 365 905 928

Net cash ow from acquisition -242 996 -8 606 -21 519 -880 097

Acquisition of Cloudia in July 2021

The net assets recognised for Cloudia in the interim nancial statements for the second quarter 2021, were based on

a provisional assessment of their fair value while the Group was nalizing the review and measurement of customer

base. This review had not been completed by the date of interim nancial statements for the second quarter 2021 were

approved for issue by the Board of Directors. By the end of December 2021, the review was completed and customer-re-

lated assets were remeasured due to new information obtained related to facts and circumstance that existed at the

date of acquisition. As a result, a reallocation between customer relationships and goodwill have been performed by a

decrease in customer relationship of NOK 40.0 million and an increase in goodwill of NOK 32.0 million adjusted for an

decrease in deferred tax liabilities of NOK 8.0 million.

Acquisitions during 2020

Acquisition

Main business

activity

Date of business

combination

Proportion of voting

equity acquired

Acquiring

entity

Aksess Innkjøp AS Post-Award 28 Feb 2020 100% Mercell Holding ASA

TrueLink A/S Post-Award 14 May 2020 100% Mercell Holding ASA

Tricom ApS Post-Award 22 Jun 2020 100% Mercell Holding ASA

Comcare A/S Post-Award 03 Sep 2020 100% Mercell Holding ASA

Visma Commerce Pre-Award 10 Dec 2020 100% Mercell Holding ASA

Aksess Innkjøp AS

On 28 February 2020, The Group acquired 100 per cent

of the voting shares of Aksess Innkjøp AS, a Norwegian-

based company operating a portal for handling digital

commercial documents. Aksess Innkjøp AS is part of the

post-award segment after the acquisition.

The transaction is recorded as a business combination

in accordance with IFRS 3. The acquisition date for

accounting purposes corresponds to the date when

Mercell Holding ASA obtained control of the legal entities,

28 February 2020. For tax and economic purposes, the

effective date was 28 February 2020.

The acquisition-date fair value of the total consideration

transferred was NOK 10 million in cash. Transaction costs

of NOK 0.3 million were expensed and are included in

M&A costs. From the date of acquisition, Aksess Innkjøp

has contributed NOK 6.9 million of revenue and NOK -0.1

million to the net prot before tax in 2020.

TrueLink A/S

On 14 May 2020, the Group acquired 100 per cent of the

voting shares of TrueLink A/S, a Denmark-based company

operating a portal for handling digital commercial docu-

ments. TrueLink Group is part of the post-award segment

after the acquisition.

Mercell – Annual report 202193

Consolidated nancial statements

The transaction is recorded as a business combination in

accordance with IFRS 3. The acquisition date for account-

ing purposes corresponds to the date when Mercell

Holding ASA obtained control of the legal entities,14 May

2020. For tax and economic purposes, the effective date

was 14 May 2020.

The acquisition-date fair value of the total consideration

transferred was NOK 58.2 million in cash. Transaction

costs of NOK 1.56 million were expensed and are included

in M&A costs. From the date of acquisition, TruLink Group

has contributed NOK 15.1 million of revenue and NOK 8.3

million to the net prot before tax in 2020.

Tricom ApS

On 22 June 2020, The Group acquired 100 per cent of the

voting shares of Tricom A/S, a Denmark-based software-

as-a-service (“SaaS”) company which provides e-pro-

curement solutions. Tricom A/S is part of the post-award

segment after the acquisition.

The transaction is recorded as a business combination in

accordance with IFRS 3. The acquisition date for account-

ing purposes corresponds to the date when Mercell

Holding ASA obtained control of the legal entities, 22 june

2020. For tax and economic purposes, the effective date

was 20 June 2020.

The acquisition-date fair value of the total consideration

transferred was NOK 114.5 million in cash. Transaction

costs of NOK 1.76 million were expensed and are included

in M&A costs. From the date of acquisition, Tricom A/S

has contributed NOK 17.2 million of revenue and NOK -4.5

million to the net prot before tax in 2020.

Comcare A/S

On 3 September 2020, The Group acquired 100 per cent

of the voting shares of Comcare A/S, a Denmark-based

software-as-a-service (“SaaS”) company which provides

e-procurement solutions. Comcare A/S is part of the post-

award segment after the acquisition.

The transaction is recorded as a business combination

in accordance with IFRS 3. The acquisition date for

accounting purposes corresponds to the date when

Mercell Holding ASA obtained control of the legal entities,

3 September 2020. For tax and economic purposes, the

effective date was 3 September 2020.

The acquisition-date fair value of the total consideration

transferred was NOK 91.6 million in cash. Transaction

costs of NOK 1.43 million were expensed and are included

in M&A costs. From the date of acquisition, Comcare A/S

has contributed NOK 10.8 million of revenue and NOK -7.2

million to the net prot before tax 2020.

Visma Commerce

On 10 December 2020, The Group acquired the Opic and

TendSign product suites (the “Target Group”), which is

currently situated in the three entities: Visma Commerce

AB, Visma Commerce AS and Visma Labs AB. Opic is a

leading Swedish procurement information portal/moni-

toring service, aimed at small/medium sized businesses

in Sweden and Norway. Sales is mainly targeted towards

the private sector. TrendSign is a leading Swedish cloud

services for digital procurement used by both public enti-

ties and private companies. Opic is part of the pre-award

supplier segment and TendSign is part of the pre-award

buyer segment after the acquisition.

The transaction is recorded as a business combination

in accordance with IFRS 3. The acquisition date for

accounting purposes corresponds to the date when

Mercell Holding ASA obtained control of the legal entities,

10 December 2020. For tax and economic purposes, the

effective date was 10 December 2020.

The acquisition-date fair value of the total consideration

transferred was NOK 2.215.8 million in cash. Transaction

costs of NOK 43.8 million were expensed and are included

in M&A costs. From the date of acquisition, Visma

Commerce has contributed NOK 18.2 million revenue and

NOK 9.2 million to the net prot before tax in 2020.

Mercell – Annual report 2021 94

Consolidated nancial statements

The below table illustrates the fair values of the identiable assets in Aksess Innkjøp, Truelink, Tricom, Comcare and

Visma Commerce acquisition date:

Acquisitions during 2020

28 Feb 2020

Aksess Innkjøp AS

14 May 2020

TrueLink A/S

22 Jun 2020

Tricom ApS

03 Sep 2020

Comcare A/S

10 Dec 2020

Visma

Commerce

Technology 622 3 449 4 473 4 504 88 001

Brand - 658 430 919 8 865

Backlog 1 005 4 469 6 843 9 930 -

Customer relationship 1 823 8 009 15 018 15 440 533 687

Machines and equipment 77 - 476 2 486 -

Other non-current assets 4 538 375 - - -

Total non-current assets 8 065 16 959 27 238 33 278 630 553

Deposits - 282 340 784 -

Accounts receivables 1 643 3 222 5 212 2 966 50 888

Other current assets 10 1 381 440 4 246 433

Cash and cash equivalents 13 5 322 3 622 -100 154 171

Total current assets 1 666 10 207 9 613 7 896 205 492

Total assets 9 731 27 166 36 852 41 174 836 045

Deferred tax liability - 3 621 5 407 6 632 130 970

Total non-current liabilities - 3 621 5 407 6 632 130 970

Accounts payable - 273 1 169 - 11 582

Other current liabilities 3 833 7 114 10 665 16 902 127 428

Total current liabilities 3 833 7 387 11 834 16 902 139 010

Total liabilities 3 833 11 008 17 241 23 534 269 980

Total identiable net assets at fair value 5 898 16 159 19 611 17 641 566 064

Purchase consideration 10 000 58 181 114 473 91 573 2 215 801

Goodwill arising on acquisition 4 102 42 022 94 862 73 933 1 649 736

Purchase consideration

Cash consideration paid 10 000 58 181 114 473 88 507 2 057 867

Estimated contingent consideration (not

yet paid) - - - 3 066 -

Sellers credit - - - - 157 934

Total consideration 10 000 58 181 114 473 91 573 2 215 801

Mercell – Annual report 202195

Consolidated nancial statements

Provision for deferred tax is made for the difference between acquisition cost and acquired tax base in accordance

with IAS 12. Offsetting entry of this non-cash deferred tax is goodwill. The remaining goodwill comprises the value of

expected synergies arising from the acquisition and assembled workforce, which is not separately recognised.

None of the goodwill recognised is deductible for income tax purposes.

Analysis of cash ows on acquisition

Aksess

Innkjøp AS TrueLink A/S Tricom ApS Comcare A/S

Visma

Commerce

Net cash acquired (included in the cash

ow from investing activities) 13 5 322 3 622 -100 154 171

Cash paid (included in the cash ow

from investing activities) 10 000 58 181 114 473 88 507 2 057 867

Net cash ow from acquisition -9 987 -52 859 -110 851 -88 607 -1 903 697

The table below shows the Group’s revenue and prot before tax for the twelve months period ended 31 December 2021

and 2020 if the business combinations had taken place at the beginning of the year:

All amounts in NOK 1 000 2021 2020

Revenue 706 296 311 906

Revenue from acquired entities pre acquisition 47 051 225 882

Pro forma revenue 753 347 537 787

All amounts in NOK 1 000 2021 2020

Loss before tax -116 469 -154 275

Loss before tax from acquired entities pre acquisition -930 -241 210

Pro forma prot before tax -117 399 -395 485

Mercell – Annual report 2021 96

Consolidated nancial statements

Note 6.3 Share based payment

Accounting policies

Key personnel of the Group receive remuneration in the

form of share-based payments, which are settled both with

shares (equity-settled program) and in cash (cash-settled

transactions).

Equity-settled programs

The equity-settled share option program gives the

employee right to purchase shares. The program is

measured at fair value at the date of the grant. The fair

value of the issued options is expensed as an employee

benet cost with a corresponding increase in equity over

the vesting period. Social security tax on the options is

recorded as a liability and is recognized over the estimated

vesting period.

Cash-settled programs

A liability is recognised for the fair value of cash-settled

transactions. The fair value is measured initially and at

each reporting date up to and including the settlement

date, with changes in fair value recognised in employee

benets expense. The fair value is expensed over the

period until the vesting date with recognition of a corre-

sponding liability. Social security tax on the options is

recorded as a liability and is recognized over the estimated

vesting period.

Option program

Equity settled programs

In 2018, the Group entered into a share option programme

covering certain employees in senior positions (key

personnel). As at 31.12.2021, 5 employees were included

in the option program. A total of 8267710 options are

included in the stock option program. In Q2 2020, there

was an amendment to the original program, increasing

the period the options be exercised over by two years.

The amendment triggered a new valuation for the options

as the time to maturity was increased. The options are

divided into 36 tranches and will vest monthly.

Cash-settled programs

In 2020, the Group entered into a share option programme

covering certain employees in senior positions (key

personnel). As at 31.12.2021, 5 employees were included

in the option program. A total of 3500000 synthetic

options are included in the program. Options issued under

the rst tranche was subject to monthly vesting with 1/12

vested each month commencing at 9 July 2020, (the

“Initial Vesting Date”), and could consequently be exer-

cised in full at the earliest after one year. The Synthetic

Options issued under the second tranche is also subject

to monthly vesting, commencing one year after the Initial

Vesting Date, and may consequently be exercised in full

at the earliest two years after the Initial Vesting Date. The

exercise period for the Synthetic Options issued in the rst

tranche will expire three years after the Initial Vesting Date,

while the exercise period for the Synthetic Options issued

in the second tranche will expire four years after the Initial

Vesting Date.

Expense from share-based payment transactions

2021 2020

Expense arising from equity-settled share-based payment transactions 195 1 066

Expense arising from cash-settled share-based payment transactions

809 4 526

Total expense arising from share-based payment transactions 1 004 5 593

Mercell – Annual report 202197

Consolidated nancial statements

Equity-settled programs

Overview of outstanding options 2021 2020

Outstanding options 1 Jan 9 185 625 9 849 646

Options granted - -

Options forfeited - -553 351

Options exercised

-917 915 -110 670

Options expired - -

Outstanding options 31 Dec 8 267 710 9 185 625

Of which exercisable 7 986 698 6 755 767

Two employees excercised a total of 917 915 options with a strike price of NOK 1.5 in April and May 2021. The share price was NOK 11.1 for 530 570 of the options at

the date of excercise (14 April 2021). For the 387 345 options exercised on 9 May 2021, the share price was NOK 9.1.

One employee resigned in May 2020 and exercised a total of 110670 options with a strike price of NOK 1.5. The share

price at date of exercise (16 July 2020) was NOK 8.3. 553351 options were forfeited at a strike price of NOK 1.5 in 2020.

The strike price for all equity-settled options is NOK 1.5.

Cash-settled programs

Overview of outstanding options 2021 2020

Outstanding options 1 Jan 3 500 000 -

Options granted - 3 500 000

Options forfeited - -

Options exercised - -

Options expired - -

Outstanding options 31 Dec 3 500 000 3 500 000

Of which exercisable

2 589 041

839 041

The outstanding options are subject to the following conditions:

Cash-settled programs

Expiry date

Average weighted

strike price (NOK)

Number of

share options

09.07.2023 7.38 1 750 000

09.07.2024 7.38 1 750 000

Number of options 3 500 000

Mercell – Annual report 2021 98

Consolidated nancial statements

Equity-settled programs

Expiry date

Average strike

price (NOK)

Number of

share options

27.06.2025 1.5 4 492 812

07.01.2026 1.5 3 264 771

31.12.2021 1.5 233 451

01.08.2026 1.5 276 676

Number of options 8 267 710

The calculations are based on the following assumptions:

Cash-settled programs

· The share price is calculated using standard Black & Scholes conditions.

· The volatility is estimated using the historic volatility of the share price. The expected volatility is therefore stipulated

to be the same as the historic volatility calculated on the basis of the rst six months of price data, which equals a

volatility of 63 per cent.

· The estimated dividend per share is NOK 0 per annum.

· Risk-free interest rate is equal to the return on a Norwegian government bond on the allocation date. The duration of

the stock option is matched against the maturity of the corresponding bond.

Equity-settled programs

· The share price is calculated using standard Black & Scholes conditions

· The volatility is estimated using the historic volatility of similar listed companies. The expected volatility is therefore

stipulated to be the same as the historic volatility of the similar companies, which equals a volatility between 35 per

cent and 46 per cent.

· The estimated dividend per share is NOK 0 per annum.

· Risk-free interest rate is equal to the return on a Norwegian government bond on the allocation date. The duration of

the stock option is matched against the maturity of the corresponding bond.

Mercell – Annual report 202199

Consolidated nancial statements

Section 7 Other information

Note 7.1 Earnings per share

Basic EPS is calculated by dividing the prot for the year attributable to ordinary equity holders of the parent by the

weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the prot attributable to ordinary equity holders of the parent by the weighted

average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares

that might be issued under the equity -settled share based option program.

The following table reects the income and share data used in the basic and diluted EPS calculations:

All amounts in NOK 1 000 2021 2020

Net prot for the year (controlling interest's share) -113 235 -146 250

No. of shares outstanding as at 1 January 2021 413 602 222 982

Share issue during the year (note 4.6) 89 062 190 621

No. of shares (in 1000) outstanding as at 31 December 2021 502 664 413 602

Weighted average number of shares for the purpose of basic earnings per share 477 378 264 756

Basic and diluted

prot for the year attributable to ordinary equity holders of the parent -0.237 -0.552

The Group has issued equity - settled share-based options (see note 6.3) that could potentially dilute basic earnings per share in the future, but were not included in the

calculation of diluted earnings per share because they are antidilutive for the periods presented.

Mercell – Annual report 2021 100

Consolidated nancial statements

Note 7.2 Subsequent events

The escalation of the conict between Russia and Ukraine

which led to armed conicts in Ukraine on 24 February

2022 has an uncertain impact on the world economy. One

of the Group’s platforms has over time been developed

and maintained by a team of 8 persons located in Ukraine.

The operation of the platform is carried out in Denmark,

and the customers using the platform are currently

unaffected as the platform is fully operational. Still, further

development of the platform will most likely be delayed

because of the new challenging circumstances. As a

countermeasure, we are working to train new people so

that ongoing maintenance can be performed by personnel

within the EU. Until further notice, all new development

in the platform will be put on hold and customers are

informed and familiar with the situation. The Group has

also started a more long-term effort to plan the transfer

of customers to our new P2P platform. We expect these

adverse effects to be limited as there are no immediate

effects experienced by customers and appropriate

countermeasures are put in place to ensure continuous

maintenance of the platform.

Indirect effects, such as nancial market volatility, sanc-

tions-related knock-on effects, general economic market

conditions and other future responses of international gov-

ernments, might have an impact on the Group’s nancial

results and nancial position. The Group’s management

continues to monitor the situation and has an ongoing

assessment of potential impact on the Group’s nancial

results and nancial position.

On 24 February 2022, the Group announced in the quar-

terly report that ARR in Cloudia was revised downwards

by approximately EUR 2 million after an invoice audit. As

a result, the Group are withholding the planned earn-out

associated with the transaction of approximately EUR 10

million, and are exploring other options to be compensated

for the ARR shortfall.

Mercell – Annual report 2021101

Consolidated nancial statements

Key performance indicators (KPI)

This section includes information about Key performance indicators applied by the Group.

These Key performance indicators are shown to improve the ability of stakeholders to evaluate the Group’s nancial

performance.

The Group applies the following KPIs;

Annual recurring revenue (ARR)

ARRis the value of the contracted recurring revenue components of subscriptions at any given point in time, normalized

to a one year period, including certain transaction based revenuestied to the subscriptions. Organic ARR growth is

used to measure the Group’s ability to grow by increased ARR from existing and new customers, as opposed to growth

through acquisitions. Organic ARR growth is dened as ARR adjusted for the effects from acquisitions, divestments and

foreign currency effects. Organic ARR growth excludes ARR acquired at the time of acquisition. ARR growth in acquired

companies are included from the subsequent months they have been acquired.

ARR is calculated based on monthly subscriptions fee per 31.12 multiplied by 12 in order to represent an annualized

gure. The Group presents ARR because it consideres it to be an important supplemental measure for stakeholders to

understand the overall picture of revenue generation in the Group’s operating activities. Organic growth is an important

key gure to Mercell and to stakeholders as it illustrates the underlying operational growth by excluding effects related to

aquisitions and other non-operational items.

All amounts in NOK 1 000 2021 2020

Annual recurring revenue 793 234 552 000

Organic ARR growth 18% 32%

Organic ARR growth 2020 is not adjusted for foreign currency effects

Organic revenue growth

Organic revenue growth is used to measure the Groups ability to grow by additional sales to existing and new customers as

opposed to growth through acquisitions. Organic growth is dened as revenue adjusted for the effects from acquisitions,

divestments and foreign currency effects. Organic growth is an important key gure to Mercell and to stakeholders as it

illustrates the underlying operational growth by excluding effects related to aquisitions and other non-operational items.

All amounts in NOK 1 000

Revenue 2020 311 906

Pro forma adjustment for companies aquired in 2020 224 205

Sum revenue 2020 including pro forma adjustments 536 111

Revenue 2021 706 296

Excluding companies aquired in 2021 -126 466

Sum revenue 2021 excluding companies aquired in 2021 579 830

Organic revenue growth 2021 8%

Mercell – Annual report 2021 102

Consolidated nancial statements

All amounts in NOK 1 000

Revenue 2019 154 251

Pro forma adjustment for companies aquired in 2019 33 796

Sum revenue 2019 including pro forma adjustments 188 047

Revenue 2020 311 906

Excluding companies acquired in 2020 -68 179

Sum revenue 2020 excluding companies aquired in 2020 243 727

Organic revenue growth 2020 30%

EBITDA and Adjusted EBITDA

The Groups earnings before interest, tax, depreciation and amortization (EBITDA) is used to provide consistent information

on Mercells operating performance relative to other companies and frequently used by analysts, investors and other

stakeholders. EBITDA, as dened by Mercell, includes total operating revenue. It excludes depreciation, amortization and

impairment loss. Mercell’s denition of EBITDA may differ from that of other companies.

For a reconcoliation of EBITDA refer to the consolidated statement of comprehensive income.

Adjusted EBITDA is a measurement which is used in the internal reporting to management which is also considered to be

relevant for external stakeholders. Adjusted EBITDA is used to better show the underlying performance, as it adjusts for

certain items that are considered extraordinary, such as acqusitions and costs incurred related to its initial public offering.

Mercell’s denition of adjusted EBITDA may differ from that of other companies.

EBITDA and Adj. EBITDA

All amounts in NOK 1 000 2021 2020

Revenue 706 296 311 906

EBITDA 105 005 -23 723

EBITDA Margin 15% -8%

M&A cost

30 379 48 751

Other items

37 511 44 086

Adjusted EBITDA 172 895 69 114

Adjusted EBITDA Margin 24% 22%

Specication of M&A cost:

All amounts in NOK 1 000 2021 2020

Legal due diligence 10 398 10 952

Technical due diligence 1 325 33 844

Financial due diligence 4 252 3 956

Financial M&A support - -

Transfer tax 14 404 -

M&A cost 30 379 48 751

Mercell – Annual report 2021103

Consolidated nancial statements

Specication of other items:

All amounts in NOK 1 000 2021 2020

Advisory fees, listing process 28875 17319

Advisory fees, other 7682 -

Severance pay - 11075

Management bonus IPO - 6941

Management compensation for acquired entities - 3115

Fees for admission to listing - 749

Contingent remuneration arising from business combinations 5546 -

Revolving credit facility 1860 -

System implementation 390 -

Post merger integration 2761 -

Effects of prior period adjustments -9604 4887

Other items 37511 44086

2020 has been restated to show the effects of prior period adjustment made in 2021 relating to this period.

Net interest-bearing debt

The Group denes net interest-bearing debt as cash and cash equivalents, reduced for current and non-current inter-

est-bearing debt, including lease liabilities. It is managements belief that this measure is useful to present as it shows

the actual nancial indebtedness of the group.

All amounts in NOK 1 000 2021 2020

Cash and cash equivalents 96 691 327 984

Less:

Interest-bearing debt to credit institutions (note 4.2) 1 518 402 1 098 920

Non-current lease liability (note 4.2) 43 114 -

Current interest bearing liabilities (note 4.2) 16 690 45 266

Current lease liabilities (note 4.2) 23 187 15 713

Other interest-bearing current liabilities - short term debt related to the acquisition of Visma Commerce

(note 2.7) - 161 591

Net interest bearing debt 1 504 703 993 506

Mercell – Annual report 2021 104

Consolidated nancial statements

Mercell – Annual report 2021105

Parent company nancial statements

Parent company

nancial statements

Statement of comprehensive income 106

Statement of nancial position 107

Statement of cash ows 109

Notes to the parent company nancial statements 110

Accounting principles 110

Note 1 Personnel expenses, number of employees, remuneration, loan to employees, audit fee 112

Note 2 Fixed assets and intangible assets 113

Note 3 Investmetns in subsidaries 114

Note 4 Inter-company balances 114

Note 5 Related party transaction 115

Note 6 Restricted bank deposits 116

Note 7 Equity 116

Note 8 Share capital and shareholder information 117

Note 9 Long-term Liabilities, pledged assets and guarantees 118

Note 10 Long-term liabilities 119

Note 11 Tax 120

Note 12 Financial income and nancial expenses 121

Mercell – Annual report 2021 106

Parent company nancial statements

Statement of comprehensive income

1 January - 31 December

All amounts in NOK 1 000 Note 2021 2020

Operating income and operating expenses

Revenues 5 67 104 60 687

Total operating revenue 67 104 60 687

Salary and personnel expenses 1 37 913 36 131

Impairement of tangible and intangible assets 2 14 814 -

Other expenses 1 125 881 40 832

Total operating expenses before depreciation 178 608 76 963

Depreciation of tangible and intanglible xed assets 2 33 102 20 480

Operating prot/loss -144 606 -36 756

Financial income and expenses

Income from subsidiaries 5 574 2 532

Interest income from group companies 12 304 949

Other interest income 683 588

Other nancial income 236 361 27 003

Interest expense to group companies 12 1 656 622

Other interest expenses 10, 12 93 685 59 809

Other nancial expenses 129 306 40 680

Net nancial items 12 13 276 -70 039

Result before tax -131 330 -106 796

Tax expense 11 - -

Result for the year -131 330 -106 796

Allocation of result for the year

Other equity 7 -131 330 -106 796

Total brought forward -131 330 -106 796

Mercell – Annual report 2021107

Parent company nancial statements

Statement of nancial position

All amounts in NOK 1 000 Note 2021 2020

ASSETS

Non-current assets

Intangible assets

Technology platform 2 150 544 67 851

Total intangible assets 150 544 67 851

Property, plant and equipment

Property, plant & equipment 2 1 443 1 727

Total property, plant and equipment 1 443 1 727

Non-current nancial assets

Investments in subsidiaries 3 3 665 946 2 460 056

Loan to group companies 4 473 058 289 080

Other long-term receivables 1 4 809 4 495

Total non-current nancial assets 4 143 813 2 753 632

Total non-current assets 4 295 800 2 823 210

Current assets

Receivables

Accounts receivables 238 -

Other short-term receivables 4 14 180 14 287

Receivables from group companies 23 437 -

Total receivables 37 854 14 287

Bank deposits, cash and cash equivalents

Bank deposits, cash and cash equivalents 6 5 877 120 896

Total bank deposits, cash and cash equivalents 5 877 120 896

Total current assets 43 731 135 184

Total assets 4 339 531 2 958 394

Mercell – Annual report 2021 108

Parent company nancial statements

Statement of nancial position

All amounts in NOK 1 000 Note 2021 2020

EQUITY AND LIABILITIES

Equity

Paid in equity

Share capital 7, 8 100 533 82 720

Share premium 7 2 579 756 1 791 125

Total paid-up equity 2 680 289 1 873 846

Retained earnings

Other equity 7 -191 703 -158 133

Total retained earnings -191 703 -158 133

Total equity 2 488 585 1 715 713

Liabilities

Long-term liabilities

Liabilities to group companies 4, 12 250 808 118 366

Non-current interest-bearing liabilities 9, 10 1 518 402 1 098 920

Other non-current liabilities 1 5 831 4 797

Total of long-term liabilities 1 775 041 1 222 083

Current liabilities

Liabilities to nancial institutions 9 - 141

Trade payables 8 751 9 637

Public duties payable 2 554 2 950

Liabilities to group companies 4 49 093 12

Other current liabilities 15 507 7 859

Total current liabilities 75 904 20 598

Total liabilities 1 850 945 1 242 681

Total equity and liabilities 4 339 531 2 958 394

The Board of Directors of Mercell Holding ASA

Oslo, 24 March 2022

Sign.

Joar Welde

Chair of the Board

Helge Nielsen

Board Member

Anne Lise Waal

Board Member

Berit Lid Scharff

Board Member

Erik Fjellvær Hagen

Board Member

Terje Wibe

CEO

Mercell – Annual report 2021109

Parent company nancial statements

Statement of cash ows

All amounts in NOK 1 000 2021 2020

Operating activities

Prot/loss before tax -131 330 -106 796

Income tax paid - -

Gain/losses sale shares and other investments - 483

Depreciation and impairment 97 564 29 743

Income from subsidaries - -

Change in trade payables -886 6 350

Change in other operating items 32 507 1 177

Net cash ows from operating activities 54 908 -69 043

Investing activities

Purchase of property, plant and equipment -256 -1 917

Development of software and other intangible assets -130 068 -56 518

Payments on sale of shares - 102

Acquisition of subsidiaries, net of cash acquired -1 058 216 -2 135 629

Proceeds from sales of shares in subsidiaries net of cash disposed -147 673 -

Loans to subsidaries -183 977 -262 009

Net cash ows from investing activities -1 520 192 -2 455 970

Financing activities

Proceeds from long term debt 542 787 1 003 387

Net change in overdraft facilities - 129

Net change in other long-term liabilities 1 034 -196

Proceeds from share issue 838 572 1 638 534

Transaction costs on issue of shares -32 129 -

Net cash ows from nancing activities 1 447 828 2 641 854

Net change in cash and cash equivalents -115 020 116 841

Cash and cash equivalents at the beginning of the period 120 896 4 056

Cash and cash equivalents at the end of the period 5 877 120 896

Mercell – Annual report 2021 110

Parent company nancial statements

Notes to the parent company nancial statements

Accounting principles

Basis for preparation

The nancial statements have been prepared in accord-

ance with the Norwegian Accounting Act of 1998 and

generally accepted accounting principles in Norway.

Further, the nancial statements are prepared based on

the going concern assumption.

Use of estimates

In the preparation of the annual accounts estimates and

assumptions have been made that have affected the prot

and loss account and the valuation of assets and liabil-

ities, and uncertain assets and liabilities on the balance

sheet date in accordance with generally accepted account-

ing practice. Areas which to a large extent contain such

subjective evaluations, a high degree of complexity, or

areas where the assumptions and estimates are material

for the annual accounts, are described in the notes.

Foreign currency

Foreign currency transactions are translated at the

exchange rate on the date of the transaction. Monetary

foreign currency items are translated to NOK at the

exchange rate on the balance sheet date. Non-monetary

items that are measured at historical cost in a foreign

currency are translated to NOK using the exchange rate on

the transaction date.

Revenues

In the parent company Mercell Holding ASA, revenues con-

sist of invoicing of joint costs to the subsidiaries. Services

are posted as income as they are delivered.

Tax

The tax charge in the prot and loss account consists of

tax payable for the period and the change in deferred tax.

Deferred tax is calculated at the tax rate at 22 percent on

the basis of tax-reducing and tax-increasing temporary

differences that exist between accounting and tax values,

and the tax loss carried forward at the end of the account-

ing year. Tax-increasing and tax-reducing temporary

differences that reverse or may reverse in the same period

are set off and entered net. The net deferred tax receivable

is entered on the balance sheet to the extent that it is likely

that it can be utilised.

Classication and valuation of xed assets

Fixed assets consist of assets intended for long-term own-

ership and use. Fixed assets are valued at acquisition cost

less depreciation and write-downs. Long-term liabilities

are entered on the balance sheet at the nominal amount at

the time of the transaction.

Plant and equipment is capitalised and appreciated over

the economic lifetime of the asset. Signicant items of

plant and equipment that consist of several material com-

ponents with different lifetimes are broken down in order

to establish different depreciation periods for the different

components. Direct maintenance of plant and equipment

is expensed on an ongoing basis under operating costs,

while additions or improvements are added to the asset’s

cost price and depreciated in line with the asset.

Mercell – Annual report 2021111

Parent company nancial statements

Classication and valuation of current assets

Current assets and short-term liabilities consist normally

of items that fall due for payment within one year of the

balance sheet date. Current assets are valued at the lower

of acquisition cost and fair value. Short-term liabilities are

entered on the balance sheet at the nominal amount at the

time of the transaction.

Intangible assets

Intangible assets are the technology platform that con-

sists of capitalized development costs that are amortized

over their expected life.

Subsidiaries and associated companies

Subsidiaries and associated companies are valued using

the cost method in the company accounts. The invest-

ment is valued at acquisition cost for the shares unless a

write-down has been necessary. A write-down to fair value

is made when a fall in value is due to reasons that cannot

be expected to be temporary and such write-down must

be considered as necessary in accordance with good

accounting practice. Write-downs are reversed when the

basis for the write-down is no longer present.

Dividends, group contributions and other distributions

from subsidiaries are posted to income in the same year

as provided for in the distributor’s accounts. To the extent

that dividends/ group contributions exceed the share of

prots earned after the date of acquisition, the excess

amounts represents a repayment of invested capital, and

distributions are deducted from the investment’s value in

the balance sheet of the parent company.

Receivables

Receivables from customers and other receivables

are entered at par value after deducting a provision for

expected losses. The provision for losses is made on

the basis of an individual assessment of the respective

receivables. In addition an unspecied provision is made

to cover expected losses on claims in respect of customer

receivables.

Financial income and expenses

Interest income and interest expenses on interest-bearing

debt and receivables is calculated using the effective

interest method.

Foreign currency gains or losses are reported as gain

or loss on foreign exchange within in nance income or

nance expense.

Cash ow statement

The cash ow statement has been prepared using the indi-

rect method. Cash and cash equivalents consist of cash,

bank deposits and other short-term, liquid investments.

Mercell – Annual report 2021 112

Parent company nancial statements

Note 1 Personnel expenses, number of employees, remuneration, loan to

employees, audit fee

Payroll expenses

All amounts in NOK 1 000 2021 2020

Salaries/wages 26 910 24 834

Skattefunn (R&D tax incentive scheme) - -

Social security fees 3 049 4 497

Pension expenses 1 343 867

Other remuneration 6 611 5 934

Total 37 913 36 131

Average number of employees during the accounting year 14 13

OTP (Statutatory occupational pension)

The company is required to have a pension scheme in

accordance with the Norwegian law on required occupa-

tional pension (“lov om obligatorisk tjenestepensjon”).

The company’s pension scheme meets the requirement

of this law.

Option program

Equity settled programs

In 2018, the Group entered into a share option programme

covering certain employees in senior positions (key per-

sonnel). As at 31.12.2021, ve employees were included

in the option program. A total of 8267710 options are

included in the stock option program. In Q2 2020, there

was an amendment to the original program, increasing

the period the options be exercised over by two years.

The amendment triggered a new valuation for the options

as the time to maturity was increased. The options are

divided into 36 tranches and will vest monthly.

Cash-settled programs

In 2020, the Group entered into a share option programme

covering certain employees in senior positions (key

personnel). As at 31.12.2021, 5 employees were included

in the option program. A total of 3500000 options are

included in the program. Options issued under the rst

tranche will be subject to monthly vesting with 1/12 vested

each month commencing at 9 July 2020, (the “Initial

Vesting Date”), and may consequently be exercised in full

at the earliest after one year.

The Synthetic Options issued under the second tranche

will also be subject to monthly vesting, commencing one

year after the Initial Vesting Date, and may consequently

be exercised in full at the earliest two years after the

Initial Vesting Date. The exercise period for the Synthetic

Options issued in the rst tranche will expire three years

after the Initial Vesting Date, while the exercise period for

the Synthetic Options issued in the second tranche will

expire four years after the Initial Vesting Date.

Remuneration to executives

All amounts in NOK 1 000

Managing

Director Board

Salaries/wages 3 000 2 660

Bonus 2 000 -

Pension expenses 109 -

Other remuneration 298 -

Mercell – Annual report 2021113

Parent company nancial statements

The Managing Director has a pension agreement that

includes pension accrual in addition to the company’s

general dened contribution pension. Accrued liability per

31.12.2021 amounts to NOK 0.5 million.

A loan of NOK 4 million has been granted to the CEO’s

holding company Camiveo AS. The loan is interest calcu-

lated in 2021 and has a balance equal to NOK 4.3 million

as of 31.12.21.

Auditor

Expenses paid to the auditor for 2021 amounts to NOK 2.8

million excl. VAT.

All amounts in NOK 1 000

Statutory auditing services 2 245

Other assurance services 255

Technical preparation accounts and tax papers 303

Other services 46

Total remuneration to the auditor 2 848

The amounts above are excluding VAT. All technical preparation and other services from BDO were made before Mercell

Holding ASA was listed on the Oslo Stock Exchange.

Note 2 Fixed assets and intangible assets

Fixed assets and intangible assets

All amounts in NOK 1 000

Technology

platform

Furniture,

xtures and

equipment Total

Acquisition cost 01.01.21 221 233 4 867 226 100

Additions 135 542 256 135 798

Disposals - - -

Skattefunn (R&D tax incentive scheme) -4 083 - -4 083

Acquisition cost 31.12.21 352 691 5 123 357 814

Acc. depreciation/ impairment 31.12.21 202 147 3 680 205 827

Book value 31.12.21 150 544 1 443 151 987

Depreciation in the year 32 561 541 33 102

Write down in the year 14 814 - 14 814

Economic life 5 years 5-8 years

Mercell – Annual report 2021 114

Parent company nancial statements

Note 3 Investmetns in subsidaries

Mercell Holding ASA wholly owned subsidiaries is Safe Tag Group AS and Mercell Midco AS.

Mercell Midco AS wholly owned subsidiaries: Udbudsvagten A/S, Licitio A/S, Mercell A/S, Mercell Danmark A/S, Mercell

Svenska A/B, Mercell Norge AS, Mercell Commerce AB, Mercell Commerce AS, Mercell Suomi, Mercell Latvia, Mercell

Estonia, Mercell Lithuania, Mercell CTM AB, EU Supply LTD, EUS Holding LTD, Mercell Nederland BV, Mercell US Inc,

Commerce Hub BV, Negometrix Bulgaria, Ibistic International A/S, Ibistic Technologies A/S, Ibistic Technologies AS, CTM

Solution BV, Cloudia Oy and Cloudia DMCC.

Mercell Holding ASA directly owns as of 31.12.2021 the following companies:

All amounts in NOK 1 000

Company

Ownership/

voting rights Location

Acquisition

cost Book value

Annual net

prot/loss Equity

Mercell Midco AS 100% Oslo, Norway 2 447 430 3 665 916 -297 3 665 007

Safe Tag Group AS 100% Oslo, Norway 2 359 30 -9 192 30

Total investments in subsidiaries 2 449 788 3 665 946

During 2021 Mercell Holding ASA sold 100 per cent of the shares in Mercell Suomi, Mercell Lithuania, Mercell Latvia and

Mercell Estonia to Commerce AB. Net gain from the transaction was NOK 97.6 million.

Note 4 Inter-company balances

Mercell Holding ASA has the following balances with companies in the Group:

Long-term loans to companies in the Group

All amounts in NOK 1 000 2021 2020

Mercell Estland OÜ - 2293

Mercell Latvia SIA 1165 8000

Mercell Lithuania UAB 89 10014

Mercell Midco AS 433897 251702

Safe Tag Norge AS 11 -36

Mercell Suomi OY 8772 9471

Mercell Product & Technology AS - 40

Licito - 5358

Aksess Innkjøp AS (merged with Mercell Norge AS in 2021) - 2240

Cloudia Oy 20809 -

Mercell Nederland BV 7503 -

Mercell CTM AB 108 -

EU Supply Ltd 434 -

EUS Holdings Ltd 20 -

CTM Solution BV 124 -

Ibistic Technologies A/S 124 -

Total long-term loans to companies in the Group 473058 289080

The loans are calculated with interest.

Mercell – Annual report 2021115

Parent company nancial statements

Long-term loans from companies in the Group

All amounts in NOK 1 000 2021 2020

Mercell Svenska AB 16 369 14 633

Mercell Danmark A/S 26 206 19 204

Mercell Norge AS 35 341 42 311

Mercell Sumi OY 5 319 3 277

Mercell A/S 16 785 13 090

Udbudsvagten A/S 6 570 4 952

Mercell CTM AB 21 413 18 869

eLuence - 2 030

Commerce AB 104 070 -

Commerce AS 18 293 -

Ibistic Technologies AS 441 -

Total long-term loans from companies in the Group 250 808 118 366

Receivables to companies in the Group

All amounts in NOK 1 000 2021 2020

Mercell Norge AS (intra-group contribution) 574 2 532

Total receivables to companies in the Group 574 2 532

Other short-term receivables and liabilities are related to cash pool transactions. Total short-term receivables amount to

NOK 14.2 million and total short-term liabilities amounts to NOK 49 million as of 31.12.2021.

Note 5 Related party transaction

Mercell Holding ASA charges the subsidiaries for accrued joint costs. Please refer to note 4 for balances with

subsidiaries as of 31.12.21.

Transactions with subsidiaries

All amounts in NOK 1 000 2021 2020

Joint cost & Distribution fee to subsidiaries 66 913 60 687

Interest income received from subsidiaries 304 949

Interest expense paid to subsidiaries 1 656 622

Purchase of IT-services from subsidaries 102 459 48 073

Marketing fee from subsidiaries 2 526 2 338

Other cost allocated to subsidaries 4 052 4 599

Received intra-group contributions from subsidiaries 574 2 532

Mercell – Annual report 2021 116

Parent company nancial statements

Note 6 Restricted bank deposits

All amounts in NOK 1 000 2021 2020

Restricted funds deposited on the tax deduction account (withheld employee tax) 1 721 1 450

Restricted funds deposited on the tax deduction account covers the tax employees tax obligation as of 31.12.2021.

The Group has established cash pool systems. Under these agreements, Mercell Holding ASA is the Group account

holder and the other companies in the Group are sub-account holders or participants. The banks can offset balances

in their favour against deposits so that the net position represents the net balance between the bank and the Group

account holder.

Note 7 Equity

All amounts in NOK 1 000 Share capital

Share premium

reserve

Retained

earnings Total Equity

Equity 31.12.2020 82720 1791125 -158133 1715713

Shareholder contribution 17812 820759 - 838572

Transaction cost - -32129 - -32129

Share-based bonus/remuneration - - - -

Gain sales of shares inta group - - 97564 97564

Annual net prot/loss - - -131135 -131135

Equity 31.12.2021 100533 2579756 -191703 2488585

Mercell – Annual report 2021117

Parent company nancial statements

Note 8 Share capital and shareholder information

The share capital consists of:

Number of

Nominal

value

Book

value

Ordinary shares 502 663 855 0.20 100 532 771

Shareholders

Number of

shares Ownership

Voting

rights

STATE STREET BANK AND TRUST COMP

42 300 000

8.42%

CITIBANK, N.A. 31 061 034 6.18% 6.18%

SKANDINAVISKA ENSKILDA BANKEN AB 29 247 857 5.82% 5.82%

BARCLAYS CAPITAL SEC. LTD FIRM

27 531 921

5.48%

VIKING VENTURE 16B AS 25 912 103 5.15% 5.15%

THE BANK OF NEW YORK MELLON SA/NV 25 349 288 5.04% 5.04%

VIKING VENTURE 16 AS 21 291 748 4.24% 4.24%

VERDIPAPIRFONDET DNB NORGE 16 812 196 3.34% 3.34%

J.P. MORGAN SECURITIES LLC

16 289 141

3.24%

UBS SECURITIES LLC 15 000 000 2.98% 2.98%

MORGAN STANLEY & CO. LLC 14 773 417 2.94% 2.94%

MORGAN STANLEY & CO. INT. PLC. 14 242 622 2.83% 2.83%

BANQUE DE LUXEMBOURG S.A. 10 541 567 2.10% 2.10%

NORDNET BANK AB

10 151 870

2.02%

GRIEG HOLDINGS II AS 9 567 947 1.90% 1.90%

EUROCLEAR BANK S.A./N.V. 8 716 968 1.73% 1.73%

MYRLID AS 8 600 000 1.71% 1.71%

CAMIVEO AS 7 023 897 1.40% 1.40%

UBS AG

6 970 000

1.39%

GLABELLA AS 6 542 397 1.30% 1.30%

Other shareholders 154 737 882 30.78% 30.78%

Total 502 663 855 100% 100%

Shares owned by members of the board and senior executives as 31.12.2021:

Position

Number of

Terje Wibe (Camiveo AS) CEO 7 023 897

Fredrik Eeg (Mineo AS) CFO 400 000

Arild Nilsen (Vikas Invest AS)

CPO

400 000

Helge Nielsen (Helida AS) Board member 2 000 000

Joar Welde (Chairman of the board) and Erik Hagen (member of the board) are partners in Viking Venture AS. In addition,

Erik Hagen is the chairman of the board for Viking Venture 16 AS, Viking Venture 16B AS og Viking Venture 16C AS.

Mercell – Annual report 2021 118

Parent company nancial statements

Note 9 Long-term Liabilities, pledged assets and guarantees

All amounts in NOK 1 000 2021 2020

Bank overdraft -180 -141

The company has NOK 100 million in unused bank overdraft rights.

All amounts in NOK 1 000 2021 2020

Liabilities secured by mortgage 1 565 437 1 152 824

Registered pledges

Furniture, xtures and equipment - -

Inventories (SEK) - -

Furniture, xtures and equipment (SEK) - -

Factoring agreement - -

Factoring agreement (SEK) - -

Pledged assets

Shares in subsidiaries 3 665 946 2 961 439

Accounts receivables - -

Fixed assets 151 987 293 575

Bank accounts 5 877 120 896

Intercompany loans 473 289 080

Total 3 824 283 3 664 991

Assets pledged as security for secured liabilities

The Group’s bond debt is secured in (i) stocks in Material Group Companies

(i.e. subsidiaries which has 10 per cent of

total EBITDA or income including possible additional entities that are necessary to ensure that the sum of all the Material

Group Companies include in total at least 80 per cent of total EBITDA and income) with exeption of issuer, (ii) in bank

accounts belonging to Material Group Companies,

(iii) in Accounts Receivables (factoringpant) to Material Group Companies, (iv) in internal loans that have a duration of at

least 12 months and minimum SEK 20 million and (v) garanties from Material Group Companies.

Material Group Companies as of 31.12.2021 consists of Mercell Holding ASA, Mercell Midco AS, Mercell Norge AS, Mercell Svenska AB, Udbudsvagten A/S, Tricom Aps,

Comcare A/S, Mercell Commerce AB, Mercell Commerce AS, Mercell CTM AB, Ibistic International A/S, Cloudia Oy and Mercell Nederland BV

Mercell – Annual report 2021119

Parent company nancial statements

Guarantees

Type Beneciant Currency Amount

Tenant lease gurantee Fabege AB SEK 400

Tenant lease gurantee Skøyen Atrium AS NOK 3 071

In addition, Mercell Holding ASA has provided security for its subsidaries for NOK 4 million.

Note 10 Long-term liabilities

All amounts in NOK 1 000 2021 2020

Long-term liabilities 1 559 200 1 147 850

Accrued establishment fee bonds -47 035 -53 904

Long-term interest added to loans 6 237 4 974

Total long-term liabilities 1 518 402 1 098 920

Covenant requirements

The Group have no maintenance covenants for its interest-bearing debt. As of 31 December 2021, there are two incur-

rence tests that regulates the Groups ability to distribute dividends and issue new debt.

Mercell – Annual report 2021 120

Parent company nancial statements

Note 11 Tax

This year’s tax expense

All amounts in NOK 1 000 2021 2020

Tax payable

Changes in deferred tax assets, intra-group contribution

Changes in deferred tax assets, subsidiaries

Tax expense on ordinary prot/loss

Calculation of this year's tax base

Prot/loss before tax -131 330 -106 796

Permanent differences 27 753 -116 055

Impairment of receivables, subsidiaries - -

Impairment of investments, subsidiaries - -

Changes in temporary differences -85 443 10 280

Allocation of loss to be brought forward - -

Basis for tax payable (taxable income) -189 020 -212 571

Used tax loss carry-forwards - -

Deferred tax

All amounts in NOK 1 000 2021 2020 Difference

Overview of the tax effect of temporary differences

Tangible assets -8 371 -4 683 3 688

Liabilities 82 580 -6 294 -88 874

Provisions 553 296 -257

Total temporary differences 74 762 -10 680 -85 443

Accumulated loss to carry forward -503 695 -314 675 189 020

Basis for deferred tax -428 932 -325 355 103 577

Not included in the deferred tax calculations 428 932 325 355 -103 577

Deferred tax assets on the balance sheet, 22 % - - -

Mercell – Annual report 2021121

Parent company nancial statements

Note 12 Financial income and nancial expenses

All amounts in NOK 1 000 2021 2020

Financial income

Intra-group contribution from subsidiaries 574 2532

Intra-company interest income 304 949

Other interest income 683 588

Currency exchange rate gain (agio) 211429 27003

Realized gains from sales of shares - -

Other nancial income 24933 -

Total nancial income 237923 31071

Financial expenses

Impairment of nancial xed assets - -

Intra-company interest expenses 1656 622

Other interest expenses 93996 59809

Currency exchange rate loss (disagio) 128889 40680

Other nancial expenses 106 -

Total nancial expenses 224647 101111

Net nancial income and expenses 13276 -70039

Mercell – Annual report 2021 122

Auditor’s report

BDO AS

Munkedamsveien 45

Postboks 1704 Vika

0121 Oslo

Independent Auditor's Report Mercell Holding ASA - 2021 Page 1 of 5

Independent Auditor's Report

To the General Meeting in Mercell Holding ASA

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Mercell Holding ASA.

The financial statements comprise:

• The financial statements of the parent

company, which comprise the balance

sheet as at 31 December 2021, income

statement, and cash flows for the year

then ended, and notes to the financial

statements, including a summary of

significant accounting policies, and

• The financial statements of the group,

which comprise the balance sheet as at

31 December 2021, and income

statement, statement of

comprehensive income, statement of

changes in equity and cash flows for

the year then ended, and notes to the

financial statements, including a

summary of significant accounting

policies.

In our opinion:

• The financial statements comply with

applicable statutory requirements,

• The accompanying financial statements

give a true and fair view of the

financial position of the company as at

31 December 2021, and its financial

performance and its cash flows for the

year then ended in accordance with

the Norwegian Accounting Act and

accounting standards and practices

generally accepted in Norway.

• The accompanying financial statements

give a true and fair view of the

financial position of the group as at 31

December 2021, and its financial

performance and its cash flows for the

year then ended in accordance with

International Financial Reporting

Standards as adopted by the EU.

Our opinion is consistent with our additional

report to the Audit Committee.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our

responsibilities under those standards are further described in the Auditor’s Responsibilities for the

Audit of the Financial Statements section of our report. We are independent of the Company and

the Group as required by laws and regulations and International Ethics Standards Board for

Accountants’ International Code of Ethics for Professional Accountants (including International

Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in

accordance with these requirements. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.

Auditor’s report

Mercell – Annual report 2021123

Auditor’s report

Independent Auditor's Report Mercell Holding ASA - 2021 Page 2 of 5

To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit

Regulation (537/2014) Article 5.1 have been provided.

We have been the auditor of Mercell Holding ASA for 18 years from the election by the general

meeting of the shareholders on 29. June 2004 for the accounting year 2004.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the financial statements of the current period. These matters were addressed in the

context of our audit of the financial statements as a whole, and in forming our opinion thereon, and

we do not provide a separate opinion on these matters.

Description of the key audit matter How the key audit matter was addressed in

the audit

Acquisition of Negometrix B.V and Cloudia Oy

In 2021, the Group acquired a 100 percent

interest in Negometrix B.V for a purchase price

of NOK 273,7 million in cash and estimated

contingent consideration and Cloudia Oy for a

purchase price of NOK 905,9 million in cash.

Acquisitions of subsidiaries are accounted for

using the acquisition method. Hence,

identifiable assets acquired, and liabilities

assumed are initially measured at fair value at

the transaction date. Any consideration in

excess of the net identifiable assets, is

recorded as goodwill. In relation to the

acquisitions, the Group has prepared purchase

price allocations. The purchase price allocation

requires the application of significant

judgement by management, in particular with

respect to identification and valuation of

intangible assets such as customer relations

and technology. Due to the materiality,

complexity and estimation uncertainty, we

considered accounting for business

combinations to constitute a key audit matter

in the audit of the group. The Group’s

accounting policy regarding acquisitions is

disclosed in note 6.2 in the consolidated

financial statements.

Our audit procedures included an evaluation of

the key assumption applied in the valuation

model, such as revenue growth, EBITDA

margin, churn rate and remaining useful life.

We involved our internal valuation specialists

to assist us with our assessment of the discount

rates, expected inflation rates, and the

appropriateness of the methodology and

valuation model used. In addition, we

performed the following audit procedures.

• we compared the Sale and Purchase

Agreement (SPA) and the Purchase

Price Allocation (PPA) with respect to

consideration amounts

• we reviewed the opening balances and

evaluated the related fair value

adjustments

• We tested the mathematical accuracy

of the calculations derived from the

forecast mode

Furthermore, we have evaluated the adequacy

of the disclosures provided in the notes

covering business combinations.

Intangible assets

Under IFRS, the Group is required to perform

an annual impairment test of goodwill and

intangible assets with an indefinite useful life.

Our audit procedures have included a detailed

review of management’s impairment test for

each business unit to which intangible assets

Mercell – Annual report 2021 124

Auditor’s report

Independent Auditor's Report Mercell Holding ASA - 2021 Page 3 of 5

Impairment testing of intangible assets is a key

aspect of our audit due to the complexity of

the assessments and the significance of

assumptions related to future market and/or

economic conditions that underlie the

assessment.

are allocated. We have also assessed

management’s assumptions underlying the

valuation and taken into account

management’s historical accuracy in

determining the estimates. Internal specialists

have assisted us in this process. We have also

considered the assumptions described in note

3.5 and assessed the adequacy of the

information provided in the notes against the

requirements of IAS 36.

Investments in subsidiaries

The company has significant investments in

subsidiaries that are measured at cost.

Investments in subsidiaries are tested for

impairment if indications of impairment are

present. An impairment loss is recognized if

the carrying amount exceeds the recoverable

amount. The significant amounts involved, and

the complexity of the valuation of the assets,

lead us to classify the valuation of investments

in subsidiaries as a key audit matter.

Our audit procedures included a detailed

review, testing, and assessment of

management's impairment tests, including the

calculation of recoverable amounts. We have

also assessed management's assumptions

underlying the valuation and taken into

consideration the historical accuracy in

determining the estimates. Internal specialists

have assisted us in this process. We have also

considered the assumptions described in note

3.5.

Other information

The Board of Directors and the Managing Director (management) is responsible for the other

information. The other information comprises the Board of Directors’ report and other information

in the Annual Report, but does not include the financial statements and our auditor’s report

thereon. Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent with

the consolidated financial statements or our knowledge obtained in the audit or otherwise appears

to be materially misstated. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

Opinion on the Board of Director’s report

Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report

• is consistent with the financial statements and

• contains the information required by applicable legal requirements.

Our opinion on the Board of Director’s report applies correspondingly for the statements on

Corporate Governance and Corporate Social Responsibility.

Mercell – Annual report 2021125

Auditor’s report

Independent Auditor's Report Mercell Holding ASA - 2021 Page 4 of 5

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements

Board of Directors and the Managing Director (management) are responsible for the preparation of

financial statements that give a true and fair view, for in accordance with the Norwegian

Accounting Act and accounting standards and practices generally accepted in Norway, and for the

preparation and fair presentation of the financial statements of the group in accordance with

International Financial Reporting Standards as adopted by the EU, and for such internal control as

management determines is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern.

The financial statements of the Company use the going concern basis of accounting insofar as it is

not likely that the enterprise will cease operations. The financial statements of the Group use the

going concern basis of accounting unless management either intends to liquidate the Group or to

cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s

report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

guarantee that an audit conducted in accordance with ISAs will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered

material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

For further description of Auditor’s Responsibilities for the Audit of the Financial Statements

reference is made to:

https://revisorforeningen.no/revisjonsberetninger

Report on compliance with Regulation on European Single Electronic Format (ESEF)

Opinion

We have performed an assurance engagement to obtain reasonable assurance that the financial

statements with file name 549300_mercell-2021-12-31-en.zip have been prepared in accordance

with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the

accompanying Regulation on European Single Electronic Format (ESEF).

In our opinion, the financial statements have been prepared, in all material respects, in accordance

with the requirements of ESEF.

Management’s Responsibilities

Management is responsible for preparing, tagging and publishing the financial statements in the

single electronic reporting format required in ESEF. This responsibility comprises an adequate

process and the internal control procedures which management determines is necessary for the

preparation, tagging and publication of the financial statements.

Mercell – Annual report 2021 126

Auditor’s report

Independent Auditor's Report Mercell Holding ASA - 2021 Page 5 of 5

BDO AS, a Norwegian liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the

international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.

Auditor’s Responsibilities

For a description of the auditor’s responsibilities when performing an assurance engagement of the

ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger

Oslo, 24. March 2022

BDO AS

Knut Nyerrød

State Authorised Public Accountant

(This document is signed electronically)

Design and production: Artbox AS

Mercell Holding ASA

Askekroken 11

0277 Oslo

Norway

post@mercell.com

mercell.com