Penneo realises 50% ARR
growth rate in 2021
Company Announcement No. 5-2022
Copenhagen, 21 February 2022
Annual report for the period
1 January 2021 - 31 December 2021
CEO, Christian Stendevad
Mobile (+45) 27 29 50 02
Mail cst@penneo.com
CFO, Casper Nielsen Christiansen
Mobile (+45) 26 47 63 73
Mail cc@penneo.com
Further information
Annual report 2021
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Contents
Annual report 2021
Management commentary
4 Letter from the CEO and Chairman
5 Penneo at a glance
6 Key features
7 ARR development
9 SaaS metrics
10 Business development
11 Expansion strategy in growing markets
12 A customer story from Belgium
13 Analyst coverage
14 Outlook for 2022
15 Guidance methodology
Financial review
17 CFO statement
18 Keyfigures
19 Financial commentary
Governance
23 Governance
24 Executive Board
25 Board of Directors
29 ESG
30 Key risks
31 Company information
Financial statements
33 Statement by management on the annual report
34 Independent auditor’s report
38 Financial statements
43 Notes
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Pursuing our growth ambitions in a year of leadership transition
2021 was a year of change that went beyond transitioning to new lead-
ership; Christian Sagild joined as Chairman of the Board in April and
Christian Stendevad joined as CEO in August. Over the course of 2021,
werefinedourexpansionstrategytofuelexecutionandtheintegration
of our KYC product to our business.
Executing the above items of our corporate agenda required diligent
work and commitment from the entire team resulting in 55.5M DKK
annual recurring revenue (ARR), aligned with the initial 2021 guidance
of 52M-57M DKK. The result corresponds to an ARR growth rate of 50%
and exceeds the expectations of a ~40% growth rate put forth in the
IPO document. EBITDA amounted to negative 14.1M DKK compared to
the guided negative 15M-20M DKK.
The growth is supported by
• increasing demand for our Sign and KYC (Know-Your-Customer)
products by both existing and new customers
• an increasing part of our ARR derived from foreign markets, which
resulted in 97% ARR growth from foreign markets
Thank you to customers, partners and employees for getting behind
ourmissiontomakeiteasyandbeneficialforcompaniestomeet
regulatory compliance requirements.
Looking ahead
Going into 2022, we continue to pursue our growth ambitions and to
execute our expansion strategy in growth markets for both Penneo
Sign and Penneo KYC with new opportunities in 2022.
Letter from the CEO and Chairman
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Penneo at a glance
Our vision
A world where being accountable
for the way you do business is a
matter of course
Our mission
Tomakeiteasyandbeneficialto
companies to meet regulatory
compliance requirements
Equity story
The rapid growth of digitisation in Europe and the strong network
effectsprovidedbyinternationalBig10auditcustomersarepowerful
enablers and distribution channels for Penneo to become the de facto
standard for the audit and accounting industry in Europe. Furthermore,
through the auditors, Penneo is exposed to the auditors’ clients locally
and globally, creating a basis for further expansion to more customer
segments.
Penneo taps into the global trends of increased regulation,
sustainability, and digitisation.
HQ:
Copenhagen,
Denmark
Sweden
Norway
Belgium
Finland
Germany
Offices
Markets International
team
A diverse
workforce of
+20 different
nationalities
working in
Penneo
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Key features
Net ARR retention rate amounted to 124%
ARR churn rate amounted to 2%
ARR uplift amounted to 26%
ARR from new customers increased by 46%
end of 2021 compared to 2020
Average Revenue Per Account (ARPA)
increased by 21% end of 2021 compared to
2020
EBITDA amounted to negative 14.1M DKK
as a result of the planned investments
ARR: 77M-82M DKK
EBITDA: Negative 5M-10M DKK
ARR increased by 18.5M DKK to 55.5M DKK
corresponding to 50% growth end of 2021
New ARR
Net ARR
retention
EBITDA
Guidance
2022
ARR growth
ARPA
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ARR development
The continued development of a strong product portfolio that
continuouslygeneratescashflowinsubsequentyearsisessen-
tial for Penneo, and it generates a solid economic foundation
for investing into future growth with low risk and better fore-
casting conditions.
An example of Penneo’s investments in future growth is the
KYC software acquired from CLA Reply in October 2020. The
software now referred to as ‘Penneo KYC’ accounted for 3.4M
DKK ARR in 2021 as a result of executing the commercial focus
to roll out the software to new customers and uplifting existing
Penneo Sign customers in the Nordics. This commercial focus
was announced in the outlook section of the 2020 annual
report.
The yearly ARR uplift and low yearly ARR churn generate a net
ARR retention rate of 124%.
From 2019 and onwards, all new customers are onboarded to a
fully subscription-based model. By the end of 2021, 75% of the
revenue was subscription-based compared to 65% at the end
of 2020.
Annual Recurring Revenue Development
Yearly cohorts (M DKK)
Annual Recurring Revenue Development
In the period (M DKK)
The annual development represents the development from 2020 to 2021 and is
measured on the last day of both periods.
2015
2016
2018
20192017
2020 2021
2014
2015
2016
2017
2018
2019
2020
2021
3
2
1 1 1 1 1
2 2
7
6
8
9
6
8
10
6
6
6
6
5
7
3
4
5
4
4
5
4
4
4
5
3
2
2
3
7
10
18
25
37
55
2020
Uplift
Penneo
Sign
New
Penneo
Sign
New
Penneo
KYC
Uplift
Penneo
KYC
Churn Existing
customers
2021
37.0
7.2
2.3
45.6
8.7
1.1
55.5
-0.9
40
50
60
30
~2%
ARR
Churn
~ 26% uplift
NewBizz ~ 26%
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Annual Recurring Revenue Development
Geographic markets (M DKK)
The chart displays the growth of Penneo’s ARR base split into
the domestic market (Denmark) and foreign markets. As put
forth in the IPO document, Penneo pursues its expansion strat-
egy based on entering new foreign markets and increasing
market share in already entered markets.
Foreign markets
ARR from foreign markets grew by 97% YoY in 2021 as a
result of executing the expansion strategy.
Domestic market
ARR from the Danish market grew by 38% Year-on-Year
(YoY)in2021asaresultofthecommercialeffortstode-
velop the market position and increased demand for
Penneo KYC.
2020 EoY
7 (20%)
37
30 (80%)
2021 EoY
14 (26%)
55
41 (74%)
ARR development
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SaaS metrics
SaaS metrics
The last four quarters
*CAC is defined as inbound lead spend and staff costs directly related towards onboarding new customers
**Net ARR retention rate is the yearly ARR development of the existing customer base.
Average ARR development (T DKK)
A five year cohort analysis based on new customers in the last twelve months
Acohortanalysisbasedonallfinancialyearssincetheestablishmentof
Penneo, shows a yearly growth of 16.5% in net ARR from a given cohort
(including both churn of customers and ARPA development of retained
customers) which is why ARR is expected to grow from 19T DKK in year one
to34TDKKinyearfive.
Average ARR for new customers (in the last twelve months) was 19T DKK. On
average, CAC was 27T DKK, which is why it takes approximately 17 months to
recover CAC.
20
10
0
30
40
Year 1 Year 2 Year 3 Year 4 Year 5
CAGR = 16,5%
2021-Q1 2021-Q2 2021-Q3 2021-Q4
New customers 149 171 87 123
AverageARRinthefirstyear
for new customers
17,027 18,845 16,366 21,939
Customer Acquisition Cost
(CAC)*
(22,511) (21,523) (35,640) (32,229)
Net ARR retention rate**
123% 130% 124% 124%
Average Revenue Per
Account (ARPA)
19,988 21,444 21,960 23,137
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Business development
Penneo signed a deal with Bankdata
As announced in Company Announcement No. 32-2021, Penneo entered into
an agreement with Bankdata to roll out Penneo’s Sign software in Bankdata
andeightfinancialinstitutionsinDenmark;Sydbank,JyskeBank,Djurslands
Bank, Skjern Bank, Sparekassen Sjælland-Fyn, Ringkjøbing Landbobank,
Kreditbanken and Nordfyns Bank.
The deal with Bankdata is of strategic importance and demonstrates execu-
tion of the strategy and the investment streams which were announced in
Company Announcement No. 26-2021. Bankdata covers approximately 20%
ofthemarketforITsolutionstothefinancialsectorinDenmark.
Penneo signed a deal with KPMG Norway
As announced in Company Announcement No. 15-2021, Penneo entered into
an agreement with KPMG Norway to roll out Penneo’s KYC software in KPMG
Norway.
The deal is testament to the augmented value proposition provided by the ac-
quisition of CLA Reply’s Know-Your-Customer (KYC) software in October 2020.
It shows the result of the commercial focus of 2021 announced in the Annual
report for 2020 to roll out the KYC software to auditors.
Over the course of 2021, Penneo focused on enterprise-grading the KYC
software to prepare the product for international roll out, in parallel to on-
boarding new customers to the software in the Nordic countries.
Leadership transition in Penneo
Christian Sagild was elected Chairman of the Board of Directors at the annual
general meeting on 28 April 2021.
Rikke Stampe Skov was elected member of the Board of Directors at the ex-
traordinary general meeting on 5 March 2021.
Christian Stendevad was appointed CEO of Penneo and succeeded interim
CEO Nicolaj Højer Nielsen. Christian Stendevad took up the position as CEO
on 18 August 2021.
Main Market aspirations
As announced in Company Announcement No.16-2021, Penneo intends to ap-
ply for admission to trading on Nasdaq Copenhagen Main Market.
By moving onto the Main Market, Penneo expects to be able to attract a wider
range of national and international institutional investors. Penneo was listed
on First North on 2 June 2020 and has since the listing made several key ac-
complishments:
• FulfillmentofthegrowthstrategyputforthintheIPOdocument
• Acquisition of CLA Reply’s KYC software
• Realised an ARR growth rate of 50% in 2021 compared to a guided ~40%
ARR growth rate in the IPO document
Consequently, migrating to Main Market is a natural next step for Penneo
and the listing process is progressing according to the plan as announced in
Company Announcement No. 16-2021.
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Expansion strategy in growing markets
Following the transition to new leadership in Penneo, the strategy was reaffirmed and revised, based on the continued core
aspirations of continued growth and expansion, through the two-fold go-to-market strategy...
21
Geographic expansion into new markets
AttractthelargestaccountingfirmsoutsideoftheNordicsbycapitalis-
ingonthestrongrelationshipwithexistingaccountingfirmcustomers
in the Nordic countries.
Growth in existing markets
After securing agreements with the first large accounting firms and
proving a product-market-fit, Penneo will target the broader auditing
and accounting industry which will create a basis for further expansion
to more customer segments.
Upsell Penneo KYC product to
auditors
Penetrate AML-governed
industries with Penneo’s KYC
and Sign product
Fuel expansion through the
Audit and Accounting vertical
to become the de facto stand-
ard for auditors in Europe
Expected market growth in the global KYC marketExpected market growth in the global digital signature market
31% 22%
CAGR CAGR
Source: Fatpos GlobalSource: MarketsandMarkets
Global market growth
is assessed to be
representative for EU
market growth
...supported by three primary investment streams
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A customer story from Belgium
Acco Accountants chose Penneo Sign to save time and focus on the
essentials – their clients
Acco Accountants has always had the drive to remain a modern company,
and since 2016 the company has decided to accelerate the automation of
its processes. The Acco and Penneo teams then worked together to develop
a solution that fits Acco Accountants’ technical requirements (via API) and
meets their daily challenges.
As a result, Acco Accountants can now provide its clients and partners with
• a secure and fast way to sign documents such as annual reports and
compliance related materials
• automated processes that provide more value
• a smoother customer experience where documents can be signed
digitally in minutes
About Acco Accountants
Acco Accountants is a Belgian audit & accounting services company that started
its activity in 1985 and has evolved to become a reference in its sector. They assist
and advise clients with their accounting, tax management, or legal procedures.
The company has around 30 employees, and its two offices are located in Antwerp
and Mechelen.
Everything that you automate, that you digitalise, you
have to take a step back and ask yourself: ‘How are we
doing today? How would we like to do it tomorrow and how
can we best embed this in a tool like Penneo?
We now have an integration that communicates between Sil-
verfin, Penneo, and with the clients to get documents and an-
nual reports that need to be signed in time. Everything now
runs automatically.
…with Penneo the fastest report we have received back is 34
minutes.
Sven Cornelis, Owner & Partner at Acco Accountants
Sign
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Analyst coverage
Independent coverage
Jesper Billeskov
jesper.billeskov@abgsc.dk
+45 35 46 30 17
Jacob Svensson
jacob.svensson@redeye.se
+46 733 004 288
Rasmus Overgaard
rasmus.overgaard@abgsc.dk
+45 35 46 30 14
Investor Relations, Morten Nybye-Petersen
Mobile +45 53 69 69 80
Mail mnp@penneo.com
IR contact
Kasper Lihn
kasper@hcandersencapital.dk
+45 28 73 93 22
Frederikke Due Olsen
frederikke.due.olsen@carnegie.dk
+45 32 88 03 26
Sponsored coverage
Penneo is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Penneo’s
performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Penneo or
its management. Penneo does not by its reference above or distribution imply its endorsement of or concurrence with such
information, conclusions or recommendations.
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Outlook for 2022
ARR guidance
In 2022, Penneo expects continued growth in ARR and guides ARR at the level
of 77M-82M DKK at the end of 2022 corresponding to an ARR growth rate of
40%-49%.
FulfilmentoftheARRguidancedependsonthefollowingkeydriversandas-
sumptions:
• A continued low churn rate
• A continued level of engagement with the platform
• A continued ability to obtain new customers across industries and
markets
EBITDA guidance
In 2022, Penneo continues to invest in long-term ARR growth in accordance
with the announced expansion strategy in the IPO document. Consequently,
Penneo expects an EBITDA at a level of negative 5-10M DKK. Deviations from
the guided range depend on investments in new strategic opportunities that
align with the announced expansion strategy.
The guided EBITDA is based on the key assumption of continued investments
in the announced use of proceeds from the IPO i.e. investments in product
development and sales and marketing activities.
Capital raise
As announced in Company Announcement No. 16-2021, Penneo intended
to raise up to 100M DKK. However, it is the assessment of the Board of
Penneo that a capital raise of 100M DKK in the current capital market
conditions would not contribute to the long term value creation for the
current shareholders in Penneo.
Instead, Penneo intends to complete a smaller capital raise of app. 5-10%
of Penneo’s market cap within the next 6 months in order to maintain the
growth momentum and secure the foundation for investing in continued
high growth rates in 2023.
Operational focus
In 2022, Penneo will continue to execute its growth strategy and focusing
on internationalisation through solidifying its market positions and con-
tinuingthecommercialeffortsfrom2021torollouttheKYCsoftwareto
auditors across the Nordic countries.
Additionally, Penneo expects increasing traction in the audit and accoun-
ting segment in foreign markets, while the domestic markets are expec-
ted to support growth in other customer segments.
Forward-looking statements
StatementsaboutthefutureexpressedintheannualreportreflectPen-
neo’scurrentexpectationsforfutureeventsandfinancialresults.Thena-
tureofthesestatementsisaffectedbyriskanduncertainties.Therefore,
thecompany’sactualresultsmaydifferfromtheexpectationsexpressed
in the management report.
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Guidance methodology
ARR guidance
The overall assumption for the expected annual recurring revenue is based
onhistoricalperformancefiguresforthelatestsixmonthsadjustedforsea-
sonalityandthespecificplansforcontinuousramp-upofthesalesorganiza-
tion.Theintermediateoutputbased onthehistorical performancefigures
is then discussed with the commercial team, who reviews it based on their
knowledge of the Company’s current pipeline as well as their qualitative and
specificknowledgeonthecurrentconditionsinPenneo’sdifferentmarkets.
The input from the commercial team is applied to adjust the intermediate
output to get the most precise forecast of expected annual recurring reve-
nue.
Lastly, the adjusted forecast and the underlying drivers is presented to the
ExecutiveManagement,whomakesthefinaladjustmentsbeforepresenting
ittotheBoardofDirectorsforfinalapproval.
EBITDA guidance
The Company’s expected EBITDA correlates with the Company’s expectations
for annual recurring revenue as the Company expects to ramp up the team to
secureandutilizeasmanygrowthopportunitiesaspossiblewithinthecash
flowlimitsoftheCompany.
TheCompanyadjustsitshiringplan,andcorrespondinglythestaffcostsac-
cordingtotheexpectedannualrecurringrevenueandcashflowgenerated
from the expected annual recurring revenue. Thus, the expected EBITDA is
subject to change in accordance with changes in the relation between expec-
tedannualrecurringrevenue,cashflow,andstaffcosts.
The Company follows the development in annual recurring revenue closely
on a monthly basis and ensures to adjust the hiring plan accordingly to re-
flectamatchinglevel,whichmeansthatEBITDAwillnotbedirectlyimpacted
following a change in expected annual recurring revenue. Should the expe-
cted annual recurring revenue be lower than expected, fewer hirings will be
executed, and contrarily, should the expected annual recurring increase, ad-
ditional hirings will be executed.
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Financial review
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CFO statement
- Casper Nielsen Christiansen
Growth ratio
In 2021, we realised a Free Cash Flow (FCF) of negative 23.6M DKK compared to a growth in ARR of 18.5M DKK. We consider a
cash to growth ratio of 1.3 healthy, especially when realising a churn of ~2% and a net ARR retention of 124%. We have been able
to demonstrate the success of our investments of the proceeds from the IPO in 2020 materialising in both healthy SaaS metrics
and a healthy cash to growth ratio. Consequently, we continue to invest into growing the company.
Further, in 2021 we onboarded 530 new customers with a total ARR of 9.9M DKK or 19T DKK per customer. We had 14.1M DKK
in total leadspend and sales and marketing related staff costs, which amount to an average of 27T DKK per new customer. Con-
sequently, it takes approximately 17 months to recover CAC (excluding direct costs). In general, the customer is invoiced for 12
months up front, which is why the customer is expected to be cash positive after one year of subscription. Given the long and
growing tail of cash-flows after year one (with net ARR retention of 124%), we consider the acquisition of new customers to be a
highly profitable process with a rapid pay-back.
Loan
As a result of our ambition to realise healthy growth metrics, we decided to support it by entering into a loan agreement of
10M DKK with Vækstfonden. The loan is expected to contribute to the capital structure of Penneo as we consider the dilution of
granting 25,000 warrants at a strike price of 23,199 DKK more favorable to existing shareholders than issuing +400,000 shares
to raise the 10M DKK, also when considering the interest rate.
Customer Acquisition Cost (CAC)
CAC levels rose in the second half year of 2021 compared to the first half year. In 2021-Q3 we referred to three reasons causing
the low inflow of new customers, of which one caused the high CAC in the second half year. However, a high CAC is not a tem-
porary exception, but part of our strategy to target bigger and international customers. This will result in a higher CAC paired
with higher average ARR in the long term.
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Key figures
*EBITDA does not include extraordinary income and costs categorised as “Other income” and “Other operating expenses” on page 38.
DKK 2021-Q4 2021-Q3 2021-Q2 2021-Q1 2020-Q4 2020-Q3 2020-Q2 2020-Q1
Revenue 18,458,693 9,128,555 15,832,776 10,860,201 11,875,102 7,733,482 9,178,939 6,746,183
Cost of sales (2,690,089) (2,071,042) (2,607,159) (2,294,986) (2,166,540) (1,450,088) (2,041,555) (1,356,144)
Grossprofit 15,768,604 7,057,514 13,225,617 8,565,215 9,708,562 6,283,394 7,137,384 5,390,039
85% 77% 84% 79% 82% 81% 81% 80%
Other external expenses (3,626,638) (3,405,948) (3,298,648) (4,114,219) (3,007,267) (2,468,528) (1,535,027) (1,603,532)
Staffcosts (12,729,816) (11,741,094) (10,628,358) (9,140,370) (9,030,075) (6,401,659) (8,063,040) (5,149,366)
EBITDA* (587,850) (8,089,529) (701,389) (4,689,374) (2,328,780) (2,586,793) (2,460,683) (1,362,859)
DKK 2021 2020 2019
Revenue 54,280,225 35,533,705 27,597,283
Cost of sales (9,663,276) (7,014,327) (5,352,122)
Gross profit 44,616,950 28,519,378 22,245,161
82% 80% 81%
Other external expenses (14,445,453) (8,614,354) (4,604,246)
Staffcosts (44,239,638) (28,644,140) (16,810,195)
EBITDA* (14,068,142) (8,739,116) 830.720
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Financial commentary
Recognized revenue
Recognizedrevenuehasincreasedby53%comparedto2020.Thein-
crease is a result of the investments made in Sales and Marketing.
Cost of sales
Cost of sales has increased by 38% compared to 2020. Consequently,
the gross profitmargin increased from 80%in 2020 to 82% in 2021,
since the revenue has increased at a higher rate than the cost of sales.
The increase in cost of sales is caused by increased usage of Penneo’s
platform.
Other external expenses
Other external expenses have increased by 68% compared to 2020.
The increase is mainly due to increased direct online marketing costs
which increased by 103% in accordance with the ‘use of proceeds’ of
the IPO document. Additionally, the increase is due to changes made
to facilitate the growth and internationalisation of Penneo, e.g. invest-
ments in automation and optimisation of new ERP and CRM systems
and hardware.
Staff costs
Staffcostsincreasedby54%comparedto2020.Alignedwiththe‘use
of proceeds’ from the IPO document, Penneo invested heavily in hir-
ings related to sales, marketing and software development. Penneo
wants to take advantage of its position in Scandinavia and use that for
internationalisation and growth through auditors in Europe.
EBITDA
EBITDA amounted to negative 14.1M DKK, compared to negative 8.7M
DKK in 2020. The result is 0.9M DKK above the 2021 guided range of ne-
gative 15M-20M DKK and is aligned with the growth strategy set out in
the IPO and the updated strategy announced in Company Announce-
ment no. 26-2021.
The growth strategy prescribes investing into product development,
commercial activities to build a globally scalable software company
and into future ARR growth and value creation. Short term, these in-
vestments will generate negative EBITDA but long term strengthen the
profitability.
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Other intangible assets
Other intangible assets have increased by 28% compared to 2020,
which is caused by the investment into development projects.
Trade receivables
Trade receivables have increased by 37% compared to 2020. The in-
crease is caused by December 2021 being the highest invoicing month
so far in Penneo history. The invoicing amount in December 2021 has
increased by 60% compared to December 2020.
Income tax receivables
Income tax receivable consists of tax credit related to Penneo’s devel-
opment projects.
Interest bearing liabilities
Interest bearing liabilities have increased by 190% compared to 2020.
The increase is caused by a new loan from Vækstfonden as described
in Company Announcement No. 27-2021.
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Cash flow from financing activities
Netcashflowfromfinancingactivitiesresultedinaninflowof17.1M
DKKin2021comparedtoaninflowof45.8MDKKin2020.Thedecrease
relates to the IPO in 2020 in which Penneo had a large cash increase
from capital of 52M DKK. In 2021 warrants were exercised resulting in
a cash increase from capital of 9.9M DKK. In addition Penneo raised a
loan from Vækstfonden on 10M DKK in order to facilitate the continu-
ous growth of Penneo.
Cash flow from operating activities
Netcashflowfromoperatingactivitiesresultedinanoutflowof8.1M
DKK in2021comparedtoanoutflow of 8.8MDKK in2020.Netcash
flow from operating activities is related to the increase in the oper-
ations-related costs (e.g. staff costs, cost of premises and increased
marketing activities) that are being invested in the international expan-
sion of Penneo according to the strategy.
Cash flow from investing activities
Netcashflowfrominvestingactivitiesresultedinanoutflowof15.5M
DKK in 2021 compared to an outflow of 13.4M DKK. The increase is
caused by the investment to develop Penneo’s product in accordance
with the strategy.
DKK 2021-Q4 2021-Q3 2021-Q2 2021-Q1 2020-Q4 2020-Q3 2020-Q2 2020-Q1
Cashflowfromoperatingactivities (617,208) 482,436 2,655,548 (10,600,077) 1,281,215 (1,284,752) (4,242,023) (4,492,163)
Cashflowfrominvestingactivities (4,755,818) (3,661,802) (3,436,842) (3,626,669) (3,060,003) (4,298,426) (4,138,362) (1,941,798)
Free Cash Flow (FCF) (5,373,026) (3,179,366) (781,294) (14,226,746) (1,778,788) (5,583,178) (8,380,385) (6,433,961)
Free Cash Flow
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Governance
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Governance
Company information
Business Registration No.: 35 63 37 66
Registeredoffice:Copenhagen
Date of incorporation: 09.01.2014
Accounting period: 01.01.2021 - 31.12.2021
Board of Directors
Christian Sagild (Chairman )
Executive Board
Auditor
Deloitte Statsautoriseret Revisionspartnerselskab
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Executive Board
Christian Stendevad
CEO since 18.08.2021
Before joining Penneo, Christian Stendevad took up as position as COO
at the Identity Governance and Administration tech company, Omada.
Christian Stendevad was co-heading the international scaling and
growth of Omada from 2004 until joining Penneo in 2021. In addition,
Christian Stendevad gained significant execution and management
expertise from his roles as managing consultant at PwC and IBM
Business Consulting Services.
Shares and warrants: Christian Stendevad owns 6,056 shares and
630,000 warrants have been issued to Christian Stendevad.
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Board of Directors
Christian Sagild
Chairman of the Board since 28.04.2021
Profession
Professional board member
Educational background
Actuary, cand. act. Copenhagen University.
ChristianSagildisaprofessionalboardmember withsignificantma-
nagerial experience from his executive positions within the insurance
industry, most recently as CEO at Topdanmark from 2009 to 2017.
Christian Sagild’s current board positions include Royal Unibrew, Ambu
and Nordic Solar (Chairman).
Independent of the Company
Shares and warrants: Christian Sagild owns 200,000 shares and
406,377 warrants have been issued to Christian Sagild.
Particular competencies in relation to Penneo A/S
Capital market experience, experience in managing public companies,
stakeholder and reputation management, complex framework
management experience.
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Board of Directors
Morten Kenneth Elk
Board member since 14.09.2018
Profession
CEO at SimpleSite
Educational background
Ph.D. Physics, University of Copenhagen.
Morten Elk is a serial entrepreneur, board member and business angel.
He started his career in 1997 after leaving a postdoctoral position in
Physics to co-found what became a leading Danish digital agency that
was exited to Swedish Adcore in 1999. In 2003, Morten Elk co-founded
SimpleSite, a global player in the Do-It-Yourself website building ser-
vices, where he remains the CEO.
Alongside, Morten Elk has invested in several startups and is the initi-
ator and driver behind the event series Nordic Growth Hackers where
participants in the Copenhagen tech community gather to share growth
experience and tactics.
Independent of the Company
Shares and warrants: Morten Elk owns 18,083 shares and 283,167
warrants have been issued to Morten Elk.
Particular competencies in relation to Penneo A/S
CEO & founder (operational) experience: Strategy development, start up
& scale up experience.
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Board of Directors
Rikke Stampe Skov
Board member since 05.03.2021
Profession
CEO at Impero
Educational background
Board Master Class (CBS), HD(O) (CBS), HA(jur.) (CBS).
Rikke Stampe Skov is CEO of Impero where she has been a force in ta-
king the company public on Nasdaq First North Growth Market.
Rikke Stampe Skov has spent several years as a partner in PwC, co-hea-
ding the Risk Assurance Services department and later as a partner with
Odgers Berndtson. Before this, Rikke Skov co-founded the IT security
consulting company, Protego, which was successfully exited to PwC in
2006. Rikke Skov’s career also includes positions with Mærsk, ISS, and
Siemens.
Independent of the Company
Shares and warrants: Rikke Stampe Skov owns 1,615 shares.
Particular competencies in relation to Penneo A/S
CEO (operational) experience, experience from the audit industry
(PwC), experience in international scaling of SaaS businesses.
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Board composition
Once a year, the Board of Directors will conduct a self-evaluation to
ensure that the Board promotes the Company’s purpose and serves
the culture and values of the Company. As of 31 December 2021, the
Board of Directors consists of three members.
To ensure constructive and value-creating discussions, the Board of
Directors aims at ensuring the right composition and balance of com-
petencies in the Board. It is the mission of the Board of Directors to
augment the competencies within scaling and internationalisation of
SaaS businesses while also looking to organise itself with Board mem-
bers that hold solid experience and a strong track record from large
listed companies to ensure long term value-creation for Penneo.
Consequently, and with reference to Company Announcement no.
17-2021,theBoardofDirectorsrecommendedtheelectionofSteffen
Heegaard as member of the Board of Directors at the next ordinary
shareholders meeting. SteffenHeegaardhasmore than30yearsof
experience within capital market communication, IR and ESG, primar-
ilyfromTopdanmark.Asanindependentboardmember,SteffenHee-
gaard will be a unique addition to the existing board competencies and
a key contributor in realising Penneo’s capital market aspirations.
Board evaluation
The Board evaluation includes all members of the Board of Directors
and the Executive Board, and the Chairman of the Board is responsible
for conducting the Board evaluation. The Board of Directors adjusts
the composition of the Board based on the results of the Board evalu-
ationandinaccordancewiththecompetencyprofile.
TheBoardofDirectorswillconductthefirstBoardevaluationinQ3,
2022.
The Company’s Corporate Governance Statement is available on the Com-
pany’s website: www.penneo.com/investors
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ESG
Social
Governance
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Key risks
Risk management
To mitigate the risks that Penneo is facing through its operations and en-
deavour to provide high quality and reliable SaaS solutions, Penneo’s top
management continuously monitors and evaluates relevant risks. The risk
management approach is inspired by the International Organisation for
Standardization(ISO)31000(RiskManagementFramework)andcoversfinan-
cial, operational, industry, cyber and information security risks. Appropriate
measures are taken and internal controls and procedures are continuously
improved.
Cyber risk
As a SaaS provider Penneo is at continuous risk from cyber threats. The
organisation stores and processes both customer data and internal data. To
mitigate the likelihood and impact of cyber threats an Information Security
Management System (ISMS) based on the internationally recognised ISO
27001 standard has been implemented. This ensures that appropriate risk
treatmentmeasuresareutilizedtoaddressrelevantcyberrisksthatcould
lead to security incidents.
Best practice principles as well as technical measures have been implement-
ed in the organisation and SaaS solutions to ensure that access to data is
only granted and technically feasible to authorised persons, backups are
created, business continuity procedures are in place and tested among other
measures.PenneocontinuestouseAmazonWebServices(AWS)asitsInfra-
structure as a Service (IaaS) provider, which is one of the most secure and
reliablehostingproviders.Bi-annualreviewsofAWS’scompliancereports
are performed by Penneo’s Risk & Compliance team.
To further ensure the security of the SaaS products, Penneo engages
anexternalITsecurityfirmtoperformsecuritypenetrationtestsof
products at least on an annual basis. Furthermore, an external audit
firmperformsanISAE3000auditofPenneo’sinternalproceduresand
controls related to the IT security of the SaaS products. This is done
to increase transparency of the implemented security measures and
demonstrate Penneo’s commitment to be a trustworthy and reliable
partner.
Industry risk
ThemarketforITservicesischaracterizedbyintensecompetition,fre-
quent new product launches, changing customer demands, evolving in-
dustry standards and legislative changes from both the EU and national
regulatory authorities. Penneo’s future success depends on its ability
to continue to develop and market services that have product-market
fitandarecost-efficientforitsexistingandnewcustomers.Inparticu-
lar, Penneo’s success depends on its ability to continuously evolve its
products and services to address the developing market for IT services
for AML governed industries.
Penneo’s established market position in the audit industry in the Nor-
dic markets and the deep adaptation to the vertical combined with the
relativelyhighswitchingcoststhataccountingfirmshavetopayfor
corporate software solutions, mitigate the risk of heavy direct competi-
tion.
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Penneo is a Software-as-a-Service (SaaS) provider originally estab-
lished to help companies with digital document signatures. Penneo
was founded by six Danish entrepreneurs, who joined forces with a
shared ambition to reduce the “hassle of getting documents signed”
by replacing pen and paper with a digital alternative. This new digital
“pen” (Pen-neo) was launched in 2014.
Today, Penneo has evolved into an eco-system of automation solutions
that digitize company workflows in connection with onboarding of
customers (KYC), secure signing and management of documents. The
companyoffersaRegTechsolutionthatgivescompaniesanefficient
and inexpensive tool for complying with regulatory requirements.
Penneo holds a strong position in the Nordic countries. In Denmark
alone, more than 740,000 individuals signed documents electronically
with Penneo in 2021.
For more information about Penneo please visit:
https://penneo.com/investors/
Financial Calendar
ANNUAL GENERAL MEETING
27 April 2022
QUARTERLY REPORT
24 May 2022
HALF YEAR REPORT
24 August 2022
QUARTERLY REPORT
23 November 2022
2022
Company information
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Financial statements
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Statement by Management
Executive Board
CEO, Christian Stendevad
Board of Directors
Christian Sagild
Morten Kenneth Elk
Rikke Stampe Skov
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Independent Auditor’s report
Opinion
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Basis for opinion
Management’s responsibilities for the financial statements
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Auditor’s responsibilities for the audit of the financial statements
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Statement on the management commentary
CVR-nr.: 33963556
MNE-nr. mne32127
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Statement of
profit or loss
and other
comprehensive
income
Note
2021
DKK
2020
DKK
Revenue 5 54,280,225 35,533,705
Cost of sales (9,663,276 ) (7,014,327 )
Gross profit 44,616,950 28,519,378
Other external expenses (14,445,453 ) (8,614,354 )
Staffcosts 6 (44,239,638 ) (28,644,140 )
Other income 44,785 0
Other operating expenses (1,017,363 ) (2,303,555 )
Depreciation, amortisation, impairment 8 (7,682,379 ) (5,202,220 )
Operating profit/(loss) (22,723,098 ) (16,244,892 )
Financial income 9 128,363 93,132
Financial expenses 10 (1,576,313 ) (1,139,027 )
Profit/(loss) before tax (24,171,048 ) (17,290,786 )
Tax for the year 11 5,536,417 4,488,137
Profit/(loss) for the year (18,634,631 ) (12,802,649 )
Total comprehensive income for the year (18,634,631 ) (12,802,649 )
Earnings per share, basic (DKK) 18 (0.72 ) (0.65 )
Earnings per share, diluted (DKK) 18 (0.61 ) (0.53 )
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Statement of
financial
position
Note
31.12.2021
DKK
31.12.2020
DKK
Intangible assets 12 45,048,292 35,256,287
Property, plant and equipment 13 1,227,193 734,739
Right-of-use assets 14 12,852,335 15,369,359
Deposits 15 1,288,942 1,258,700
Total non-current assets 60,416,763 52,619,085
Trade receivables 16 11,830,821 8,660,841
Income tax receivables 11 4,756,084 1,964,811
Other receivables 22,325 1,016
Prepayments 2,039,272 800,486
Cash 25,415,797 31,842,851
Total current assets 44,064,299 43,270,005
Total assets 104,481,061 95,889,090
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Statement of
financial
position
Note
31.12.2021
DKK
31.12.2020
DKK
Share capital 18 542,579 502,615
Reserve for development 30,600,906 15,928,604
Retained earnings 12,050,329 35,227,386
Treasury shares 7,177 7,177
Other capital reserve 19 13,842,673 5,910,269
Total equity 57,043,664 57,576,051
Interest bearing liabilities 20 14,366,991 4,695,526
Provisions 21 442,790 432,267
Lease liabilities 14 11,212,840 13,560,555
Other payables 2,384,316 2,220,843
Contract liabilities 5 403,066 447,851
Total non-current liabilites 28,810,003 21,357,042
Contract liabilities 5 4,216,457 4,063,593
Lease liabilites 14 2,347,715 2,003,508
Trade payables 4,487,375 2,665,906
Other payables 7,245,187 7,848,086
Interest bearing liabilities 20 330,660 374,904
Total current liabilities 18,627,395 16,955,997
Total liabilities 47,437,397 38,313,039
Total equity and liabilites 104,481,061 95,889,090
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Statement of
changes in
equity
2020
Share
Capital
DKK
Reserve for
deveopment
expenditure
DKK
Retained
earnings
DKK
Treasury
shares
DKK
Other
capital
reserve
DKK
Total
DKK
Equity beginning of 2020 135,995 11,167,899 (3,891,111 ) 1,542,693 8,955,476
Netprofit/(loss)fortheperiod (12,802,649 ) (12,802,649 )
Purchase of own shares 12,198 12,198
Sale of own shares 8,255,021 (5,021 ) 8,250,000
Capital increase 366,620 49,644,554 50,011,174
Transaction costs (3,125,560 ) (3,125,560 )
Holding merger 1,907,836 1,907,836
Transfer to reserves 4,760,705 (4,760,705 )
Potential shares issued as conside-
ration in a business combination
refer to note 25
Shared-based payments 1,367,576 1,367,576
Equity end of 2020 502,615 15,928,604 35,227,386 7,177 5,910,269 57,576,051
2021
Share
Capital
DKK
Reserve for
deveopment
expenditure
DKK
Retained
earnings
DKK
Treasury
shares
DKK
Other capi-
tal reserve
DKK
Total
DKK
Equity beginning of 2021 502,615 15,928,604 35,227,386 7,177 5,910,269 57,576,051
Netprofit/(loss)fortheperiod (18,634,631 ) (18,634,631 )
Exercise of warrants 39,964 10,159,877 (295,361 ) 9,904,480
Transaction costs (30,000 ) (30,000 )
Transfer to reserves 14,672,302 (14,672,302 ) 0
Shared-based payments 8,227,765 8,227,765
Equity end of 2021 542,579 30,600,906 12,050,329 7,177 13,842,673 57,043,664
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Cash flow
statement
Note
2021
DKK
2020
DKK
Operatingprofit/loss (22,723,098 ) (16,244,892 )
Depreciation, amortisation and impairment 7,682,379 5,202,220
Share-based payment expense 8,227,765 1,367,576
Other income (44,785 ) 0
Changes in working capital 17 (2,895,167 ) 954,105
Income taxes received 2,745,144 727,385
Financial income received 128,363 93,132
Financial expenses paid (1,199,901 ) (837,249 )
Cash flow from operating activities (8,079,301 ) (8,737,723 )
Investments in intangible assets (14,763,630 ) (8,930,476 )
Investments in property plant and equipment (687,259 ) (612,085 )
Deposits (30,242 ) (146,028 )
Acquisition of business 0 (3,750,000 )
Cash flow from investing activities (15,481,131 ) (13,438,589 )
Proceeds from borrowings 10,000,000 5,000,000
Repayment of borrowings (372,778 ) (5,000,000 )
Payment of principal portion of lease liabilities (2,368,323 ) (2,122,058 )
Transactions costs from capital increase (30,000 ) (4,095,872 )
Cash increase from capital 9,904,480 52,019,954
Cash flow from financing activities 17,133,378 45,802,024
Change in cash and cash equivalents
Cash and cash equivalents 1 January 31,842,851 8,217,139
Netcashflow (6,427,054 ) 23,625,712
Cash and cash equivalents 31 December 25,415,797 31,842,851
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Notes
1. Accounting policies
2. Adoption of new and amended standards
3. Critical accounting judgements and key sources of estimation uncertainty
4. Segment information
5. Revenue
6.Staffcosts
7. Share-based payments
8. Depreciation, amortisation and impairment
9. Financial income
10. Financial expenses
11. Tax for the year
12. Intangible assets
13. Property, plant and equipment
14. Leases
15. Deposits
16. Trade receivables
17.Workingcapitalchanges
18. Share capital and earnings per share
19. Other capital reserve
20. Interest-bearing liabilities
21. Provisions
22. Financial risks
23.Liabilitiesarisingfromfinancingactivities
24. Guarantees, contingent liabilities and collateral
25. Business combinations
26. Related parties
27. Events after the reporting period
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1. Accounting policies
Penneo’s financial statements have been prepared in accordance with Interna-
tional Financial Reporting Standards (“IFRS”) as adopted by the EU and additional
Danish disclosure requirements for the financial statements of reporting class
B enterprises with addition of certain provisions for reporting class C, cf. the
Danish Executive Order on Adoption of IFRSs (“IFRS bekendtgørelsen “) issued in
accordance with the Danish Financial Statements Act (“DFSA”).
Basis of preparation
The financial statements are presented in Danish kroner (DKK). The financial
statements have been prepared on a going concern basis and in accordance
with the historical cost convention, except where IFRS explicitly requires use of
other values.
For the purpose of clarity, the financial statements and the notes to the finan-
cial statements are prepared using the concepts of materiality and relevance.
This means that line items not considered material in terms of quantitative and
qualitative measures or relevant to financial statement users are aggregated and
presented together with other items in the financial statements. Similarly, infor-
mation not considered material is not presented in the notes.
The accounting policies, except as described below, have been applied consist-
ently during the financial year and for the comparative figures.
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Foreign currency translation
Transactions denominated in currencies other than the functional curren-
cy are considered transactions in foreign currency.
On initial recognition, transactions denominated in foreign currencies
are translated to the functional currency at the exchange rates at the
transaction date. Foreign exchange rate adjustments arising between the
transaction date and at the date of payment are recognised in the income
statement under financial income or financial expenses.
Monetary assets and liabilities denominated in foreign currencies are
translated at the exchange rates at the reporting date. The difference
between the exchange rates at the reporting date and at the date of trans-
action or the exchange rate in the latest financial statements is recognised
in the income statement under financial income or financial expenses.
Cash flow statement
The cash flow statement is presented using the indirect method and
shows cash flows from operating, investing and financing activities for the
year as well as Penneo’s cash and cash equivalents at the beginning and
end of the financial year.
Cash flows from operating activities are calculated based on operating
profit/loss, adjusted for the cash flow effect of non-cash operating items,
working capital changes, financial expenses paid and income tax paid.
Cash flows from investing activities comprise payments in connection
with the acquisition and sale of non-current intangible assets, property,
plant and equipment as well as financial assets.
Cash flows from financing activities comprise payments arising from
changes in the size or composition of Penneo’s share capital and dividend
paid.
Income statement
Revenue
Revenue is recognised exclusive of VAT and taxes and with deduction of
any rebates given. Net revenue is allocated to performance elements,
where performance elements are training/education, customer access
to systems agreed, delivery of any validations and certificates of signa-
tures and to a lesser extent support and storage. Allocation is based on
the contract with the customer to the extent possible, but for combined
contracts, an estimate is being made for the distribution of sales price
to the performance elements. Such allocation to performance elements
is based on historical data to the extent possible, with frequent reesti-
mation based on the development in data or other knowledge around
tendencies or expected development. The contracts held by Penneo are
to a huge extent combined contracts. The main contracts contain three
elements: right to use the system, signatures and support.
Penneo has two main price models within the Sign solution: “old” trans-
action based and “new” subscription based price model. The “old”
transaction based price model which is only for customers who signed up
before 2019 is recognized when the two distinct performance obligations
are met. The invoiced subscription is recognized upfront at the start date
of the subscription. The signatures are recognized upon the specific use
since the customers have an inventory that comprises signatures. Bought
but not used signatures are deferred according to the cost-plus a margin
approach as a part of the Contract liabilities.
The “new” subscription based price model which comprises a fair usage
is recognized according to the subscription period by a specific percent-
age upfront and the remaining amount recognized on a straight-line basis
over time. The percentage is calculated by the average cost of signature
lines as certificates on the signature lines is the only performance ele-
ment not fulfilled at the start date of the subscription. Refer to note 3 for
further details.
One-time fees comprises onboarding and other consultancy services and
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is recognized upon fulfillment.
Cost of sales
Cost of sales comprise costs incurred to achieve the year’s revenue.
Other external costs
Other external expenses include expenses relating to Penneo’s ordinary
activities, including expenses for stationery and office supplies, marketing
costs, etc.
Staff costs
Staff costs consist of salaries and wages, share-based payments, and
other benefits. Salaries, share-based payments, and other benefits are
recognised in the year in which the associated services are rendered by
the employees. Contributions to defined contribution plans are recog-
nised in the income statement in the period to which they relate and any
contributions outstanding are recognised in the statement of financial
position as other liabilities.
Depreciation, amortisation and impairment losses
Depreciation, amortisation and impairment losses relating to property,
plant and equipment, intangible assets and right-of-use assets comprise
depreciation and amortisation.
Share-based payments
The Board of Directors, Management and other employees have been
granted warrants. In addition the Company has also had an employee
share scheme where the employees were able to sign up. The warrants
as well as the share scheme are measured at fair value at the grant date
and are recognised as an expense in staff costs over the vesting peri-
od. Expenses are set off against equity as a consequence of the share
based payments being equity settled. Lender warrants are measured at
fair value at the grant date and are recognised as an expense in financial
expenses over the vesting period. Expenses are set off against equity as a
consequence of the share based payments being equity settled.
The fair value of the warrants is measured using the Black Scholes val-
uation method or other generally accepted valuation techniques. The
calculation takes into account the terms and conditions under which the
warrants are granted.
Fair value is not subsequently remeasured. If subsequent modifications
to a warrant program increase the value of the warrants granted, meas-
ured before and after the modification, the increase is recognised as an
expense. If the modification occurs before the end of the vesting period
the increase in value is recognised as an expense over the period for ser-
vices to be received. If the modification occurs after the vesting date, the
increase in value is recognised as an expense immediately. Consideration
received for warrants sold are recognised directly in equity.
Other operating income and expenses
Other operating income and other operating expenses comprise income
and expenses of a secondary nature relative to the principal activities of
Penneo.
Other financial income
Other financial income comprises dividends etc received on other invest-
ments, interest income, including interest income on receivables from
group enterprises, net capital or exchange gains on securities, payables
and transactions in foreign currencies, amortisation of financial assets as
well as tax relief under the Danish Tax Prepayment Scheme etc..
Impairment losses on financial assets
Impairment losses on financial assets comprise impairment losses on
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financial assets which are not measured at fair value on a current basis.
They are included in the line item “depreciation, amortisation and impair-
ment losses.
Other financial expenses
Other financial expenses comprise interest expenses, lease interest, net
capital or exchange losses on payables and transactions in foreign cur-
rencies, amortisation of financial liabilities as well as tax surcharge under
the Danish Tax Prepayment Scheme, etc.
Tax
Tax on the profit/loss for the year comprises the year’s current tax and
changes in deferred tax. The tax expense relating to the profit/loss for the
year is recognised in the income statement, and the tax expense relating
to items recognised in other comprehensive income and directly in equity,
respectively, is recognised in other comprehensive income or directly in
equity. Exchange rate adjustments of deferred tax are recognised as part
of the adjustment of deferred tax for the year.
Current tax payable and receivable is recognised in the balance sheet as
the expected tax on the taxable income for the year, adjusted for tax paid
on account. The current tax charge for the year is calculated based on the
tax rates and rules enacted at the balance sheet date.
Penneo is jointly taxed with all Danish group enterprises. The current
Danish income tax is allocated among the jointly taxed entities propor-
tionally to their taxable income (full allocation with a refund concerning
tax losses).
Deferred tax is calculated using the liabilit y method on all temporar y differ-
ences between the accounting and taxable values of assets and liabilities.
Deferred tax assets are assessed yearly and only recognised to the extent
that it is more likely than not that they can be utilised. Deferred tax assets,
including the tax value of tax losses carried forward, are recognised as
other non-current assets and measured at the amount at which they are
expected to be realised, either by setting off deferred tax liabilities or by
setting off tax on future earnings within the same legal entity or a jointly
taxed entity.
However, no deferred tax is recognised for amortisation of goodwill dis-
allowed for tax purposes and temporary differences arising at the date of
acquisition that do not result from a business combination and that do
not have any effect on profit or loss or on taxable income.
Penneo recognises deferred tax assets relating to losses carried forward
when Management finds that these can be offset against taxable income
in the foreseeable future. An assessment is made taking into considera-
tion the effect of restrictions in utilisation in local tax legislation. Future
taxable income is assessed based on budgets as well as Management’s
expectations regarding growth and opeating margin in the coming years.
Balance sheet - Intangible assets
Goodwill
In connection with every acquisition of businesses, goodwill and a non-con-
trolling interest (minority) are recognised as follows: Goodwill relating to
the entity acquired comprises a positive difference, if any, between the
consideration paid plus the fair value of previous held interest in the ac-
quiree and the fair value of the total net assets for accounting purposes.
Goodwill is recognised in intangible assets. It is not amortised, but reviewed
for impairment once a year and also if events or changes in circumstances
indicate that the carrying value may be impaired. If impairment is present,
the goodwill is written down to its lower recoverable amount. Sold or liq-
uidated entities are recognised up to the date of disposal.
Annual report 2021
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Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
Intellectual property rights and development projects
Intellectual property rights etc. comprise development projects completed
and in progress with related intellectual property rights, acquired intellec-
tual property rights and prepayments for intangible assets. Development
projects on clearly defined and identifiable products and processes, for
which the technical feasibility, adequate resources and a potential future
market or development opportunity in the enterprise can be established,
and where the intention is to manufacture, market or apply the product
or process in question, are recognised as intangible assets.
Development costs that does not meet the criteria for capitalization are
recognised as costs in the income statement as incurred. Following in-
itial recognition of the development expenditure as an asset, the asset
is carried at cost less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins when development
is complete and the asset is available for use.
Acquired intangible assets are at initial recognition measured at cost
where as intangible assets acquired in a business combination is meas-
ured at fair value.
Intangible assets are amortised over the period of expected future bene-
fit. During the period of development, the asset is tested for impairment
annually. For development projects protected by intellectual property
rights, the maximum period of amortisation is the remaining duration of
the relevant rights. The amortisation periods used are 3-10 years.
Property, plant and equipment
Property, plant and equipment comprise other fixtures and fittings as well
as leasehold improvements and are measured at cost less accumulated
depreciation and accumulated impairment. Cost comprises the acquisi-
tion price, costs directly attributable to the acquisition and preparation
costs of the asset until the time when it is ready to be put into opera-
tion. Property, plant and equipment are depreciated on a straight-line
basis over the expected useful lives of the finite-lived assets, which are
as follows:
Leasehold improvements – 5 years
Other fixtures - 5 years
For leasehold improvements, the depreciation period cannot exceed the
contract period. Estimated useful lives and residual values are reassessed
annually. Items of property, plant and equipment are written down to
the lower of recoverable amount and carrying amount. Leasehold im-
provements are tested for impairment if indications of impairment exist.
Tangible assets are written down to its recoverable amount, if the carry-
ing amount exceeds the higher of the fair value less costs to sell and the
value in use. Depreciation and impairment charges are recognised in the
income statement
Leases
When entering into an agreement, Penneo assesses whether an agree-
ment is a lease agreement or contains a lease element.
The right-of-use asset is measured at cost, which is calculated as the
present value of the lease obligation plus any direct costs related to the
entering into of the lease and prepaid lease payments. The cost also in-
cludes an estimate of costs to be incurred by the lessee in dismantling
and removing the underlying asset.
The right-of-use asset is depreciated on a straight-line basis over the
shorter of the lease term and the useful life of the asset.
Penneo leases properties which includes a service element in the pay-
ments to the lessor. This service is deducted from the lease payment
Annual report 2021
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Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
when measuring the lease obligation. Where Penneo cannot reliably sep-
arate lease and non-lease items, it is considered a single lease payment.
Short leases with a maximum lease term of 12 months and leases where
the underlying asset has a low value are not recognised in the statement
of financial position.
The lease term is defined as the non-cancellable period of a lease togeth-
er with periods covered by options to extend the lease if it is reasonably
certain that the options will be exercised and periods covered by options
to terminate the lease if it is reasonably certain that the options will not
be exercised. A number of leases contain extension and termination op-
tions in order to guarantee operational flexibility in managing the leases.
The lease obligation, which is recognised under “Lease liabilities”, is meas-
ured at the present value of the remaining lease payments, discounted by
Penneo incremental loan interest rate, if the implicit interest rate is not
stated in the lease agreement or cannot reasonably be determined. The
lease obligation is subsequently adjusted if:
• The value of the index or interest rate on which the lease payments
are based changes.
• There is a change in the exercise of options to extend or shorten the
lease period due to a material event or material change in circum-
stances which are within the control of the lessee.
• The lease term is changed as a result of exercising an option to extend
or shorten the lease term.
Subsequent adjustments of the lease obligation are recognised as a cor-
rection to the right-of-use asset.
Trade receivables
Trade receivables are measured at amortised cost less allowance for life-
time expected credit losses.
For trade receivables, Penneo applies a simplified approach in calculating
expected credit losses (ECLs). Therefore, Penneo does not track changes
in credit risk, but instead recognises a loss allowance based on lifetime
ECLs at each reporting date.
Provisions for bad debts are determined on the basis of a general provi-
sion based on overdue accounts receivables, adjusted for forward-looking
factors specific to the debtors and the economic environment.
However, in certain cases, Penneo may also consider a financial asset to
be in default when internal or external information indicates that Penneo
is unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by Penneo. Trade re-
ceivables are written off when all possible options have been exhausted
and there is no reasonable expectation of recovery.
The cost of allowances for expected credit losses and write-offs for trade
receivables are recognised in the income statement under other external
expenses.
The maximum exposure to credit risk at the reporting date is the carrying
value of trade receivables in note 16. Penneo does not hold collateral as
security.
Annual report 2021
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Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
Prepayments
Prepayments comprise incurred costs relating to subsequent financial
years. Prepayments are measured at cost.
Cash and cash equivalents
Cash comprises bank deposits.
Contract liabilities
Contract liabilities include prepayments from customers, which comprise
amounts received from customers prior to delivery of the goods agreed
or completion of the service agreed. Deferred income comprises income
received for recognition in subsequent financial years. Deferred income is
measured at cost.
Interest-bearing liabilities
Interest-bearing liabilities are measured at amortised cost, which usually
corresponds to nominal value.
Trade payables and other payables
Other payables include bonus and commission accruals, vacation pay ob-
ligations, payroll taxes and VAT. Payables are measured at cost.
Provisions
Provisions are recognised when Penneo has a present obligation (legal
or constructive) as a result of a past event, it is probable that an out-
flow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the
obligation.
If the effect of the time value of money is material, provisions are dis-
counted using a current pre-tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as financial expense.
Annual report 2021
50
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
2.
Adoption of
new and
amended
standards
The new and amended standards and interpretations that have been issued, but are not yet effective, up to
the date of issuance of Penneo’s financial statements are disclosed below. Penneo intends to adopt these
new and amended standards and interpretations, if applicable, when they become effective.
• Amendments to IFRS 16 Leases: Covid-19- Related Rent Concessions beyond 30 June 2021, effective 1
April 2021.
• Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework, effective 1 Jan-
uary 2022.
• Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use, effective 1 Janu-
ary 2022.
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts—
Cost of Fulfilling a Contract, effective 1 January 2022.
• Annual Improvements 2018-2020, effective 1 January 2022.
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current, effective 1 January 2023.
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting policies, effective 1 January 2023.
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates, effective 1 January 2023.
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction, effective 1 January 2023.
Penneo does not expect that the amended standards will have a significant impact on financial statements
of Penneo.
Annual report 2021
51
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
3.
Critical
accounting
judgements
and key sources of
estimation
uncertainty
As part of the preparation of the financial statements, Management makes a number of accounting estimates
and assumptions as a basis for recognising and measuring Penneo’s assets, liabilities, income and expenses
as well as judgements made in applying Penneo’s accounting policies. The estimates, judgements and as-
sumptions made are based on experience gained and other factors that are considered prudent by Manage-
ment in the circumstances, but which are inherently subject to uncertainty and volatility.
The assumptions may be incomplete or inaccurate, and unforeseen events or circumstances may occur for
which reason the actual results may differ from the estimates and judgements made. The accounting policies
are described in detail in note 1 to the financial statements to which we refer. Management considers the fol-
lowing accounting estimates and judgements to be significant in the preparation of the financial statements.
Revenue
Contracts with customers often include several components. Subscription to the platform and certificates
on signature lines constitute the main performance obligations. The fees allocated to the different perfor-
mance obligations are recognized separately.
The only performance obligation related to subscription has been identified as the right to use the Penneo
platform which is why this is recognized upon the start date of subscription.
Penneo uses the cost-plus a margin approach relating to the determination of the deferred revenue relating
to the certificates on the signature lines. The residual between the transaction price and the allocated price
for certificates on the signature lines are allocated to the subscription to the platform.
Judgment is applied in allocating the transaction price to the different performance obligations, subscription
and certificates
Development costs
Penneo capitalises costs for software development projects. Initial capitalisation of costs is based on man-
agement’s judgement that technological and economic feasibility is confirmed, usually when a product de-
velopment project has reached a defined milestone according to an established project management model.
In determining the amounts to be capitalised, management makes assumptions regarding the expected fu-
ture cash generation of the project and the expected period of benefits. At 31 December 2021, the carrying
amount of capitalised development costs was DKK 30,873k (2020: DKK 20,421k).
Annual report 2021
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Determining the lease term of contracts with renewal and termination options – Penneo as lessee
Penneo determines the lease term as the non-cancellable term of the lease, together with any periods cov-
ered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by
an option to terminate the lease, if it is reasonably certain not to be exercised. Penneo applies judgement in
evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the
lease.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate
valuation model, which depends on the terms and conditions of the grant. This estimate also requires de-
termination of the most appropriate inputs to the valuation model including the expected life of the share
option or appreciation right, volatility and dividend yield and making assumptions about them. The assump-
tions and models used for estimating fair value for share-based payment transactions are disclosed in note
7.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash-generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs
of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length,
for similar assets or observable market prices less incremental costs of disposing of the asset. The value-in-
use calculation is based on a DCF model.
The cash flows are derived from the budget for the next five years and do not include restructuring activities
that Penneo is not yet committed to or significant future investments that will enhance the performance of
the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the
DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.
These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognised
by Penneo.
The assumptions may be incomplete or inaccurate, and unforeseen events or circumstances may occur, for
which reason the actual results may differ from the estimates and judgements made.
Annual report 2021
53
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
5. Revenue
4. Segment
information
2021
DKK
2020
DKK
Subscription incl. fair usage 39,713,249 24,336,971
Signature packages 12,699,575 10,239,987
One-time fee
1,867,401 956,747
Total 54,280,225 35,533,705
For management purposes and based on internal reporting information, Penneo is organised in only one
operating segment, as the information reported includes operating results at a consolidated level only. The
company setup and costs related to the main nature of the business are not attributable to any specific rev-
enue stream or customer type and are therefore borne centrally. The results of the single reporting segment
are shown in the statement of comprehensive income.
2021
DKK
2020
DKK
Domestic market 39,936,676 28,455,391
Foreign markets
14,343,549 7,078,314
Total 54.280.225 35.533.705
The following table shows the opening and closing balances of contract liabilities. There was no revenue
recognised in the current reporting period that related to performance obligations that were satisfied
in a prior year.
Annual report 2021
54
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
6. Staff costs
2021
DKK
2020
DKK
Salaries (33,245,634) (23,925,753)
Shared-based payments (7,631,651) (1,367,576)
Other social security costs
(1,247,608) (276,839)
Otherstaffcosts
(2,114,744) (3,073,972)
Total (44,239,638) (28,644,140)
Average numbers of FTE based on ATP during the year 78 54
Salaries (6,669,230) (8,361,396)
Share-based payments (7,248,513) (597,961)
Total (13,917,743) (8,959,357)
Employment contracts for members of the Key Management Personnel contain terms and conditions
that are common to those of their peers in similar companies including terms of notice and non-
competitive clauses.
Penneo does not provide pension contributions.
Contract balances (liability)
2021
DKK
2020
DKK
Cost as at 1 January 4,511,444 5,083,893
Additions 2,644,914
2,861,372
Performanceobligationssatisfied
(2,536,835) (3,433,821)
Cost at as 31 December 4,619,523 4,511,444
Management expects that around 85% of the transaction price allocated to the unsatisfied contracts as of
the year ended 2021 will be recognised as revenue during the next reporting period. The remaining 15% will
be recognised in the upcoming financial years.
Board of Directors and Key Management Personnel
Annual report 2021
55
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
7. Shared-based
payments
2021
DKK
2020
DKK
Cost of share-based payments (8,225,676) (1,367,576)
Cost of lender warrants (2,089) 0
Total (8,227,765) (1,367,576)
Costs of share-based payments are recognised as staff costs with a corresponding effect in equity. In 2021
Penneo has activated an amount corresponding to DKK 594k of the share-based payments as a part of devel-
opment projects.
Costs of lender warrants are recognised as financial expenses with a corresponding effect in equity.
Consideration received for warrants sold is recognised directly in equity.
Employee shares
In 2020, the employees were offered to participate in an Employee Share Scheme. A number of shares with a
total fair value at grand date equal to a voluntary deduction in pre-tax salary vest successively over a period
of 14 months ending 31 December 2021 and are transferred to the employees when the Company has pub-
lished the 2021 Annual Report. If the employee has left in the vesting period, the employee will still receive
the shares corresponding to the amount deducted from the pre-tax salary until they left. Every employee
was offered to subscribe for shares within a maximum of 20% of the pre-tax salary before deduction. 56
employees have accepted the offer and 44,045 shares were earned corresponding to 0.16% of the share
capital. The share price was DKK 32.77 per share based on the average share price during week 38 in 2020.
In December 2021, the employees were offered to participate in an Employee Share Scheme starting as of
January 2022. A number of shares with a total fair value at grand date equal to the voluntary deduction in
pre-tax salary vest successively over a period of 12 months ending 31 December 2022 and are transferred
to the employees when the Company has published the 2022 Annual Report. If the employee leaves in the
vesting period, the employee will still receive the shares corresponding to the amount deducted from the
pre-tax salary until they leave. Every employee was offered to subscribe for shares within a maximum of 20%
of the pre-tax salary before deduction. 27 employees accepted the offer corresponding to the issue of 52,768
shares equal to 0.19% of the share capital. The share price was DKK 25.81 per share based on the average
share price during week 47 in 2021.
Annual report 2021
56
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
Employee warrant programmes
The company has over the years introduced Warrant programmes aimed to key employees. Warrants are
vesting over time to ensure the retention of such key employees. The warrant program of 28 May 2020 is
fully vested and is a modification to non-exercised warrants under an existing program where all warrants
were fully vested upon the listing of the Company on First North in 2020. The program consists of 4,502,603
warrants. The warrants can be exercised within a period of 14 days after the announcement of the interim
financial reporting ending 30 June 2021 at the earliest and no later than 14 days after announcement of the
interim report ending 30 September 2023.
Further, in accordance with the provisions of the warrant programme the warrant holders are bound by
a lock-up agreement on terms equivalent to the terms of the Lock-Up Obligation applying to the Existing
Shareholders.
At 13 October 2020, 37,500 warrants were granted to two key employees divided in 5 tranches. The warrants
in each tranche vest upon the fulfillment of different performance conditions before 30 September 2023
provided that the employee is employed at the date the performance condition is fulfilled. Vested warrants
can be exercised after the announcement of the financial reporting ending 30 June 2021 at the earliest and
no later than 14 days after announcement of the interim report ending 30 September 2023.
At 22 March 2021, 630,000 warrants were granted in connection with the appointment of Christian Stendevad
as the new CEO of Penneo. The warrants are vested over 36 months starting from the first day of the employ-
ment. Continuous employment during the vesting period is a condition for the vesting. Warrants that have
not been exercised before 22 March 2029 will lapse automatically. Vested warrants can be exercised in peri-
ods of four weeks starting the day after the publication of the Company’s annual report, half-year report or
quarterly report, respectively.
Annual report 2021
57
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
At 28 April 2021, 406,377 warrants were granted in connection with the election of Christian Sagild as new
Chairman of Penneo. The warrants will vest over 36 months starting from the first day of employment.
Continuous board duties during the vesting period is a condition for the vesting. Warrants that have not
been exercised before 28 April 2029 will lapse automatically. When vested warrants can be exercised in
periods of four weeks starting the day after the publication of the Company’s annual report, half-year report
or quarterly report, respectively.
Lender warrant programme
At 8 December 2021, 25,000 warrants were granted to Vækstfonden in connection with raising of a loan. The
warrants will vest upon and can solely be exercised in connection with one of the following three events: In
a period of fourteen days following repayment of the loan, in a period of fourteen days from the due date
of repayment in which repayment has not been completed or in a period of ten working days following the
Company’s announcement of delisting from Nasdaq First North with no simultaneous listing of the Company
on Nasdaq Copenhagen Main Market. Warrants that have not been exercised before 18 January 2027 will
lapse automatically.
Annual report 2021
58
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
Specification of outstanding warrants:
Number of warrants
Weighted
average
exercise
price
DKK
Board of
Directors
Key
mana-
gement
personnel
Employees,
former
employees
and advi-
sors
Lender
warrants Total
Outstanding at 1 January 2020 672.88 1,941 11,630 16,992 0 30,563
Granted 2020 32.93 37,500 37,500
Exercised 2020 50.00 (399) (399)
Modification2020 4.86 281,226 1,787,096 2,404,117 4,472,439
Outstanding at 31 December 2020 4.90 283,167 1,798,726 2,458,210 0 4,540,103
Granted 2021 56.12 406,377 630,000 25.000 1,061,377
Exercised 2021 4.96 (63,421) (1,934,782) (1,998,203)
Outstanding at 31 December 2021 19.96 689,544 2,365,305 523,428 25.000 3,603,277
Annual report 2021
59
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
Outstanding warrants have the following characteristics::
Warrants outstanding
Weighted average
exercise price
DKK Vesting period Exercise period 2021 2020
Warrantsgranted28May2020 4.86
Fully vested as of
28 May 2020
From August
2021 to Novem-
ber 2023
2,504.,400 4,502,603
Warrantsgranted13October2020 32.93
From October
2020 to
November 2023
From August
2021 to Novem-
ber 2023
37,500 37,500
Warrantsgranted22March2021 58.94
From August
2021 to July 2024
From August
2021 to March
2029
630,000 0
Warrantsgranted28April2021 53.79
From April 2021
to March 2024
From April 2021
to April 2029
406,377 0
Warrantsgranted8December2021 23.20
From December
2021 to January
2027
From December
2021 to January
2027
25,000 0
Outstanding at 31 december 3.603.277 4,540,103
2021 2020
Average remaining life of outstanding warrants at 31 December (years) 3.5 2.4
Exercise price for outstanding warrants at 31 December (DKK) 4.28 to 58.94 0.34 to 32.93
Annual report 2021
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Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
Warrant
programs
2021
Lender warrants
2021
Warrant programme
2020
Average share price (DKK) 53.79 - 58.94 23.20 10.99
Expected volatility rate (% p.a.) 25 25 24.92
InterRisk-free interest rate (% p.a.) 0 0 0
Expected warrant life (no. years) 8 5 3
Exercise price (DKK) 53.79 - 58.94 23.20 4.86
Fair value all warrants, after dilusion
(DKK’000)
16,300 129 27,741
Expected volatility rate is applied based on the annualised volatility on relevant peer groups derived from the
standard deviation of daily observations over 12 months ending 2020 as the entity has not been listed for 12
months as of grant date.
The fair value of the warrants issued is measured at calculated market price at the grant date based on the Black
& Scholes option pricing model. Penneo expects no dividend to be paid out within the near future. The calculation
is based on the following assumptions at the grant date:
Annual report 2021
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Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
2021
DKK
2020
DKK
Amortisation of intangible assets (4,971,625) (2,827,008)
Depreciation of property, plant and equipment (194,806) (118,831)
Depreciation of right-of-use assets (2,515,948) (2,256,381)
Total (7,682,379) (5,202,220)
2021
DKK
2020
DKK
Interest expenses (768,498) (672,565)
Exchange rate adjustments (171,165) (163,296)
Otherfinancialexpenses (636,650) (303,166)
Total (1,576,313) (1,139,027)
2021
DKK
2020
DKK
Exchange rate adjustments 128,363 93,132
Total 128,363 93,132
8. Depreciation,
amortisations,
and impairment
9. Financial
income
10. Financial
expenses
Annual report 2021
62
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11. Tax for the
year
2021
DKK
2020
DKK
Taxcalculatedas22%ofprofit/lossbeforetax (5,317,631) (3,803,973)
Non-capitalised tax assets 1,986,393 13,303
Increased tax deduction regarding development projects
(130%)
(1,426,825) (823,586)
Non-deductible expenses 1,979 126,119
Effective tax (4,756,084) (4,488,137)
Effective tax rate for the year 20% 26%
Income tax benefits for both the years 2021 and 2020 relate to tax credit for research and development ex-
penses at the applicable tax rate under the Danish Corporate Income Tax Act.
2021
DKK
2020
DKK
Current tax for the year income 4,756,084 1,964,811
Changes in deferred tax 0 3,405,000
Adjustment concerning previous years 780,333 (881,674)
Total 5,536,417 4,488,137
Annual report 2021
63
Penneo document key: ULW0K-3TDY3-WLF17-2B6MH-HYMUL-EX0YH
2021
DKK
2020
DKK
Deferred tax (asset) 0 0
Deferred tax (liability) 0 0
Total 0 0
Deferred tax concers
2021
DKK
2020
DKK
Intangible assets 6,611,000 4,456,000
Property, plan and equipment 22,000 (7,000)
Right-of-use assets 2,769,000 3,365,000
Lease liabilites (2,983,000) (3,424,000)
Tax loss carried forward (6,419,000) (4,390,000)
Total 0 0
Deferred tax is recognized in the statement of financial position as follows:
Due to uncertainty of utilisation of the tax loss carry-forward, Penneo has not recognised any deferred
taxassets.DeferredtaxassetnotrecognizedhasatotalvalueofDKK2,000kasof31-12-2021(2020:
DKK 13k).
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12. Intangible
assests
2021
Acquired
intellectual
property rights
DKK
Completed
development
projects
DKK
Development
projects in
progress
DKK
Goodwill
DKK Total
Cost as at 1 January 6,600,000 17,963,202 9,963,932 9,500,000 44,027,134
Additions - - 14,763,630 - 14,763,630
Transfer - 9,963,932 (9,963,932) - 0
Cost as at 31 December 6,600,000 27,927,134 14,763,630 9,500,000 58,790,764
Amortisation and impairment as at 1 January (165,000) (7,505,847) - (1,100,000) (8,770,847)
Amortisations during the year (660,000) (4,311,625) - - (4,971,625)
Amortisations and impairment as at 31
December
(825,000) (11,817,472) - (1,100,000) (13,742,472)
Carrying amount as at 31 December 5,775,000 16,109,662 14,763,630 8,400,000 45,048,292
2020
Acquired
intellectual
property rights
DKK
Completed
development
projects
DKK
Development
projects in
progress
DKK
Goodwill
DKK Total
Cost as at 1 January - 12,002,256 6,753,788 1,100,000 19,856,044
Additions from business combinations 6,600,000
- -
8,400,000 15,000,000
Additions
-
5,960,946 3,210,144 - 9,171,090
Cost as at 31 December 6,600,000 17,963,202 9,963,932 9,500,000 44,027,134
Amortisation and impairment as at 1 January - (4,843,839)
-
(1,100,000) (5,943,839)
Amortisations during the year (165,000) (2,662,008) - - (2,827,008)
Amortisations and impairment as at 31
December
(165,000) (7,505,847) - (1,100,000) (8,770,847)
Carrying amount as at 31 December 6,435,000 10,457,355 9,963,932 8,400,000 35,256,287
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Development projects in progress include the development of a new software platform. The development
project essentially consists of costs in the form of direct costs which are registered through Penneo’s internal
project module.
Management is of the opinion that it is technically possible to complete the development projects during
execution.
Completed development projects comprise software development costs related to development of the
existing software platform. The software is under continuous development for the use of customers
and is sold as a licence to use the software for a given period. The user has access to upgrades and new
functionalities during the contract period. Costs related to maintenance are expensed when incurred.
Development costs for the year cover both development of the front-end and the back-end part of the
software solution. Both parts to increase the user experience and functionalities within the software in order
to increase Penneo’s revenue by maintaining existing clients and acquiring new clients.
It is Management’s assessment that the expected useful lives, as well as the expected future revenue streams
from the assets are sufficient to cover the value of recognised developed software at the reporting date.
In 2021, Penneo expensed DKK 6,855k (2020: DKK 3,217k) for development projects, primarily planning,
administrative and other general overhead expenditures not meeting the recognition criteria applicable to
internally generated intangible assets.
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Impairment testing
Penneo tests goodwill for impairment annually, or more frequently if there are indications that goodwill
might be impaired.
The carrying amount of goodwill has been allocated to the following cash-generating unit:
2021
DKK
Penneo KYC
2020
DKK
Penneo KYC
Goodwill 8,400,000 8,400,000
Acquired intellectual property rights 5,775,000 6,435,000
Development projects in progress 4,127,726 597,721
Completed development projects 597,721 0
Total 18,900,447 15,432,721
Management is of the opinion that the lowest level of cash-generating unit to which the carrying amount of
goodwill can be allocated is in the CGU.
In both 2021 and 2020, the impairment test of goodwill showed no impairment.
The following key assumptions have been used in the impairment testing:
Penneo
KYC
Lifetime (years) 10
Net retention rate 18.70%
WACC 14.83%
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Lifetime:
Lifetime has been estimated according to the expected lifetime of the assets involved in the CGU. The
CGU is under continuous development which is why the lifetime is evaluated yearly where all the assets
involved are taken into consideration.
Net retention rate:
Net retention rate has been calculated by taking an average of the ARR net retention rate for the last 3
years for the CGU.
WACC:
WACC has been calculated after tax and according to the company’s financial numbers and loan
agreements.
Penneo has conducted an analysis of the sensitivity of the impairment test to changes in the key
assumptions used to determine the recoverable amount for the company’s CGU to which goodwill is
allocated. Management believes that any reasonably possible change in the key assumptions on which
the recoverable amount of Penneo KYC is based would not cause the aggregate carrying amount to
exceed the aggregate recoverable amount of the related CGU.
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13. Property,
plant and
equipment
2021
Other fixtures
DKK
Leasehold
improvements
DKK
Total
DKK
Cost as at 1 January 1,009,231 1,009,231
Additions 494,966 192,294 687,260
Cost as at 31 December 494,966 1,201,525 1,696,491
Depreciation as at 1 January (274,492) (274,492)
Depreciation during the year (194,806) (194,806)
Depreciation as at 31 December (469,298) (469,298)
Carrying amount as at 31 December 494,966 732,227 1,227,193
2020
Leasehold
improvements
DKK
Cost as at 1 January 397,146
Additions 612,085
Cost as at 31 December 1,009,231
Depreciation as at 1 January (154,689)
Depreciation during the year (119,803)
Depreciation as at 31 December (274,492)
Carrying amount as at 31 December 734,739
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14. Leases
2021
Properties
DKK
Cost as at 1 January 17,797,072
Additions -
Disposals -
Adjustments and revaluations (1,076)
Cost as at 31 December 17,795,996
Depreciation as at 1 January (2,427,713)
Reversals regarding disposals -
Depreciation during the year (2,515,948)
Depreciation as at 31 December (4,943,661)
Carrying amount as at 31 December 12,852,335
2020
Properties
DKK
Cost as at 1 January 11,357,158
Additions 235,562
Disposals (347,180)
Adjustments and revaluations 6,551,532
Cost as at 31 December 17,797,072
Depreciation as at 1 January (518,512)
Reversals regarding disposals 347,180
Depreciation during the year (2,256,381)
Depreciation as at 31 December (2,427,713)
Carrying amount as at 31 December 15,369,359
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Carrying amounts of lease liabilities and movements during the period:
Adjustments in 2020 is related to an addition and extension of an existing rental agreement.
The following amounts have been recognized in the income statement:
Penneo had total cash outflow for leases of DKK 2,368k (2020: DKK 2,122k).
Penneo leases offices and lease terms are negotiated on an individual basis and contain different terms and
conditions.
2021
DKK
2020
DKK
As at 1 January 15,564,063 10,711,721
Additions - 235,562
Acrual of interest 365,893 292,816
Payments (2,368,325) (2,122,058)
Adjustments (1,076) 6,446,022
As at 31 December 13,560,555 15,564,063
Non-current 11,212,840 13,560,555
Current 2,347,715 2,003,508
2021
DKK
2020
DKK
Depreciation expense of right-of-use assets 2,515,948 2,256,381
Interest expense on lease liabilities 365,893 292,816
Total amount recognised in the income statement 2,881,841 2,549,197
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15. Deposits
2021
DKK
2020
DKK
Cost as at 1 January 1,258,700 1,112,672
Additions 30,242 146,028
Impairment losses for the year - -
Cost as at 31 December 1,288,942 1,258,700
16. Trade
receivables
The carrying amounts are equivalent to the fair value of the assets. In 2021 write-downs of DKK 1,116k has
been recognized as an expense (2020: DKK 350k)
Expected credit loss
The expected credit losses on trade receivables are estimated using a provision matrix and Penneo has
recognised a loss allowance of 100% against all receivables over 90 days because historical experience
has indicated that these receivables are the only ones with a risk of not being recoverable. The provision is
considered to cover all expected credit loss in the trade receivables
The follwing table details the risk profile of trade receivables based on Penneo’s expected loss on trade
receivables:
Not past
due
Overdue
by
0-45 days
Overdue
by
49-90 days
Overdue
by
>90 days
Write
downs
Carrying
amount of
receivables
31 December 2021
Trade receivables
9,100,665 1,646,099 1,084,057 1,539,512 (1,539,512) 11,830,821
31 December 2020
Trade receivables
7,404,976 807,554 448,311 423,740 (423,740) 8,660,841
1. January 2020
Trade receivables
2,030,299 1,215,395 152,700 136,575 (74,075) 3,460,894
31.12.2021
DKK
31.12.2020
DKK
01.01.2020
DKK
Trade receivables 13,370,333 9,084,581 3,534,969
Write-downs (1,539,512) (423,740) (74,075)
Total 11,830,821 8,660,841 3,460,894
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17. Working
capital
changes
18. Share
capital and
earnings per
share
2021
DKK
2020
DKK
Change in receivables and prepayments (4,430,075) (5,506,607)
Change in trade payables and other payables etc. 1,534,907 6,460,712
(2,895,167) 954,105
As at 31 December 2021, the share capital consisted of 27,128,931 (2020: 25,130,728) shares with a
nominal value of DKK 0.02 each. The shares are not divided into classes and carry no right to fixed
income.
As at 1 January 2020
135,995
Capital increase
366,620
As at 31 December 2020
502,615
Capital increase
39,964
Share capital as at 31 December 2021
542,579
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Earnings per share
The calculation of earnings per share is based
on the following:
2021
DKK
2020
DKK
Profit/(loss)fortheperiod (18,634,631) (12,802,649)
Average numbers of ordinary shares
for calculation of earnings per share:
25,719,152 19,640,190
Averagedilutedeffectofoutstandingshareoptions 4,719,712 4,525,153
Average number of shares
for calculation of diluted earnings per share
30,438,864 24,165,343
Earnings per share, basic (EPS) (0.72) (0.65)
Earnings per share, diluted (DEPS) (0.61) (0.53)
Treasury shares Number Nominal value
% of share capital,
year-end
Holding at 1 January 2020 0 0 0
Purchased during the year 609,921 12,198 2.4%
Issuance of shares as a consideration
in the business combination
refer to note 25
(251,080) (5,022) (1.0%)
Holding at 31 December 2020 358,841 7,177 1.4%
Holding at 31 December 2021 358,841 7,177 1.3%
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19. Other
capital reserve
20. Interest-
bearing
liabilities
Other capital reserve is used to recognise the value of equity-settled share-based payments provided
to employees, including key management personnel, as part of their remuneration as well as lender
warrants. Refer to Note 7 for further details of these programmes.
In addition the reserve is used for the potential shares issued as consideration in a business combination
(earn out), see note 25.
The reserve is decreasing upon exercise of warrants and issuance of shares as consideration for the
business combination.
The carrying amount is by Management assessed as equivalent to the fair value of the liabilities as
explained in note 22.
Non-current borrowings
31.12.2021
DKK
31.12.2020
DKK
Debt to credit institutions 14,366,991 4,695,526
Lease liabilities 11,212,840 13,560,555
Total 25,579,831 18,256,081
Current borrowings
Debt to credit institutions 330,660 374,904
Lease liabilities 2,347,715 2,003,508
Total 2,678,375 2,378,412
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Debt to credit institutions
2021 DKK Vækstfonden (i) Vækstfonden (ii) Vækstfonden (iii) Total
Non-current borrowings 662,862 3,704,129 10,000,000 14,366,991
Current borowings 330,660 0 0 330,660
Total 993,522 3,704,129 10,000,000 14,697,651
2020 DKK Vækstfonden (i) Vækstfonden (ii) Vækstfonden (iii) Total
Non-current borrowings 993,063 3,702,463 0 4,695,526
Current borowings 77,367 297,537 0 374,904
Total 1,070,430 4,000,000 0 5,070,430
Vækstfonden (i) Vækstfonden (ii) Vækstfonden (iii)
Last scheduled repayment July 2024 July 2025 January 2027
Exit obligation (maximized DKK) 0 800,000 0
Performance obligation (maximi-
zed DKK)
0 400,000 0
Dividend limitation agreement Yes Yes Yes
Warrants granted No No Yes
Penneo has signed a dividend limitation agreement, which entails that the Company is not entitled to
propose a resolution to pay dividends without the consent of Vækstfonden. The dividend limitation
agreement applies until all current and future loans are fully repaid. The last scheduled repayment fall
due on January 4, 2027.
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21. Provisions
Aprovisionhasbeenrecognisedfordecommissioningcostsassociatedwithanofficelease.Penneo is
committed to restore the site at the end of the lease term.
Decommissioning
2021
DKK
2020
DKK
As at 1 January 432,267 317,797
Additions - 105,509
Utilised - -
Unused amounts reversed - -
Unwinding of discount and changes in the discount rate 10,523 8,961
As at 31 December 442,790 432,267
Vækstfonden has the right to demand the loans to be repaid if a change of control in Penneo should
happen. A “change of control” is defined as a direct or indirect transfer of more than 25% of the shares
or the rights of the shares in the Company, or in any other way the transfer of a controlling majority.
Vækstfonden (ii) is entitled to a one-time performance bonus of DKK 400,000.00 if the Company
reaches a performance target within a financial year during the loan period. The performance tar-
get is reached when the Company’s accumulated earnings measured at EBITDA-level exceeds DKK
15,000,000.00 in accordance with the latest audited report.
Further, Vækstfonden (ii) is entitled to a one-time exit bonus of DKK 800,000, if an exit transaction oc-
curs, and the Company has experienced an added (equity) value in the period between July 2019 and
the date of the exit transaction. An “exit transaction” is defined as a direct or indirect transfer of more
than 25% of the shares or the rights of the shares in the Company, or in any other way the transfer of a
controlling majority. For the avoidance of doubt, capital increases by the issuance of new shares does
not constitute an exit transaction.
Warrants have been granted as a part of the loan agreement with Vækstfonden(iii). Refer to Note 7 for
further details regarding the warrants.
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22. Financial
risks
Capital Management
Penneo manages its capital to ensure that it will be able to continue as a going concern while maximising
the growth in ARR through the optimisation of the debt and equity balances. The capital structure of Penneo
consists of net debt and equity. Management reviews the capital structure continually to consider if the cur-
rent capital structure is in accordance with the company and shareholders’ interests. In December 2021, the
company entered into a loan agreement with Vækstfonden on DKK 10,000k in order to continue to invest in
continued ARR growth and optimise the capital structure.
Financial risk management
Due to the nature of its operations, investments, and financing, Penneo is exposed to a number of financial
risks. It is company policy to operate with a low risk profile, so that currency risk, interest rate risk and credit
risk only occur in commercial relations.
The scope and nature of the financial instruments appear from the income statement and statement of finan-
cial position in accordance with the accounting policies applied. Provided below is information about factors
that may influence amounts, time of payment, or reliability of future payments, where such information is not
provided directly in the financial statements. This note addresses only financial risks directly related to Pen-
neo’s financial instruments.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations towards Penneo, leading to a financial
loss. Penneo is exposed to credit risk primarily related to its trade and other receivables.
Penneo assesses default and write off outstanding amounts when the accounts receivables are due more
than 90 days or when there is a court order of bankruptcy from the counterparty.
Penneo is also exposed to credit risk in regards to bankdeposits. In order to limit Penneo’s counterparty risk,
deposits are only made in well-reputed banks
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Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. Penneo issues invoices in local currency, which is why the incoming
cash flow reflects different currencies. Penneo has in all aspects only transactions in DKK, NOK, SEK and
EUR. The material costs and investments are primarily paid in DKK and EUR, which is why there is low risk
on that part.
However management has established new bank accounts for NOK and EUR currencies in 2021, to reduce
costs and lower risk in the short term. Penneo is avoiding the small fluctations since both incoming and
outgoing payments are paid directly in the currency.
Liquidity risk
Penneo ensures sufficient liquidity resources by liquidity management. Overall Penneo has a policy to only
allocate cash flow that the company has at its disposal defined as cash, cash equivalents, forecasted cash
flow and credit facility.
After each month, the previous month is financially closed and reviewed with an updated running 12 month
forecast. The forecast is adjusted to meet Penneo’s policy through adapting it to the hiring plan. Each quar-
ter, an updated 12 month cash flow forecast is reviewed and approved by the Board of Directors.
At 31 December 2021, Penneo’s cash and cash equivalents amounted to DKK 25,416k (2020: DKK 31,843k).
The cash reserves including the current credit facility at DKK 5,000k and expected cash flow for 2022 are
considered to be adequate to meet the obligations of Penneo as they fall due
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Year ended 31
December 2020
On
demand
DKK
Less than
6 months
DKK
6 to 12
months
DKK
1 to 5 years
DKK
> 5 years
DKK
Total
DKK
Interest-bearing loans
and borrowings
- - 482,814 5,312,114 - 5,794,928
Lease liabilities - - 2,371,295 10,858,333 3,608,274 16,873,902
Other financial liabilities - - - - - -
Trade and other
payables
66,989 3,020,897 - 2,220,842 - 5,308,728
66,989 3,020,897 2,854,109 18,391,289 3,608,274 27,941,558
The table below summarises the maturity profile of Penneo’s financial liabilities based on contractual
undiscounted payments:
Year ended 31
December 2021
On
demand
DKK
Less than 6
months
DKK
6 to 12
months
DKK
1 to 5 years
DKK
> 5 years
DKK
Total
DKK
Interest-bearing loans
and borrowings
- 208,800 208,800 16,145,287 701,589 17,264,475
Lease liabilities 1,342,746 1,314,518 11,073,256 736,087 14,466,607
Other financial liabilities - - - - - 0
Trade and other
payables
304,398 8,604,387 2,384,316 11,293,101
304,398 10,155,933 1,523,318 29,602,859 1,437,676 43,024,183
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Financial assets measured at amortised cost
2021
DKK
2020
DKK
Deposits 1,288,942 1,258,700
Trade receivables 11,830,821 8,660,841
Other receivables 22,325 1,016
Current Cash 25,415,797 31,842,851
Total 38,557,885 41,763,408
Financial liabilities measured at amortised cost
Interest bearing loan 14,697,652 5,070,430
Lease liabilities 13.560.555 15,564,063
Trade payables 4,487,375 2,665,906
Other payables 9,629,502 10,068,929
Total 42,375,084 33,369,328
Financial instruments:
Interest rate risk
Interest rate risk arises in relation to interest-bearing assets and liabilities. Penneo’s interest-bearing
debt to Vækstfonden of DKK 14,698k as per 31 December 2021 (2020: DKK 5,070k) is subject to a var-
iable rate of interest based on a 3-month CIBOR plus a premium. If market interest rates increased by
one percentage point, the interest rate sensitivity as calculated based on the loan balance to credit
institutions as per end of 2021 would lead to a yearly increase in interest expenses of DKK 0,15 million.
A corresponding decrease in market interest rates would have the opposite impact.
Fair value of financial assets measured at amortised cost
Since Penneo’s financial instruments measured at amortised cost are either short-term and/ or exposed to
floating interest rates, Management has assessed that the carrying amount is a reasonable approximation
of fair value.
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23. Liabilities
arising
from financing
activities
2021
Other
borrowings
Lease
liabilities
Total
DKK
Liabilities as at 1 January 5,070,430 15,564,063 20,634,493
Loans raised 10,000,000 0 10,000,000
Repayments (372,778) (2,368,325) (2,741,103)
Adjustments 0 (1,076) (1,076)
Other 0 365,893 365,893
Liabilities as at 31 December 14,697,652 13,560,555 28,258,207
2020
Other
borrowings
Lease
liabilities
Total
DKK
Liabilities as at 1 January 5,070,430 10,711,721 15,782,151
Loans raised 235,562 235,562
Repayments (2,122,058) (2,122,058)
Adjustments 6,446,022 6,446,022
Other 292,816 292,816
Liabilities as at 31 December 5,070,430 15,564,063 20,634,493
Adjustments in 2020 is related to an addition and extension of an existing rental agreement.
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24. Guaran-
tees, contin-
gent liabilities
and collateral
Contingent liabilities
As security for debt to credit insitutions of DKK 14,698k, a company charge of DKK 15,000k has been
provided comprising trade recievables, intangible assets and property, plant and equipment. The total
carrying amount of the comprised assets is DKK 58,106k (2020: 44,652k).
25. Business
combinations
Acquisition of business activities from CLA Reply in 2020
On 6 October 2020, Penneo acquired a part of CLA Reply business division concerning Anti Money
Laundering (AML) and Know Your Customer (KYC) activities, in exchange for cash consideration, issue of
Penneo shares and earn out in terms of potential Penneo shares.
As a part of the acquisition an earn-out clause was agreed. The earn-out clause was triggered by:
a) Retention of critical business knowledge and know-how from key stakeholders
b) Successful technical integration of Penneo’s and CLA Reply’s platforms
c) Proof of internationalizing CLA Reply’s platform
The fair value of the earn-out was DKK 3,000k and was recognised upon acquisition due to the expectation
of fulfillment. The triggers have as of 31-12-2021 expired and are all fulfilled which is why there has been no
changes to the recognised amount. The earn out in terms of Penneo shares has been transferred in January
2022.
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Shareholders Registered office Basis influence*
Andersen Advisory Group A/S Denmark 11%
Biostrat Biotech Consulting ApS Denmark 9%
Flora IT ApS Denmark 8%
Clausen Online ApS Denmark 7%
NH Rasmussen Holding II ApS Denmark 6%
André Clement Holding ApS Denmark 6%
Neua Holding ApS Denmark 5%
26. Related
parties
27. Events
after the
reporting
period
Other related parties
Other related parties of Penneo A/S with significant influence comprise the Board of Directors and
Executive Board and their related parties. There were no other related parties identified.
There has been no related party transactions other than normal remuneration of the Board of Directors
and Executive Board which are disclosed as part of note 6.
From the balance sheet date and until today, no matters, which would influence the evaluation of the annual
report has occurred.
* None of the shareholders have control or significant influence over the company
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Christian Stendevad
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Christian Sagild
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Morten Kenneth Elk
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Rikke Birgitte Skov
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Bjørn Winkler Jakobsen
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