DIGITAL WORKFORCE INITIAL PUBLIC OFFERING 22 – 30 NOVEMBER 2021*

*Public and personnel offering 22 November – 30 November 2021. Institutional offering 22 November -2 December 2021. Subscription period for the public, institutional and personnel offering can be suspended at the earliest 29 November 2021 at 16:00. The initial public offering consists of a share issue and a share sale.

DIGITAL WORKFORCE INITIAL PUBLIC OFFERING

Digital Workforce applies for its shares to be listed on Nasdaq First North Growth Market Finland.

The contemplated IPO consists of a share issue by the company of approximately EUR 22,5 million (gross proceeds) and of a share sale by certain existing shareholders.

The proceeds from the share issue are intended to be used to support Digital Workforce’s international growth strategy by strengthening the company’s sales and delivery resources, and potentially also to finance corporate acquisitions. In addition, the proceeds are intended to be used to finance investments related to adopting new automation technologies and to ensure having sufficient delivery resources and scalability.

INTERVIEW WITH CEO IN FINNISH

The CEO of Digital Workforce, Mika Vainio-Mattila talks about the company, its business and future plans in an interview with InderesTV. The interview is in Finnish.

FROM THE CEO

Information work is transforming rapidly. We help our clients in making business processes more efficient and in letting people concentrate on more productive work.

Digitalization changes information work. More labor is needed in a growing number of tasks within information work. For this, we have digital workers.

THE OFFERING IN BRIEF

The offering consists of a public offering to private individuals and entities in Finland and an institutional offering to institutional investors in Finland and, in accordance with applicable laws, internationally outside the United States as well as personnel offering to the company’s full-time and part-time permanent employees as well as employees with a fixed-term employment with the company at the commencement of the subscription period on 22 November 2021 at 10:00 (Finnish time) and to the company’s management team and CEO and to the members of the Board of Directors.

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Digital Workforce aims to raise gross proceeds of approximately EUR 22,5 million through the share issue. In addition, the company’s current shareholders are offering existing shares in the company for purchase.

The company is preliminarily offering up to 3 424 451 new shares in the company for subscription. In addition, the company’s current shareholders are offering up to 448 417 existing shares in the company for purchase, jointly with the share issue.

The offer shares are offered in the public offering and the institutional offering for a subscription price of EUR 6,58 per offer share. The subscription price per share in the personnel offering is 10 percent lower than the subscription price in the public offering, i.e. the subscription price in the personnel offering is EUR 5,93 per offer share.

Further information, see “Terms and conditions of the Offering”

The subscription price in the public offering is EUR 6,58 per share

REASONS FOR THE OFFERING AND USE OF PROCEEDS

The purpose of the Offering is to enable the financing of its growth and expansion of its operations in accordance with the Company’s strategy.

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The Company expects to use the net proceeds from the share issue to support the Company’s growth strategy. Net proceeds will be used for investments in new sales and delivery resources to accelerate growth especially in the UK and US markets; for investments to adoption of new technologies to maintain the high quality and leading global position of Digital Workforce’s intelligent automation and end-to-end cloud service offering; and for investments to ensure sufficient delivery capabilities and business scalability.

DIGITAL WORKFORCE IN BRIEF

Digital Workforce is a Finnish Intelligent Automation (IA) and Robotic Process Automation (RPA) services provider. Based on a competitive environment survey carried out by the Company and on research company Forrester¹, Digital Workforce is one of the leading service providers specializing in RPA and IA on an industrial scale in terms of revenue, service offering, customer referenced and head count.

¹The Forrester Wave Robotic Process Automation Q1 2021, Forrester 2021; from public sources.

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Digital Workforce helps its customers to automate knowledge work tasks and business processes with IA through its digital workers. Digital Workers are software robots that are in essence automated team members that execute business processes precisely, tirelessly and with fewer mistakes than human workers – with no significant changes to the customer’s existing systems. Digital workers have super powers based on RPA, Artificial intelligence and cloud services, which make them fast and efficient.

The Company’s service offering covers the entire lifecycle of IA: design and consultancy, development and implementation, cloud-based platform, support and maintenance as well as further development. The company’s business model is divided into two main areas: professional services and continuous services. Professional Services are mainly billed on a time-and-material or project basis. Continuous services in turn have recurring revenues as the operation and management of customers’ automation is continuous and billed based on use (e.g. pay-per-minute). The purpose of the company’s business model is to increase the absolute revenue and relative proportion of the higher margin continuous services business. Digital Workforce operates globally and its customer base consists of more than 200 mostly large global organisations. The company offers its services and solutions to a wide customer base in different industry verticals including e.g. banking and insurance services, health and social care, manufacturing and logistics, and different public sector organizations.

Historically, Digital Workforce has been able to grow rapidly while simultaneously increasing its share of recurring revenues. The company’s average annual revenue growth rate (CAGR) was 27.6 percent between the accounting periods ending in 31 December 2018 and 31 December 2020. Simultaneously, the company’s share of recurring revenue increased from 29.7 percent to 47.2 percent between the accounting periods ending in 31 December 2018 and 31 December 2020. In the accounting period ending in 31 December 2020, the company’s revenue was 19.1 million euros. In the first nine months of 2021 the company’s revenue increased by 19.3 percent compared to the first nine months of 2020, and in the first nine months of 2021 the company’s share of recurring revenue was 52.7 percent.

The Digital Workforce Group consists of the parent company Digital Workforce Services Plc. and its fully owned subsidiaries Digital Workforce Svenska AB, Digital Workforce Sp. z o.o., Digital Workforce AS, Digital Workforce A/S, Digital Workforce Services Ltd., Digital Workforce Services Inc. and DWF Digital Workforce Services GmbH. The company offers its services globally through eight offices located in Finland, Sweden, Norway, Denmark, Germany, Poland, The United Kingdom and The United States. In the nine-month period ending on 30 September 2021 the company’s average number of personnel was 194.

Strengths

Digital Workforce’s management estimates that particularly the following factors are the company’s strengths:

Digital Workforce operates in an attractive target market which is expected to grow rapidly
Digital Workforce is a leading global RPA specialist
Digital Workforce operates a scalable business model and has a high share of recurring revenue
Digital Workforce is in a good position to further accelerate growth

Strategy

To achieve its business targets, Digital Workforce’s strategy is built on the following cornerstones:

Continue expanding business and developing advanced solutions in the Nordics
Accelerate growth in US & UK by focusing on core offering
Strengthen delivery resources, capabilities and management tools to support expected scalable growth

Financial targets and dividend policy

Digital Workforce’s goal is to achieve an annual revenue of EUR 100 million by the end of 2026. Approximately EUR 30 million of the annual increase in the revenue is expected to come from the Nordics and EUR 50 million from the United States and the United Kingdom.

In addition, the company targets a clearly positive adjusted EBITDA margin by the end of 2026. In the longer term, the company targets an adjusted EBITDA margin² of over 20 percent, but in the period 2021–2026 the company will prioritise investments for growth over profitability.

The investments in new sales and delivery resources to accelerate growth especially in the UK and US markets are expected to have a temporary negative effect on the company’s profitability, as it will be necessary to increase costs in said markets before the revenue from those markets will grow. However, the company estimates that it will achieve its profitability goals, because the company expects the profitability of its business to improve significantly as the revenue and especially the share of revenue from continuous services increases.

Digital Workforce has no confirmed dividend policy.

²The adjusted EBITDA is calculated by adjusting the EBITDA with respect to material items that deviate from the ordinary course of business and affect comparability. Such items include, for example, acquisition and restructuring costs and other material exceptional costs.

IMPORTANT DATES

The subscription period for the public, institutional and personnel offering begins on	22 November 2021 at 10:00
Subscription period for the public, institutional and personnel offering can be suspended at the earliest	29 November 2021 at 16:00
The subscription period for the public and personnel offering ends (on or about)	30 November 2021 at 16:00
The subscription period for the institutional offering ends (on or about)	2 December 2021 at 11:00
Results of the offering published (on or about)	2 December 2021
The offer shares will be registered with the Finnish Trade Register (on or about)	2 December 2021
Entry of offer shares into book-entry accounts begins (on or about)	3 December 2021
Trading in offer shares on First North expected to begin (on or about)	3 December 2021

THE PLACES OF SUBSCIPTION

for customers with a book-entry account in Danske Bank

The places of subscription in the Public Offering for customers with a book-entry account in Danske Bank are:

Danske Bank’s eBanking service with bank identifiers for private customers at www.danskebank.fi/digitalworkforce;
Danske Bank’s corporate eBanking services in the Markets Online module for District customers;
Danske Bank’s Investment Advisory Center with Danske Bank’s bank identifiers by phone 9:00 a.m. to 6:00 p.m. (Finnish time) Monday to Friday, tel. +358 200 20109 (local network charge / mobile charge). Calls to the Danske Bank Investment Advisory Center are recorded;
Danske Bank’s offices in Finland during normal business hours; and
Danske Bank’s Private Banking offices in Finland (for Danske Bank’s Private Banking customers only).

Making a Commitment by phone using Danske Bank's Investment Advisory Center or Danske Bank’s eBanking service requires a valid eBanking agreement with Danske Bank.

Subscriptions to equity savings accounts can be made through Danske Bank only to an equity savings account provided by Danske Bank.

for investors that are not Danske Bank book-entry account customers

The places of subscription in the Public Offering for investors that are not Danske Bank book-entry account customers are:

Online subscription at www.danskebank.fi/digitalworkforce for private customers. An internet subscription requires bank identifiers of Aktia, Danske Bank, Handelsbanken, Nordea, Oma Savings Bank, OP, POP Bank, S-Bank, Savings Bank or Ålandsbanken.
Danske Bank’s offices (excluding corporate offices) in Finland during normal business hours. Information on the offices offering subscription services is available by phone using Danske Bank's Investment Advisory, 9:00 a.m. to 6:00 p.m. Monday to Friday (Finnish time), tel. +358 200 20109 (local network charge/mobile charge) or online at www.danskebank.fi. Calls to Danske Bank are recorded.

Individual investors can submit a Commitment of up to EUR 100 000 in the Public Offering through Danske Bank’s online subscription. If a Commitment exceeds EUR 100 000, the Commitment can be given at Danske Bank branches.

The Offer Shares covered by a Commitment must be paid using an account in the name of the investor making the Commitment. Legal entities cannot submit Commitments as Danske Bank online subscriptions.

for Nordnet’s book-entry account and equity savings account customers

The place of subscription in the Public Offering in Finland for Nordnet’s book-entry account and equity savings account customers is:

Nordnet’s online service at www.nordnet.fi/fi/digitalworkforce. The Commitment submitted through Nordnet’s online service requires personal bank identifiers of Nordnet. A Commitment can also be made on behalf of a corporation through Nordnet’s online service. A subscription to equity savings account can be made through Nordnet only to equity savings accounts provided by Nordnet.

COMPANY PRESENTATION
(in Finnish)

Digital Workforce’s company presentation will be webcasted live on Monday 22 November 2021 at 6 PM Finnish time. The event is held in Finnish. A recording of the event will be available on this website after the event.

Join / Watch recording

DIGITAL WORKFORCE INITIAL PUBLIC OFFERING 22 – 30 NOVEMBER 2021*