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SALIMA NOORMOHAMED

LARS KVINGE

AXEL KIELLAND

Annual Report

Knowit 2019

Hei

MORTEN DYBO

ANNIKEN CARSON ENGESVIK

OSLO

KNOWIT: LAKKEGATA 53 IN OSLO

Innehåll

Contents1024 12

821

5226

54 5

40

5 16 Artificial intelligence

17 Data-driven customer experiences OPERATIONS

20 Three collaborative business areas

21 Solutions

24 Experience

27 Insight EMPLOYEES AND STRUCTURAL CAPITAL

31 Modern corporate culture WE ARE KNOWIT

33 Employees share Knowit’s vision THE KNOWIT SHARE

36 Positive development for shareholder value

OTHER

38 Board of Directors 39 Corporate management team 40 Sustainability reporting 52 Directors' report 57 Corporate governance report 61 Financial review

GROUP

62 Income statement 62 Total results 63 Balance sheet 64 Cash flow analysis 65 Statement of changes in equity

PARENT COMPANY

66 Income statement 66 Total results 67 Balance sheet 68 Cash flow analysis 69 Statement of changes in equity

NOTES

70 Supplementary information and notes

OTHER

95 Certification 96 Auditor’s report 100 Information about the AGM101 Definitions102 GRI index

EVENTS DURING THE YEAR

5 Sustainable development THE YEAR IN BRIEF

7 Wide improvements PRESIDENT’S REVIEW

9 Increased net sales and profit for the sixth year running CHAIRMAN OF THE BOARD’S REVIEW

10 More than 20 years with Knowit BUSINESS CONCEPT, GOALS AND STRATEGY

12 Sustainable and innovative solutions

13 Our business model MARKET AND TRENDS

15 Positive market development and clear trends

15 Cybersecurity and societal security

3 KNOWIT AB ANNUAL REPORT 2019

Hello

VICTORIA SAHLBERG

MALIN ÅBERG

Sustainable developmentJANUARY – MARCH 2019

Knowit was in SHARED FIRST PLACE IN THE NORDIC HACK SAS VIYA, with an algorithm for facial recognition.

In collaboration with Oslo Green Capital, the OSLO ENVIRONMENTAL

HACK was performed.

Knowit was named EPISERVER PARTNER OF THE YEAR 2019 in Sweden.

NEW OPERATIONS in Customer Relationship Management were esta-blished by Knowit Experience in Norway and Sweden.

The digitalization consultancy industry handed over a JOINT ROADMAP

FOR A FOSSIL-FREE SWEDEN to the government.

Knowit was ranked ONE OF THE MOST ATTRACTIVE IT CONSULTANCY firms in Universum’s FöretagsBarometern 2019 among students.

In Malmö, Knowit Insight established NEW OPERATIONS in management consulting.

Knowit has developed A NEW TECHNICAL PLATFORM FOR 1177.SE, which is one of the most visited websites in Sweden for health and health care information.

APRIL – JUNE 2019

Tekniska verken in Linköping has chosen Knowit as its DIGITAL

PARTNER for its five websites.

Knowit has signed a framework agreement with the AMBULANCE CARE in Stockholm (AISAB).

When the business journal Dagens Industri named THE BEST IT

CONSULTANCY FIRMS on the Stockholm Stock Exchange, Knowit was in first place.

Together with Furhat Robotics, Knowit has developed a concept to help clients and stakeholders to study new uses for SOCIAL ROBOTS.

For Beijer Byggmaterial, Knowit has led the DIGITAL TRANSFORMATION in the organization, from strategy to implementation.




Knowit has created a new venture focused on the FORESTRY

INDUSTRY’S INCREASED NEEDS of digitalization and new technology.

The Finnish Council for Gender Equality rewarded THE DAD CHAL-

LENGE campaign in Finland, for which Knowit was one of the initiators.

When IT students in the Nordic region voted for their FAVORITE

EMPLOYERS, Knowit is in tenth place among all companies with opera-tions in the Nordic countries.

JULY – SEPTEMBER 2019

Knowit developed the 112 App for SOS Alarm which has already reached ONE MILLION USERS.

Knowit was named PREMIUM PLATINUM PARTNER to Episerver.

The Salesforce agency 4front, with a focus on DATA-DRIVEN CUSTO-

MER experiences, was acquired by Knowit.

To increase its local service levels, Knowit opened A NEW OFFICE IN HELSINGBORG.

Knowit, in collaboration with Dagens Industri, organized a popular seminar during THE ALMEDALEN WEEK, with the topic “How do we en-sure justice and equality when decision-making is moved to robots?”.

OCTOBER – DECEMBER 2019

Dagens Industri named Knowit one of the MOST SUSTAINABLE AND PROFITABLE COMPANIES ON THE STOCKHOLM STOCK EXCHANGE.

The specialist company Invativa was acquired by Knowit, which thus further reinforced its offering in DATA-DRIVEN DIGITAL BUSINESS

DEVELOPMENT.

Knowit was named the most EQUAL COMPANY on the Nasdaq Stock-holm Stock Exchange by the Allbright Foundation.

Länsförsäkringar has signed A FRAMEWORK AGREEMENT REGARDING

IT CONSULTANCY SERVICES with Knowit in the competence areas ma-nagement, governance, development, architecture, and infrastructure.

In Universum’s survey among Young Professionals, Knowit was named BEST IN THE INDUSTRY among employers in the data and IT category.


Profit before amortization of intangible assets (EBITA) increased to SEK 319.2 (315.1) million, an increase by 1.3 percent as compared with the corresponding period last year. Compared with the corres-ponding period last year, the development of the exchange rates had a positive effect of SEK 1.8 million on EBITA. Cash flow from operating activities increased to SEK 305.0 (274.1) million, where the change in operating capital is affected by -8.1 million. Goodwill and other intangible assets were SEK 983.4 (962.9) million. On December 31 2019, a total of 2,337 (2,260) people were employed in the Group. SEK, MILLIONS JAN-DEC 2019 JAN-DEC 2018

Sales 3,335.1 3,083.3

EBITA 319.2 315.1

EBITA margin in percent 9.6 10.2

Cash flow from operating activities 305.0 274.1

Intangible assets 983.4 962.9

Number of employees 2,337 2,260

Wide improvementsTHE YEAR IN BRIEF

NET SALES

Net sales for 2019 increased to SEK 3,335 (3,083) million.

SALES PER COUNTRYJANUARY – DECEMBER 2019

Sweden 54% (57)

Norway 39% (36)

Finland 5% (5)

Other 2% (2)

39

5

2015

2,20

6

2016

2,42

6

2017

2,73

4

2018

3,08

3

2019

3,33

5

SALES GROWTH

In 2019, net sales grew by 8.2 percent, as compared with 12.8 percent in the previous year.

2015

8.6

2016

10.0

2017

12.7

2018

12.8

2019

8.2

PROFIT DEVELOPMENT

Profit before amortization of intangible assets (EBITA) increased to SEK 319.2 (315.1) million. The EBITA margin was 9.6 (10.2) percent.

EBITA profit, SEK, millions EBITA margin, %

2015

164

2016

212

2017

282

2018

315

2019

319

7.4

10.39.6

54


PER WALLENTIN

IT IS THE sixth year in a row that we increase our net sales and profit. Our employee growth continues and we have had a growth to more than 2,300 specialist (net) at the end of the year. The fact that our margins have fallen behind is something that we will focus on in future.

THREE STRONG BUSINESS AREAS

When we look to our different business areas, we can conclude that the division into three specialist areas has been successful. We are clear with what we offer in relation to both clients and employees. Our largest business area, Solutions, has shown very good results in 2019. We increase our net sales, profit, margin, and employee growth. Projects close to the operations, that require new system support, are highly prioritized among our clients. The business area Insight, which is focused on mana-gement consulting, showed lower net sales, with a signi-ficantly lower profit as compared with the year before. One reason for the negative development was that a few assignments were stopped by clients during the third quarter, with little warning. However, we have also had a slightly lower capacity utilization during the fall. The third business area, Experience, one of the lar-gest digital agencies in the Nordic region, shows incre-ased net sales, with a slightly lower profit and margin, for the full year. The main reason is that we, during the fall, invested in new operations in the CRM area, where demand is high among our e-commerce clients.

CONTINUED DEVELOPMENT

Our market has been strong during 2019, although the signs of a general slowdown in the economy during the second half of 2019 have now been followed by

It has been another successful year for Knowit. We strengthen our position as one of the leading digitalization consultants in the Nordic region. Net sales, profit, and employee growth have continued the positive development of the past several years.

Increased net sales and profit for the sixth year running

PRESIDENT’S REVIEW

large financial and human concern, as a result of the escalating covid-19 pandemic. Future developments are very hard to predict and we are therefore facing a much more uncertain market. Automation and streamlining are high up on our clients’ agendas, in both the public and the private sectors. Still, we are taking action to prevent a possible slowdown. To stay at pace with the market development, we have prioritized forward-looking initiatives to increase our sales. We have also focused on further increasing our operation’s efficiency; for instance, we have decre-ased the number of small subsidiaries by integrating them into larger units. Furthermore, we have invested in new offerings in societal security, data-driven clients experiences, and artificial intelligence. These three market trends are presented further in this annual report.

SUCCESSFUL CULTURE

Our growth and success are largely due to our being an attractive workplace, where all employees are treated equally, with good possibilities for development and inte-resting assignments. We have prioritized these matters for many years, by creating a culture that offers plenty of room for personal development. In 2019, our equality work was rewarded by the AllBright Foundation, which named us the most equal company on the Stockholm Stock Exchange. In the employer branding company Universum’s survey among Young Professionals, we were voted as the most attractive workplace in the industry and awarded the title Best of Industry 2019.

THE VISION IS A GUIDING LIGHT

Knowit is an attractive partner to clients facing the next step in their digitalization journeys. In addition to offe-ring competent specialists within digital transformation, we are guided by our vision. Our efforts to contribute to a sustainable and humane society through digitalization and innovation is in line with the zeitgeist. It is also reflected in our client assignments. We have taken part in creating solutions that make a diffe-rence, with the app SOS Alarm, the web solution for 1177, and the operational development for UNICEF in Norway. Read more about these projects in the pages ahead. During 2019, we have continued to develop our offe-rings together with our clients and employees. We are well-positioned on a changing market. I am confident in our possibilities to make a difference in society.

PER WALLENTIN

CEO and President


PER WALLENTIN

THE FIRST YEARS of my chairmanship was characterized by phase-outs and downsizing. We were fighting for our survival. Knowit was, after the IT bubble popped, not a company worthy of a place on the Small Cap list of the exchange. In 2003, the market capitalization was barely SEK 200 million, and the number of employees was around 300. But there were some operations, primarily Knowit Norrland, that provided a foundation for growth. More that fifteen years later, in 2020, Knowit is thriving. The number of employees is over 2,300 and market capita-lization was around SEK 3.5 billion at the turn of the year. Knowit is established on the Mid Cap list.

SUCCESSFUL GROWTH STRATEGIES

The road to becoming an established listed company has not been straight as an arrow. Since it was listed in 1997, the Company has passed through a number of phases to get where it is today. After the challenges of the first few years, our focus was on growth through acquisitions. That was a successful strategy at the time. Around 2011, we chose to consolidate the operations with a focus on a joint brand and organic growth. This strategy still applies, with the addition of three daughter brands, one for each of our business areas. During the past years, we have chosen to supplement the organic growth with acquisitions of companies with specialist competence that is new to us, in geographic areas where we see good market potential.

GOOD CONDITIONS

Knowit is well-positioned for a continued positive growth. The employees are creative, knowledgeable, and agile. The brand is strong. The Company is almost debt-free. The management is competent and the executive team has an appropriate composition. The three business areas have promising futures, both individually and jointly. The market is on our side, and increased digitalization is a matter of course for organizations, authorities, and companies. The efficiency gains are significant. In the short term, worldly concerns – in the form of decreased globalization, the impact of the covid-19 pandemic, and a lack of political action – may reduce growth and affect the economic climate negatively. In the longer term, Knowit has every opportunity to achieve growth, improve profitability, and create shareholder value.

A Board Member since 1997, Chairman since 2001 – looking back, I’ve been part of Knowit’s Board for many years. This is many years in the history of Knowit, too. It has been a fascinating journey, one that few have had the chance to be part of.

More than 20 years with KnowitCHAIRMAN OF THE BOARD’S REVIEW

SUPPORT FROM THE SHAREHOLDERS

The Knowit share has, in the last four to five years, had a positive development. During the first months of 2020, global instabilities have created a notch in the curve. During my years as Chairman, it has been important to deliver value to the shareholders. Both the Board and the management have also had the wholehearted support of the shareholders. The larger shareholders have been the same for many years. The step onto the Mid Cap list in 2018 increased the number of foreign shareholders significantly. I want to take this opportunity, now that I have chosen to leave the Board at the AGM, to thank Knowit’s manage-ment team and all its employees for their stunning commit-ment and steadfast willingness to develop Knowit and themselves. You can all be proud of Knowit as a com-pany, as a workplace, and as a listed share.

MATS OLSSON

Chairman of the Board

MATS OLSSON


Hej

DEAM DEMETRIA

KNOWIT’S OFFERINGS ARE aimed at purchasers throug-hout the client organizations. The services are developed and delivered from three clearly positioned business areas: Experience, digital brand and market communi-cation services, Insight, management consultancy, and Solutions, tailor-made system solutions and tech-asso-ciated services.

A CLEAR CORPORATE CULTURE

The corporate culture is characterized by high compe-tence, personal commitment, and a desire to develop continuously. The concept of employeeship is central to the organization and is based on the idea that all emp-loyees take joint responsibility for creating an environment in which the individual can perform at the peak of their potential.

A SUSTAINABLE FUTURE

In the chapter on Sustainability, pages 40–51, we des-cribe how Knowit is taking responsibility for our shared

Knowit is a consultancy firm that supports its clients in their digital transformations. With a focus on the client, digital and innovative solutions are created to contribute to increased business value.

Sustainable and innovative solutions

BUSINESS CONCEPT, GOALS AND STRATEGY

future, how it creates long-term value for its stakehol-ders, and how it manages the risks identified in the sustainability field. BUSINESS CONCEPT

By combining strategic capacity with a passion for technology and creative solutions, we create digital opportunities and long-term value.

FINANCIAL TARGETS

The Board has decided upon the following financial targets:

• Earnings per share should increase faster than organic growth, which should, in turn, grow faster than the market on which Knowit operates.• The EBITA margin should be higher than ten percent on average over a five-year period.• EBITA should exceed net liabilities.• Equity should exceed intangible assets.

10

EBITA MARGIN, %

Outcome Goal

2015

7.4

2016

8.7

2017

10.3

2018

10.2

2019

9.6

EARNINGS PERSHARE, SEK

2015

4.58

2016

7.39

2017

10.2

2

2018

11.6

2

2019

12.0

6

EQUITY IN RELATIONTO INTANGIBLE ASSETS(SEK, MILLIONS)

Equity Intangible assets

2015

752

898

2016

844

916

2017

951

921

2018

1,10

696

3

2019

1,24

198

3

EBITA RESULT IN RELATION TO NET LIABILITIES (SEK, MILLIONS)

EBITA result Interest-bearing net liabilities

2015

164

214

2016

212

119

2017

282

45

2018

315

0

2019

319

0

LEO WESTBY

ANDREAS HAFSAAS


Resources EMPLOYEES

Over 2,300 employees.

FINANCIAL STRENGTH

A solid balance sheet and high earning capacity.

CLIENTS AND PARTNERS

Long-term relationships that develop both parties.

THE BRAND

A well-known and positively charged brand. A strong and clear position in the digitalization industry.

CORPORATE CULTURE

A company that encourages collaboration, innovation, and personal commitment. Our employee promise: Grow, Create a Difference, Together.

DIGITAL SOLUTIONS FOR A SUSTAINABLE SOCIETY

We strive to combine our clients’ needs and demands with minimizing their impact on the climate and environment. We contribute to making our clients’ businesses sus-tainable in the long term.

Our business model

Value creating SOCIETY

Digital solutions that simplify and streamline for citizens, companies, and the public sector. Job opportunities in 14 locations in the Nordic region. Paid taxes.

EMPLOYEES

A modern and flexible workplace, with stimu-lating and developing tasks. Salaries, competence development, pensions, and wellness allowance.

SHAREHOLDERS

Dividends and value growth.

CLIENTS

Streamlining and new, long-term sustainable business opportunities.

Results THREE BUSINESS AREAS IN COLLA-BORATION

Services in data-driven communication and tailor-made system develop-ment and management consultancy.

AGILE

Each business area consists of independent, flexible units with a strong focus on the client’s needs and possibilities. This matches the changeable world of today, with new technology and new work methods.

Business model VISION

We create a sustainable and humane society through digitalization and innovation.

STRATEGY

Create a strong and well-positioned brand that supports our three subsidiary brands Experience, Insight, and Solutions. Support our clients toward sustainable and profitable business models on a quickly changing market through strengthened creative collaboration between different competencies and perspectives on the industry. Develop a corporate culture that makes it attrac-tive for individuals and partners to operate in our ecosystem. Increase our capacity for speed by simplifying, digitalizing, and automa-ting our processes and offerings.

GOVERNANCE MODEL

We have a decentralized organization, divided into three business areas. The EVPs of the business areas are part of the corporate management team. The business areas collaborate in client assignments and internal resource usage. Group- wide guidelines and policies.

ACCORDING TO RADAR Ecosystem Specialists, the Nordic market for IT services is worth EUR 25.5 billion. The Swedish market is behind 42 percent of that, with the Danish second, at 21 percent, and Norway and Finland at 18 percent each. Digitalization and IT are the drivers of performance in vital processes in all industries. Services in these areas are therefore less sensitive to economic recessions. They are a strategic part of the organizations’ produc-tion capacity and performance.

A LACK OF COMPETENCE

The challenge that the Nordic digitalization consultants must deal with is the lack of competent employees. While Sweden, Finland, and Denmark have the largest number of professional system developers per capita in Europa, the recruitment need remains high. According to the Confederation of Swedish Enterprise, there is a need for another 30,000 IT specialists in Sweden. In five years, the need will be up to 70,000. Knowit has dealt with this challenge and shown a strong growth in the last three years, with a total net recruitment of 400 employees.

UNCERTAIN DEMAND

Investments in Sweden are the fourth highest in Europe. The change predicted by Radar is that the focus of IT investments will shift from long-term goals to short-term effects for the client companies. Before the covid-19 pandemic, Radar estimated that the demand for IT services would increase by 1.5-3.5 percent during 2020 and 2021. Following the spread of the virus, Radar has adjusted its forecast depending on how well society manages the effects of the covid-19 pandemic. The new estimate is that IT market will dec-rease by up to 25 percent.

THREE FOCUS AREAS

Knowit has during 2019 increased its focus on three specific areas that show strong market potential and in which the technical development is fast. Knowit has been well-positioned in the Cybersecurity field for many years. The offering has been expanded and now encompasses the areas of security protection and societal security. Security protection is about protec-ting the information and operations that are significant to Sweden’s defenses against espionage, sabotage, terrorist acts, and certain other threats. Another area in which Knowit has invested is data- driven customer experiences and data analytics. Knowit has taken major steps here, including an acquisition and establishment of new operations in CRM. In AI, Knowit has continued to develop its offering with both recruitment of new competence and continued investments in associated services.

The market for digitalization services continued to grow in 2019. Despite there being talk about a general slowdown in the economy during the second half of the year, this was only barely noticeable in the digitalization sector.

Positive market development and clear trends

MARKET AND TRENDS

Cybersecurity and societal securityAS SOCIETY IS digitalized, the needs regarding security protection change, for both individual citizens, companies, and the public sector. Sweden is a high-performing and digitally mature company, according to assessments from the European Commission. Åsa Schwarz and Richard Oehme, security specialists at Knowit, are of the opini-on that security matters need to be a greater priority. “Sweden is one of the world leaders when it comes to digitalization, innovation, and start-ups. But security is lagging behind,” says Åsa. “Secure digitalization has become a crucial matter that more and more organizations have started to focus on. A lot of them are trying to find a way forward. But the digital security debt is heavy, so many are lagging behind,” says Richard.

THREE ASPECTS OF SECURITY

Secure digitalization involves protecting information from unauthorized access (confidentiality/secrecy), being able to distribute the information securely (availability) and that the information that is distributed is correct (information integrity). These are the three classic aspects of informa-tion security work, Åsa and Richard explain. The cyber threats are many. They encompass entities that try to gain an advantage through espionage in order to steal trade secrets, or through dissemination of dis-information, and criminals that use flaws in cybersecurity

ÅSA SCHWARTZ

RICHARD OEHME


to steal goods or money. Security flaws can also be found in development and innovation environments within companies, or in the privacy protection of com-panies and in the public sector.

INDUSTRIAL ESPIONAGE IS A THREAT

Richard mentions that industrial espionage against small innovation start-ups can threaten the very existence of a company.

“We are a hi-tech country, with high levels of innovation. Industrial espionage actually occurs on a daily basis, without our talking about it, and is a threat to both large companies and smaller innovation companies, when they make large investments in new products,” says Richard.

SECURITY FLAWS IN PRODUCTS

Another aspect is the security of the products themselves. Current product development is very fast, with time-to-market being critical from a competition perspective. Those organizations that get their products out first will get the market shares. “Build it fast and fix it later” is a concept that captures the challenge created by the fast-paced digitalization. In cutthroat competition, companies need to get their pro-ducts on the market as soon as possible, which means that security takes a backseat. This leads to companies being forced to correct the problems that may arise later, which often entails large costs, in the form of both money and goodwill in relation to the brand. “This is very clear when it comes to AI and IoT. The companies are struggling to get out on the market quickly, meaning that is no security, traceability, and that kind of thing in the products. Many are data-driven and contain our personal data, which because of the low priority on security work may be disclosed or used in an incorrect way,” says Åsa. “In order for IoT to work fully, 5G needs to be expanded. It is promising that 5G looks like it will be the first techno-logy where suppliers and societal stakeholders are thin-king about security before the products are launched. During the past six months, we have started talking about 5G security seriously, worldwide,” says Richard.

MARKET AND TRENDS

Artificial intelligenceAI AND MACHINE learning will support our decision-ma-king in the future. This creates possibilities of hyper-auto-mation and handing over work to autonomous devices, according to Gartner Group. But what is AI, really? While it is one of the hottest trends in the digitalization sector, it is a concept that many find hard to define. The scientist who coined the phrase in 1956, John McCarthy, defined it as “the science and technology to create intelligent machines.” Most AI scientists and textbooks define this area as “the study and design of intelligent agents,” where an intelligent agent is a system that can observe its surroundings and take actions to maximize its chances to successfully achieve its goals. AI – AN UMBRELLA TERM

Artificial intelligence is an umbrella term covering many different applications. Jonna Stålring-Westerberg works at Knowit, establishing operations in the AI field. “AI is a huge and complex field. Without delving too deeply into the details, we can divide AI into different areas: ‘observing and acting,’ ‘knowledge representation and reasoning,’ ‘machine learning,’ ‘optimization,’ and ‘expert systems.’ More simply put, AI is about represen-

One of the people who has taken part in developing Knowit’s offering in cybersecurity is ÅSA SCHWARZ, who started at Knowit in 2013. She has long experience from the security field and has been involved in several start-ups in the field. Her col-league RICHARD OEHME is much newer at Knowit, having joined in the summer of 2019. Still, he has extensive experience, with 30 years working at places like the National Defence Radio Establishment, the Government Offices, and the Swedish Civil Contingencies Agency. Today, they are both consultants in the cybersecurity and societal security field.

INCLUDE SECURITY AT AN EARLY STAGE

Correct management of security matters requires that these are included at an early stage in the product development process or in new projects, according to Åsa. “If you get things right from the start, from a security perspective, it will be possible to create new services and products. We can assist from the very beginning, with requirements specification, development, testing, verification, and ensuring that there are continuous security efforts, which is cost-efficient in the long run,” says Åsa. “Methodical information security work is about execu-tives, in both private and public organizations, ensuring that the right routines are in place, handled by the right competence, in the organization, in the long term. This also requires adequate resource allocation based on the risks that the organization is facing,” says Richard. “You need to add continuity management,” says Åsa. “And a risk analysis. And some practice,” says Richard.

JONNA STÅLRING-WESTERBERG


MARKET AND TRENDS

ting knowledge and using it to create new insights, objects, or actions,” says Jonna.

CONCEPTUAL UNDERSTANDING

The area she feels has the greatest potential is “know-ledge representation and reasoning.” This means that a system can make decisions based on knowledge. The methods that are used are based on how humans reason, communicate, and solve problems. “An example of a solution that many people come into contact with is improved technology for web searches. Today, we use precise words in our searches, but searc-hes could be tailored for identifying concepts instead. For example, the word ‘cattle’ could be interpreted by the system as ‘animals’ and better match the intentions of the search,” says Jonna. Another area is understanding speech and text. This is included in “observing and acting” and is common in robotization, which is based on cognitive characteris-tics and training to learn a certain behavior.

THE TECHNOLOGY IS MORE MATURE

The reason that AI is more talked about than ever before is in part because the technology has now developed far enough that functional applications are possible, and in part because of data storage, bandwidth, and high-speed data connections. However, knowledge about what AI can be used for is still limited. “We need to educate our clients. Simple AI applications and machine learning methods can create a lot of added value. To my mind, the main thing is communication and education, to see how AI can help clients achieve their business objectives,” says Jonna.

AN AI REVOLUTION

There are several possible applications where AI is relatively accessible. One area is algorithms that can predict the need for maintenance of products connec-ted to the IoT. By monitoring and storing historical data, you can predict when various components will need to be replaced. “Taking a long view, I believe in an AI revolution. Most companies want to be data-driven and it is the investment willingness of the companies that will determine how quickly they achieve that. We are seeing fast progress in robotics, chatbots, and virtual assistants. Looking further ahead, knowledge representation and reasoning will develop. This is technology that will be very useful, for instance in healthcare,” says Jonna. One well-known product is IBM’s AI, Watson, which is said to have saved the life of a woman in 2016. She suffered from leukemia and, even after treatment, kept deteriorating. The decision was made to feed all the data from her examinations into Watson, which simul-taneously reviewed 20 million documents on cancer research. Within ten minutes, Watson had concluded that she had not one kind of leukemia – but two kinds at once. The right treatment could then be given.

JONNA STÅLRING-WESTERBERG got her doctoral degree in theoretical chemistry in 2001, focusing mainly on numerical methods and quantum mechanics. From there, it is not a big step to machine learning, which is her main competence. She has extensive experience from the pharmaceutical industry, as a researcher and expert.

“A strong driving force in AI deve-lopment, in addition to companies seeing the possibilities of stream-lining, is stimulating innovations through AI being able to see con-nections that would otherwise be hard to discover. In pharmaceuti-cal research, for instance, AI can discover and suggest new molecu-lar compositions,” says Jonna. There is also a lot of fear related to AI. That it will become too complex or that it is dangerous. Will machines take over the world and humans become slaves to technology? There are also challenges that must be discussed at the societal level, for instance in relation to autonomous weapons and bias in the algorithms. Here, an ethics of AI needs to be established, according to Jonna. “I strive to simplify and clarify how AI can have tangible benefits. Of course, the technical stuff can get complex, but the concepts aren’t. General AI is getting better and better at performing tasks. And in the future, it will be smarter than the human brain, but hopefully still used in the service of humanity,” says Jonna.

Data-driven customer experiences BRANDS ARE BECOMING increasingly data-driven. Companies today have a greater focus on using their customer data to increase the relevance of their con-tacts with their target groups. This is revealed in a new report on digital trends from Adobe and Econsultancy.

HÅVARD GUNDERSEN

TOVE LINDEN


MARKET AND TRENDS

differ very little. What matters is place and promotion. Where can I find the product and how is it marketed? It is the tailored experience that determines if a buyer will stick around and buy something, and maybe come back,” says Tove.

BALANCE IS IMPORTANT

The development is moving toward a closer relationship between brands and customers in channels where users are always signed on. This is a kind of permission marke-ting, where customers provide information about them-selves in the form of search patterns in web shops or on websites. “Some people dislike this development, but billions choose to sign on every day. Still, as a trustworthy busi-ness, you need to stay on the right side of the law and only do things that customers feel comfortable with,” says Håvard. “I hear from some of our clients that they don’t want too much information about their customers. They try to find a balance in their relationships with their customers. I think it is important to be transparent, open, and clear toward the customers about how our clients work. Why the customer gets certain information and what kind of information our clients have about their customers,” says Tove.

NEW BUSINESS MODELS

Distribution of goods and services is moving toward becoming entirely digitalized. The media sector is at the forefront, along with banks and retail. New offerings that have appeared in the last few years are health companies providing physician services online. Digitalization and the possibilities that follow from use of big data affect not only sales and marketing, but entire business models.

“It’s about survival. Adapting your algorithms to the customers’ needs. Technology has meant that many companies now com-pete with foreign companies on a global market, which means they have to adapt quickly to what’s going on,” says Tove.One classic example of new business models involves music streaming services. “With their algorithms, the streaming companies measure everything that you’ve listened to, and there is a risk that you will only get more of the same. Nowadays, it is possible to implement more intelligence in the recom-mendations. The channel has gotten better at adapting what’s on offer to suit your preferences,” says Tove. “Less spam and more relevant information to the people. That gives me energy,” says Håvard.

Simply gathering and doing a direct translation of data is not enough. You also need to analyze them and find creative and efficient ways of using them, to cover every part of the customer experience.

NEW EXPECTATIONS

A new generation of consumers is on their way onto the market. They are the so-called natives, who were born into a world with the internet and smartphones, and have now begun to earn their own money and make their own purchasing decisions. They expect relevant and tailored market communication.

“For them, being exposed to goods that are not relevant is not an option. They want to feel that they are taken seriously, says Håvard Gundersen, who is the manager of Knowit’s venture into data-driven customer experiences. His colleague in Malmö, Tove Linden, agrees with him. “The new channels are gaining ground, the ones where you are always signed on and thereby revealing who you are,” says Tove. “In those channels, the recipients, not least the new generation of consumers, can get ads and other information that interests them.”

DATA STORAGE AND ANALYSIS

Customer Relationship Management (CRM) is nothing new. It is a system for strengthening customer relation-ships. The new thing is that modern technology, like cloud solutions and AI, mean that larger amounts of data can be stored and analyzed compared with in the past. “Our focus is on the customer experience. CRM is a technical matter, but at the end of the day, the interaction between the buyer and the provider is the important thing. That is what we focus on,” says Tove. “Yes. Nowadays, everyone has less patience. If the content you offer to the target group is irrelevant, you will quickly be blocked. The provider loses a deal,” says Håvard.

A B2B TREND

It is not just on the consumer market that data-driven customer experiences have gained in importance. In B2B, the trend is headed in the same direction. “We can see that BSB is growing in this area, even though the focus was on consumer business to begin with. But professional purchasers also want relevant information. We bring the behaviors we have in private with us to work, which increases demands on informa-tion,” says Håvard. “The old ways of competing that we learned at uni-versity, Kotler’s Four Ps of Marketing, have now gained a new meaning. The products are more similar, the prices

HÅVARD GUNDERSEN is the manager of Knowit’s venture into data-driven customer experiences and CRM. He has long experience of the marketing and e-commerce field at Knowit, having joined in 2005. TOVE LINDEN has recently started working at Knowit, as the CRM company she managed was acquired by Knowit in 2019. She is head of the CRM operations in Malmö.



Ciao

GUSTAV PETTERSSON

Three collaborative business areas

OPERATIONS

EACH BUSINESS AREA is specialized in its service areas and aimed at customer groups in multiple different sectors. Together, they have a strong, broad offering in data-driven customer experiences, strategy and transformation management, and tailor-made IT and system solutions.

To deal with the rapidly changing market and the new requirements on partners, Knowit has chosen to divide its operations into three business areas: Experience, Insight, and Solutions.

Clients often need services from more than one busi-ness area. This means that projects are staffed with competencies from more than one area. Collaborations that develop the business for both Knowit and its clients.

KIM DUONG

INGEGERD MYHRE


SOLUTIONS IS THE largest business area within Knowit. The business area offers cutting-edge expertise in every phase of the system development process – from idea, architecture, and project governance, to system deve-lopment, implementation, testing, and security. The EVP of the business area is Åsa Holmberg, who has held that position since 2018. Åsa has an M.Sc. from the Royal Institute of Technology and has been working at Knowit since 2013 and in the IT business for over twenty years. She has held executive positions within several consultancy firms.

SUPPORT IN CHANGE

When she describes what Solutions does for their clients, she says that they help clients build new technical solu-tions and systems that support their operations, from administration to production.

Digitalization creates new possibilities for citizens and society. Each day, people use various digital solutions that simplify their lives and facilitate new ways of keeping in touch and communicating. Knowit Solutions helps companies and organizations to develop their operations by offering innovative digital solutions. In this way, Knowit contributes to simplifying everyday life.

Digitalization consultants under continuous development

“The clients have a vision and idea about where things are going. Maybe they are changing their business model, in which case our consultants can support them with innovative and tailor-made solutions that make it easier for the clients to get where they want to go. They often focus on automating their processes, to become more efficient,” says Åsa. “Right now, we are seeing a high demand for techni-cal competence that can support implementation and ensure that the client’s plan is realized,” she says.

DATA ANALYTICS MORE IMPORTANT

For all of us, it is vital to develop in tandem with tech-nology and the market. One specialist competence that falls within the business area is data analytics and

SOLUTIONS

ÅSA HOLMBERG


decision support. All clients have large amounts of data in their operations and among their customers, but it is often disorganized, making it hard to extract information. This is where Solutions comes into the picture. “Working with advanced analytics is nothing new for us. However, we are seeing increased openness toward investments in new technical solutions that facilitate this in a modern way. Most organizations are now striving to become more data-driven, which means large-scale in-vestments in analytics and trying out new approaches,” says Åsa.

COLLABORATION WITH COLLEAGUES

In relation to the other business areas within Knowit, a fair amount of overlap can be seen between Solutions and Experience in the analytics area. This provides good conditions for organic collaboration between the business areas, which does occur frequently. Collabo-rations with Insight are often of a different form. “Insight evaluates how clients should adapt to a mar-ket that has changed, what they should alter, and what support they need in order to succeed. In the next step, they may need IT support, which we can build from scratch or help them create by modifying their existing systems. Our contribution is in creating the technical platform, so that the client can perform their value-adding transformation,” says Åsa.

THE VISION COMES TO LIFE

Knowit’s vision of a sustainable and humane society is important to the entire organization. Sustainability is not just about the environment, but also about a long-term ability to contribute to a more humane society, in regard to matters like equality, diversity, and justice.

“In procurements, more sustainability-related issues are being taken into account, which we see as positive. This can involve requirements for various environ-mental certificates or even gender distribution in project teams,” says Åsa.

SOLUTIONS

A lot of people place their faith in IT development to decrease climate impact and to increase the availability of societal services to everyone. Åsa is among them. There are and will be more solutions that support the development, she believes. When it comes to the recruitment market and the ability to retain employees, sustainability is also vital. Knowit has had a strong organic growth in the last three years, and Solutions is behind a large proportion of the recruitment. “In particular in relation to younger people, we need to show how we can contribute to decreasing carbon footprints and make a difference in our client projects,” says Åsa.

EQUALITY IS CRUCIAL

Solutions strives to live up to Knowit’s vision in other areas too. One important aspect is positioning the Company in relation to clients and colleagues in the industry. “So, what do we do differently?” Åsa asks, rhetorically, and promptly provides an answer: “We always try to be involved in equality. Participating in Datatjej [Computer Girls] is a nobrainer, and we are involved in the Dad Challenge in Finland, which highlights that it is acceptable for dads to go on parental leave. Our work is part of the equality efforts that are ongoing throughout Knowit,” she says.

GEOGRAPHIC DISTRIBUTION

Solutions is the business area within Knowit with the largest geographic reach, having operations in all countries where Knowit operates. In Sweden alone, it has offices in four-teen locations, with another five in Norway. “We want local strength in our offerings. In locations where we have had a primary focus on a specialist competence, we are now expanding with services in system development. This will happen in Linköping, Helsinki, and Copenhagen, for example. We want to be one step ahead of our clients in our development, and I think this is the right way,” says Åsa.


DEVELOPING A DIGITAL mobile service for direct com-munication with the general public has been an important project for SOS Alarm for a long time. The goal is a safer Sweden, through improved communication and faster, more flexible information about current emergencies. Through joint design efforts, workshops, and concept development, the goals and vision of SOS Alarm were visualized, as was the main need that the service would satisfy.

CLOSE COLLABORATION WITH THE CLIENT

During the project, user tests and interviews were used to validate a prototype of the service, so that design flaws could be identified and remedied at an early stage. An important component in the project was a tight, close collaboration between Knowit’s developer team and representatives of SOS Alarm. This meant shorter lead times and increased transparency in both directions. The development was adapted continually to meet the strict requirements from SOS Alarm. “With an agile design process, where all the important competences were involved at an early stage, we could work with Knowit to quickly find a concept that felt good and was confirmed through user testing. The result is a mobile app that the user will hopefully never have to use, but which can save lives and minimize suffering,” says Niclas Cholodov, product owner at SOS Alarm.

SOS Alarm, which is in charge of the national emergency number 112, secures and coordinates emergency aid efforts from emergency services, ambulances, and the police within Swedish emergency preparedness. SOS Alarm saw the need for a mobile digital channel for communication of emergencies and contacted Knowit. The result was a mobile app that has already been downloaded more than one million times.

Do you know where you are when disaster strikes?

THE RESULT WILL SAVE LIVES

The app provides SOS Alarm with another communication channel with the general public, where personal and re-levant information is sent in real time to the user, based on geographical position and personal settings. When someone in an emergency requests help by dialing 112 on their mobile phone through the app, their geographical position is sent to SOS Alarm. This is a vital function, as it can sometimes be difficult for SOS Alarm to know exactly where the person in need of help is. In the app, you can also get information about incidents nearby and receive Important Public Announcements (VMA; Viktigt meddelande till allmänheten) as push noti-fications. There is also information about other important contact channels and handy tips in case of a crisis, serving to increase both knowledge and the feeling of security among the public. “This assignment is another example of how we contri-bute to a more humane and sustainable society through our competence in digitalization and innovation. This is the kind of assignment that makes it fun to go to work,” says Fredrik Sävenborg, client manager at Knowit Solutions.

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Creating strong relationships between brand and customer

FREDRIK EKERHOVD HAS been EVP of Experience for four years. With over 600 employees and operations in a large number of cities in the four Nordic countries, it is the largest digital communication agency in the Nordic region. We meet in one of Knowit’s conference rooms in the main office in central Stockholm. He has an MBA from the Norwegian School of Economics, so is neither techie nor creative. Fredrik is from Bergen and it is in Bergen and Oslo that almost half of the operations can be found. “We have a lot of solutions that can be part of our deliveries, like traditional web projects and portal solu-tions, but increasingly we are delivering e-commerce solutions or other bespoke solutions, where the custo-mer experience is based on larger data streams and analysis.

The client projects of the business area Experience are largely about helping clients build strong relationships with their own customers. This is done by creating the most relevant and personal customer experience possible, whether this is related to consumer products in e-commerce or services in the public sector.

“Today, customer interfaces are becoming more integrated with other existing systems in the operations. Our assignments are becoming more and more complex. A mix of data analytics, design with a user focus, and technology development,” says Fredrik Ekerhovd.

EXPERIENCE

FREDRIK EKERHOVD


ANALYTICS ARE GROWING MORE IMPORTANT

During 2019, Experience has started up operations in CRM and acquired a company in that field. The focus is on relevant customer experiences, where they create solutions to follow the end customer through the entire customer journey. Experience works with clients to ensure greater customer acquisition, decreased churn, and increased brand loyalty. To achieve this, understanding of customer behavior is crucial, and can be gained through gathering and analyzing data. “We offer what we call data-driven customer experien-ces. Based on our clients’ customer data, we can help them create tailored offerings to their customers. This increases the quality of our client’s offerings and strengt-hens the brand, in both the business to business and business to consumer segments,” says Fredrik Ekerhovd.

THE MARKET IS STRONG

The market is powering along at a good pace. Despite this, Fredrik wants to work more with sales and increase the focus on new clients. One reason is that the clients have learned more about what can be achieved with support from digital communications and use of existing data. Experience needs to reach decisionmakers higher up within the clients’ internal organizations. That is whe-re they will be most relevant in the future, in his opinion. “We have succeeded in being relevant within the inter-nal projects for our clients, which have thereby learned more about what we can do. This makes it easier for us to explain the complexity of the projects, and easier for the clients to understand this. That is a positive develop-ment,” says Fredrik.

COLLABORATIONS BETWEEN BUSINESS AREAS

When it comes to collaborations with the other business areas in client projects, Fredrik says that they are common. Companies looking to succeed on a dynamic market, with large changes and adaptations, know that they need shorter decision paths and broader support throughout the operations, both within management and in the line organization. The business-critical projects are run within matrix organizations and require advisors and experts who can contribute across multiple departments and across the borders of established organizational structures.

EXPERIENCE

“The projects span from management to the line organization, by way of operative processes, and from there out onto the market and to the end cus-tomer. I know that Knowit, with its three business areas, is well-positioned to strike up strong partner-ships. What we need to do is successfully deliver as a unified professional entity within our internal expert and business areas,” says Fredrik.

DEVELOPING WITH THE MARKET

Experience places great weight in developing its offering and, by extension, its consultants. The technical development is moving faster than ever, and it is important that consultants keep abreast of developments. But new competencies must also be recruited. “We are recruiting more operations developers and architects, aside from the traditional roles of UX designers and system developers. The venture into data-driven customer experiences means that we also need more analysts,” says Fredrik. Knowit Experience has strong competence in many different platforms, such as Episerver, Site-core, and Salesforce. This means they can give independent advice to their clients. And the plat-forms will increase in number. “It is important for us to keep up with this deve-lopment,” says Fredrik. “We can’t just drop what we are good at, but we should supplement it with the competence our clients are asking for.”

THE VISION PROVIDES GUIDANCE

Knowit’s vision is to contribute to a humane and sustainable society. Fredrik says that the vision serves as a guiding light in choosing clients and assignments. “We make particular efforts to choose clients that live up to our expectations in relation to sus-tainability and humanity. For example, we have worked a lot with e-health. We also try to help our employees develop their sustainability thinking, so as to inspire our clients,” he says.


An efficient and secure healthcare guide

EXPERIENCE

THE NEW PLATFORM provides increased stability – from an operations and maintenance perspective – not only for 1177, but also for a number of other websites in e-health that use the same platform. These websites are “Find and compare healthcare,” “Youth healthcare centers, UMO,” “Youmo,” “Advice and support,” “The healthcare handbook,” and “The national handbook in child healt-hcare.” These sites will also, thanks to Knowit’s delivery, be easier to develop in future.

TWENTY-ONE PURCHASERS

The work with developing the new platform has been both an agile and a cross-functional collaboration. One aspect that added to the project complexity was the purchaser: a total of 21 regions with many different stakeholders. “We have had a very close collaboration with the client, where we have created cross-functional teams in which everyone has been a specialist in their field. This, along with an agile work method, has been the key to a suc-cessful project,” says Sebastian Vidovic, head of Client Development at Knowit Experience.

With 12 million visits a month, 1177 Vårdguiden (the healthcare guide) is one of Sweden’s largest and most important websites with information on healthcare and health. Here, the public can search for information, log in to make an appointment, renew prescriptions, and see their medical charts. During 2019, the site got an entirely new look and a new technical platform, developed by Knowit Experience.

EFFICIENCY AND QUALITY

The agile work method has meant that the project has been broken down into shorter, three-week deliveries. This, plus the use of automated testing and an administ-rative robot to migrate all the contents, has helped make the project both time- and cost-efficient. “The healthcare guide encompasses thousands of pages, and it is important that everything is correct, both medically and language-wise. The robot minimizes the boring work and eliminates the mistakes that the human factor can cause,” says Sebastian. Websites have also been load-tested to ensure that they work even with many simultaneous visitors. “The website has been put through its paces during the ongoing covid-19 pandemic and has contributed to decreasing the load on healthcare. One of the most important channels for self-service will be 1177. We are very proud of this project, which is in line with Knowit’s vision of a sustainable and humane society through digitalization and innovation,” says Sebastian Vidovic.

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A transformation journey toward a more humane society

WITH ABOUT 300 employees, Insight is a challenger among the management consultants in the Nordic region. The business area’s target group includes decisionmakers and executive teams in client companies and organizations. “We are specialized in helping our clients develop and strengthen the abilities that will be required from success-ful organizations in the future, for example by helping them with prioritizations, strategic choices, and transfor-mation management,” says Tommy Berg, EVP Insight.

COLLABORATIONS ARE COMMON

Insight is the smallest of three business areas at Knowit. The other two business areas, Experience and Solutions, offer services related to the digital building blocks in a solution or project. Insight can facilitate and initiate the change. Collaborations between the business areas are something that both Tommy and their clients appreciate. “Some clients see it as a strength that we can be a one-stop shop. If we are given the confidence to work for a CIO or IT manager and a need arises for a system architect – which we can supply – they think that is gre-at. It saves the client both time and money and is highly appreciated,” says Tommy.

DEMAND IS CHANGING

During the second half of 2019, the topic of whether a new economic recession is coming has been raised more frequently in the media. However, the weaker result and debit ratio during the fall were rather a reflection of individual client assignments being stopped abruptly. “In my view, we are coming from a very high demand. In 2019 we had a few extraordinary events in which some larger projects were stopped. That was the cause, rather than a weaker market,” says Tommy. Another factor that drives demand is that clients have started working with change and strategy projects in a new way. In the past, they would make a plan for the next several years. Now, more and more companies and organizations have realized that the world is changing too rapidly for this to be worthwhile. “We are seeing that our clients increasingly need a different approach. In this, we can contribute with our expertise in agile methods.

“We help them get better at testing and evaluating, and gathering new information more often, including in strategic projects.

Knowit Insight offers management consultancy services that help the executive teams of companies and other operations to create more agile organizations. The transformation created by digitalization creates an increased demand for such services among our clients.

Here, we are well prepared with competence in orga-nizational development, psychology, human behavior, and transformation management,” says Tommy.

DIGITALIZATION AND MANAGEMENT

Knowit are primarily known as IT consultants, although management consultancy has been part of their operations for many years. This makes it important that Insight also gains a place in the clients’ awareness and becomes a natural part of the Knowit brand. “We have a goal that the brand awareness regarding Knowit will encompass the management parts, not just the IT consultants. We all work in the digitalization consul-tancy field, which means more than just traditional IT services. It can be hard to get an overview of what the digital technology can offer, and that’s precisely where we can contribute,” says Tommy. He continues: “We have competencies and experience that make us well-prepared to understand how clients can make the most of the possibilities of digitalization, instead of only experiencing the challenges that digitali-zation can entail.”

CONTINUAL DEVELOPMENT

It is important to continue to develop when the world around us changes. The good and bad aspects of digitalization have been a hot topic for the last few years. According to Tommy, we are moving toward a more automated and digital society. Companies, factories, processes, and homes are moving into a new era. At the same time as we are simplifying our daily lives, we are also becoming more vulnerable. “We have an important venture and investment area within societal security. Here, we have recruited a lot of very experienced people and are taking the next step in what is often called cybersecurity. This is one way to follow the development around us and stay relevant,” he says.

STRONG CONNECTION TO THE VISION

The connection between societal security and Knowit’s vision of contributing to creating a more humane and sustainable society is obvious. If the digital systems are used for purposes that strengthen people within society, this will drive development in the direction of the vision. “We are gradually getting better at identifying and finding the kind of deals and assignments that are in line with the vision. One important aspect is how we describe the assign-ments when we are talking to our clients,” says Tommy. “We have received a lot of positive feedback for an assignment we did for UNICEF, related to the donor journey. Assignments like that instill a lot of pride in our employees. It is something real. It impacts on how we do business. That is the kind of impact we want to have in our client assignments,” says Tommy.

INSIGHT


CARIN HAS BEEN working at Knowit since 2004. She had then most recently been working at Bearing Point and, prior to that, at KPMG. Thanks to her experience, she brings a lot of knowledge about Knowit with her when she now joins the management team. To get to know Carin a bit better, we asked her a few brief questions.

What is most exciting or challenging in your new role as EVP of Insight? I look forward to continuing to develop a profitable Insight in the Nordic region. It is important for Insight to highlight that we are an innovative and natural partner in digital transformation.

What do you see as Knowit’s most important advantage over its competitors? We have a unique combination of deep knowledge in digitalization, business, and human behavior, which meansthat we can help our clients develop their business models and make reality out of what they truly want to achieve.

Which trends do you see affecting Insight’s business?Our clients want to become more data-driven by using the data they have gathered to gain better insights into

In February 2020, Carin Strindmark took over after Tommy Berg as EVP of Knowit Insight. This also meant that she became a member of Knowit's corporate management team.

New EVP

their operations and their customers’ behaviors. Another trend is connected to the public sector, where the need to develop the operations with digitali-zation are in high demand, to cope with future needs of public services. Here, Knowit has a strong position with its long experience of operational development in the public sector. Sustainability, the climate, and equality are also impor-tant, of course. In our assignments, we strive to contri-bute to helping our clients become more sustainable, in multiple ways.

What is the best thing about working at Knowit?The best thing about working at Knowit is all the compe-tent, professional, and generous colleagues who create business together. I am proud of working in a modern network and knowledge organization where we work together to “create a sustainable and humane society through digitalization and innovation.” That speaks to my heart.

INSIGHT

CARIN STRINDMARK

Background: Forty-five years old, raised in Nacka. Education: B.Sc. in Operations mana-gement and HR management from Indiana University, USA. Work experience: Knowit, KPMG, BearingPoint.Family: Married, two children, lives in Täby.Hobbies: Runs a sailing school and a training group for dinghy sailors. Aside from sailing, many soccer and floorball matches with the children.


THE ESTABLISHMENT OF new technical solutions has created new channels for fundraising, challenging the traditional ones. At the same time, those donating to non-profit organizations are making more demands for infor-mation on how contributions and donations are being used.

THE DONOR JOURNEY WAS STRENGTHENED

There was a particular need to improve the contributors’ perceived value of being UNICEF donors, the so-called donor journey. Further, there was a need for a faster time-to-market for new initiatives and products and to strengthen UNICEF’s capacity to change the organization, products and services in step with market developments. Knowit Insight started with mapping the donor jour-ney and implementing agile work methods to develop the organization at the strategic and operative level. The agile work method means that UNICEF works with improvements in short sub-projects – iterations – which are evaluated continuously. The work method led to a more digitally adapted donor journey, to get more do-nors to use digital payment instead of paper invoices. “It was the obvious choice to help UNICEF develop their work method and organization. Their operations fit with our vision of a sustainable and humane society,” says Kari Sylten at Knowit Insight.

UNICEF is the world’s largest aid organization and an important part of the UN’s support efforts. Its main goal is to increase the general public’s commitment to safeguard the rights of disadvantaged children worldwide. In Norway, a large number of professional fundraisers have now become established, which has increased competition for donations. The Norwegian chapter of UNICEF saw a need to develop its organization to meet the increasing demands on aid organizations.

Donor journeys and agile work methods

EDUCATION IN AGILE METHODS

Knowit Insight also performed both educations and competence development in a designated agile work group and with the organization’s management team. This was done to give both the work group and the mana-gement the right tools, so that they could transform the operations into the digital sphere. UNICEF Norway has now begun the process toward a more digital donor journey that satisfies the new demands of its donors. They have strengthened their innovation capacity through systematic learning and shortened their time-to-market for product and service development. Examples of new products are ads for Text messages – Lifesavers on Instagram and having D2D (door to door) recruiters present the new product, not just regular spon-sorship. Text messages – Lifesavers means that the donor contributes 100 kronor per month to UNICEF digitally. “We are very pleased with and impressed by how Knowit Insight solved this task and what a great support they have been to me and the rest of the management team. The agile work method has been a real eye-opener for us, and we are highly motivated to continue developing in this direction,” says Marianne Myhrer Kristensen, director Market Private at UNICEF Norway.

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CHRISTIAN HARTMANN

TOFTES GATE OSLO

EACH BUSINESS AREA consists of decentralized units which work close to their clients, and can quickly act on new trends and adapt to changes in their surroundings and on their market. The business office develops group-wide strategic client and partnership agreements, while also working proactively to sign new deals and establish new part-nerships, in close dialogue with each of the three busi-ness areas. Knowit has chosen a brand strategy with three daughter brands, one for each business area, which in combination with the joint parent brand, Knowit, highlight the Group’s offerings.

THE HEALTHY WORKPLACE

To make Knowit an even healthier workplace, both group-wide and local efforts have been made during the year. Executives and managers have been trained in how they can work with sustainable leadership and prevent stress-related ill health and burnout. All employees in Sweden have received training in what stress-related ill health is, how it can be prevented, and what support can be given if someone is affected. During 2019,

Knowit is characterized by high specialist competence and the employees’ drive to develop continuously. The operations are divided into three business areas to meet the clients’ needs and requirements and to attract employees.

Modern corporate cultureEMPLOYEES AND STRUCTURAL CAPITAL

Knowit has begun this work in Norway, and plans to perform similar efforts in Finland, Denmark, and Ger-many during 2020.

POPULAR WORKPLACE

During 2019, Knowit has continued to market the Company toward students at universities and university colleges. The response has been large, with a continued increase in both spontaneous applications and applications for open positions. At the Magnet Awards – the Swedish national cham-pionships in employer branding 2019 – Knowit won third place in the category Digital Shift. The reason given was that Knowit “attracts new candidates through influencer marketing and data-driven conversations.” Knowit’s popularity can also be seen in the employer brandingcompany Universum’s surveys during the year. In its ranking of the Nordic region’s most attractive emp-loyers, Knowit has a top position among Nordic consul-tancy firms. Overall, Knowit was in tenth place. On the list of most attractive employers among “young professionals” in the IT sector, Knowit was best in the industry in the Career Barometer for Data/IT among IT students in Sweden. Knowit was also near the top in the Norwegian rankings, ending up in thirteenth place.

SOPHIE HILLEBRANT

ALEXANDRA GUSTAFSSON

ELVIRA BOKSTRÖM


OPENNESS TO CHANGE

Knowit is an idea-driven company that encourages inn-ovation, entrepreneurship, and personal commitment. Our way of working and organizing our work matches the changeable world of today, with new technology, new work methods, and new working models. The concept of employeeship is central and based on each employee taking responsibility for creating an environment where every individual feels a sense of social security and can perform at the peak of their potential. This means, among other things, that we become an attractive workplace that people seek out to grow as human beings and to create value for the Company, for their client, and for society. Knowit has a decentralized organization, with a balance between responsibility and authority for every employee. A lot of weight is placed on each individual’s ability to take responsibility and solve the issues that arise in day-to-day work, thus growing both as a person and in their professional role.

EQUALITY FOR GROWTH

Since 2017, Knowit has been performing a gender pro-ject with a focus on creating a more equal and inclusive corporate culture, where women and men have the same possibilities to develop and make a career. The work has contributed to Knowit being named the most equal com-pany on the Stockholm Stock Exchange by the AllBright Foundation, winning the AllBright Award in 2019.

EMPLOYEES AND STRUCTURAL CAPITAL

EDUCATION LEVELS Other academic education 32%

M.Sc. 30%

Systems science 20%

Other specialized education 11%

MBA 4%

Secondary school 3%

NUMBER OF EMPLOYEESAT YEAR-END

Knowit has 2,337 (2,260) emp-loyees as of December 31, 2019. The average number of employ-ees for 2019 is 2,213 (2,032), of which 90 (90) percent are consul-tants. Other employees are in sales, finance, administration, and group-wide functions.

2015

1,80

2

2016

1,86

7

2017

2,06

5

2018

2,26

0

2019

2,33

7

AGE STRUCTURE

Of our employees, 72 (72) percent are male and 28 (28) percent female. The average age among our male employees is 40 (40) years and among our female employees it is 39 (40) years. Overall, average age is 39 (40) years.

Male Female

82 330

283

218

246

4

32

30

20

11

330

283

218

42

8995 74

45 32

<26 years

26-30 years

31-35 years

36-40 years

41-45 years

46-50 years

51-55 years

>55 years

172

107

More than one in four employees is female. It is a matter of course that all employees shall be treated equally, regardless of age, gender, sexual orientation, ethnicity, and creed. During 2019, the work with reviewing and improving existing action plans and policies continued. In this work, account is taken of legislation and employer responsibili-ties, but also of gender perspectives and psychological knowledge about human needs.

A BLEND OF HIGH COMPETENCIES

Knowit’s consultants are a unique blend of experienced science majors, operational analysts, psychologists, systems scientists, economists, project managers, testers, designers, communications experts, and statisticians, who support the entire process, from operational deve-lopment, design, usability, communication, and analysis, to system development. This means that the consultants’ competencies supplement each other and contribute to new ways of managing each individual assignment. Competence development primarily occurs through further education and challenging client assignments. Internal competence network for exchange of experiences and knowledge is also an important piece of the puzzle. Experience and knowledge exchange also occurs on Knowit’s collaboration portal, Shareit, which is a tool for networking and knowledge exchange between individual employees and our many specialist groups.


THE OFFICES ARE near the central station in Akerselva in Oslo. The premises are modern and, as is often the case in Norway, the employees have a canteen on the ground floor, where lunch is served. The impression you get as a visitor is of an environment with high service levels and efficiency. At Knowit’s offices, all the conference rooms have glass walls and there are meetings going on in all the rooms I walk past. The transparency is stri-king. Everything oozes collaboration and commitment.

SIX VOICES

To get an idea of what it is like to work as a consultant at one of the fastest growing companies in the digitalization industry, I am talking to employees from the three business areas about their day-to-day work. They are Kristian from the business area Insight, Salima and Axel from the bu-siness area Experience, and Lars, Lise, and Tale from the business area Solutions. The six consultants quickly find a seat each in the con-ference room when we meet. The mood is informal and light-hearted. The dress code is what we in Sweden would call casual. A sweater, a shirt, and jeans. Not a tie as far as the eye can see. The employees I’m meeting with

The vision of contributing to a sustainable and humane society is very much alive at Knowit. This is clear when I meet six employees at the offices in Oslo to talk about what it is like to be a consultant at one of the fastest growing consultancy firms in the Nordic region.

Employees share Knowit’s vision

WE ARE KNOWIT

seem relaxed and easygoing. The overall impression is pleasant and modern.

MAKING THE VISION REAL

We start by talking about Knowit’s vision of contributing to a humane and sustainable society with the help of digitalization and innovation. “Greta Thunberg is behind one of the current mega-trends, sustainability. The other is the power of techno-logy. We have performed a number of workshops connec-ted to what the vision means for us, as individual employ-ees,” says Kristian Kjernsmo, from the business area Insight. And Salima Noormohamed jumps in: “We have done the same thing within Experience. We held workshops about what we, as individuals, could do to realize the vision. We also had a so-called environmental hackat-hon, where clients came in with issues that we tried to help them solve. The result was that they are continuing to work with the solutions we created.”

DOING, NOT JUST TALKING

“Giving life to the vision is also about which clients Knowit should be working with,” Kristian says. In its assignment for UNICEF, the Company accepted a

SALIMA NOORMOHAMED

LARS KVINGE

AXEL KIELLAND

KRISTIAN KJERNSMO


lower remuneration. “We see this as an investment to realize the vision and because we want to contributed to increased involvement in society,” he says. “Yes, it’s important that it becomes something we do, not just something we say – and that it is related to technology,” says Lise Sværi, from the business area Solutions.

ENRICHING COLLABORATIONS

Knowit’s vision seems to be well-known to the employees in Oslo. Everyone in the group, except Salima, who has been at Knowit for five years, is relatively new to their role. Some of them started in 2019 and the others have been at the Company for up to two years. This leads us on to what makes Knowit interesting as a workplace. “My first thought about what makes Knowit an attractive company is all the great colleagues. The combination of all these people and that there is a culture of wanting to help one another improve,” says Salima. “That’s our strength, our desire to collaborate. It has been fun to be a part of the changes, being allowed to make suggestions, and to both fail and succeed – we are encouraged to try new things,” says Lise Sværi.

GROWING WITH YOUR ROLE

A good culture that means all employees get a possibility to grow and get better in their particular fields of expertise seems to be something they’ve all experienced. An important part of Knowit’s projects and operations is working with innovations, by joining clients in devising and testing out new solutions. At Knowit, you don’t get stuck in a certain box. You can come in with pretty much any background and de-velop in the area you are best suited for at the time, or develop in an area that you find personally motivating,” says Axel Kielland. “If you want something, it can be arranged. That we are allowed and encouraged to think differently – disruptively.” Collaboration between the different business areas and consultants from various parts of Knowit, along

WE ARE KNOWIT

with clients in projects contributing to reinforcing the vision, is important. This is something they all agree on. The clients are included in projects and are important for developing the right solutions. “Solutions and Experience have worked close to our client Vy in a price optimization project. Here, it is important that we drive the project along with the client and that the client feels ownership for the project and is an active party. Otherwise, there is a risk that we are seen as a bunch of consultants who just cost money,” says Lars. “I agree with Lars,” says Tale. “This became very obvious in a project where we were working on the client’s premises with a project team manned by both internal resources and people from Knowit. We performed that assignment truly alongside the client, with joint ownership.” “Deliver capacity is important to me. When I have worked at other management companies in the past, we could only deliver the concept. The magic of Knowit is that we can deliver both the strategy and its execution, along with our colleagues from the other business areas, Experience and Solutions,” says Kristian, who works in the business area Insight.

GOOD REPUTATION

Knowit has for several years been rated highly in various surveys where employer branding companies like Uni-versum and others rank the most popular workplaces among young professional consultants and students in IT and systems science.

“I came here straight from univer-sity and Knowit have a very visible presence at recruitment days and job fairs. I could tell that the people talking about Knowit were happy with the assignments they had. It felt genuine,” says Tale.

TALE PRESTMO

LARS KVINGE

AXEL KIELLAND


“The other companies were often represented by someone who was trying to sell the company, without actually working with what they were talking about. You can always tell.” Those who did not come to Knowit straight from univer-sity say that they heard about Knowit from acquaintances. Or former colleagues who had started working at Knowit. “I was at a party and started talking to a guy about what he did for a living. At first, he didn’t seem to want to talk about it – I mean, he was at a party. But once he had started talking, he seemed very positive. That intrigued me,” says Lars. “I met a former colleague who told me about Knowit and that he had the chance to participate in finding a role that was suitable for him. That seemed very inspi-ring and made me feel like there was an opportunity to grow here,” says Axel.

MODERN TECHNOLOGY CREATES A BALANCE

Working with something stimulating is important for well-being, but so is having a balance between work and leisure. Pretty much everyone in the group is a millennial or gen Y-er; they have grown up with mobile phones, the internet, and personal computers. The habit of using modern technology means that work is just a swipe or a click away. “You are always online, but that increases flexibility as well,” says Salima. “My daughter does wonder why I gets to look at my smartphone when she isn’t allowed to look at hers. It can be difficult to explain that it’s for work.” “I feel that I have been given the confidence from my managers and colleagues to work the hours that fit best in my situation,” says Lise. Salima says that balancing time between family and work is not that hard. “There are a lot of us in similar

WE ARE KNOWIT

situations, so it’s kind of self-regulating. That is a source of security.”

“I think that when I have good days, with interesting assignments and tasks, I have more energy to do things, both at work and at home. Those days create enough positive energy that it can spill over outside of work as well,” says Axel.As experienced users of modern technology, they have an attitude of working wherever you are and whenever you need to. Lars mentions that he, not so long ago, started his workday at a café in Lisbon. Being able to do that provides a lot of freedom that means you can combine high delivery capacity with your personal life, in his opinion. Kristian summarizes our talk very concisely: “The demands on us are high, but we help each other out!” Knowit has committed employees who appreciate the decentralized management model, the freedom to solve tasks in new, innovative ways, and collaborating both within the Company and with clients. A good combination of productivity and stimulating tasks yields positive results, for clients, for society, and for the employees.

AXEL KIELLAND

Role at Knowit: Project managerEmployed since: 2019Hobbies: Music

KRISTIAN KJERNSMO

Role at Knowit: Director (Head of Next-Gen Operating Model)Employed since: 2018Hobbies: Goofing around with our two sons

LARS KVINGE

Role at Knowit: Data scientistEmployed since: 2017Hobbies: Travelling

TALE PRESTMO

Role at Knowit: System developer and group leader Employed since: 2017Hobbies: Playing soc-cer for Hasle/Løren

LISE SVÆRI

Role at Knowit: Business development managerEmployed since: 2019Hobbies: Snow- boarding and skiing, climbing and downhill cycling

SALIMA NOORMOHAMED

Role at Knowit: Manager Knowit Experience DesignEmployed since: 2015Hobbies: Spending time with friends and family, skiing, running, and food

KRISTIAN KJERNSMO

LISE SVAERI


Positive development for shareholder value

THE KNOWIT SHARE

ANALYST FIRMS THAT MONITOR KNOWIT

ABG Sundal Collier: Daniel Thorsson, +46 8 566 286 82 ABG Sundal Collier Simon Granath, +46 708 44 86 32 Handelsbanken: Erik Eklund, +46 8 701 31 41 Pareto Securities: Anton Wester, +46 8 402 52 66SEB: Sebastian Olsson, +46 8 763 81 28

TEN LARGEST SHAREHOLDERS,DECEMBER 30 2019 % of Number share capital Shareholder of shares and votes

Brown Brothers Harriman & Co 2,065,925 10.7

Handelsbanken 1,432,079 7.4

Nordea 1,112,817 5.8

Swedbank 988,512 5.1

Morgan Stanley & Co Intl Plc 885,650 4.6

State Street Bank And Trust Co 865,446 4.5

Societe Generale Nantes 743,000 3.9

Bny Mellon Sa/Nv 735,368 3.8

Catella Småbolagsfond 650,897 3.4

Cliens Småbolag 362,600 1.9

Total, ten largest shareholders 9,842,294 51.1

Total, other shareholders 9,411,466 48.9

TOTAL 19,253,760 100.0

OWNERSHIP DISTRIBUTION, DECEMBER 30 2019

No. of Holdings shareholders No. of votes %

1-1,000 10,141 1,427,809 7.4

1,001-5,000 521 1,197,427 6.2

5,001-10,000 76 568,916 3.0

10,001-20,000 49 736,608 3.8

20,001-50,000 27 911,157 4.7

50,001-100,000 17 1,209,572 6.3

100,001-500,000 25 5,103,210 26.5

500,001-1,000,000 8 6,033,136 31.3

1,000,001-5,000,000 1 2,065,925 10.8

TOTAL 10,865 19,253,760 100.0

In the compilation of ownership distribution, ownership has not been grouped, but is presented for each individual shareholder.

KNOWIT’S SHARE HAS been listed on the Nordic Ex-change in Stockholm since 1997, and was moved from the Small Cap list to the Mid Cap list in January 2018. Knowit’s market value increased by 35.7 percent during the year, on an exchange where OMX Nasdaq Stock-holm PI increased by 29.6 percent.

SHARE CAPITAL

As of December 30 2019, Knowit’s share capital was SEK 19.3 million, distributed across 19,253,760 shares at a quota value of SEK 1 each. All shares carry the same number of votes and the same rights to dividends.

MARKET LISTING

The share price at the end of the financial year was SEK 208.50 (153.60) per share, corresponding to a total market capitalization of SEK 4,014.4 (2,952.3) million. During the year, the share price increased by 35.7 per-cent, which can be compared with an increase of 29.6 percent for OMX Nasdaq Stockholm PI and an increase of 17.7 percent for OMX Nasdaq Stockholm Technology PI. The highest price paid during the year was SEK 224.00 on April 30 2019, while the lowest price was SEK 148.80 on January 3 2019. During the financial year, 9.7 (6.8) million Knowit shares were traded on the Stockholm Stock Exchange, or an average of 35,813 (27,294) shares per trading session. The number of shares traded corres-ponds to 50.2 (35.5) percent of the total shares at year-end. The share was traded on 248 of the 249 trading days. The total number of shareholders as per December 30 2019 was 10,865 (8,466).

DIVIDEND POLICY

The Board has adopted a dividend policy aimed at ma-intaining or increasing dividends each year. The dividend shall reflect the Board’s view on the expected market development over the next few years.

DIVIDEND

The Board retracts its proposal for dividends of SEK 6.40 for fiscal 2019. The decision was made to prioritize the Company’s financial stability given the uncertain situation due to the covid-19 pandemic.

DIVIDENDS, SEK, MILLIONS

2015 2016 2017 2018 2019

To Knowit AB’s shareholders 63.5 61.3 78.5 92.5 114.3

Dividends paid 69.6 72.1 82.8 99.1 122.9


SHARE DEVELOPMENT ASCOMPARED WITH INDEX, 2015-2019

Knowit OMX Stockholm PI OMX Stockholm Technology PI Number of shares traded per months, 000s

OWNERSHIP DISTRIBUTION, DECEMBER 30 2019

Ownership category %

Foreign shareholders 47.2

Financial and institutional organizations 33.2

Private Swedish shareholders 14.7

Non-financial companies 3.3

Aid and interest organizations 1.6

TOTAL 100.0

DATA PER SHARE IN THE LAST FIVE YEARS 2019 2018 2017 2016 2015

Number of shares on balance sheet date, 000s, basic 19,254 19,254 19,139 18,914 18,389

Number of shares on balance sheet date, 000s, diluted 19,254 19,254 19,139 18,914 18,389

Average number of shares, 000s, basic 19,254 19,191 19,028 18,716 18,389

Average number of shares, 000s, diluted 19,254 19,191 19,028 18,716 18,389

Earnings per share, SEK, basic 12.06 11.62 10.22 7.39 4.58

Earnings per share, SEK, diluted 12.06 11.62 10.22 7.39 4.58

Equity per share, SEK, basic 63.63 56.68 49.05 44.15 40.18

Equity per share, SEK, diluted 63.63 56.68 49.05 44.15 40.18

Cash flow per share, SEK, basic 4.35 4.81 3.22 1.55 -4.54

Cash flow per share, SEK, diluted 4.35 4.81 3.22 1.55 -4.54

Dividend per share, SEK 0.001) 5.80 4.75 3.75 3.25

Share price, SEK 208.50 153.60 155.50 89.75 56.50

P/E ratio 17.3 13.2 15.2 12.1 2.3 1) Recommended dividend.

CHANGES IN THE SHARE CAPITAL IN THE LAST FIVE YEARS Change in Total share Change in no. Total no. Quota value, share capital, capital, Year Activity of shares of shares SEK SEK M SEK M

2015 – – 18,389,032 1 – 18.4

2016 Off-set issue 1) 525,092 18,914,124 1 0.5 18.9

2017 Off-set issue 2) 164,879 19,079,003 1 0.2 19.1

2017 Off-set issue 3) 60,214 19,139,217 1 0.0 19.1

2018 Off-set issue 4) 81,702 19,220,919 1 0.1 19.2

2018 Off-set issue 5) 32,841 19,253,760 1 0.1 19.3

2019 – – 19,253,760 1 – 19.3 1) Off-set issue in connection with acquisition of Knowit Amende AS and non-controlling interest shares in Knowit Experience Holding AS, Knowit Stavanger AS, Knowit Infra Syd AB and Knowit Infrastructure Göteborg AB.2) Off-set issue in connection with acquisition of Knowit Dataess AS and non-controlling interest shares in Knowit Quality AS and Knowit Experience eCommerce AB.3) Off-set issue in connection with acquisition of Require AB.4) Off-set issue in connection with acquisition of Knowit Dataess AS and non-controlling interest shares in Knowit Experience AS and redemption of synthetic options in Knowit Skåne AB.5) Off-set issue in connection with acquisition of All Rise Media AB.

0

300

600

900

1 200

1 500

1 800

2 100

2 400

2 700

Omsatt antal aktier per månad i 1000-tal

201920182017201620150

25

50

75

100

125

150

175

200

225

OMX Stockholm Technology PIOMX Stockholm PIKnow IT

SEK Antal

SEK 225

200

175

150

125

100

75

50

25

0

Number ofshares traded 3,500

3,000

2,500

2,000

1,500

1,000

500

0

2015 2016 2017 2018 2019

14.7

3.3

THE KNOWIT SHARE

47.2

33.2

SOURCE: WEBFINANCIALGROUP


MATS OLSSON

Chairman of the BoardBorn: 1948Chairman of the Board since: 2001Board member since: 1997Other directorships: Fenix Outdoor AB, KIAB Fastighetsut-veckling AB (chairman)Education: M.Pol.Sc., Linköping UniversityProfessional experience: Subsidiary President Investment AB D Carnegie, CEO/President AB Custodia, CEO/President Merchant Holding, CEO/Presi-dent Kipling Holding AB, CEO/ President Displayit AB Dependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 10,000 shares.

JON RISFELT

Board work/AdvisorBorn: 1961Board member since: 2013Other directorships: Bilia AB, Bisnode AB (chairman), Bisnode Business Information Group AB (chairman), Boule Diagnostics AB,CAB Group (chair-man), Cabonline Group Holding AB (chairman), Elos Medtech ABEducation: Master of Science in Chemical Engineering, Royal Institute of TechnologyProfessional experience: The Ericsson Group in Sweden and Mexico, SAS, American Express Card, Ame-rican Express Travel, Nyman & Schultz, CEO, Europolitan, CEO, Vodafone Sverige, CEO, Gambro Renal, CEODependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 4,750 shares.

KIA ORBACK PETTERSSON

Board workBorn: 1959Board member since: 2018Other directorships: Friskis & Svettis (chairman), Karolinska University Hospital, Vasakronan, the Karl Adam Bonnier FoundationEducation: MBA, Lund UniversityProfessional expe-rience: Marketing director at DN, COO at Guldfynd/Hallbergs,Business deve-lopment at Securum/Castellum, CEO at Sturegallerian, Head of marketing at Medvik/KinnevikDependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 1,200 shares.

GUNILLA ASKER

SVP Marketing ICA SwedenBorn: 1962 Board member since: 2018Other directorships: Göta Kanalbolag AB, Tinius Stiftelsen, Blommenholm Industrier AS Professional expe-rience: Executive positions at Unilever, Head of marketing and information at SJ, Head of division at Research International, Head of marketing and sales at Svenska Dagbladet, CEO Svenska Dagbladet, SVP Marketing ICADependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 500 shares.

CAMILLA MONETOFT KIRSTEIN

Executive Vice President Business Unit Workwear, Hultafors Group ABBorn: 1972 Board member since: 2014 Education: M.Sc. Industrial Economics – Norwegian Institute of Technology (NTNU), M.Sc. Operational Research – London School of Economics and Politi-cal Science (LSE)Professional experience: Mana-gement positions at Oriflame Cosmetics AB, SAS Group, K-World, and mana-gement consultant at McKinsey & Company Dependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 1,000 shares.

PEDER RAMEL

Board workBorn: 1955 Board member since: 2018Other directorships: ECPAT Sverige, Hi3 Access AB, Hoist Group AB, ManoMotion AB Education: MBA, Lund University Professional experience: CEO Viasat, CEO Bred-bandsbolaget, President Hi3G (Sweden and Denmark) Dependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 2,000 shares.

STEFAN GARDEFJORD

CEO/President Swedish Space CorporationBorn: 1958Board member since: 2018Other directorships: BTS Group ABEducation: Secon-dary degree in economicsProfessional experience: CEO and President Swedish Space Corporation (Svenska Rymdaktie-bolaget), CEO Logica Sweden, CEO WM-data SwedenDependence accor-ding to Swedish Code of Corporate Governance: Inde-pendent in relation to the Company, management and major shareholdersHoldings: 1,000 shares.

Board of Directors

The information is current as per December 31, 2019.


PER WALLENTIN

CEO and PresidentBorn: 1971Employed at Knowit since: 1999Education: Master of Science in Business and Economics from Gothenburg UniversityHoldings in Knowit: 40,000 shares.

ÅSA HOLMBERG

EVP SolutionsBorn: 1968Employed at Knowit since: 2013Education: Master of Science in Engineering, Royal Institute of Techno-logy, StockholmHoldings in Knowit: 1,200 shares.

FREDRIK EKERHOVD

EVP ExperienceBorn: 1982Employed at Knowit since: 2011 Education: Master of Business Administra-tion (MBA), Norwegian School of EconomicsHoldings in Knowit: 37,000 shares.

MARIE BJÖRKLUND

CFOBorn: 1978Employed at Knowit since: 2019Education: Master of Science in Business and Economics from Uppsala UniversityHoldings in Knowit: 0 shares.

CHRISTINA JOHANSSON

CCOBorn: 1965Employed at Knowit since: 2017 Education: Master of Science in Business and Economics from Uppsala UniversityHoldings in Knowit: 1,750 shares

TOMMY BERG

EVP InsightBorn: 1971Employed at Knowit since: 2014Education: M.Sc. Chalmers University of Technology and Executive MBA, School of Business, Economics, and Law in GothenburgHoldings in Knowit: 0 shares.

Corporate management team

The information is current as per December 31, 2019.


KNOWIT’S ROLE IN society grows in an increasingly digitized world. Understanding how society is changing means that we can be better at seizing opportunities, managing risks, and shaping our business. For Knowit, sustainable business is about creating long-term value for us and our stakeholders. We do this by identifying and managing environmental, social, and economic risks and by integrating these prioritizations in business strategy and operations. Integrating sustai-nability contributes to creating an attractive and flexible company equipped for dealing with a changeable busi-ness landscape. This is an important part of delivering long-term sustainable value. With a basis in its vision of a sustainable and humane society through digitization and innovation, Knowit can be a positive force in matters relating to both the environ-ment and sustainability in a broader perspective. The Company’s code of conduct, diversity and equality policy, and environmental policy govern and describe Knowit's work in the sustainability field. As Knowit’s policies reflect the ten principles in the UN Global Com-pact, the Company undertakes to conduct business in an ethical manner with respect for its own employees and those of other organizations, as well as minimizing its negative environmental impact.

THE UN SUSTAINABLE DEVELOPMENT GOALS

Knowit has chosen three of the UN global targets, in which we see the largest possibility of contributing to a positive development through internal initiatives and in client assignments.

With a focus on the futureThe megatrends often mentioned as having a crucial impact on the future of society are related to an intercon-nected world, demographic changes, a lack of resources, and climate change. These are the driving forces affecting our environment and how society develops. This in turn impacts on which companies that employees want to work for and how clients and society view Knowit. The trends are global, but differ in their local impact.

A CONNECTED AND INTERCONNECTED WORLD

The development toward an interconnected world can be summarized as digitization and automation, which increase efficiency and facilitate innovation. New tech-

Creating long-term sustainable value

SUSTAINABILITY REPORTING

nology not only changes our way of life, but also affects our values and relationships. Examples of an intercon-nected world are the digitization of societal functions, but also automation, and an increasing number of mobile services. Technical development also leads to threats against privacy, security flaws, data breaches and cybercrime.The solutions to many serious social challenges depend on mankind’s ability to use new and existing technology. Knowit has many possibilities, based on its competen-ce regarding new products and services, like artificial intelligence, automation, and robotics, to participate in and affect the digitization of society in a positive direction. For SOS Alarm, Knowit has developed yet another communication channel for the general public, in which personal and relevant information is sent in real time to the user, based on their geographic position and perso-nal settings. When someone in an emergency situation signals for help by calling 112 through the app, their geographic position is automatically sent to SOS Alarm. This is a life-saving function, as it is often difficult for SOS Alarm to know exactly where the caller is. Read more on page 23.

DEMOGRAPHIC CHANGES

In 2035, 30 percent of the Swedish workforce between 25 and 64 years of age will be born outside Sweden, compared with less than 25 percent in 2018. Corporate executives need to understand and manage teams that are characterized by increased diversity. Knowit can increase its competence by hiring new Swedish residents and creating a healthy, attractive work-place, with a sound, inclusive culture that leads to both diversity and gender balance. The population of the world is aging, as people are living longer and longer. An aging population is predic-ted to increase costs for healthcare and pensions. Furt-hermore, stress-related illnesses and poor psychological and social health will increase, as will the gap between those in good health and those in poor health. Knowit has many clients in the public sector, which is expected to have successively less economic power due to gradually increased societal costs for poor health (and climate change), while the need for digitalization increases, which increases Knowit’s business opportu-nities. Knowit can help its clients in the public sector by creating products and services that increase efficiency. With twelve million visits a month, 1177 Vårdguiden is one of Sweden’s largest and most important websites providing information regarding health and healthcare. Here, the general public can search for information, log in to make an appointment, renew prescriptions, or see their own medical records. During 2019, the website got an entirely new look and a new technical platform, developed by Knowit. The new platform not only provides increased stability for 1177 from an operations and management perspective, but also for a number of other websites in e-health that use the same platform. Read more on page 26.

The three global targets are “Quality education” (target number 4), “Industry, innovation and infrastructure” (target number 9), and “Climate action” (target number 13).


A LACK OF RESOURCES

Energy, water, food, and raw materials are a few examples of where resources are lacking. New technology can contribute to streamlining, meaning that fewer resources are used. However, very little currently indicates that technical development in itself is the answer. Instead, recycling of resources must increase, and a circular economy should be stimulated. There are many opportunities for Knowit to create good business models based on digitization that are in line with the ideas behind circular economy: decreased input, increased efficiency, and less resource wastage. In some projects, Knowit has been able to help clients follow up on their footprints (water, energy, and resources) and identify more sustainable opportunities, for instance through increased usage of public transportation. Digi-tization is an important driver for streamlining in the vehicle industry and here Knowit is involved as a partner in several projects. Knowit’s Norwegian client Norsirk manages collection and disposal of electronics. For Norsirk, Knowit has deve-loped a cloud-based tool that connects and makes management simpler and more efficient for both the company and its clients. Read more at on knowit.no by searching for Norsirk.

CLIMATE CHANGE

In June 2017, the Swedish Government decided that Sweden’s net climate-impacting emissions should be zero by 2045. As one step toward that goal, Sweden is aiming to have more than 63 percent lower emissions in 2030 as compared with the levels in 1990. During 2018, Knowit got involved in the governmental initiative Fossil-Free Sweden, by actively contributing to the work with the roadmap for the digitalization consul-tancy sector. In the roadmap, we and most of our com-petitors have committed to actively contributing, both in our own operations and through our client assignments, to Sweden being able to become the first fossil-free welfare state, and that this will be achieved by 2045. By developing services that help the client gain information about their direct and indirect impact, for instance by following up on energy usage, providing transparency on the carbon dioxide impact of e-com-merce, and streamlining logistics and transportation, Knowit can contribute to lower emissions. Knowit’s competence contributes to increased efficiency with the help of smart electricity meters and other digital solu-tions. We are also increasing connectivity possibilities, promoting the use of public transportation, renewable energy – and through systems that gather information on energy usage, our clients can increase transparency in their CO2 emissions. Knowit takes responsibility for its negative climate impact by, since 2018, drawing up a Carbon Foot-print Assessment and working with a basis therein to continuously decrease its own negative climate impact. The Carbon Footprint Assessment is a prerequisite for Knowit to become climate-neutral, which we are as of January 1, 2019, by measuring our CO2 emissions and performing active work with decreasing emissions and carbon offsetting. In 2017, one of Knowit’s clients required that their supp-liers would be climate-neutral no later than January1, 2019.


Value-creating strategyVISION

We create a sustainable, humane society through digiti-zation and innovation.

BUSINESS MODEL

The business model, which describes how we create value for our stakeholders, can be found in the strategy section of the Annual report on page 13.

STRATEGIES

In the sustainability field, Knowit has four strategic focal areas, which are integrated into Knowit’s operations.

• “The attractive workplace” is about creating a workplace where employees are healthy, develop as people, and experience social security.• “Contributing to a sustainable and humane society together with our clients” is about how we at Knowit realize our vision with our client.• “Climate impact from Knowit’s own operations” is about how we actively work to contribute to a fossil- free society before 2045 through our employees’ knowledge and work, both in our client assignments and internally, and through the Company’s actions.• “Brand and governance” is about engendering confidence for and confidence in how the Company is run.

NO 1: The attractive workplaceOur most important issues:

• Employeeship and attracting competence.• Creating a health workplace.• Safeguarding equality and diversity.

EMPLOYEESHIP AND ATTRACTING COMPETENCE

KPIs:(Independently defined indicator): eNPS (employer Net Promotor Score)

• 2019: 37• 2018: 45• 2017: 42• 2015 – 2016: N/A

Knowit continuously measures employee satisfaction and eNPS (willingness to recommend the workplace). This KPI is a clear indicator of our chances to attract new employees. The more people who would want to work at Knowit, the better our chances of finding the right competence. The reference value in our industry is 7. Knowit’s goal is to be at over 30. In Universum’s Career Barometer for Young Professionals 2019, Knowit


-

was named best in the industry among consultancy firms in the category Data/IT. This means that we are ranked highest of all IT consultancy firms in Sweden by the young professionals in the IT sector.

THE HEALTHY WORKPLACE

KPIs:

(403-2): Short-term sick leave

• 2019: 2.0%• 2018: 2.1%• 2017: 1.9%• 2016: 1.8%• 2015: N/A

(403-2): Long-term sick leave

• 2019: 1.2%• 2018: 1.2%• 2017: 1.1%• 2016: 0.9%• 2015: N/A

The metrics on ill health in the IT sector in general, and at Knowit, are lower than in society in general. The largest health risk in our sector is the risk of psychological or social poor health due to a demanding work situation and stress. During 2018, a project has been initiated, The Healthy Workplace, with the goals of:

• Significantly improving the metrics on total ill health.• Increasing knowledge among employees and managers on stress-related poor health and the risk of burnout.• Shortening the average time of long-term sick leave through active therapeutic measures.• Increasing physical activity among Knowit’s employees.

In order to make Knowit a healthier workplace, we are performing both group-wide and local investments. Employees get information on psycho-social ill health and stress. Managers and executives are educated in sustainable leadership and how to prevent stress-re-lated ill health and burnout in the workplace. We also make investments for faster therapeutic efforts among those on long-term sick leave and offer corporate healt-hcare and health check-ups to all employees. During 2018 and 2019, we have educated all our employees in Sweden one what stress-related ill health is, how it can be prevented, and what support those affected can get. During the fall of 2019, the education efforts were


focused on managers and executives, with a focus on how to create a sustainable work environment. During 2019, we have also begun similar efforts in Norway and in 2020 we will offer corresponding education in Finland, Denmark, and Germany. During 2019, we managed to stop the upward trend of short-term sick leave, while long-term sick leave remains at the same levels as before. In total, our metrics on ill health have decreased from 3.2% to 3.1% between 2018 and 2019. During 2020, we will be gathering experiences from what we have done thus far and, based on this and available research, formulate a health strategy, with the aim of working more on the connections between mental and physical health. We will be distributing infor-mation throughout the Group on activities that companies in each town can focus on to increase awareness regar-ding mental and physical health.

In the sustainability survey for 2019, we asked our emp-loyees how important they feel the efforts in “The Healthy Workplace” are. The answers above show high commit-ment. Our offices in Sweden already organize local activities like group training, personal coaching, and inspirational health lectures on diet, exercise, and mindfulness. Knowit’s Code of Conduct governs how Knowit offers all employees access to corporate healthcare and volun-tary health check-ups.

(403-2): Number of work-related injuries

• 2019: 10 (accidents during travel to/from work)• 2018: 2 (accidents during travel to/from work) • 2017: 0• 2016: 1 (suspected noise pollution injury)• 2015: 0

During 2019, all work-related injuries occurred in con-nection to travel to or from work or during work, and all occurred when employees were either walking on foot or travelling by bicycle. Our assessment is that Knowit could not have acted in any way to prevent these incidents.

ILL HEALTH

Short-term Long-term Total

%3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0 2016 2017 2018 2019

2

0 %

3

0 %

4

0 %

5

1 %

6

8.4

%

7

6.1

%

8

18.

3 %

9

21.

6 %

10

44.

1 %

0 %

1

NOT IMPORTANT AT ALL VERY IMPORTANT


EQUALITY AND DIVERSITY

KPIs:

(405-1): Proportion of women overall

• 2019: 28%• 2018: 28% • 2017: 26% • 2016: 25% • 2015: 24%

(405-1): Proportion of women among managers with staff responsibility

• 2019: 38%• 2018: 34%• 2017: 28%• 2016: 26%• 2015: N/A

(405-1): Proportion of women in subsidiaries’ boards

• 2019: 36%• 2018: 31%• 2015 – 2017: N/A

(405-1): Proportion of women in corporate management team

• 2019: 50% (3 of 6) • 2018: 50% (3 of 6) • 2017: 33% (2 of 6) • 2016: 16% (1 of 6) • 2015: 14% (1 of 7)

(405-1): Proportion of women in Board of Directors

• 2019: 43% (3 of 7) • 2018: 43% (3 of 7) • 2017: 50% (3 of 6) • 2016: 43% (3 of 7) • 2015: 43% (3 of 7)

We prioritize matters relating to equality and it is a given that all employees are treated equally, regardless of age, gender, ethnicity, and religion. Active work is performed to prevent and counteract the occurrence of sexual harassment. Our up-to-date plan of action against discrimination and harassment/sexual harassment is updated continuously and the latest version is always available in Swedish on knowit.se. Emphasis is placed on the proactive work, which focuses on spreading information, offering a forum for discussion and building a culture characterized by respect and security. The goal is to create a process for taking tangible actions to manage what has happened, for instance therapy talks under safe conditions. This work is governed by Knowit’s Code of Conduct and equality policy. Since 2016, efforts have been made to make Knowit a more attractive workplace. The consultant development program GROW has been offered since 2018 and is aimed at female employees, to improve equality at Knowit and to retain and develop competence. Knowit’s many equality-related initiatives were lauded through a shared second place in the AllBright Awards 2018. In 2019, we were named the best company on the Stockholm Stock Exchange in regards to equality efforts. The prize is awarded by the AllBright Foundation to the listed com-pany that has made the largest progress on the equality front during the preceding year.


The jury stated:

– This year’s winner has under-stood that equality is a matter of business strategy. The jury is impressed by the genuine commitment that permeates the company. They have succeeded in the difficult act of implementing equality efforts throughout the organization, with the CEO at the helm. This year’s winner has made an impressive journey, but is not content to work internally. The company generously shares its recipe for success – and is transparent regarding the mistakes it has made along the way. Policies, guidelines, and processes are all based on research and their equality efforts have therefore yielded obvious results. We can-not but congratulate the winner of the year: Knowit!

NO 2: Contributing to a sustainable and humane society together with our clientsOur most important issues:

• Fossil-Free Sweden 2045.• Services for humane digitization and circular economy.• Cutting-edge security solutions.

FOSSIL-FREE SWEDEN 2045

During 2018, Knowit was involved in the work on the road-map for the digitalization consultancy industry within the framework of the governmental initiative on a Fossil-Free Sweden, along with many of our competitors. For more information, see http://fossilfritt-sverige.se/in-english/.


In March 2019, the roadmap was handed over to the Swedish government, after which work has continued in various industry-wide work groups. Knowit has been involved in two work groups:

• Avoided Emissions – how should reporting of the sustainability benefits we add to a client project be performed?• Creating an education plan that ensures the minimum level of knowledge on digitalization and sustainability that a digitalization consultant needs to have.

The work with Avoided Emissions serves to ensure that we, in the future, can measure and report the sustaina-bility benefits that we bring to client projects by contri-buting with our knowledge and experience, creating client solutions that have lower or not climate impact. This work is intended to have tangible results during 2020. The idea behind having an industry-wide view on what minimum knowledge a digitalization consultant needs is to ensure that we use existing knowledge and experience about the risks and possibilities of digitalization, from a sustainability perspective, to contribute to a more sustai-nable world. Based on the results of this work, Knowit will during 2020 create a new mandatory education program in digitalization and sustainability for all Knowit employees.

SERVICES FOR HUMANE DIGITIZATION AND CIRCULAR ECONOMY

Knowit’s strategy is based on developing long-term value for clients through modern, creative solutions for digitization and innovation. Knowit delivers projects that contribute to societal development and includes the human aspect based on both usability and integrity. One task is to contribute with competence for increased understanding of how digitization can contribute to a circular economy and an improved society. Knowit’s competence in cybersecurity is an asset in both internal and external projects, to ensure that data and personal data are not used in negative or illegal contexts. In the sustainability survey for 2019, we asked our employees how important they feel the efforts in Humane Digitalization are. The answers below show high commit-ment.


CUTTING-EDGE SECURITY SOLUTIONS

KPIs:

(418-1): Number of losses of customer data during the year

• 2019: 0• 2018: 1• 2017: 0• 2016: 0• 2015: 0 Managing large amounts of data in the cloud leads to increased complexity when it comes to security issues. Here, Knowit is at the frontline, and delivers both cloud services and security services regarding implementation and operation. The same holds true for AI applications, where technology and law are closely connected. Knowit delivers both the technical solution and support for mana-ging security and privacy. The new regulations, like GDPR and PSD2, have con-tinued to cause large challenges for many of Knowit’s clients during 2019. Knowit has supported them in under-standing what the regulations mean for them and what is required to achieve compliance – with a focus on privacy matters, the needs of the operations, and societal benefits. Security solutions at the cutting edge are also about helping clients develop solutions that increase security for individuals when it comes to e-commerce or payment solutions, for example. Knowit’s management system for information security is based on ISO-27001. Within Knowit, we have one sub-sidiary in Sweden and one in Norway specialized in infor-mation security and offering consultancy services in this field. Resources and competence from these subsidiaries are used in Knowit’s internal work on information security. During 2018, the work began with certifying parts of the Knowit’s Norwegian operations in accordance with ISO27001. This work was delayed due to a lack of resources in 2019, but the aim is to complete it in 2020 and gain an ISO 27001 certificate.

NO 3: Climate impact from Knowit’s own operationsOur most important issues:

• The road from climate-neutral operations in 2019 to fossil-free operations by 2045.• Knowledge and attitudes.

THE ROAD FROM CLIMATE-NEUTRAL OPERATIONS IN 2019 TO FOSSIL-FREE OPERATIONS BY 2045

During 2018 and 2019, Knowit has worked with over 40 other companies in the digitalization consultancy industry to create a roadmap for a fossil-free, climate positive, and competitive digitalization consultancy sector. The road-

2

1.1

%

3

2.5

%

4

2.3

%

5

4.0

%

6

23.

3 %

7

14.

2 %

8

22.

9 %

9

14.

5 %

10

13.

9 %

1.2

%

1

NOT IMPORTANT AT ALL VERY IMPORTANT


map is created by order of the Swedish government within the framework of Fossil-free Sweden. As part of the roadmap, Knowit has committed to halving its CO2 emissions compared with 2018, no later than 2018, and to be entirely fossil-free by 2045. Based on our Carbon Footprint Assessment for 2019, we can see that our joint sustainability efforts are having an effect and that we are on the right path. Compared with other companies, we are doing very well. So well that Dagens Industri in late 2019 chose to highlight Knowit as one of the most sustainable and profitable companies on the Stockholm Stock Exchange. But just like all com-panies and operations, we are at the start of our trans-formation. We still release 2.41 tons of CO2e per employee, which is far above the limit for a sustainable level, usually set at a total of less than 1 ton of CO2e per person (at work and in their private life). Within the framework of Fossil-free Sweden, we have committed to decreasing our CO2 emissions with at least 50% between 2018 and 2030, and to be entirely fossil-free before 2045. To succeed with this, we must, among other things, decrease our flight miles and extend the lifespan of our computers and mobile phones.

KPIs:

(305-1, 305-2, 305-3 and 305-4): Carbon Footprint Assessment

• 2019: 5,325 tons CO2e, corresponding to 2.41 tons CO2e/employee, distributed as: Scope 1: 0.041 tons CO2e per employee Scope 2: 0.36 tons CO2e per employee Scope 3: 2.00 tons CO2e per employee• 2018: 6,373 tons CO2e, corresponding to 3.14 tons CO2e/employee, distributed as: Scope 1: 0.11 tons CO2e per employee Scope 2: 0.52 tons CO2e per employee Scope 3: 2.51 tons CO2e per employee• 2015 – 2017: N/A, as the travel surveys performed in 2015 – 2017 only measured part of what is included in a Carbon Footprint Assessment and the result was based on other emission factors

(Independently defined indicator): CO2 emissions per employee from travel to and from work.

• 2019: 0.56 tons CO2/employee• 2018: 0.69 tons CO2/employee 1• 2015 – 2017: N/A, as the travel surveys performed in 2015 – 2017 were based on other emission factors

As of 2018, we are drafting an annual Carbon Footprint Assessment in order to assess our climate impact and understand what it would take for Knowit to halve its CO2 emissions by 2030 compared with 2018, and to become a climate-neutral company by 2045. The assessment is made in accordance with the Greenhouse Gas Protocol (GHG Protocol), an international reporting standard for estimating and reporting an operation’s climate impact.

TONS CO2e

The Carbon Footprint Assessment includes all our direct emissions from travel to and from work and on business, as well as indirect emissions from purchasing electri-city, cooling and heating of offices, computers, mobile phones, and construction materials and goods used for refurbishing offices, waste, and transport. We also mea-sure and report our climate impact caused by the server operations that we purchase for our own operations and the clients were Knowit provides operative assistance. Knowit has decided, based on its Carbon Footprint Assessment and through active measures, conscious choices, and carbon offsetting, to be a climate-neutral company as of January 1 2019. The estimates in our Carbon Footprint Assessment hare therefore made in accordance with the standard for climate neutrality PAS 2060

KNOWLEDGE AND ATTITUDES

KPIs:

(Independently defined indicator): Proportion of employees who have undergone environmental training

• 2019: 72% (pertains only to employees in Sweden) • 2018: 64% (pertains only to employees in Sweden) • 2017: 61% (pertains only to employees in Sweden) • 2015 – 2016: N/A

Knowit works with continual competence development for company employees. We also strive to combine clients’ needs and requirements with minimizing the impact on the environment. For this reason, our employees take an internal environmental training course. Knowit AB and a few subsidiaries are certified in accordance with ISO 14001:2004, since 2010. During 2020, the existing envi-ronmental training will be replaced with a program focu-sed on sustainability through digitalization. The new program will be mandatory for all Knowit employees.


1,232 (1,411)

833 (1,085)

342 (407)

454 (336)

283 (168)

2,181 (2,966)BUSINESS TRIPS

COMMUTING

ELECTRICITY AND HEATING

ELECTRICAL EQUIPMENT

MATERIALS PURCHASED

OTHER

1) The comparison value for 2018 is corrected, as the estimate for 2018 was erroneously based on the average number of employees on December 31, 2018, instead of the average number of employees for the full year 2018.

Commitment in roadmap Outcome up to and including 2019

CO2e, tons

4

3

2

1

0 2018 2030 2045

3.14

2019: 2.41

2030: 1.57

2045: 0.0


KNOWIT’S CLIMATE FOOTPRINT

In the sustainability survey for 2019, we asked our employ-ees how important they feel the efforts in the matter of Knowit’s climate impact are. The answers above show high commitment. Through education and high commitment among Knowit’s employees, we create the conditions for working to conti-nually improve ourselves through environmentally conscious and sustainable choices and decisions in our everyday work.

NO 4: Brand and governance Our most important issues:

• Long-term financial sustainability.• Labor rights and human rights pursuant to the Code of Conduct.• Social responsibility.

LONG-TERM FINANCIAL SUSTAINABILITY

KPIs:

Long-term financial sustainability is governed by the financial targets presented on page 12. The outcome of financial sustainability is presented on page 62. The financial KPIs are presented on page 61. Long-term financial sustainability is the most impor-tant prerequisite for Knowit to remain an attractive partner and employer and to contribute to developing society over time.

LABOR RIGHTS AND HUMAN RIGHTS PURSUANT TO THE CODE OF CONDUCT

KPIs:

(Independently defined indicator): The number of suppliers on our watch list and the list of non-approved suppliers

• 2019: No suppliers on the watch list and four that were non-approved• 2018: No suppliers on the watch list and three that were non-approved


• 2017: No suppliers on the watch list and three that were non-approved• 2016: Two suppliers on the watch list and three that were non-approved• 2015: No suppliers on the watch list and two that were non-approved

Knowit operates on markets with well-functioning legal systems regarding human rights and environmental impact. The suppliers and sub-consultants that Knowit hires operate on the markets where Knowit operates and should work in accordance with the same basic values as Knowit. This is ensured through Knowit choosing suppliers/sub-consultants after an evaluation showing that their fundamental values correspond to those of Knowit’s Code of Conduct. We call this principle “Care-ful Selection.” If Knowit assesses that there is uncertainty regarding or that there is a risk that a supplier’s fundamental values or actions do not correspond to Knowit’s Code of Con-duct, and this cannot be clarified without contacting the supplier, Knowit’s internal supplier evaluation shall be supplemented by a “Survey for supplier evaluation.” Knowit differentiates between important purchases and simpler purchases. An important purchase is one where the purchase is expected to affect quality or is important from a sustainability perspective and of a certain size. There is no strict threshold, but as a rule of thumb, an important purchase is a standalone purchase of goods exceeding SEK 10,000 (or one making up part of an annual total volume exceeding SEK 50,000) or a purchase of services exceeding SEK 100,000 (or one making up part of an annual total volume exceeding SEK 250,000). All suppliers used for important purchases shall be managed in accordance with Knowit’s purchasing routines. When possible, we shall choose suppliers/services that are climate-neutral. As regards purchases of a simpler kind, there is freedom when it comes to choice of supp-lier and how the purchase is to be performed. Knowit performs assessments of suppliers based mainly on its own evaluations. During 2019, there were no suppliers on Knowit’s watch list and the same three suppliers that were on Knowit’s list of non-approved suppliers in 2018 remained on the list in 2019. In addi-tion to these three, another supplier has been added to the list of non-approved suppliers in 2019.Suppliers that do not act in accordance with Knowit’s Code of Conduct entail a risk for Knowit, mainly as regards Knowit’s brand and the risk of corruption.

KPIs:

(406-1): Number of labor law disputes during the year

• 2019: 0 • 2018: 0 • 2017: 0 • 2016: 0 • 2015: 0

Knowit’s ambition is to be seen as a decent employer and we therefore have an ongoing dialogue with the parties on the labor market to ensure that we are.

2

1.8

%

3

2.0

%

4

2.3

%

5

4.1

%

6

16.

6 %

7

12.

3 %

8

20.

3 %

9

14.

4 %

10

23.

7 %

2.5

%

1

NOT AT ALL IMPORTANT VERY IMPORTANT


KPIs:

(412-2): Number of employees who have undergone a Code of Conduct training

• 2019: 87%• 2018: 80%• 2017: 75%• 2015 – 2016: N/A

Knowit’s corporate culture, which is characterized by the meeting between responsible managers and employers, is based on respect, openness and honest. Knowit’s Code of Conduct governs how Knowit creates relation-ships with the Company’s stakeholders. Knowit observes laws and ordinances in the countries in which it operates, as well as complying with governing documents, such as company-specific regulations and policies. All of Knowit’s employees and sub-consultants must protect the tangible assets and information assets of both Knowit and our clients. The information may be owned by Knowit, produced by Knowit on behalf of a client, or provided by a client. Regardless of the type of information, it is to be protected in the same way.

ETHICAL DEALS

KPIs:

(205-3): Number of corruption matters during the year

• 2019: 0 • 2018: 0 • 2017: 0• 2016: 0 • 2015: 0

Clients and shareholders demand that Knowit has robust systems to prevent instances of corruption and wastage, and to increase transparency regarding risks. In order to deliver to state-owned companies and the public sector, this is a prerequisite. Under Knowit’s Code of Conduct, no employee may give or accept bribes. Gifts and services may only be given or accepted within the framework of sound business practice and on condition that they are within the limits of the laws on the markets on which we operate. Knowit shall adhere to the ethical rules for communication, mar-keting, and advertising that are relevant for the markets on which we operate. When employees represent Knowit, they shall observe Knowit’s Code of Conduct.


KPIs:

(102-34): Number of Whistleblower matters

• 2019: 0• 2018: 0• 2017: 0• 2016: 0• 2015: 1

Knowit has a system where employees can report if they discover any behavior that does not reflect Knowit’s Code of Conduct. Knowit’s whistleblower function is provided by an external supplier and is available through the Company’s intranet. The external supplier ensures that the identity of the person reporting is protected and that he/she will remain anonymous. All new employees are informed about the function as part of the introduc-tory program.

SOCIAL RESPONSIBILITY

KPIs:

(Independently defined indicator): Christmas gift to UNHCR and other group-wide initiatives

• 2019: SEK 1,073,000 • 2018: SEK 912,000• 2017: SEK 320,000 • 2016: SEK 515,000• 2015: SEK 410,000

(Independently defined indicator): Local sponsorships and pro bono-projects

• 2019: SEK 2,862,000• 2018: SEK 2,917,000• 2017: SEK 1,193,000• 2016: SEK 1,130,000• 2015: N/A

At Knowit, local initiatives are stimulated to contribute to greater social responsibility. Examples include program-ming schools from children in the Nordic capitals, and the Angered challenge, in which Knowit supports an initiative to build bridges and prepare students in disad-vantaged areas ahead of the meeting with the job mar-ket and professional world. During the year, we have remained a corporate spon-sor of UNHCR and thus contributed to the important aid to displaced people. In December 2019, Knowit and Knowit’s employees collected SEK 349,000 in donations to UNHCR’s project Educate a Child. In past years, we have collected donations to UNHCR’s projects for inn-ovative refugee shelters in Iraq and displaced families from Aleppo. Knowit has a long-term collaboration with the organi-zation Wonsa – World of no sexual abuse – with the goal of creating a more efficient, digital workplace that invites to communication and collaboration. The work is perfor-med pro bono by a team from Knowit passionate about creating digital workplaces.



POLICY

Work environment policy (Sweden)

Work environment policy (Norway)

Code of Conduct(group-wide)

Action plan against dis-crimination and harass-ment/sexual harassment (Sweden)

Action plan against dis-crimination and harass-ment/sexual harassment (Norway)

AIM

No Knowit employee should be the victim of physical or psychological harm or be injured as a result of his/her work. If this does happen, Knowit as an employer, has readiness for hand-ling the situation and hel-ping the affected person.

Knowit’s corporate culture is based on the idea of a sustainable society and is created in collaboration between responsible exe-cutives and employees and based on respect for the value and dignity of each person, as well as openness and honesty. In this document, we des-cribe what this means in practice in relation to our various stakeholders.All suppliers and the sub-consultants Knowit hires shall work in accordance with the same fundamental values as Knowit. This is ensured through Knowit’s selection of a supplier/sub-consultant based on its fundamental values being found, in an assess-ment performed by Knowit, to correspond to those in Knowit Group’s Code of Conduct. Knowit can also ensure this by having the supplier/sub-consultant sign an agreement obli-ging it to observe Knowit Group’s Code of Conduct.

Knowit has a zero toleran-ce of discrimination and all forms of harassment. This action plan descri-bes the measures taken by Knowit to prevent and counteract discrimination, harassment, and sexual harassment. It also descri-bes Knowit’s routines for how a report or statement on discrimination, harass-ment, or sexual harass-ment should be managed and investigated.

OWNERSHIP

HR

Corporate management team

HR

HOW IT IS FOLLOWED UP

KPI: Number or work- related injuries.

KPI: Ill health metrics, through internal follow-up.

All KPIs, through internal follow-ups.

The employee survey’s annual questions on ha-rassment and discrimi-nation; analyzed by an external party.

Policies


POLICY

Action plan against stress-related ill health (Sweden only)

Information security policy (group-wide)

Job Rotation Policy(group-wide)

Diversity and equality policy (Sweden)

Diversity and equality policy (Norway during 2020)

Environmental policy (group-wide)

Communication policy (group-wide)

AIM

In society in general, stress-related ill health is increasing. More people than before have trouble with their work-life balan-ce. The risk of suffering from the feeling of losing control of one’s life, both at home and at work, is increasing. This action plan describes how we at Knowit work to prevent stress-related ill health and how we work to rehabilitate those people who are on stress-related sick leave.

The purpose of this policy is to protect our clients, Knowit as a company, our brand, our employees and our business against inter-ruptions and outages, as well as reducing risks and damages by preventing and managing unwanted incidents and breaches.

To simplify for employees to switch employer from one Knowit subsidiary to another, by clarifying the conditions under which this can be done.

Using information, we shall increase awareness of equality issues and strive for an open attitude and equal treatment throughout the corporation.

In day-to-day work, Knowit’s employees, sub-consultants, and other people working under Knowit’s supervision in Knowit’s offices shall be aware of the Company’s positive and negative envi-ronmental impact and work to minimize the negative impact.

The communication policy gives everyone at Knowit a set of joint guidelines for internal and external com-munication. It also describes how we divide up responsi-bility for communication.

OWNERSHIP

HR

Security manager/CIO

HR

HR

Environmentalmanager

CCO

HOW IT IS FOLLOWED UP

KPI: Ill health metrics, through internal follow-up.

KPI: Number of losses of customer data, through internal follow-ups.

Not followed up.

Employee survey through external supplier.

The climate footprint assessment.

Not followed up.

Policies, continued

Some of the policies mentioned above are available in English at www.knowit.eu/about/,

all are available in Swedish at www.knowit.se/om-knowit.



RisksThe significant sustainability risks identified within Knowit’s four focal areas are in the Personnel area, the IT and information security area and the Environ-ment and climate area. The description of these risks has been integrated into Note 2 in this annual report. Knowit applies the precautionary principle in its work with non-financial risks.

CLIENTS AS SUPPORT FOR SUSTAINABILITY REPORTING

One of the most important opportunities for Knowit to have a positive impact on sustainability is through the client assignments that the Company has. In the annual report, three reference cases with positive impact are presented:

• Do you know where you are when disaster strikes?, page 23.• An efficient and secure healthcare guide, page 26.• Donor journeys and agile work methods, page 29.

Our essential issuesThe key to sustainability work that contributes to long-term value creation is to understand the surrounding world and the stakeholders’ expectations in a change-able time. Knowit’s essentiality process to identify the most important issues contributes to prioritizing the sustainability issues that Knowit should be focusing on. This analysis of the societal changes that Knowit and its stakeholders can affect and are affected by is the foun-dation for how sustainability is integrated into company


strategy and reported. The analysis is divided into three stages:

1. SOCIETY IN THE FUTURE: Four global drivers are affecting our future: Limitations in growth, demograp- hical shifts, an interconnected world, and a changed living environment. In the first stage, we assessed how these drivers affect society and the market up until 2030, how this is relevant to Knowit, and how risks can be minimized and business opportunities maxi- mized.2. A UNIVERSE OF ISSUES: Knowit identified a set of 22 non-financial issues relating to areas like economy, environment, human rights, work conditions, and anti- corruption. They include areas that may affect Knowit’s response to a changeable market in the future.3. KNOWIT INVOLVED INTERNAL experts with insight into prioritization in business strategy and the Company’s key stakeholders. Together with them, Knowit has identified four key stakeholders and assessed how Knowit creates value for them and how this value-creation affects Knowit’s reputation. Together with the experts, a prioritization exercise involving the 22 issues was performed.

During 2020, Knowit will continue working with the most essential issues by involving stakeholders, connecting the sustainability work more closely to the business model and operations, and continuing to measure impacts.

StakeholdersKnowit has identified employees, clients, shareholders, and society as the most significant shareholders, based on how much they affect or are affected by Knowit.

STAKEHOLDER GROUP

Employees

Clients

DIALOGUE

• Annual employee surveys• Developmental talks• Ongoing dialogues between employees and management team• Sustainability survey

• Client surveys• Ongoing dialogues in sales and during assignments

HOW KNOWIT CREATES VALUE

• Employeeship• Attracting the right competence• Safeguarding diversity and equality• Decreasing negative climate impact in our operations• Contributing to a fossil-free society• Contributing to services for a circular economy and humane digitization• Knowledge on digitalization• Social accountability• Recycling of IT equipment• Our work environment efforts serving to create a healthy workplace

• Employeeship• Contributing to services for a circular economy and humane digitization• Creating security solutions• Knowledge on digitalization• Our work with creating a Fossil- Free Sweden• Long-term financial sustainability

Stakeholders


About this reportThis report summarizes Knowit’s way of working to inte-grate sustainability in its operations and business model, and reflects this work during 2019. Knowit strives to report on sustainability efforts in a relevant, transparent way. An essentiality analysis of the most relevant issues is the foundation for the reporting and Knowit’s way of working in the future. Knowit uses the GRI (Global Reporting Initiative) standard framework as guidance in its reporting. The annual report contains standard information and key

figures connected to the most essential issues. Data collec-tion was performed during the financial year January-December 2019. No significant changes in the organization have been made since the publication of the Annual Report 2018. The report has been reviewed by Knowit’s management team. For more information on this report and on Knowit’s sustainability efforts, please contact Sustainability Manager Joakim Pilborg, Vice President Corporate Operations, +46 730 74 66 37, [email protected].


STAKEHOLDER GROUP

Shareholders

Society

DIALOGUE

• The AGM• Contact with the Board• Analyst/investor meetings with the management team

• Ongoing dialogues during assignments• Continuous contact with relatives of employees and authorities

HOW KNOWIT CREATES VALUE

• Attracting the right competence• Employeeship• Contributing to services for a circular economy and humane digitization• Long-term financial sustainability• Knowit’s work to contribute to the sustainability efforts of its clients

• Safeguarding diversity and equality• Contributing to services for a circular economy and humane digitization• Contributing to a fossil-free society• Creating security solutions• Knowledge on digitalization• Attracting competence

Stakeholders, continued

To the AGM of Knowit AB (publ), company reg. no 556391-0354

TASK AND DIVISION OF RESPONSIBILITIES

It is the Board that is responsible for the sustainability report for the year 2019, on pages 40-51, and that it is drawn up in accordance with the Swedish Annual Accounts Act.

AUDIT SCOPE

Our audit has been performed in accordance with FAR’s recommendation RevR 12 Auditor’s statement on the regulatory sustainability report. This means that our audit of the sustainability report has a different and sig-nificantly smaller scope as compared with the scope of

an audit in accordance with the International Standard on Auditing and generally accepted auditing standards in Sweden. We believe that the audit evidence we have obtained is sufficient to provide a basis for our statement. STATEMENT

A sustainability report has been drawn up.

STOCKHOLM, APRIL 6 2020

KPMG AB

HELENA ARVIDSSON ÄLGNE Authorised Public Accountant

The Auditor’s statement on the regulatory sustainability report


The Board of Directors and the President of Knowit AB (publ), with the company registration number 556391-0354, headquartered in the municipality of Stockholm in Stockholm County, herewith present the annual report for the Parent Company and the Group for the financial year 2019.

General operations and 2019 in briefKnowit is a Nordic consultancy firm operating in a time of increased digitalization, with interdisciplinary delive-ries from three business areas: Experience, Insight and Solutions. Advertising and marketing converge with IT and new business models appear thanks to new tech-nology. Our ability to combine competencies in IT, design and digital communication and management consultancy is a crucial key to success. Our services encompass system development and application management, communication solutions for web and market commu-nication, and strategic consultancy. Increased collabo-ration within and between business areas, irrespective of geography, reinforces our client offerings and has contributed to the positive development of results and sales during the year. The development in the Group has been positive during 2019, with increased sales and profit, combined with strong recruitment. During the year, we have had a net increase of 77 employees, in tandem with stream-lining and development of more attractive client offerings, combined with high demand on the market, which has increased our profit. We are well-positioned toward com-panies and authorities where digitalization is important for future development and we see increased collabo-ration with several clients, thanks to being part of the innovation process from an early stage. Demand has been high during the year, in the business areas Solutions and Experience. Insight has faced some challenges and ended 2019 with slightly lower net sales. This was due to a few client assignments being closed down suddenly, and during the second half of the year the focus has been on increasing sales in the business area. Solutions and Experience have, through clear posi-tioning, increased net sales and profit, thanks to projects close to client operations, strong client relationships, and the ability to grow alongside clients. Knowit operates mainly on the Nordic market, which was characterized by high demand during the past year. Knowit’s expansion in 2019 was due to a strong rec-ruitment and a positive development of price in rela-tion to personnel costs, thanks to new client offerings and recruitment of younger employees. In July 2019, the Swedish Salesforce agency 4front was acquired. Through the acquisition, Experience gained increased competence in data-driven client experiences. In De-cember 2019, Knowit acquired Invativa, a consultancy firm with specialists in digital business and service deve-lopment, with acquisition finalized in January 2020. The company has 25 consultants, primarily based in Gothen-burg.

Directors’ report Operations are conducted in about 60 subsidiaries, located in larger and smaller towns in Sweden, Norway, Finland and Denmark. The subsidiaries are part of one of the three business areas of the Group. The manage-ment team continually reviews the companies’ locations and size, to achieve positive effects in the form of cost savings and increased collaboration, regarding sales, administration, etc. The Parent Company Knowit AB is in charge of group-wide functions such as consolidated reporting, financial administration, internal and external information, marke-ting, IR, acquisitions, security, sustainability and CSR. The corporate management consists of the CEO, CFO, CCO, and the EVPs of the business areas. It is the responsibility of the management team to continuously evaluate the result development of the Group and its subsidiaries. Throughout the year, the management develops strategies and business decisions, deciding on group-wide activities in the long and short term to execute strategies and achieve goals. Knowit is listed on Nasdaq OMX Stockholm since 1997 and has, as of 2018, moved from the Small Cap list to the Mid Cap list, thanks to a higher valuation. At year end, Knowit had a total of 10,865 shareholders. For further information about Knowit AB’s ownership distribution, see the section Knowit Share in this annual report.

SALES AND PROFIT

The Group increased net sales by 8.2 percent, to SEK 3,335.1 (3,083.3) million. The operating profit before amortization of intangible assets (EBITA) increased to SEK 319.2 (315.1) million. The EBITA margin was 9.6 (10.2) percent. Net sales in Sweden increased to SEK 1,780.0 (1,737.3) million and the operating profit before amortization of intangible assets (EBITA) increased to SEK 196.4 (217.4) million, corresponding to an EBITA margin of 11.0 (12.5) percent. The Norwegian companies increased net sales to SEK 1,311.9 (1,114.8) million and the operating profit before amortization of intangible assets (EBITA) increased to SEK 160.0 (135.6) million, for an operating margin of 12.2 (12.2) percent. The Finnish operations increased net sales to SEK 173.4(161.5) million and the operating profit before amorti-zation of intangible assets (EBITA) increased to SEK 14.8 (15.1) million, for an operating margin of 8.5 (9.3) percent. Knowit’s net sales and EBITA were positively affected by exchange rate changes mainly between the Norwegian krone and the Swedish krona, with the effects being around SEK 15.2 million and SEK 1.8 million, respectively. Amortization of intangible assets totaled SEK -6.1 (-6.1) million. The operating profit (EBIT) increased to SEK 313.1 (309.0) million. The financial net was SEK 0.1 (-54) million, mainly negatively affected by costs for synthetic options in subsidiaries totaling SEK -8.0 (-4.1) million and positively affected by the valuation of additional consideration totaling SEK 12.9 (0) million. IFRS 16 has affected the


net by SEK -3.7 million. The net of interest revenue and interest costs totaled SEK -3.3 (-0.9) million. Interest costs from bank loans were SEK -1.7 (-1.5) million and financial leases totaled SEK -4.2 (-0.3) million. The result after financial items increased to SEK 313.2 (303.6) million. Earnings after taxes were SEK 241.7 (231.9) million and the Group’s tax expense amounted to SEK -71.5 (-71.7) million. For more details, see Note 14 Taxes. Earnings per share increased to SEK 12.06 (11.62).

SEGMENTS

The Group’s operations are organized so that the corporate management mainly follows up on three busi-ness areas: Experience, Insight, and Solutions. Net sales for the segment Experience increased to-SEK 870.5 (780.1) million, for the segment Insight they were SEK 420.2 (426.6) million, and for the segment Solutions they increased to SEK 2,210.3 (2,037.9) million. The operating profit before amortization of intangible assets (EBITA) was SEK 68.8 (71.8) million for the seg-ment Experience, were SEK 38.8 (60.5) million for the segment Insight, and increased to SEK 261.0 (238.7) million for the segment Solutions. The EBITA margin was 7.9 (9.2) percent for the segment Experience, was 9.2 (14.2) percent for the segment Insight, and increased to 11.8 (11.7) percent for the segment Solutions. The Parent Company’s results and the company sales in the previous year are not included in segment reporting.

CASH FLOW

Cash flow from operating activities increased to SEK 305.0 (274.1) million, affected by a positive result deve-lopment, decreased accounts receivable and liabilities, and IFRS 16. Cash flow from investment activities totaled SEK -25.9 (-68.0) million, affected mainly by additional consideration paid. Additional consideration paid to settle acquisitions made in earlier years totaled SEK -10.0 (-56.4) million. Cash flow from financing activities totaled SEK -195.4 (-113.8) million, affected by dividends to non-controlling interests in subsidiaries and share-holders in Knowit AB and amortizations of loans. Total cash flow was SEK 83.7 (92.3) million.

FINANCIAL POSITION

Current assets, excluding cash and cash equivalents, increased to SEK 718.5 (714.0) million, of which in-creases in accounts receivable were SEK 23.1 (-34.2) million. Cash and cash equivalents increased to SEK 278.4 (194.6) million. The Group’s intangible assets amounted to SEK 983.4 (962.9) million, of which goodwill totaled SEK 957.4 (938.9) million, and other intangible assets totaled SEK 26.0 (24.0) million. Impairment tests carried out per segment show a high margin between reported value and fair value based on assessed future cash flow. At year-end, shareholders’ equity was SEK 1,241.1 (1,106.3) million, for an equity/asset ratio of 55.7 (57.5) percent. The change in equity is due to profit for the period totaling SEK 241.7 (231.9) million, dividends paid totaling SEK -122.9 (-99.1) million, translation differences totaling SEK -15.8 (-10.0) million, disposals for acquisition of non-controlling interest shares totaling SEK 0.2 (-6.9) million, and off-set issues connected to acquisitions totaling SEK 0.0 (20.3) million.

DIRECTORS’ REPORT

Interest-bearing liabilities totaled SEK 270.2 (106.3) million at year-end. Of this, bank loans totaled SEK 0.0 (8.8) million, a used overdraft facility totaled SEK 0,0 (0,0) million of a granted overdraft facility of SEK 85.0 (25.0) million, financial leases totaled SEK 203.5 (24.7) million and liabilities related to future consideration and synthetic options in subsidiaries totaled SEK 66.6 (72.8) million. The long-term part of interest-bearing liabilities totaled SEK 164.4 (79.5) million and the short-term part SEK 105.8 (26.8) million. During the year, long-term interest-bearing liabilities and short-term liabilities have both increased, primarily because of IFRS 16.

ACQUISITIONS, SALES AND START-UPS

Purchases of non-controlling interest shares in startups from previous years has been made in cash and totaled SEK 10.0 (56.4) million. In July 2019, assets and liabilities related to the ope-rations of 4front were acquired. With the new employees from 4front, Knowit strengthened its offering in CRM with 13 Salesforce specialists, reaching a total of around 25 employees in CRM in Sweden and Norway. Through the acquisition, Knowit gains increased knowledge in data-driven customer experiences.

OTHER INVESTMENTS

Aside from investments in company acquisitions, invest-ments in property, plant, and equipment totaled SEK 15.9 (12.2) million.

Parent CompanyThe Parent Company’s net sales totaled SEK 346.7 (302.1) million. The operating profit before amortization of intangible assets (EBITA) totaled SEK -52.8 (-55.4) million. The result after financial items was SEK 211.6 (74.1) million. The financial net increased to SEK 267.0 (130.2) million, affected mainly by group contributions, dividends from subsidiaries totaling SEK 263.5 (130.8) million and depreciation of shares in subsidiaries tota-ling SEK 0.0 (-4.4) million. The Parent Company’s cash and cash equivalents were SEK 273.5 (189.6) million. Shareholders’ equity increased to SEK 436.1 (372.9) million and untaxed reserves, mainly accrual funds, totaled SEK 111.8 (92.9) million. Interest-bearing liabilities decreased to SEK 8.3 (8.8) million, of which long-term liabilities amounted to SEK 7.9 (1.6) million, and short-term liabilities to SEK 0.4 (7.2) million.

EmployeesKnowit has increased the number of employees by 77 to 2,337 (2,260) as per December 31 2019. The average number of employees during the period was 2,213 (2,032). Employee turnover remains at a good level for the industry.

Share structureThe number of shares at year-end was 19,253,760 (19,253,760). No share issues have thus been performed during the year.


Board work, audit committee and nomination committee The work of the Board, the audit committee and the nomination committee are described in the corporate governance report on pages 57-60.

Compensation to senior executives GUIDELINES FOR 2019

The Board proposes the following guidelines for compen-sation to senior executives to the AGM. Remuneration consists of a base salary, a variable component in the form of annual variable compensation, pension and other benefits. The total remuneration package is designed to be marketable and competitive and reflect the employee’s areas of responsibility and the complexity of his/ her position. The annual variable compensation will be subject to a ceiling and never exceed the fixed component. The variable compensation is based on results in relation to established targets and is related to the employee’sperformance. The variable compensation is not pensio-nable. Pension benefits should normally consist of defined contribution pension solutions related to the employee's fixed salary. Other benefits, e.g., company cars and health-care plans, should be competitive compared with other players. If an employment contract is termi-nated by the Company, the maximum term of notice is one year. Severance pay ought not to occur. The Board may deviate from the guidelines under special circum-stances. The remuneration guidelines were followed in 2019.

GUIDELINES FOR 2020

At the AGM 2020, the Board will propose the following guidelinesThe guidelines pertain to salary and other remuneration to the CEO of Knowit AB and other senior executives in the Group (currently five people). The guidelines encom-pass remuneration to board members as an employee at or for performance of consultancy assignments for Knowit AB or any other Group company. The guidelines will be applied after being adopted by the AGM in 2020 to remunerations later agreed and to changes of remune-rations previously agreed. The guidelines do not apply to the AGM’s decisions on fees for board work, issues of shares in the Company, transfer of securities, or the right to acquires securities from the Company in the future. For a board member’s consultancy assignments for the Company or any other Group company, a fair market fee shall be set, taking into account the competence and experience of the board member, and the verifiable time spent performing the assignments. The guidelines promote the Group’s business strategy, to create long-term value through modern and creative solutions for digitalization and innovation, the Company’s long-term interests and sustainability through a fair and competitive remuneration, taking into account the respon-sibilities and complexity associated with the position.

DIRECTORS’ REPORT

Forms of remunerationRemuneration may be in the form of fixed cash salary, variable cash remuneration, pension benefits, and other benefits such as life insurance, health insurance, and car benefits. The AGM can also – beyond the scope of these guidelines – decide on share- or share price-rela-ted remunerations, for example. Variable cash remuneration services to promote the company’s business strategy, long-term interests and sustainability, and should be based on outcome in relation to the targets and connected to the employee’s performance. Fulfilment of criteria for payout should be measured by calendar year. The variable cash remune-ration may be at most 50 percent of the fixed cash salary for the same calendar year. The variable remuneration is on condition that the Company does not report a loss for the year to which the remuneration pertains. The variable cash remuneration is not to be grounds for pension benefits. Pension benefits, including health insurance, shall be fixed to premiums, and the pension premiums shall be at most 35 percent of the fixed annual cash salary. For other benefits, such as life insurance, health insu-rance, and car benefits, the premiums and other costs may be at most 10 percent of the fixed annual cash salary. In employment relations that are not subject to Swedish rules, adaptations can be made to pension benefits and other benefits, as required by mandatory rules or local practices. In this, the intentions of these guidelines should, in so far as possible, be observed.

Termination of employmentIn case of termination on the part of the Company, the period of notice for the CEO shall be at most 24 months, and for other senior executives, at most 12 months. The fixed cash salary during the period of notice and seve-rance pay may not, for the CEO, exceed a sum corres-ponding to the fixed cash salary for two years, and for other senior executives, may not exceed a sum corre-sponding to the fixed cash salary for one year. In case of termination to the part of the executive, the period of notice shall be at most six months, without a right to severance pay. In addition, remuneration may be paid out for an under-taking of non-competition after the end of employment. Such remuneration shall serve to compensate for loss of income and shall only be paid to the extent that the former executive does not have the right to severance pay. This remuneration shall be at most 60 percent of the fixed cash salary at the end of employment.

Criteria for variable cash remunerationThe variable cash remuneration shall be connected to predetermined and measurable criteria, which may be financial or non-financial quantitative or qualitative targets tailored for the person in question. The criteria shall be such that they promote the business strategy and long-term interests of the Company, including sustainability. When the measuring period for fulfilment of the criteria for variable cash remuneration has ended, the Board shall, based on the assessment of the remuneration committee, determine the extent to which the criteria were fulfilled. As regards financial targets, the assessment shall be based on the financial information made public by the Company.


Salaries and employment terms for Company employeesIn the drafting of these guidelines, the salaries and employment terms for Company employees have been taken into account, as information on the total remune-ration to employees, its components, its increase and rate of increase over time, have all been part of the decision support for the remuneration committee and Board in assessing the fairness of the guidelines.

Decision process used to determine, review and implement the guidelinesThe Board has instated a remuneration committee, whose tasks include preparing the Board’s decisions on sug-gested guidelines for remuneration to senior executives. These guidelines apply from the time of the AGM’s deci-sion in 2020 and until new guidelines are adopted by anAGM. The Board shall draft suggested new guidelines at least every four years, and make a suggestion on new guidelines for adoption no later than at the AGM in 2024. The remuneration committee shall review and assess the application of the guidelines and the remuneration structures and levels applied within the Company. The remuneration committee shall also review and evaluate any share-related programs for variable remuneration to the corporate management team. The Company does not currently have any such program. In the Board’s management of and decisions related to remuneration, the CEO and other members of the corporate manage-ment team shall not participate, to the extent they are affected by the matters in question.

Review of the guidelinesIf the Board has performed a review of the guidelines and suggests amendments thereto, the Board shall present a report on and explanation of all significant changes compared with then-current guidelines and an explanation on how any input from shareholders has been taken into account.

Deviations from the guidelinesThe Board may decide to temporarily entirely or partially deviate from the guidelines if there are particular reasons for this in an individual case and a deviation is necessary to protect the Company’s long-term interests, including its sustainability, or to ensure the financial security of the Company. In such case, the remuneration committee shall prepare for the decision on deviation from the guidelines.

Environmental impactBy their nature, Knowit’s operations have little impact on the environment. The Group has no production or sales of physical products; it is exclusively engaged in consulting. Environmental work is an integrated part of operations and each subsidiary head has responsibility locally for implement Knowit’s environmental policy and manage-ment system. As part of Knowit’s long-term environmental work, Knowit AB and some subsidiaries were certified in accordance with ISO 14001:2004 during 2010. Knowit continually strives to minimize the usage of energy and other natural resources. Knowit follows up on environmen-tal impact changes over time, with a focus on emission into the air caused by trips taken by Knowit employees as part of their duties. This is the only significant source of indirect emissions of greenhouse gases caused by the company’s operations. For more information, see Knowit’s sustainabili-ty report in this annual report on pages 40-51.

DIRECTORS’ REPORT

Discrimination and gender equalityKnowit strives for an inclusive work environment where all employees thrive and feel at home. Differing experiences and perspectives are an important part of successful client projects and therefore also for Knowit’s profitability. During the year, work with equality has continued with the aim of creating a more even gender distribution within the Group. The management team has initiated a project to create understanding and highlight gender issues, with the goal of creating a culture that is inclusive of both men and women. The work on equality also serves to increase the number of female executives and is a high priority within the Company. In 2019 the Company was named most equal company on the Stockholm Exchange by the AllBright Foundation. The proportion of female employees is now 28 (28) percent and the goal is 30 percent.

Research and developmentThe Group’s activities in research and development are very limited. The Group has, as in previous years, not expensed any significant sum for this in 2019.

Risk exposureThere are a number of factors that might affect Knowit’s operations, both indirectly and directly. Based on its vision and targets, Knowit identifies, assesses, and manages its risks. Continual evaluation of the operational risks is performed within day-to-day operations. An evaluation of strategic, compliance, and financial risks is presented by the management team to the Board annually. It is the Board that is in charge of internal control. Several group-wide policies have been adopted. The following describes the significant circumstances and risk factors that are particularly sig-nificant for Knowit’s operations and future development.

NEW COMPETITORS

The market for IT consultants, digital solutions, and ma-nagement consultants is fragmented and competitive. Knowit competes with a large number of other players, of various types and sizes, which apply differing business models. This risk is related to competitors or new play-ers entering the market, merging, or expanding, which might increase competition and potentially reduce Knowit’s market share. To manage this risk, the Company focuses on communication. This serves to increase awareness about the brand and connect emotional drivers to the brand. In addition, Knowit is placing effort in geographic expansion through ventures in Finland and Denmark. A well-developed and well-defined service offering in all business areas, and collaborations between them, also strengthens Knowit.

A WEAKENED ECONOMIC CLIMATE

Knowit is affected by general political, financial, and economic circumstances. Uncertainty regarding economic developments in the future can affect the purchasing habits of clients and have a significant negative impact on the demand for Knowit’s services, thus thus negatively affecting Knowit's revenue and gross margin. However,


DIRECTORS’ REPORT

the demand for Knowit’s services should likely remain strong in a weaker economic climate, although macroe-conomic changes may affect client behavior and demand negatively. Knowit manages this by always having a rele-vant offering, regardless of service category and busi-ness area. The Company has a broad mix of services in different price categories and with different project lengths. Knowit follows up on revenue and certain KPIs on a running basis, to be able to quickly act in case of changed behavior.

BRAND

The brand “Knowit” is one of the most important busi-ness assets. Succeeding in retaining the value associ-ated with the brand and protecting Knowit’s reputation are crucial to the Company’s future. Knowit’s reputation is important in relation to both current and future clients. The value of the brand might decrease as a result of bad publicity surrounding the brand, or complaints from clients. There is a risk that such events would lead to decreased revenue, profit, and growth opportunities. The Company manages this through continuous horizon scanning and professional communication. In addition, Knowit makes relevant investments in marketing.

GROWTH

Growth can be expected to entail significant demands on Knowit’s management and its complex operative and financial infrastructure. If Knowit does not succeed in managing the increase of operation size and complexity resulting from future growth, this could have a negative impact of the Company’s profit and financial position. To manage this, Knowit has three clearly positioned business areas with a clear strategy for growth. Further-more, the corporate management team has been strengt-hened and works with organizational development on the agenda. Further risks are described in Note 2 on pages 77-78 and in the sustainability report on pages 40-51.

Events after the end of the financial yearPROPOSED DISTRIBUTION OF EARNINGS

Parent Company, SEK

At the disposal of the AGM

Share premium reserve 471,289,982

Retained earnings after dividend -306,018,040

Result for the year 174,838,135

TOTAL 340,110,077

The Board of Directors and the President propose that the funds be treated as follows

Balance carried forward 340,110,077

TOTAL 340,110,077

The Board proposes that profit is carried forward in its entirety, thus retracting its proposal for dividends. The decision is made to prioritize the Company’s financial stability, given the uncertain situation regarding the covid-19 pandemic.

IMPACT OF THE COVID-19 PANDEMIC

After the end of the reporting period, the covid-19 pandemic has begun. In order to protect the health of employees and clients, the management team and Company adhere closely to the recommendations of the Public Health Agency of Sweden. Local deviations exist, if these are stricter than the aforementioned recommen-dations and justified for operational reasons. The covid-19 pandemic remains hard to predict, although it is clear that it has had far-reaching effects on society, with a large number of restrictions being implemented. These rest-rictions will likely have a significant impact on Knowit’s operations as well as on the Company’s services and demand for them. The Company has, at the time of publication of this annual report, not been able to make a reasoned assess-ment of the impacts on the operations and financial development. The management team and Board con-tinuously monitor the development of the operations in this context, in order to quickly and effectively manage the risks and challenges that may arise.


Corporate governance defines the decision-making systems through which shareholders, directly or indirectly, control the Company. The purpose of corporate gover-nance is to guarantee the Group’s commitments to its stakeholders, such as shareholders, clients, suppliers, creditors, society, and employees.

Legislation and regulationsCorporate governance at Knowit is based on both external and internal regulations. The external regulations include the Swedish Companies Act, the Nasdaq/OMX Stock-holm’s regulations for issuers, the Swedish Code for Corporate Governance (the “Code”), and other appli-cable Swedish statutes and regulations. The Company’s internal framework encompasses the articles of asso-ciation, the rules and guidelines for corporate gover-nance, the working order of the Board, the instruction to the CEO, and the policy documents adopted by the Company. The articles of association are the fundamen-tal governing document for the Company, setting out the type of operations that the Company shall perform, the size of the share capital and the number of shares, the shareholders’ rights to participate at meetings, election and dismissal of board members, and what should be discussed at the AGM. The Company observes the Code without deviation.

ShareholdersKnowit’s share is listed on Nasdaq Stockholm. At year-end, the share capital was SEK 19.3 million, divided over 19,253,760 shares with a quota value of SEK 1. There is one type of share in Knowit. The number of shareholders was 10,865. The proportion of foreign shareholders was 47 percent. At year-end, 33.2% was owned by financial, institutional shareholders. As far as the Company is aware, there is not direct or indirect ownership in the Company that represents at least one tenth of the votes for all shares in the Company. For further information on Knowit’s share and the ownership distribution, see the section on the share, pages 36-37.

General MeetingThe highest decision-making body is the General Meeting(GM), and it is here that shareholders can exercise their influence on the Company. The GM shall be held within six months of the end of the financial year. All sharehol-ders that are registered in the share register, and have given notice of their participation in due time, have the right to participate at the GM. Shareholders can vote for the total number of shares they hold and may be accom-panied by two advisors. Shareholders that cannot parti-cipate may be represented by a proxy. The GM covers matters including election of the Board, election of an auditor, if necessary, dividend, adoption of income statement and balance sheet, and discharge of liability for the board members and the CEO. Share-holders have the right to have matters raised at the GM if an appropriate notification has been made to the Com-pany in due time before notice to the GM is sent out.

Corporate governance report Information, including the notice and proposals for the AGM, as well as minutes from previous AGMs are available on Knowit’s website, www.knowit.eu.

Annual General Meeting 2019The AGM 2019 was held at Knowit’s offices on Klarabergs-gatan 60, Stockholm, Sweden, on April 26. During the meeting, shareholders were provided the opportunity to ask the Chairman of the Board and the President ques-tions, which were answered during the AGM. A total of 99 shareholders who were entitled to vote participated at Knowit’s AGM 2019. They represented 5,982,363 shares or 31 percent of the capital and votes. At the AGM, the shareholders determined the following among other things: • A dividend of SEK 5.80 per share, for a total of SEK 111.7 million.• That the Board shall consist of seven members elected by the AGM, with no deputies.• That Mats Olsson, Jon Risfelt, Camilla Monefeldt, Gunilla Asker, Stefan Gardefjord, Kia Orback Pettersson, and Peder Ramel be re-elected as Board Members until the time of the next AGM.• That Mats Olsson be re-elected as Chairman of the Board.• That remuneration to the Chairman shall be SEK 575,000 and SEK 235,000 to each of the Board Mem- bers elected by the AGM.• That remuneration to the Chairman of the audit committee shall be SEK 100,000 and SEK 50,000 to each member of the audit committee.• That remuneration to the Chairman of the remuneration committee shall be SEK 50,000 and SEK 35,000 to each member of the remuneration committee.• That the auditing firm KPMG AB be elected, with Helena Arvidsson Älgne appointed as auditor-in-charge.• A fee to the auditor in accordance with approved invoices.• Authorization for the Board to approve an increase of the share capital by at most SEK 500,000 through one or more issues of at most 500,000 shares, waiving shareholders’ preferential rights and/or with conditions regarding non-cash consideration and/or offsetting or otherwise with conditions, with the purpose of using said authorization for acquisitions of companies or operations.

Further, the shareholders at the AGM resolved upon guidelines for remuneration to senior executives as proposed by the Board, namely:

• The fee shall consist of a fixed salary, a variable component in the form of annual variable compensation, pension and other benefits.• The annual variable compensation is on condition that, among other things, Knowit not report a loss for the year the compensation pertains to.• The annual variable compensation will be subject to a ceiling and never exceed the fixed component. It is not pensionable. • Severance pay ought not to occur.


Annual General Meeting 2020The AGM 2020 will take place on April 28 2020 at 1 p.m. and will be held in the Company’s offices at Klarabergs-gatan 60, Stockholm. Information regarding the AGM is published on the website, www.knowit.eu.

Nomination committeeIn accordance with the resolution of the Annual General Meeting on April 26 2019, the nomination committee shall consist of one representative from each of Knowit’s three largest registered shareholders on September 30, and the Chairman of the Board, who shall convene the committee to its first meeting. The nomination committee for the AGM 2020 consists of:Lennart Francke, Swedbank Robur fonder, Malin Björkmo, SHB fonder, Jan Särlvik, Nordea Funds, and Mats Olsson, Chairman of the Board and convener. The duties of the nomination committee are to propose, during the AGM, the Chairman of the AGM, the Board members to be elec-ted by the AGM, the Chairman of the Board, Directors’ fees, auditors’ fees and the nomination committee’s pro-cedures. Shareholders who want to make proposals to the nomination committee can do so by email to [email protected]. No fees have been paid to the members of the nomi-nation committee for their work.

Board of DirectorsDuring 2019, the Board consisted of Gunilla Asker, Ste-fan Gardefjord, Camilla Monefeldt Kirstein, Mats Olsson (Chairman), Kia Orback Pettersson, Peder Ramel, and Jon Risfelt. According to Knowit’s Articles of Association, the Board of Directors shall consist of at least three and at most eight members, with a maximum of two deputies, elected each year at the AGM to serve until the end of the next AGM. There is no rule on the maximum time a Director may serve on the Board. In electing a Board, it is desirable that the Board as a whole has the knowledge and experience required for board work, as regards the societal, cultural and business conditions at hand in the regions and market segments where Knowit’s main operations are conducted. Under the Swedish Code of Corporate Governance, which Knowit observes, the Board should, given its operations, developmental stage and other conditions, have a suitable composition, characterized by diversity and breadth regarding the competence, experience and background of the elected members. Under the Code, the Company should strive for an even gender distribution. All assignments in Knowit’s Board are based on compet-ence, where the main purpose is to ensure and improve the efficiency of the Board as a whole. To achieve this, a broad set of characteristics and competencies are desirable, and it is explicitly stated that diversity, as regards, i.a., age, gender, geographic origin, education, and profes-sional experience, are important to take into account. All Directors are independent in relation to the Company and management, in accordance with the Stockholm StockExchange’s ongoing listing requirements and the Swedish Code of Corporate Governance. More information on the Board and management can be found on pages 38-39 of this annual report.

CORPORATE GOVERNANCE REPORT

Board workDuring the financial year, the board convened ten mee-tings at which the minutes were recorded. The board’s prioritized matters have been the Group’s risk-related work and sustainability efforts. At its scheduled meetings, the board discussed the fixed items on the agenda in compliance with its rules of procedure, such as business conditions, orders, forecasts, financial outcomes, liquidity, annual accounts and interim reports. Further, general questions regarding strategic orientation, structure,organizational changes, and acquisitions, have also been dealt with. One recurring matter has been the stream-lining of the Group, prioritized developmental projects, and achieving financial targets. Four of the board meetings were held prior to the release of interim reports. One meeting addressed the Company’s operational planning and a review of mission, vision, business concept and strategies. Two board meetings were devoted to the Group’s targets, forecast, and focus of operations. At the first board meeting of the year, the chairman of the audit committee reviews the year-end report from the auditors, with any comments from the review of the Group’s internal control and year-end report. An inaugural board meeting held after the AGM reached decisions on signatories, the Board’s rules of procedure, the instructions for the President, and a plan for scheduled board meetings during the year. The Board has held two extra board meetings during the year, to discuss decisions matters related to acquisitions. Prior to board meetings, the Directors have received written material regarding the issues to be discussed. Part of this material is the President’s written report on operations, which is also sent to the Board each month. The President and CEO of Knowit takes part in board meetings to submit reports. During 2019, the CFO served as secretary for the Board. When necessary, other offici-als have presented reports for the Board. These officials have been present during such reports. The Board decides on written rules of procedure for its own work as well as CEO instructions including repor-ting instructions for the CEO and President. The rules of procedure determine the work that is required over and above the Companies Act and Articles of Association.

The Chairman’s roleThe Chairman organizes and manages the Board’s work so that is conducted in accordance with the Swedish Companies Act, other legal acts and regulations, current regulations for listed companies (including the Code) and the Board’s internal governing documents. The Chair-man monitors operations through continuous contactwith the CEO and is in charge of the other Board Members. The Chairman ensures that the Board’s and CEO’s work is evaluated annually and that the nomination committee is informed about the results of the evaluation. The Chair-man represents the Company in ownership matters.

Evaluation of the Board’s workOnce a year, the Chairman of the Board initiates an evaluation of the Board’s work, by asking each Director to fill in a questionnaire. The questions relate to internal


climate, breadth of knowledge and how board work is carried out. The purpose is to find out how the Directors feel the Board is run and what actions can be taken to make board work more efficient. The results are presented to the Board by the Chairman. results of the evaluation are also presented to the nomination committee. The Board continuously evaluates the work of the President, by monitoring the development of the organi-zation and by studying the President’s written reports, sent to the Board on a monthly basis. Once a year, the President is evaluated at a meeting where he himself does not participate. The results of the evaluation are presented to the President by the Chairman of the Board.

Remuneration and remuneration committeeRemuneration to the Board of Directors is determined for the next year during the AGM. In accordance with the Swedish Code of Corporate Governance, the Board has established a remuneration committee, consisting of Mats Olsson, chairman, and Camilla Monefeldt Kirstein. The committee has met two times during the year and discussed remuneration, in-centive programs and guidelines for incentive programs, as well as employment conditions for the corporate management team. No share-based incentive programs are proposed to the AGM. The committee and Board propose that the guidelines on remuneration to executives shall include a basic salary, a variable performance remuneration, other benefits and pension. The total compensation package shall be market-based and competitive, reflecting the employee's area of responsibility and the complexity of the position. The President negotiates the remuneration and terms of employment for the employees on the corporate mana-gement team. The total compensation package shall be market-based and competitive, reflecting the employee's area of responsibility and the complexity of the position. For further information, see Note 9 in the annual report. Fees are paid to the auditors based on approved invoices.

Auditing and audit committee An auditor is elected by the AGM, for a term running up until the end of the AGM during the financial year after the election. The auditor is assigned to review Knowit’s annual report, accounting records and the administra-tion performed by the Board and President. The auditor delivers a report to the AGM. Shareholders have the op-portunity to ask the auditor questions during the AGM. The AGM 2019 elected the accounting firm of KPMG AB as auditor until the end of the AGM 2020. The auditor-in-charge is Helena Arvidsson Älgne. KPMG AB has conducted the audit of Knowit AB and its subsidiaries. During the year, the auditors have, in addition to revie-wing the Company’s books, performed brief audits of the Company’s third interim report. The auditors have participated at all of the audit committee’s meetings and twice presented reports on significant observationsin connection with the third interim report and in connec-tion with the year-end report. Following the review of the annual report, the auditors present an audit report.


The auditors’ written reports have been distributed to the entire Board and the chairman of the audit committee has presented significant items from the reports. The auditors also report a summary of the review directly to the Board at one occasion during the year. The Board has instated an audit committee, which con-sists of Jon Risfelt, Chairman, and Kia Orback Pettersson. The audit committee has held four meetings during the year and has discussed, among other things, internal governance and review, the auditors’ review and repor-ting, internal financial reporting, depreciation tests of goodwill, valuation of shares in subsidiaries, the status of implementation of a new economy system, and made an inventory of company risks.

The corporate management teamThe CEO has designated a corporate management team. During 2019, the corporate management team has con-sisted of the Group’s CEO, the CFO, the CCO, and the EVPs of the business areas Experience, Insight, and Solutions. The corporate management team meets every four-teenth day, on average, but also works very closely, with nearly daily contact. During the year, matters of an operative and strategic matter have been managed continually. When necessary, larger meetings have been held where senior executives from Knowit’s subsidiaries and the heads of the Group departments for administra-tion, IT, and communication have also participated. In-formation on the CEO and corporate management team can be found on page 39 in the annual report.

Internal control and risk assessment regarding financial reportingThe Board is charged with ensuring the Company’s internal control and review and that financial reporting follows the legislation and rules applicable to compa-nies traded on NASDAQ OMX Nordic in Stockholm. In addition, there are internal instructions, routines, sys-tems and a system for delegating roles and responsibi-lity, to ensure good internal control.

Control environmentKnowit’s operations are organized in independent sub-sidiaries. Each subsidiary appoints a board, with a chair-man in charge of the Company’s governance, develop-ment and management. The CEO of the subsidiary is in charge of day-to-day operations and operative mana-gement is in line with group-wide policies, the articles of association, instructions to the board, and applicable legislation. The subsidiaries are grouped into three business areas, with an EVP in each business area, who is usually the chairman or a board member in the associated subsidiaries. The EVPs govern and develop the subsidiaries in their area, in some cases with the help of a management team for the area. The EVPS are part of Knowit’s corporate management team. Knowit’s decentralized organization, with many subsidiaries, entails demanding requirements on the


Board’s and management teams of subsidiaries, as well as their competence, common values and ethics. Further, this requires understanding and respect for delegation of roles. This also requires that the division of responsibility within and between the corporate ma-nagement team, the management team of the business area, and the management teams and boards of the subsidiaries is well-defined and that the communication between all these units works well, as the internal con-trol is strongly connected to each respective subsidiary. Rules of procedure and authorization instructions for subsidiary boards and CEO instructions for subsidiaries are reviewed and determined at the first constitutive meeting in each subsidiary. Instructions on governing documents, accounting principles, guidelines and routi-nes are regularly distributed to affected employees. The authorization instructions in Knowit AB and all its subsidiaries regulate the decision process for important contracts, larger investments and other significant deci-sions, thus becoming an important part of the Group’s control environment.

Risk managementKnowit’s operations are affected by a number of risk factors that cannot be fully controlled by the Company. The Board has a work agenda determined at the con-stituting meeting. It provides the basis for the Board’s work and for effective handling of the risks to which the Company is exposed. For a more detailed description of financial and share-related risks, see Note 2 in the annual report. The Board is responsible for identifying and managing significant financial risks and risks of errors in the finan-cial reports. The focus in on significant income and balance items, transactions with high complexity and/or where the effects of any errors could be significant.Knowit’s CFO annually reviews the Company’s minimum requirements for internal control and routines for financial reporting. These minimum requirements serve to prevent, uncover and correct errors and deviations in the financial reporting. Reviews include, i.a., approval of significant agreements, follow-up of risk exposure, checking account balances and analyzing results.

Information and communicationFinancial reporting is governed by Knowit’s financial manual, which is updated annually. Economists within the Group meet regularly to discuss matters related to financial reporting.


The Group’s financial position is discussed at each board meeting and the Board gets extensive reports from the CEO on a monthly basis, regarding the financial position and development of operations.

Follow-upThe subsidiaries’ observance of Knowit’s minimum requi-rements of internal review and processes for financial reporting is monitored continuously by the CFO and/or the head of accounting during visits to subsidiaries, which are selected based on particular needs and timed depending on internal reviews already performed. Obser-vations made through internal control are reported to the audit committee. The Group’s subsidiaries report income and balance sheets in a monthly basis, as well as relevant key figures. The monthly reports of the subsidiaries and the conso-lidated monthly report of the Group are analyzed by corporate management.

Internal reviewGiven the Group’s structure and processes for internal review of financial reporting, the Board has not asses-sed it as appropriate to instate a special function for internal review.

InformationThe Company’s information releases follow the information policy for the Knowit Group established by the Board. The policy states what should be communicated, by whom and in what manner – to ensure that both exter-nal and internal information is correct and complete. Knowit provides information to shareholders and other stakeholders through published press releases, interim and year-end reports, the annual report and the Com-pany’s Swedish website (www.knowit.se). The press releases, financial reports and presentation materials for the past few years are all published on the website, along with information on corporate governance. Interim reports, annual reports and press releases are trans-lated into English and published on the Company’s international website (www.knowit.eu).


SEK M 2019 2018 2017 2016 2015

Net sales and profit

Net sales 3,335.1 3,083.3 2,733.5 2,426.2 2,205.6

Operating profit before amortization of intangible assets (EBITA) 319.2 315.1 281.8 211.6 163.9

Profit after financial items 313.2 303.6 266.7 191.8 116.0

Profit margin, % 8.2 12.8 12.7 10.0 8.6

EBITA margin, % 9.6 10.2 10.3 8.7 7.4

Sales growth, % 9.4 9.8 9.8 7.9 5.3

Capital structure DEC 31, 2019 DEC 31, 2018 DEC 31, 2017 DEC 31, 2016 DEC 31, 2015

Intangible assets 983.4 963.0 921.4 915.7 898.5

Other fixed assets 245.9 51.0 51.8 53.6 52.8

Current assets 996.9 908.6 820.8 642.3 524.0

TOTAL ASSETS 2,226.2 1,922.6 1,794.0 1,611.6 1,475.3

Equity attributable to shareholders of the Parent Company 1,225.1 1,091.4 938.7 835.0 738.9

Non-controlling interests 16.0 14.9 12.5 9.3 13.3

TOTAL EQUITY 1,241.1 1,106.3 951.2 844.3 752.2

Interest-bearing long-term liabilities 164.4 79.5 55.0 101.1 81.6

Other long-term liabilities 50.7 45.0 39.0 34.8 36.2

Interest-bearing current liabilities 105.8 26.8 95.2 62.7 138.9

Other current liabilities 664.2 665.0 653.6 568.7 466.4

TOTAL EQUITY AND LIABILITIES 2,226.2 1,922.6 1,794.0 1,611.6 1,475.3

Equity/assets ratio, % 55.7 57.5 53.0 52.4 51.0

Investments in goodwill and other surplus values 8.0 6.1 7.3 – 10.7

Investments in property, plant and equipment 7.9 6.1 13.4 4.8 12.7

Cash flow from operating activities 305.0 274.1 196.9 193.1 68.5

Net cash and cash equivalents 8.2 88.3 -45.0 -119.0 -213.8

Capital employed 1,511.3 1,212.6 1,102.6 1,008.1 972.7

Acid test ratio, multiple 1.3 1.3 1.1 1.0 0.9

Net debt/equity ratio, multiple 0.0 -0.1 0.0 0.1 0.3

Profitability

Return on total capital, % 15.8 16.7 16.2 13.2 9.0

Return on equity, % 20.6 22.5 22.5 18.1 11.9

Return on capital employed, % 24.1 26.8 26.2 20.5 13.2

Employees

Average number of employees 2,213 2,032 1,864 1,737 1,769

Net sales per employee 1.5 1.5 1.5 1.4 1.2

Value-added per employee 1.1 1.1 1.1 1.0 0.9

Profit after financial income/expense per employee 0.1 0.1 0.1 0.1 0.1

Number of employees at year-end 2,337 2,260 2,065 1,867 1,802 Definitions of key figures can be found on page 101.

Financial review


Consolidated income statement

Consolidated total results

SEK 000s Note 2019 2018

Net sales 3,4,5 3,335,145 3,083,304

TOTAL OPERATING INCOME 3,335,145 3,083,304

Operating expenses

Purchased goods and services -556,803 -512,288

Other external costs 7 -171,737 -226,870

Staff costs 8,9 -2,215,079 -2,017,075

Depreciation and amortization

Intangible assets 10 -6,085 -6,098

Property, plant, and equipment 11 -73,304 -11,936

Share in interest companies’ results 12 955 -68

TOTAL OPERATING EXPENSES -3,022,053 -2,774,335

OPERATING RESULT 313,092 308,969

Result from financial items 13

Financial income 15,518 979

Financial expenses -15,419 -6,298

RESULT AFTER FINANCIAL ITEMS 313,191 303,650

Income taxes 14 -71,452 -71,705

PROFIT FOR THE YEAR 241,739 231,945

Profit for the year attributable to shareholders of the Parent Company 232,185 223,025

Profit for the year attributable to non-controlling interests’ holdings 9,554 8,920

Earnings per share 28

Earnings per share, basic, SEK 12.06 11.62

Earnings per share, diluted, SEK 12.06 11.62

SEK 000s 2019 2018

Profit for the year 241,739 231,945

Items that may be reclassified subsequently to profit or loss

Hedging of net investments – -486

Tax effect, hedging of net investments – 107

This year’s exchange rate differences for foreign operations 15,846 9,929

OTHER TOTAL RESULTS FOR THE YEAR, NET AFTER TAX 15,846 9,550

TOTAL RESULTS FOR THE YEAR 257,585 241,495

Total results for the period attributable to shareholders in Parent Company 247,801 232,575

Total results for the period attributable to non-controlling interests 9,784 8,920


Consolidated balance sheetSEK 000s Note 31 Dec, 2019 31 Dec, 2018

ASSETS

Non-current assets

Intangible assets 10

Goodwill 957,388 938,991

Other intangible assets 25,995 23,996

Property, plant and equipment 11

Equipment 21,399 42,523

Usufruct assets 32 212,895 –

Financial non-current assets

Holdings in interest companies 12 6,968 4,111

Other long-term receivables 16 1,722 1,554

Other long-term securities holdings 311 301

Deferred taxes 14 2,634 2,555

TOTAL NON-CURRENT ASSETS 1,229,312 1,014,031

Current assets

Current receivables

Accounts receivable 17 575,353 552,261

Other receivables 83,495 87,522

Assets in disposal groups held for sale 18 59,662 74,184

TOTAL CURRENT RECEIVABLES 718,510 713,967

Cash and bank balances 278,372 194,609

TOTAL CURRENT ASSETS 996,882 908,576

TOTAL ASSETS 2,226,194 1,922,607

SEK 000s Note 31 Dec, 2019 31 Dec, 2018

EQUITY AND LIABILITIES

Equity 20,33

Share capital 19,254 19,254

Other paid-in capital 591,791 591,791

Reserves -17,337 -32,952

Recognized profits, including profit for the year 631,358 513,288

EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY 1,225,066 1,091,381 Non-controlling interests 16,032 14,908

TOTAL EQUITY 1,241,098 1,106,289

Long-term liabilities 21

Interest-bearing long-term liabilities 23 164,407 79,513

Deferred taxes 14 48,240 44,970

Long-term provisions 21 2,472 –

TOTAL LONG-TERM LIABILITIES 215,119 124,483

Current liabilities

Interest-bearing current liabilities 23 105,799 26,776

Accounts payable 110,795 115,394

Current tax liabilities 14 48,372 61,181

Other liabilities 24 206,211 180,820

Accrued expenses and deferred income 25 298,800 307,664

TOTAL CURRENT LIABILITIES 769,977 691,835 TOTAL EQUITY AND LIABILITIES 2,226,194 1,922,607


Consolidated cash flow analysis

SEK 000s Note 2019 2018

Operating activities 26

Profit before taxes 313,191 303,650

Adjustment for non-cash items

Depreciation and amortization 10,11 79,389 18,034

Capital gain from sale of company – -60

Changed provisions 2,503 -273

From holdings reported with the equity method 12 -2,746 -30

Change interest-bearing liabilities through income statement 13 -4,883 –

Unrealized exchange rate differences 8,623 -2,601

Paid taxes -82,948 -67,853

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING CAPITAL 313,129 250,867

Change in working capital

Change in operating receivables 2,136 13,194

Change in operating liabilities -10,230 10,047

CHANGE IN WORKING CAPITAL INCL. SHORT-TERM INVESTMENTS -8,094 23,241

CASH FLOW FROM OPERATING ACTIVITIES 305,035 274,108

Investing activities

Acquisition of businesses 31 -10,524 -54,194

Sale of businesses 519 -1,615

Acquisition of intangible assets 10 -8,029 -6,090

Acquisition of property, plant and equipment 11 -7,899 -6,148

CASH FLOW FROM INVESTING ACTIVITIES -25,933 -68,047

Financing activities 26

Amortization on loans -72,436 -14,694

Dividend payment -122,939 -99,088

CASH FLOW FROM FINANCING ACTIVITIES -195,375 -113,782

Cash flow for the year 83,727 92,279

Cash and cash equivalents, January 1 194,609 107,296

Translation differences in cash and cash equivalents 36 -4,966

CASH AND CASH EQUIVALENTS, DECEMBER 31 278,372 194,609


Statement of changes in equity, Group

Other Non- Share paid-in Recognized controlling Total SEK 000s capital capital Reserves profits Total interest equity

Opening balance, Jan 1, 2018 19,139 571,595 -42,494 390,432 938,672 12,530 951,202

RESULTS FOR THE YEAR 223,025 223,025 8,920 231,945

Other total results

Currency hedge accounting (Note 25) -486 -486 -486

Deferred tax costs, currency hedge accounting 107 107 107

Exchange rate differences 9,921 9,921 115 10,036

SUM OTHER TOTAL RESULTS 9,542 9,542 115 9,657

SUM TOTAL RESULTS 9,542 223,025 232,567 9,035 241,602

Transactions with shareholders

Dividend payment -92,537 -92,537 -6,551 -99,088

Altered liabilities, acquisition of non-controlling interests’ holdings -6,915 -6,915 -6,915

New issues for acquisitions 33 4,967 5,000 5,000

Off-set issue to settle synthetic options 28 5,312 5,340 5,340

New issues for acquisitions of non-controlling interests' holdings 54 9,917 9,971 9,971

Non-controlling interests’ holdings -717 -717 -106 -823

SUM TRANSACTIONS WITH SHAREHOLDERS 115 20,196 – -100,169 -79,858 -6,657 -86,515

Equity, Dec 31, 2018 19,254 591,791 -32,952 513,288 1,091,381 14,908 1,106,289

Opening balance, Jan 1, 2019 19,254 591,791 -32,952 513,288 1,091,381 14,908 1,106,289

RESULTS FOR THE YEAR 232,185 232,185 9,554 241,739

Other total results

Translation differences 15,615 15,615 230 15,845

SUM OTHER TOTAL RESULTS 15,615 15,615 230 15,845

SUM TOTAL RESULTS 15,615 232,185 247,800 9,784 257,584

Transactions with shareholders

Dividend payment -114,279 -114,279 -8,660 -122,939

Altered liabilities, acquisition of non-controlling interests’ holdings1) 164 164 164

SUM TRANSACTIONS WITH SHAREHOLDERS – – -114,115 -114,115 -8,660 -122,775

EQUITY, DEC 31, 2019 19,254 591,791 -17,337 631,358 1,225,066 16,032 1,241,098 1) Pertains to altered assessments regarding agreed-upon future consideration2) Refers to change in non-controlling interest in connection with offset issues

ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT COMPANY


Income statement Parent Company

Total results Parent Company

SEK 000s Note 2019 2018

Net sales 3,6 346,711 302,145

Work performed by the Company for its own use and capitalized 6,401 5,420

TOTAL OPERATING INCOME 353,112 307,565

Operating expenses 6

Purchased goods and services -297,986 -254,722

Other external costs 7 -68,177 -68,581

Staff costs 8,9 -38,580 -38,363

Depreciation of intangible assets 10 -2,576 -653

Depreciation of property, plant, and equipment 11 -1,193 -1,295

TOTAL OPERATING EXPENSES -408,512 -363,614

OPERATING LOSS -55,400 -56,049

Result from financial items 13

Result from shares in Group companies 268,703 129,588

Other interest income and similar profit/loss items 3,707 2,740

Interest expenses and similar profit/loss items -5,399 -2,167

RESULT AFTER FINANCIAL ITEMS 211,611 74,112

Appropriations 30 -18,901 -14,416

Income taxes 14 -17,872 -12,912

RESULT FOR THE YEAR 174,838 46,784

SEK 000s 2019 2018

Results for the year 174,838 46,784

OTHER TOTAL RESULTS FOR THE PERIOD, NET AFTER TAXES – –

SUM, TOTAL RESULTS FOR THE PERIOD 174,838 46,784


Balance sheet Parent CompanySEK 000s Note Dec 31, 2019 Dec 31, 2018

ASSETS

Non-current assets

Intangible assets 10

Other intangible assets 16,535 12,711

Property, plant and equipment 11

Equipment 3,374 4,144

Financial non-current assets

Shares in Group companies 15 812,380 817,657

Deferred tax assets 408 –

Non-current receivables from Group companies 59,800 54,082

Other non-current receivables 1,911 –

TOTAL NON-CURRENT ASSETS 894,408 888,594

Current assets

Current receivables

Accounts receivable 64,871 70,972

Receivables from Group companies 15 22,557 19,917

Tax claims – –

Other receivables 1,032 3,694

Prepaid expenses and accrued income 18 9,321 8,202

TOTAL CURRENT ASSETS 97,781 102,785

Cash and bank balances 273,498 189,629

TOTAL CURRENT RECEIVABLES 371,279 292,414

TOTAL ASSETS 1,265,687 1,181,008

SEK 000s Note Dec 31, 2019 Dec 31, 2018

EQUITY AND LIABILITIES

Equity 20,33

Restricted equity

Share capital 19,254 19,254

Statutory reserve 68,038 68,038

Fund for development costs 8,697 11,273

TOTAL RESTRICTED EQUITY 95,989 98,565 Non-restricted equity

Share premium reserve 471,290 471,290

Balanced result -306,018 -243,724

Result for the year 174,838 46,784

TOTAL NON-RESTRICTED EQUITY 340,110 274,350

TOTAL EQUITY 436,099 372,915

Untaxed reserves 30 111,779 92,878

Provisions 21 2,388 –

Long-term liabilities 21

Interest-bearing long-term liabilities 7,880 1,600

TOTAL LONG-TERM LIABILITIES 7,880 1,600

Current liabilities

Interest-bearing current liabilities 428 7,200

Accounts payable 4,128 7,246

Liabilities to Group companies 692,871 676,803

Current tax liabilities 1,839 7,081

Other liabilities 24 1,451 1,476

Advances from clients 25 2,383 592

Accrued expenses and deferred income 25 4,441 13,217

TOTAL CURRENT LIABILITIES 707,541 713,615 TOTAL EQUITY AND LIABILITIES 1,265,687 1,181,008


Cash flow analysis Parent CompanySEK 000s Note 2019 2018

Operating activities

Profit before taxes 211,611 74,112

Adjustment for non-cash items

Depreciation and amortization 10,11 3,769 1,948

Group contributions received 13 -157,250 -127,325

Dividends from subsidiaries – -2,000

Amortization receivables from subsidiaries 21 2,388 –

Result of sale of subsidiaries – -2,026

Capital gains, inventory 11 11 –

Write-down of shares in Group companies – 2,600

Exchange rate losses 13 -1,403 -979

Paid taxes -23,155 -20,760

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING CAPITAL 35,971 -74,430

Change in working capital

Change in operating receivables 137,254 124,184

Change in operating liabilities 42,703 186,537

CHANGE IN WORKING CAPITAL 179,957 310,721

CASH FLOW FROM OPERATING ACTIVITIES 215,928 236,291

Investing activities

Acquisition of shares in Group companies -4,771 -55,796

Sale of subsidiary – 25,268

Acquisition of intangible assets 10 -6,401 -6,090

Acquisition of property, plant and equipment 11 -433 -629

Change other financial assets – -273

CASH FLOW FROM INVESTING ACTIVITIES -11,605 -37,520

Financing activities

Amortization of loans -8,800 -14,694

Raising of loans – –

Dividend payments -111,654 -90,911

CASH FLOW FROM FINANCING ACTIVITIES -120,454 -105,605

Cash flow for the year 83,869 93,166

Cash and cash equivalents, January 1 189,629 96,463

CASH AND CASH EQUIVALENTS, DECEMBER 31 273,498 189,629


Statement of changes in equityParent Company

Fund for Share Statutory development Share Accumulated Total SEK 000s capital reserve costs premium profit or loss equity

Opening balance, Jan 1, 2018 19,139 68,038 7,274 451,094 -148,814 396,731

RESULTS FOR THE YEAR 46,784 46,784

Redistribution to fund for development expenditure 4,652 -4,652 –

Dissolution of fund for development expenditure -653 653 –

Other total results

SUM OTHER TOTAL RESULTS – –

SUM TOTAL RESULTS 3,999 42,785 46,784

Transactions with Company shareholders

New issues for acquisitions 33 4,967 5,000

Offset issues for redemption of synthetic options 28 5,312 5,340

Offset issues for acquisitions of non-controlling interests' holdings 54 9,917 9,971


TOTAL TRANSACTIONS WITH COMPANY SHAREHOLDERS 115 20,196 -90,911 -70,600

EQUITY, DEC 31, 2018 19,254 68,038 11,273 471,290 -196,940 372,915

Opening balance, Jan 1, 2019 19,254 68,038 11,273 471,290 -196,940 372,915

RESULTS FOR THE YEAR 174,838 174,838

Dissolution of fund for development expenditure -2,576 2,576 –

Other total results

SUM OTHER TOTAL RESULTS

SUM TOTAL RESULTS -2,576 177,414 174,838

Transactions with Company shareholders

New issues for acquisitions –

Offset issues for redemption of synthetic options –

Offset issues for acquisitions of non-controlling interests' holdings –


TOTAL TRANSACTIONS WITH COMPANY SHAREHOLDERS -111,654 -111,654

EQUITY, DEC 31, 2019 19,254 68,038 8,697 471,290 -131,180 436,099

RESTRICTED EQUITY NON-RESTRICTED EQUITY


-

Knowit applies IFRS 16 as of January 1 2019. The stan-dard has mainly affected Knowit’s reporting of the Group’s operational leasing agreements, such as rental agree-ments for offices and the like. The standard provides for various transitional methods and Knowit has chosen not to apply the standard retroactively. Instead, Knowit will apply IFRS 16 as of January 1 2019. The transitional rule selected means that the financial reports for 2018 are not recalculated. Formerly, the Group classified leasing agreements as operational or financial leasing contracts, depending on if the leasing contract transferred significant risks and benefits that ownership of the underlying asset entails tothe Group. Operational leasing contracts were not recog-nized as assets and liabilities in the Group’s balance sheet and a cost for leasing or rental was recognized on a straight-line basis for the leasing period of the con-tract. Under IFRS 16, the Group reports a usufruct asset and a leasing liability for most leasing contracts, even those formerly classified as operational, and depreciation and interest costs are recognized in the Group’s income sta-tement and report on other total results. The Group has chosen not to report usufruct assets and leasing liabili-ties for leasing contracts with a remaining leasing period of 12 months or less, or underlying assets of lesser value (value of underlying asset less than SEK 50,000). Leasing fees for these leasing contracts are reported as a cost linearly throughout the leasing period. The usufruct asset is initially valued at the cost of acqui-sition, plus leasing fees paid at or before the start date plus any initial direct fees. The usufruct asset is then written off linearly, from the start date until the end of the use period of the asset or the end of the leasing period, whichever comes first. The leasing liability is initially valued at the present value of the future leasing fees that have not been paid at the start date. The leasing fees are discounted at the marginal borrowing rate of the leasing contract. If this interest rate cannot easily be determined, Knowit’s marginal borrowing rate is used. The leasing liability is then valued at amortized cost with the effective interest method. The leasing liability is reva-lued if the future leasing fees are changed as a result of changes in an index or a rate. When the leasing liability is revalued in this way, a corresponding adjustment is made to the reported value of the usufruct asset. For the segments, the effects of IFRS 16 are reported as parent company and group adjustments, see the segment reporting for the Group.

EFFECTS ON THE FINANCIAL REPORTS

The opening effect on the balance sheet of the Group as per January 1 2019 is that a leasing asset (usufruct) tota-ling SEK 229 million and a leasing liability totaling SEK 216 million are added, of which SEK 13 million have been reclassified from prepaid expenses. To estimate the effects of IFRS 16, the Group has used a weighted average of the marginal interest rate as the discount rate. The marginal interest rate applied is 1.7 percent. For comparative figures if IAS 17 had been applied in 2019 as well, see Note 32.

NOTE 1: Accounting and valuation principlesGeneral informationKnowit AB (publ.) with the corporate registration number 556391-0354 is headquartered in Stockholm. The Com-pany’s address is Klarabergsgatan 60, 103 68 Stockholm. The operations of the Company and its subsidiaries are described further below. This annual and consolidated report was on April 6 2020 approved for publication by the Board. The consolidated income statement and balance sheet and the Parent Com-pany’s income statement and balance sheet are subject to approval by the AGM on April 28 2020.

Compliance with standards and lawsThe consolidated accounts have been prepared in accordance with the Swedish Annual Accounts Act, the Swedish Financial Accounting Council’s supplementary recommendation for consolidated accounting RFR 1, International Financial Reporting Standards (IFRS) and interpretations from IFRIC as adopted by the EU. The consolidated accounts have been prepared based on the cost method, excepting as regards revaluation of financial assets to be sold, financial assets and liabilities (including derivative instruments), valued at fair value in the income statement. The Parent Company has prepared the annual report in accordance with the Swedish Annual Accounts Act and the Swedish Financial Accounting Council’s recom-mendation RFR. The Parent Company applies the same accounting principles as the Group, except in the cases specified in the section “Parent Company’s accounting principles”. Existing deviations are due to limitations in the possibility of applying IFRS to the Parent Company, following from the Swedish Annual Accounts Act and the Pension Obligations Vesting Act and in some cases for tax reasons. These principles have been applied continuously for all reported years, unless otherwise stated.

Changes in accounting principles and informationNEW AND REVISED STANDARDS APPLIED BY THE GROUP

IFRS 16 “Leases” replaces IAS 17 “Leases” and the associated interpretations IFRIC 4, SIC-15, and SIC 27. The standard requires that all assets and liabilities attri-butable to all leasing contracts, with some exceptions, are presented in the balance sheet.

Supplementaryinformation and notes


NOTE 1: continuedSEK, millions January 1, 2019

Operational leasing undertakings as per December 31, 2018, as disclosed in annual report 201

Discounted by the marginal interest rate as per January 1, 2019 197

Plus financial leasing liabilities recognized as per December 31, 2018 25

Less short-term leasing contracts and leases of low value -6

Leasing liabilities as per Jan 1, 2019 216

NEW STANDARDS AND INTERPRETATIONS NOT YET APPLIED BY THE GROUP

A number of new standards and interpretations enter into force for financial years starting after January 1 2020 and have not been applied to this financial report. None of them is expected to have any significant impact on the Group’s financial reports.

Group companiesGroup companies are all enterprises over which the Group has the power to govern the financial and operating policiesgenerally accompanying a shareholding of more than one-half of the voting rights. Group companies are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The purchase accounting method is used to report acquisitions of Group companies. The cost of an acquired company consists of the fair value of the assets submitted as reimbursement, issued equity instruments and liabilities that arise or are assumed on the closing date, plus expenses directly attributable to the acquisition, as they arise. Iden-tifiable acquired assets, assumed liabilities and contingent liabilities associated with an acquisition are initially valued at fair value on the date of acquisition. For each acquisition, the Group determines if all non-controlling interests in the acquired company are to be reported at fair value or as the proportional share of the holdings in the acquired company’s net assets. The surplus consisting of the difference between the acquisition cost and fair value of the Group’s share of identifiable acquired net assets, debts and contingent liabilities is reported as goodwill and mainly consists of expected synergy effects. Transactions and balance sheet items within the Group aswell as unrealized profit and loss on transactions between Group companies are eliminated. Accounting principles in subsidiaries have in some cases been altered, to guarantee a consistent application of Group principles.

TRANSACTIONS WITH NON-CONTROLLING INTERESTS

The Group treats transactions with non-controlling inte-rests as transactions with Group shareholders. Upon acquisition of non-controlling interests’ shares, the dif-ference between the consideration paid and the actual

acquired share of the accounted value of the subsidia-ries net assets is recognized as profit or loss. This profit or loss is recognized as a change in equity.

Translation of foreign Group companies The financial statements of all foreign Group companies are translated to Swedish kronor using the current method. This means that the assets and liabilities of foreign sub-sidiaries are translated at year-end rate, while all income statement items are translated at the average rate for the year. Translation differences are taken directly to consolidated equity.

Translation of foreign currencyFUNCTIONAL CURRENCY AND REPORTING CURRENCY

Items included in the financial reports of the various units of the Group are valued in the currency used in the economic environment in which each company principally operates (functional currency). In the consolidated accounts, SEK is used, which is the Parent Company’s functional and reporting currency.

TRANSACTIONS AND BALANCE SHEET ITEMS

Transactions in foreign currencies are translated into the functional currency according to the exchange rates applicable on the transaction date. Exchange-rate gains and losses arising through the payment of such transactions and on the translation of monetary assets and liabilities in foreign currencies to balance sheet date exchange rates are recognized through profit or loss. The exception is where the transactions represent hedges that meet the requirements for hedge accoun-ting of cash flows or net investments, where gains and losses are recognized in equity.

Revenue recognitionKnowit recognizes revenue in accordance with IFRS 15. The Group’s revenue comes from consultancy services performed and program licenses sold. Most of the Group’s revenue falls into the category Fee revenue. Revenue from service contracts are reported in the period that the services are performed or when a project is finalized. If there are different performance commitments in a contract, the transaction price is distributed across the transaction price for the different performance commit-ments. In the cases where the transaction price contains variable remuneration, these are estimated and taken into account in the transaction price to the degree to which they are highly likely not to be required to be repaid.

CURRENT ACCOUNT AGREEMENTS

Essentially all invoicing is based on current account agreements with the client. Projects are recognized as revenue when work has been carried out and the client has taken control of and approved delivery.

FIXED PRICE AGREEMENTS

Revenue from fixed price agreements is recognized based on the proportion that is completed and that the client has taken control of, using labor hours and production


NOTE 1: continuedcosts incurred as measures of progress. Production costs include all direct material and work costs and indirect costs related to performance of the contract in question. Revenue not yet invoiced to clients for fixed price projects is recognized as accrued income in the balance sheet. If the invoiced amount exceeds the total completed project value, additional invoicing is reported as advances from clients. Revenue from maintenance contracts is deferred and recognized pro rata over the contractual periods during which services are performed. An estimated loss is recognized in accordance with IAS 37.

Licensing revenueRevenue from licensing refers to licensing revenue for both products developed in-house and externally procu-red licenses where the costs are invoiced from clients. The licenses can be used by the client without modifi-cation or further work, meaning that the revenue can be recognized as profit at the time of sale.

Leasing agreements 2018 FEES FOR OPERATING LEASES

Fees for operating leases are recognized in the income statement on a straight-line basis over the term of the lease. Benefits received in connection with a lease are recognized in the income statement as a reduction in leasing fees on a straight-line basis over the term of the leasing agreement.

FEES FOR FINANCE LEASES

Minimum lease fees are divided between interest expenses and amortization of the outstanding liability. Interest expenses are distributed over the term of the lease so that every accounting period is charged with an amount corresponding to a fixed rate of interest for the liability recognized during each period.

Financial income and costsFinancial income and costs in the Group consist of interest income, interest costs, costs for synthetic options and exchange rate differences. In the Parent Company, results from shares in subsidiaries are added. Interest income and interest costs are recognized proportionately over time using the effective interest method. The effective in-terest rate is the interest rate that means the current value of all estimated future deposits and payments during the expected fixed interest period is equal to the reported value of the claim or liability. Synthetic options are valued annually according to the Black and Scholes’ evaluation method. Exchange rate income and exchange rate losses are reported in gross.

Segment reportingThe Group uses segment reporting based on the inter-nal reporting to the highest executive decision-maker. The highest executive decision-maker is the function

in charge of allotment of resources and assessment of segment results. In the Group, the highest executive decision-maker is the president. The Group’s operations are organized so that the management team mainly follows up on three business areas: Experience, Insight and Solutions. See Note 5.

Employee benefitsSHORT-TERM BENEFITS TO EMPLOYEES

Liabilities for wages and remuneration, including non-monetary benefits and paid absence, which are expec-ted to be paid within 12 months of the end of the finan-cial year, are reported as short-term liabilities at the non-discounted sums expected to be paid when the liabili-ties are regulated. The cost is reported as services are rendered by the employees. The liabilities are reported as obligations regarding payments to employees in the balance sheet.

SEVERANCE PAYMENTS

Severance payment is made when an employee’s emp-loyment is terminated by the Group ahead of a normal pensioning date or when an employee accepts volunta-ry dismissal in return for such payments. The Group re-ports severance payments at the first of the following time points: (a) when the Group no longer has the possibility of recalling the offering of payment; or (b) when the Com-pany reports costs for a restructuring that is within the application area of IAS 37 and which entails severance payment. In the case where the Company has made an offer to encourage voluntary retirement, compensationis calculated at the time of termination based on the number of employees who are estimated to accept the offering. Benefits that mature more than 12 months after the reporting periods end are discounted at present value.

PENSION PLANS

The Group companies have differing pension plans, both defined benefits and defined contribution pension plans. They are often financed through payments to insurance companies or trustee-administrated funds, where pay-ments are established based on periodic actuary calcu-lations.

Defined contribution plansA defined contribution pension plan is a pension plan in which the Group agrees to pay set fees to a separate legal entity. In this case, the size of the employee’s pen-sion depends upon the fees the Group pays and the proceeds from the contributions. The Group has no legal or informal obligations to pay further fees if this legal entity should not have enough assets to pay employees remuneration for their service during current or previous periods. These fees are accounted for as personnel costs when they fall due. Pensions to senior executives are ensured through defined contribution plans. Among other employees, 90 percent have defined contribution pension plans and 10 percent have defi-ned benefit plans through insurance with Alecta.


NOTE 1: continued

Defined benefit plansA defined benefit pension plan is a pension plan without defined contribution. Such plans are characterized in that they stipulate the pension benefits an employee will receive after pensioning, usually based on factors such as age, years of service and wages. The Group vouches for the payment of stipulate benefits. For salaried employees in Sweden, the ITP2 plans defined benefit pension commitments are secured for retirement and family pensions through insurance in Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 10 Reporting of the pension plan ITP2 financed through insurance in Alecta, this is a defined benefit plan covering several employers. Alecta has no possibility of making an exact division of assets and allocations per individual employer. The pension plan ITP 2 which is guaranteed through insurance in Alecta are therefore reported as a defined contribution plan. The Group’s proportion of total savings premiums for ITP2 in Alecta amount to 0.03 percent; the Group’s proportion of the total num-ber of actively insured in ITP2 amount to 0.03 percent.

Income taxesThe tax cost of the period encompasses current tax calculated based on the taxable result of the period, under the current tax rates. The current tax cost is adjusted based on the current tax for former years and changes in deferred tax claims and taxes payable attri-butable to temporary differences and unused deficits. The current tax cost is calculated based on the tax rules that are, on the balance sheet day, determined or determined in practice in the countries where the Parent Company and its subsidiaries operate and gene-rate taxable revenue. Deferred taxes are calculated according to the balan-ce sheet method, using temporary differences between reported and taxable values of assets and claims as a starting point. Deferred tax claims are reported to the extent to which it is likely that future taxable profits will be available, against which the temporary differences can be used. The current and deferred taxes are reported in the balance sheet, except when taxes pertain to posts that are reported in other total results or directly in equity. In such cases, taxes are also reported in other total results and equity, respectively. Deferred tax claims and tax debts are offset when there is a legal right to offset current tax claims and debts, and when the deferred tax claims and debts pertain to taxes debited by a single tax authority and either the same tax subject or different tax subjects. All tax liabilities and assets are valued at nominal amounts according to the tax rules and tax rates that have been decided on or announced and are likely to be adopted. A tax rate of 21.4 percent is used for Swedish companies, a tax rate of 22.0 percent for Norwegian and Danish companies and a tax rate of 20.0 percent for the Finnish company.

Non-current assetsPROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are reported at cost and reduced through depreciation. Costs for improvements in the performance of assets, over and above their original performance, increase the carrying amount of the assets. Costs for repairs and maintenance are reported as expen-ses. Property, plant, and equipment are systematically depreciated over the estimated useful life of the asset. If applicable, the residual value of the asset is taken into account when determining the depreciation amount.

INTANGIBLE ASSETS

Goodwill and other intangible assets represent the dif-ference between the cost and fair value of the Group’s participation rights in the acquired subsidiary’s assets, assumed liabilities and contingent liabilities at the time of acquisition. An assessment of the reported goodwill value is made whenever there is reason to believe the value of the goodwill has decreased. In cases where reported goodwill exceeds the calculated recoverable amount, the asset is immediately written down to its recoverable amount. Other intangible assets mainly consist of client relations and trademarks. These assets are reported at cost less accumulated amortization. See Note 10.

DEPRECIATION

The straight-line method is used for all types of intan-gible assets and property, plant, and equipment. The following amortization periods are applied:

Computers 3 years Equipment 5-7 years Other intangibles 3-8 years Computer equipment used in consulting operations is expensed directly at the time of acquisition.

IMPAIRMENT LOSSES

Assets with an undeterminable useful life, such as good-will and intangible assets not ready for use, are not dep-reciated but annually tested regarding need for depre-ciation through a so-called “impairment test”. Assets are depreciated in regards to value decrease when events or changed conditions indicate that the booked value may not be recoverable. Depreciation is made totaling the amount by which the assets booked value exceeds its recoverable value. The recoverable value is the greater of the asset’s fair value less sales costs and its value in use. When determining value in use, future cash flows are dis-counted using a discount rate that takes into account the risk-free interest rate and risk associated with the specific asset. If the calculated recoverable amount is less than the booked amount, depreciation is made to the recoverable amount. When assessing need for depreciation, assets are grouped at the lowest levels for which there are sepa-rate identifiable cash flows (cash-generating units). The cash-generating units in the Group consist of seg-ments, as their cash-generating capabilities are large judged to be independent of other assets. As regards assets other than financial assets and goodwill, as previously mentioned, on each balance sheet day, they are tested to see if reversal should be carried out.


NOTE 1: continuedAn impairment loss is recognized in the income state-ment. The decrease in value recognized through profit or loss is the difference between cost and current fair value less any previously expensed impairment losses. See Note 10.

CALCULATION OF RECOVERABLE AMOUNT

The recoverable amount of other assets is the higher of fair value less selling costs and value in use. When de-termining value in use, future cash flows are discounted using a discount rate that takes into account the risk-free interest rate and risk associated with the specific asset. For an asset that does not generate cash flow largely independent of other assets, a common recove-rable amount is determined for the cash-generating unit to which the asset belongs.

REVERSAL OF IMPAIRMENT LOSSES

Goodwill impairment is not reversed. Impairment losses on other assets are reversed if there has been a change in the assumptions that served as the basis for the cal-culation of the recoverable amount. Impairment losses are reversed only to the extent the carrying amount of the assets following the reversal does not exceed the carrying amount that the asset would have had if the im-pairment had not been recognized, taking into account the depreciation or amortization that would have been recognized.

LEASING 2019

When a leasing contract is signed, the Group determines if it is a leasing contract. A contract is a leasing contract if the contract transfers the right to, during a certain peri-od, make decisions on the use of an identified assets in exchange for remuneration. The Group recognizes a usufruct asset and a leasing liability from the start date of the leasing contract. The usufruct asset is initially valued at the cost of acquisition, consisting of the original value of the leasing liability plus leasing fees paid at or before the start date plus any initial direct fees. The usufruct asset is then written off linearly, from the start date until the end of the use period of the asset or the end of the leasing period, whichever comes first. The leasing liability, which is divided into a long-term and a short-term part, is initially valued at the present value of the remaining leasing fees for the estimated leasing period. The leasing period consists of the non-cancellable term, plus any further terms in the contract for which, at the start date, use is assessed as reasonably certain. The Group has estimated the length of the leasing period based on expected use in current business opera-tions. The leasing fees are discounted at the marginal bor-rowing rate of the leasing contract. If this interest rate cannot easily be determined, Knowit’s marginal borrowing rate is used. The leasing liability is then valued at amortized

cost with the effective interest method. The Group has chosen not to report usufruct assets and leasing liabilities for leasing contracts with a remaining leasing period of 12 months or less, or underlying assets of lesser value (value of underlying asset less than SEK 50,000). Leasing fees for these leasing contracts are reported as a cost linearly throughout the leasing period.

LEASING 2018

Leases are classified as either financial or operating leases. In a financial lease, the economic risks and rewards associated with ownership of the leased asset are essentially transferred to the lessee; otherwise, the lease is classified as an operating lease. This means that Knowit reports both owned assets and assets that are utilized through finance leases as equipment in the consolidated balance sheet. When signing a finan-cial lease, a value corresponding to the future obligation for leasing fees is accounted as a liability and divided between current and long-term liabilities. Depreciation and amortization are calculated using the same eco-nomic lives as other equivalent assets. Lease payments are recognized as interest expenses and amortization of the liability.

Financial assetsKnowit applies IFRS 9 as of 2018. For Knowit, this has not entailed any changes in reporting. Financial assets are initially valued at fair value. The Group has financial assets in the form of loans and receivables. The classi-fication depends on the purpose for which the financial asset was acquired. Management determines the classi-fication of financial assets upon initial recognition. Purcha-ses and sales of financial assets are recognized on the business day – the date when the Group binds itself to buying or selling the asset. Financial assets are removed from the balance sheet when the right to gain cash flow from the instrument has expired or been transferred and the Group has transferred the main part of the risks and benefits connected to ownership.

LOANS AND RECEIVABLES

Loans and receivables are financial assets which are not derivatives, which have determined or determinable payments, and which are not listed on an active market. This category includes cash, accounts receivable, and other claims. They are included in current assets excepting items which fall due more than twelve months after the balance sheet day, which are classified as non-current assets. The assets in this category are reported after the time of procurement at the value of accrued costs, using the effective interest method.

WRITE-DOWNS

For the category financial assets value at accrued procu-rement value, write-downs are calculated as the differen-ce between the recognized value of the assets and the current value of estimated future cash flows, discounted at the original effective interest rate of the financial asset. The recognized value of the asset is written down and the sum of the write-down is recognized in the income statement of the Group.


NOTE 1: continued

Financial liabilitiesACCOUNTS PAYABLE

Accounts payable are classified under other financial liabilities. Accounts payable have a short expected ma-turity and are carried without discounting their nominal amount.

OUTSTANDING LOANS

Outstanding loans are initially recognized at the amounts received after deducting transaction costs. Thereafter, outstanding loans are recognized as amortized costs and any difference between the amount received (net after transaction costs) and the amount to be reimbur-sed is recognized in the income statement, divided over the term, applying the effective rate method. A financial debt is removed from the balance sheet when it is annulled, i.e., when the obligation stated in the contract is fulfilled, cancelled or ceases. The Group’s loans currently have floating interest.

LIABILITIES PERTAINING TO FUTURE CONSIDERATION AND DIVIDENDS TO NON-CONTROLLING INTERESTS

The Group’s liabilities arising from future consideration of non-controlling interests are estimated at fair value, with the change of value recognized in equity.

Currency hedge accountingThe Group has taken loans in NOK in order to decrease exchange rate risks. effective part of changes in fairvalue of derivative instruments as hedges of net invest-ments in foreign operations and which meet the require-ments for hedge accounting, are accounted in consoli-dated equity. Profit or loss relating to the non-effective part is recognized directly in the income statement. Accumulated profit or loss are recognized in the income statement when foreign operations are sold.

ProvisionsProvisions are reported when the Group has a legal or informal obligation due to events that have occurred, it is more likely than not that an outflow of resources will be required and a reliable estimate can be made. Res-tructuring provisions are made when a detailed, formal plan for these measures is prepared and those who will be affected by such measures have well-founded ex-pectations. If there are a number of similar obligations, the probability of whether an outflow of resources will be required is assessed for the group of undertakings as a whole. A provision is reported even if the proba-bility of an outflow for a specific entry in this group of obligations is minimal.

EquityCommon shares are classified as shareholders’ equity. Transaction costs directly attributable to the issuance of new shares or options are recognized in equity as a deduction from the issue proceeds.

When the Group repurchases shares, the equity related to the Parent Company’s shareholders is reduced by the price paid, including any transaction costs. If these shares are sold, the price received is reported in the portion of equity attributable to the Parent Company’s shareholders.

Cash flow analysisThe cash flow analysis is prepared using the indirect method. Reported cash flow includes only those tran-sactions that have involved receipts or disbursements. Cash and bank balances are classified as cash and cash equivalents, as are other short-term investments with a maturity of less than three months from the date of acquisition.

Important assumptions and estimates in financial reportsPreparing accounts in accordance with IFRS requires the use of some important accounting assumptions. The management team must also make some estimates when applying the Group’s accounting principles. These lead to projections that affect the values of assets and liabilities and revenues and expenses, as well as the information reported in explanations and disclosures. Assumptions and estimates are evaluated regularly based on historical experience and other factors, inclu-ding expectations of future events that are considered reasonable under current conditions. Estimates and assumptions have been made in the following areas:

ASSESSMENT OF NEED FOR DEPRECIATION OF GOODWILL

The Group annually researches if there is need for depreciation of goodwill. Impairment losses for cash-generating units has been established through calculation of the recoverable amount. The test of depreciation for reported values performed by the Group encompasses a number of significant assumptions and estimates, such as future revenue, growth, margins, discount rates, see Note 10.

REVENUES

Most of the Group’s revenue are based on current account agreements with the client and reported conti-nuously as work is performed and the delivery has been handed over to and approved by the client. A smaller share of the Group’s agreements are fixed price agreements. These are assessed in relation to the proportion of the project that is performed. A revenue not yet invoiced is reported as an accrued income in the balance sheet. As not all earned revenue has been invoiced at each respective year-end, but are reported as accrued revenue, leads to a subjective assessment of the accrued income being in accordance with exis-ting contracts and thus can be invoiced to clients. The same subjective assessment must be performed based on invoiced revenue as Knowit must, at each year-end, assess the risk for client losses and make reservations for the assessed risk of payment not being made.


NOTE 1: continuedADDITIONAL CONSIDERATION IN ACQUISITIONS AND CONTRACTUAL FUTURE CONSIDERATION

Management continuously monitors the financial per-formance of acquired units with outstanding additional consideration stipulations and estimates future outco-mes. Estimated outcomes are reported as liabilities, see Note 21.

Parent Company’s accounting principlesThe Parent Company has prepared its annual financial statements in accordance with the Swedish Annual Accounts Act and Swedish Financial Accounting Stan-dards Council’s recommendation RFR 2. RFR 2 states that the Parent Company, in the annual financial state-ments of the legal entity, must apply all IFRS standards and statements adopted by the EU to the extent this is practicable within the framework of the Annual Accounts Act and taking into account the relation between accoun-ting and taxation. The recommendation specifies the exceptions and additions from IFRS’ standards. The accounting principles indicated below have been used consistently for the Parent Company in all periods pre-sented in the Parent Company’s financial reports.

Differences between the Group and Parent Company’s accounting principlesLEASING

In the Parent Company, all leasing contracts are recog-nized in accordance with the rules on operational and financial leasing. This means that the Parent Company does not apply IFRS 16, in accordance with the excep-tion in RFR 2. As a lessee, the leasing fees for opera-tional leasing are recognized on a straight-line basis over the leasing period.

SUBSIDIARIES

Shares in subsidiaries are recognized in the Parent Company according to the acquisition value method, IFRS 3. Transaction fees are included in the recognized value for holdings in subsidiaries. In the Group, trans-action fees attributable to subsidiaries are recognized as profit/loss when they arise.

FINANCIAL INSTRUMENTS

In the Parent Company, financial non-current assets are valued at cost less any impairment losses, while financial current assets are valued according to the lowest value principle.

TRANSACTIONS WITH RELATED PARTIES

The Parent Company maintains close relations with its sub-sidiaries. Fifteen percent of its sales relate to subsidiaries and 75 percent of purchases have been made from sub-sidiaries. Receivables and liabilities vis-à-vis subsidiaries are indicated in the balance sheet. The Group and Parent Company’s transactions with key persons are shown in Note 9, Salaries, other remuneration and social security expenses, and Note 29, Transactions with related parties. Knowit has not granted any loans, issued any guarantees or offered any sureties to, or on behalf on, any members of the Board or senior executives.

SALE OF GOODS AND PERFORMANCE OF SERVICE CONTRACTS

Service contracts are recognized in profit/loss in accor-dance with the Swedish Annual Accounts Act, Chapter 2 Section 4, when the services are delivered. Until then, they are recognized as contractual assets pertaining to service contracts at cost of acquisition or net sales value on the balance sheet day, whichever is lower.

PROPERTY, PLANT AND EQUIPMENT

The Parent Company reports property, plant, and equip-ment at cost less accumulated depreciation and any impairment losses in the same way as for the Group, but with an addition for any revaluations. In the Parent Company, all leasing agreements are recognized in accordance with the rules on operational leases.

LOAN COSTS

The Parent Company’s loan costs are recognized as an expense in the period in which they are incurred, in accordance with IAS 23.

TAXES

The Parent Company reports untaxed reserves including deferred taxes. In the consolidated accounts, untaxed re-serves are divided between deferred taxes and equity.

GROUP CONTRIBUTIONS

Group contributions received from and granted to sub-sidiaries are recognized as financial items.


NOTE 2: Critical valuation and risk factorsThe Group is through its operations exposed to a number of risks, both valuation risks and financial risks. Manage-ment has assessed the factors and risks that could impact the consolidated accounts in the financial reports through the application of the principles for valuation of assets and liabilities detailed in Note 1. Below is an account of the most critical valuation and risk factors.

Valuation factorsINTANGIBLE ASSETS

The total value of goodwill on December 31, 2019 is approximately SEK 983.4 million, making it an important factor in the valuation of consolidated earnings. So-called impairment tests have been conducted to determine the value of goodwill using anticipated future cash flows for the Group’s cash-generating units. The Group’s cash-generating units are the segments. The assessments are based on each segment’s past per-formance and anticipated future prospects. Sensitivity analyses have been conducted with regard to changes in interest rates. See Note 10.

FIXED PRICE PROJECTS

Fixed price projects also pose a risk to financial results. Fixed price projects accounted for around 11 (10) percent of total sales in 2019. Since the projects are recognized as revenue in relation to their degree of completion, great demands are placed on the organization’s ability to evaluate and assess each individual project.

Risk factorsKnowit’s operations are affected by a number of risk factors, which are not or not fully controlled by the Company. The Board and management team work con-tinuously with risk assessment and risk management. The management team performs an annual mapping, analysis, gradation, and liability distribution of the identified risks and their development, and to identify any new risks. The risk mapping is part of the audit committee’s annual work. Knowit has identified four risk areas, as per the following:

CLIENT AND BUSINESS RISKS

Knowit’s significant client and business risks involve reduced demand for consulting services, delivery risks in projects, and lower prices due to competition and changed purchasing patterns. Careful and methodical follow-up of income, projects, clients, prices, and billing serve to decrease the risks.Knowit’s large number of frame agreements, and diver-sification through industry fields and geographically gives the Group strong possibilities of coping with a potential weakened demand. Knowit is not dependent on any one client, as the ten largest clients provide about 26 (25) percent of net sales. No client provided more than about 4 (4) percent of sales during 2019.

Fixed-price projects account for 11 (10) percent of net sales 2019, and because of its extensive experience with such projects Knowit considers the risk of costly miscal-culations to be low. A 1 percentage point price change would have an equivalent effect of ±SEK 27 million. A sensitivity analysis shows that a 1 percentage point change in the billing ratio would affect pre-tax earnings by ±SEK 33.5 million.

PERSONNEL RISKS

The competition for qualified personnel is expected to increase over the next year, both for managers and consultants. This will mean that Knowit is required to offer attractive terms, tasks and professional development. Knowit offers training and education to all personnel and regularly reviews employment terms to ensure that they are fair.

FINANCIAL RISKS

Accounts receivableThe turnover rate of accounts receivable and credit losses constitutes a risk. Each subsidiary is charged with follo-wing up and analyzing the credit risk for each new client before standard terms of payment and delivery are offe-red. Overdue accounts receivable are followed up on a monthly basis in each subsidiary and in the Group’s monthly report to the Board. A group-wide policy for credit checks and reminders has been drawn up and compli-ance is followed up during internal control. The Group is assessed to have routines for managing credit expo-sure in relation to each individual client. Individual risk limits are set based on internal or exter-nal credit assessments in accordance with the limitations set by the Board. As Knowit’s clients are mainly larger companies and organizations with strong financial posit-ions, the credit risk is assessed to be low, which the historically realized and reserved losses also show.

Interest-bearing liabilitiesFinancial interest-bearing liabilities consist mainly of debts to non-controlling interests connected to acqui-sitions and startups. These are valued at each interim report and the change as compared with the preceding period and expected future changes over the coming 1-5 years are followed up by the Board and management. The Group’s interest risks are mainly due to investment of cash and cash equivalents and to loans taken. The Group’s loans are with floating interest rate, usually fixed for a period of three months. A change in the interest rate by one percentage point is expected to affect profit after financial items by ±SEK 0.0 million.

LiquidityThe supply of cash and cash equivalents are a financial risk. Management follows running prognoses regarding the Group’s liquidity reserves based on expected cash flow and has a continuous dialogue with creditors to be prepared is financing needs should arise. The Group’s placement policy is that all placements of cash and cash equivalents are made in banks where there is a negligible risk of value changes.

Refinancing risksA refinancing risk is the risk that the Company does not have liquid assets available and that financing cannot be obtained, obtained only in part, or obtained at a higher cost. If Knowit cannot obtain financing, or can only do


NOTE 3: Net sales by classification

NOTE 2: continued

NET SALES BY CLASSIFICATION

SEK 000s 2019 2018 2019 2018

Consulting services 3,194,534 2,949,465 281,103 247,337

Software licenses 71,559 45,179 7,755 2,835

Own work capitalized – – 6,401 6,090

Other 69,052 88,660 6,625 51,303

TOTAL 3,335,145 3,083,304 301,884 307,565

NET SALES BY GEOGRAPHICAL MARKET

SEK 000s 2019 2018 2019 2018

Sweden 1,710,703 1,757,620 301,884 298,793

Norway 1,284,433 1,063,594 – 6,456

Finland 169,630 168,264 – 1,048

Denmark 68,801 57,320 – 361

The Netherlands 79,059 12,911 – –

Germany 13,376 11,525 – 989

Belgium 6,423 5,457 – –

Greenland – 1,959 – –

Great Britain 1,463 1,687 – 36

Italy – 1,479 – –

France – 307 – -119

USA 241 201 – –

Estonia – 35 – –

Other 1,016 944 – –

TOTAL 3,335,145 3,083,304 301,884 307,565

During the fiscal year, the 10 largest customers accountedfor about 26 (25) percent of sales. No single customeraccounted for more than 4 (4) percent of sales.

Group Parent Company


so on poor terms, this could entail a significant negative effect on the Company’s financial position, operations, and thus also its profit. For Knowit as a group, there is the possibility to finance projects and acquisitions through loans or new issues.

Exchange rate risksThe Group operates internationally and is exposed to exchange rate risk from various currencies, mainly NOK and EUR. Exchange rate risks arise from recal-culation of future business transactions, accounted assets and liabilities and net investments in foreign operations. If the Swedish krona were weakened/strengthened by ten percent as compared with the Norwegian krona, with all other things constant, the profit for the year before taxes on December 31 2019, would have been SEK 15.8 million higher/lower. If the Swedish krona were weakened/strengthened by ten percent as compared with the euro, with all other things constant, the profit for the year before taxes on December 31 2019, would have been SEK 3.3 million higher/lower.

Capital structureThe Group’s goal regarding capital structure is to safe-guard the Group’s ability to continue operations, so that it can continue to generate returns to shareholders and benefit other interested parties, and to retain the best possible capital structure to keep capital costs down. The Board’s long-term targets for earnings per share, EBITA margin, equity in relation to intangible assets and EBITA results in relation to net liabilities are prioritized targets for a sustainable capital structure. For a follow-up of these targets, see page 12 in this annual report. In order to retain or adjust the capital structure, the Group can alter dividends paid to shareholders, return invested capital to shareholders, issue new shares or sell assets to decrease liabilities. The Group assess the need for capital in relation to the equity/asset ratio.

IT AND INFORMATION SECURITY RISKS

Knowit’s strategy on information security is to make employees aware and educate them on the risks of information management, and on how Knowit manages various types of information based on content. Policies and routines have been drawn up for how we manage and process information; this is done using technical solutions, such as encryption where information is stored, encrypted links when information is moved, and sorting out and erasing when the information no longer meets any operational needs. Knowit uses technical solutions to verify the identity of users who have access to non-public information and have modern solutions in place to protect our information from data breaches. Compliance with policies and routines are continuously followed up, and incidents are reported to the management team and audit committee.


NOTE 4: Group revenue fromclient contracts

NOTE 5: Segment reportingThe Group's operations are organized so that the mana-gement team primarily follows up sales, EBITA result,EBITA margin, intangible fixed assets and averagenumber of employees for the Group's segments. The Group's segments consist of Knowit's threebusiness areas: Experience, Insight and Solutions. Unallocated costs consist of the Parent Company'sgroup-wide costs relating to management, finance andmarket.

Parent company/ group 2019 SEK 000s Experience Insight Solutions adjustment Total

External net sales 809,780 382,663 2,142,702 – 3,335,145

Net sales between segments 60,756 37 538 67,598 -165,892 –

NET SALES 870,536 420,201 2,210,300 -165,892 3,335,145

EBITA result 1) 68,823 38,767 261,002 -49,414 319,178

Depreciation of non-current and intangible assets -1,067 – -2,442 -2,576 -6,085

Operating profit (EBIT) 67,756 38,767 258,560 -51,990 313,093

Result after financial items 313,191

PROFIT FOR THE YEAR 241,739

EBITA margin in % 7.9 9.2 11.8 9.6

AVERAGE NUMBER OF EMPLOYEES 570 290 1,340 13 2,213

TOTAL INTANGIBLE ASSETS 245,468 61,080 658,674 18,161 983,383

PROPERTY, PLANT AND EQUIPMENT 2) 3,916 247 11,721 218,410 234,294

Parent company/ group 2018 SEK 000s Experience Insight Solutions adjustment Total

External net sales 741,472 387,296 1,954,536 – 3,083,304

Net sales between segments 38,651 39,312 83,372 -161,335 –

NET SALES 780,123 426,608 2,037,908 -161,335 3,083,304

EBITA result 1) 71,757 60,517 238,698 -55,905 315,067

Depreciation of non-current and intangible assets – – -5,445 -653 -6,098

Operating profit (EBIT) 71,757 60,517 233,253 -56,558 308,969

Result after financial items 303,650

PROFIT FOR THE YEAR 231,945

EBITA margin in % 9,2 14.2 11.7 10.2

AVERAGE NUMBER OF EMPLOYEES 521 264 1,235 12 2,032

TOTAL INTANGIBLE ASSETS 235,334 60,468 654,474 12,711 962,987

PROPERTY, PLANT AND EQUIPMENT 2) 2,653 346 12,499 27,025 42,523

1) Result before amortization of intangible assets. 2) Of total equipment totaling SEK 234 (43) million, equipment in Sweden amounted to SEK 117 (36) million.

GEOGRAPHIC CATEGORIZATION Group, SEK 000s 2019 2018

Fee revenue

Sweden 1,686,219 1,666,038

Norway 1,267,212 1,054,995

Finland 171,242 158,882

Other 69,861 69,550

TOTAL FEE REVENUE 3,194,534 2,949,465

Other revenue

Sweden 93,756 71,236

Norway 44,733 59,801

Finland 2,127 2,655

Other -5 147

TOTAL OTHER REVENUE 140,611 133,839

TOTAL NET REVENUE 3,335,145 3,083,304

SEGMENT CATEGORIZATION

Group, SEK 000s 2019 2018

Fee revenue

Experience 783,352 701,915

Insight 409,217 417,689

Solutions 2,146,630 1,955,579

Parent company/group adjustments -144,665 -125,718

TOTAL OTHER REVENUE 3,194,534 2,949,465

Other revenue

Experience 87,184 78,208

Insight 10,984 8,919

Solutions 63,671 82,329

Parent company/group adjustments -21,228 -35,617

TOTAL OTHER REVENUE 140,611 133,839

TOTAL NET REVENUE 3,335,145 3,083,304

The income category Licensing fees is reported under the category Other revenue, as the amount is not signi-ficant. For more information, see Note 1 Accounting and valuation principles and Note 3 Net sales by classification, in the Annual report 2019. For fixed price agreements, the term is seldom longer than 12 months. The total value of remaining commitments as of December 31, 2019, where the term exceeds 12 months, was SEK 21 million. The revenue is estimated to be reported within 24 months.


NOTE 8: Average number of employees

NOTE 6: Purchases andsales between

Employees Male Employees Male

Parent Company

Sweden 13 5 12 4

TOTAL IN PARENT COMPANY 13 5 12 4

Subsidiaries

Sweden 1,297 965 1,235 945

Norway 744 584 638 551

Finland 116 93 110 91

Denmark 36 33 32 30

Estonia – – – –

Germany 7 7 5 5

TOTAL IN SUBSIDIARIES 2,200 1,682 2,020 1,622

GROUP TOTAL 2,213 1,687 2,032 1,626

20182019

NOTE 7: Compensation to the auditors

Group Moderbolaget

KSEK 2019 2018 2019 2018

KPMG

Audit assignment 3,062 3,169 488 447

Additional auditing assignments 74 218 – –

Tax counseling 585 126 43 122

Other assignments 104 138 – 99

TOTAL 1) 3,825 3,651 531 668

TOTAL 3,825 3,651 531 668

1) THE GROUP: In the audit assignment, SEK 2,034,000 pertains to KPMG Sweden, in the additional auditing assignments SEK 25,000 pertains to KPMG Sweden, for tax counseling, SEK 43,000 pertains to KPMG Sweden, and for other services, SEK 5,000 pertains to KPMG Sweden. THE PARENT COMPANY: In the audit assignment, SEK 488,000 pertains to KPMG Sweden, for auditing outside the audit assignment, SEK 0 pertains to KPMG Sweden, for tax counseling, SEK 43,000 pertains to KPMG Sweden, and for other services, SEK 0 pertains to KPMG Sweden.

The audit assignment pertains to fees for statutory audi-ting, i.e, work necessary to present the auditor’s report and so-called audit counseling in connection with the audit assignment. All other auditing activities are consi-dered to be other assignments. This includes, for example,cursory reviewing of Knowit’s interim reports.

PARENT COMPANY

Of the Parent Company’s sales, 15 (15) percent is attri-butable to invoicing to subsidiaries and 75 (73) percent of the Parent Company’s costs is attributable to purcha-sing from subsidiaries.


NOTE 9: Salaries, other remuneration and social security expenses

REMUNERATION AND REMUNERATION TO THE BOARD AND SENIOR EXECUTIVES

Base Variable Other Pension Group, 2019 SEK 000s salary/fees compensation benefits costs 1) Total

Mats Olsson, Chairman 608 – – – 608

Gunilla Asker, Director 230 – – – 230

Stefan Gardefjord, Director 230 – – – 230

Camilla Monefeldt Kirstein, Director 265 – – – 265

Peder Ramel, Director 230 – – – 230

Jon Risfelt, Director 330 – – – 330

Kia Orback Pettersson, Director 280 – – – 280

Per Wallentin, President 6,384 105 73 2,387 8,949

Other senior executives (4,5) 9,267 518 126 1,901 11,812

Group, 2018 SEK 000s

Mats Olsson, Chairman 558 – – – 558

Gunilla Asker, Director 147 – – – 147

Carl-Olof By, Director 67 – – – 67

Eva Elmstedt, Director 83 – – – 83

Stefan Gardefjord, Director 147 – – – 147

Liselotte Hägertz Engstam, Director 33 – – – 33

Camilla Monefeldt Kirstein, Director 248 – – – 248

Peder Ramel, Director 147 – – – 147

Jon Risfelt, Director 305 – – – 305

Kia Orback Pettersson, Director 180 – – – 180

Per Wallentin, President 5,820 2,138 54 2,169 10,181

Other senior executives (5) 10,336 2,940 160 3,894 17,330

1) Including payroll tax.

Of which Of which Salaries and Social security pension Salaries and Social security pension SEK 000s remuneration expenses costs remuneration expenses costs

Parent Company 25,350 11,844 4,719 24,468 13,416 6,003

Subsidiaries in Sweden 794,442 357,161 109,984 759,817 337,703 104,295

Subsidiaries in Norway 659,471 125,042 27,144 561,180 105,397 23,483

Subsidiaries in Finland 80,668 16,525 15,030 75,320 16,243 13,498

Subsidiaries in other countries 45,915 5,532 4,250 45,846 3,216 2,286

TOTAL IN SUBSIDIARIES 1,580,496 504,260 156,408 1,442,163 462,559 143,562

GROUP TOTAL 1 605 846 516,104 161,127 1,466,631 475,975 149,565 More than 10 (10) percent of all employees qualify for the ITP-defined benefit pension plan through Alecta. The others have defined contribution insurance solutions.The pension plan secured through insurance from Alecta is reported as a defined contribution plan. The retirement age for all employees is 65 years. SALARIES AND OTHER REMUNERATION AS DIVIDED BETWEEN THE BOARD,PRESIDENT, MANAGEMENT TEAM AND OTHER EMPLOYEES

Board, Board, president and president and management Of which Other management Of which Other SEK 000s team 1) bonuses employees team 1) bonuses employees

Parent Company 10,937 150 14,263 11,426 3,007 10,035

Subsidiaries in Sweden 42,384 3,409 748,649 40,498 5,875 713,444

Subsidiaries in Norway 23,719 5,377 630,375 20,127 4,154 536,899

Subsidiaries in Finland 2,064 1,710 76,894 1,964 932 72,424

Subsidiaries in other countries 4,791 183 40,941 8,369 430 37,047

TOTAL IN SUBSIDIARIES 72,958 10,679 1,496,859 70,958 11,391 1,359,814

GROUP TOTAL 83,895 10,829 1,511,122 82,384 14,398 1,369,849 The number of CEOs in subsidiaries is 66 (62). 1) For 2019, there were three senior executives for the Group, of which two female, and seven Directors in the Parent Company. For 2018, there were three senior executives for the Group, of which two female, and six Directors in the Parent Company.

20182019

20182019

PRINCIPLES AND REMUNERATIONTO SENIOR EXECUTIVES

Remuneration paid to the Chairman of the Board and Board members is determined by the Annual General Meeting. The AGM 2019 resolved that remuneration should be as follows: SEK 575,000 (525,000) to the Chairman and SEK 235,000 (220,000) to other Directors. The fee to the Chairman of the Audit Committee is SEK 100,000 (100,000) and that to the Member of the Audit Committee is 50,000 (50,000). The fee to the Chairman of the Remuneration Committee is SEK 50,000 (50,000) and that to the Member of the Remuneration Committee is SEK 35,000 (35,000). Remuneration to the President and other senior exe-cutives is made up of a base salary, variable remuneration, other benefits and pensions. The Chairman negotiates the President’s terms of employment, which are set by the remuneration committee. The President negotiates the terms of employment of other senior executives, and the variable remuneration is approved by the remuneration committee.


NOTE 9: continued

NOTE 10: Intangible assets

Group, SEK 000s 2019 2018 2019 2018 Accumulated costs

Opening balance 938,991 902,933 206,266 194,758

Business acquisitions 8,880 26,404 – 5,333

Disposal of company – – – –

Investments in business systems – – 8,029 6,090

Translation differences 9,517 9,654 18 85

CLOSING BALANCE, COSTS 957,388 938,991 214,313 206,266

Accumulated amortization

Opening balance – – -182,270 -176,248

Amortization for the year – – -6,085 -6,098

Translation differences – – 37 76

CLOSING BALANCE – – -188,318 -182,270

CARRYING AMOUNT 957,388 938,991 25,995 23,996

Allocation of other intangibles

Client relations 7,832 11,225

Business systems 18,163 12,711

TOTAL 25,995 23,936 Allocation of goodwill and other intangibles per segment

Experience 241,201 230,001 4,267 5,333

Insight 61,080 60,468 – –

Solutions 655,107 648,522 3,565 5,952

Parent Company – – 18,163 12,711

TOTAL 957,388 938,991 25,995 23,996

EXAMINATION OF DEPRECIATION NEEDS,GOODWILL

Goodwill is divided into cash-generating units, which coincide with the Group’s segments. The depreciation examination is performed for segments, as the acquired operations are integrated into existing operations to such an extent that it is no longer possible to differentiate between assets and cash flow attributable to the acquired company. It is possible to see the Group as a cash-gene-rating unit, as the same offering covers the entire Group: consultancy services. Internally, follow-up is performed for our business fields: Experience, Insight and Solutions, for which reason we have chosen to divide goodwill between them. They operate on the same market, with the effect that we have the same requirements on returns and growth for all three segments. The recoverable value for cash-generating units has been determined based on the units’ value in use, which consists of the current value of expected future cash flow. The cash flow prognoses are based on an assessment of expected growth rate and development of the EBITA margin with a basis in the business plan for next year, the management team’s long-term expectations on the ope-rations and its historical development. Estimated values in use are sensitive mainly to changes in assumptions on growth rate, EBITA margin and discount rate. The assumptions applied are based on past experience and the market development. For next year and the following three years, a growth rate of 2 (2) percent has been used. For cash flow beyond this four-year period, the growth rate has been assumed to correspond to that for the

Goodwill Other intangibles

The Board consists of 7(7) members elected by the AGM,including 3 (3) women. Other senior executives in the Parent Company consist of 6 (6) persons, including 3 (3) women. The President of the Parent Company, Per Wal-lentin, receives a base compensation of SEK 6,384,000 (5,812,000) and a variable benefit of SEK 105,000 (2,138,000), based on Group results and operating margin. Health insurance and pension premiums during the year amounted to SEK 2,387,000 (2,169,000). Other benefits amounted to SEK 73,000 (54,000). Other senior executives received base salaries totaling SEK 9,267,000 (10,336,000) and variable compensa-tion, based on the Group’s earnings and/or operating margin, of SEK 518,000 (2,940,000). Health insurance and pension premiums amounted to SEK 1,901,000 (3,894,000). Other benefits amounted to SEK 126,000 (160,000). TERMS OF SEVERANCE ETC.

Knowit AB and the President have agreed upon a mutual term of notice of 12-24 months. Severance is not payable. Other senior executives have a mutual term of notice of between 6 and 12 months. Severance is not payable. PENSIONS

The pension premium for the President and other senior executives, is set at a maximum of 35 percent of base salary, however always the maximum tax-deductible sum. For the President, a one-time sum for a temporary pension totaling SEK 0 (1,255,000) is included. For other senior executives, one-time sums for temporary pensions totaling SEK 0 (130,000) are included.


NOTE 11: Property, plant, and equipment

NOTE 10: continuedthird year. The requirement on returns has been discoun-ted with an average capital cost corresponding to 8.8 (8.7) percent before taxes. The requirement on returns has been established based on the Group’s current capital structure and reflects the risks that apply to the various segment. The level of the discount rate also corresponds to the levels that the stock market has for a company like Knowit. Scenarios in which the variables for growth rate, margin development and the discount rate vary are used to obtain an interval between a lowest value and an expec-ted value for the operation. Even the lowest calculated value shows that the recoverable amount for goodwill is greater than the book value in all cash-generating units. A sensitivity analysis shows that the goodwill value would be retained is the growth rate were decreased by two percentage points and/or if the discount rate were increased by two percentage points.

Parent Company, SEK 000s 2019 2018 Accumulated costs

Opening balance 15,087 8,997

Investments in business systems 6,400 6,090

CLOSING BALANCE, COSTS 21,487 15,087

Accumulated depreciation

Opening balance -2,376 -1,723

Depreciation for the year -2,576 -653

CLOSING BALANCE -4,952 -2,376

CARRYING AMOUNT 16,535 12,711

Investments in business systems refers to costs paid for group-wide systems and refers only to externally acquired assets and internally invested time.

Other intangible assets

SEK 000s 2019 2018 2019 2018 Equipment

Acquisition value brought forward 71,937 65,812 17,926 17,297

Through acquisition of Group companies – 96 – –

Purchases 7,899 6,148 434 629

Sales/disposals -469 -583 -229 –

Translation difference 628 464 – –

ACQUISITION VALUE CARRIED FORWARD 79,995 71,937 18,131 17,926

Depreciation brought forward -51,657 -45,837 -13,782 -12,487

Sales/disposals 403 430 218 –

Depreciation for the year -7,096 -6,061 -1,193 -1,295

Translation difference -246 -189 – –

DEPRECIATION CARRIED FORWARD -58,596 -51,657 -14,757 -13,782

CARRYING AMOUNT 21,399 20,280 3,374 4,144

Finance leases

Acquisition value brought forward – 29,015

Purchases – 15,983

Sales/disposals – -10,708

ACQUISITION VALUE CARRIED FORWARD – 34,290

Opening balance, depreciation – -7,557

Sales/disposals – 1,385

Amortization for the year – -5,875

Translation differences – –

CLOSING BALANCE, ACCUMULATED DEPRECIATION – -12,047

CLOSING BALANCE, PLANNED RESIDUAL VALUE – 22,243

TOTAL, PROPERTY, PLANT, AND EQUIPMENT – 42,523

The Group’s financial leasing in 2018 covered mainly company cars. See further in the section Leasing in the Accounting Principles, for more information.


The Group’s property, plant, and equipment include both owned and leased assets.

Group, SEK 000s 2019 2018

Owner equipment 21,399 42,523

Usufruct assets 1) 212,895 –

CLOSING BALANCE, RESIDUAL VALUE 234,294 42,523

Depreciation for the year of owned property, plant, and equipment -7,096 -6,061

Depreciation for the year of usufruct assets 1) -66,208 -5,875

TOTAL DEPRECIATION FOR THE YEAR -73,304 -11,936

1) See Note 32 Leasing.


NOTE 12: Shares in interest companiesKnowit AS owns 24.99% in Norwegian Stacc AS.

Group, SEK 000s 2019 2018

Accumulated acquisition values

At the start of the year 4,111 4,081

Acquisitions for the year – –

Acquisitions for the year 2,746 -68

Exchange rate differences 111 98

EXCHANGE RATE DIFFERENCES 6,968 4,111

NOTE 11: continued

SEK 000s 2019 2018 2019 2018

Operating leases

Paid leasing fees for the financial year – 62,783 – 18,353

Remaining agreed leasing costs fall due in accordance with the with the following

Within one year – 61,382 – 19,111

In one to five years – 130,342 – 21,196

In more than five years – 9,094 – –

TOTAL – 200,818 – 40,307

The Group’s operating leasing agreements in 2018 covered mainly rental of operating facilities.


NOTE 13: Result from financial items

Group, SEK 000s 2019 2018

Financial income

Other interest income 2,587 979

Other financial income 12,931 –

TOTAL FINANCIAL INCOME 15,518 979

Financial costs

Interest cost leasing -4,182 -342

Interest cost bank loans -1,660 -1,525

Other financial costs -8,048 -4,052

Exchange rate differences -1,529 -379

TOTAL FINANCIAL COSTS -15,419 -6,298

Other financial costs have been affected by revaluation of future consideration totaling SEK 12.9 (–) million. Other financial costs have been affected by costs regarding synthetic options in group subsidiaries totaling SEK -8.0 (-4.0) million.

Group, SEK 000s 2019 2018

Result from participations in group companies

Capital gain on sale of shares in group companies 5,176 3,111

Deprecation of shares in subsidiaries – -4,350

Group contributions 157,250 127,325

Dividends 106,277 3,502

TOTAL RESULTS FROM PARTICIPATIONS IN GROUP COMPANIES 268,703 129,588

Interest income and similar profit/loss items

Interest income group companies 1,097 482

Other interest income – 762

Exchange rate differences 2,610 1,496

TOTAL INTEREST INCOME AND SIMILAR PROFIT/LOSS ITEMS 3,707 2,740

Interest expenses and similar profit/loss items

Interest expenses group companies – -346

Interest expenses bank loans -1,388 -1,302

Exchange rate differences -4,011 -519

TOTAL INTEREST EXPENSES AND SIMILAR PROFIT/LOSS ITEMS -5,399 -2,167


NOTE 14: Taxes

SEK 000s 2019 2018 2019 2018

Current tax

Current tax on profit/ loss for the year -69,453 -66,279 -18,211 -12,912

Adjustments from earlier years -565 – -68 –

TOTAL CURRENT TAX -70,018 -66,279 -18,279 -12,912

Deferred taxes

Creation and repayment of temporary differences -1,434 -5,337 408 –

Effect of changes in the Norwegian tax rate – -89 – –

TOTAL DEFERRED TAXES -1,434 -5,426 408 –

INCOME TAX -71,452 -71,705 -17,871 -12,912

The Group’s hedge accounting has led to taxes totaling SEK 0 (107,000) being accounted for as other total results. Income tax on the Group’s results before taxes differs from the theoretic amount that would have been reported using a weighted average tax rate for the results in the consolidated companies as follows:

SEK 000s 2019 2018 2019 2018

Reported result before tax 313,191 303,650 192,710 59,696

Taxes according to current tax rate 21.76 (22.26)% -68,150 -67,592 – –

Taxes according to current tax rate 21.4 (22.0)% – – -41,240 -13,133

Tax effects of:

Non-taxable revenue 438 25 1,238 831

Non-deductible expenses -5,728 -4,739 -813 -1,380

Tax deductible items not expensed 633 – – –

Dividends – – 22,743 770

Use of loss carry-forward not previously recognized 775 690 – –

Effect of altered tax regulation – -89 267 –

Adjustments relating to previous years -565 – -68 –

TAX ON PROFIT FOR THE YEAR -71,452 -71,705 -17,872 -12,912



Deferred tax claims and deferred tax liabilities relating to temporary differences and loss carry-forward as follows:

SEK 000s 2019 2018 2019 2018

Deferred tax claims

Loss carry-forward 886 1,739 – –

Temporary differences in claims and liabilities 1,748 816 408 –

TOTAL DEFERRED TAX CLAIMS 2,634 2,555 408 –

Deferred tax liabilities

Temporary differences in claims and liabilities 46,626 42,587 – –

Intangible fixed assets 1,614 2,383 – –

TOTAL DEFERRED TAX LIABILITIES 48,240 44,970 – –

Deferred tax liabilities relating to fiscal loss carry-forward is presented only to the extent to which it is likely that the loss can be balanced against surplus in future taxation. Unused fiscal deficits totaled SEK 7,551,000 (7,900,000), of which 2,884,000 (7,900,000) have been taken into account in deferred tax claims. Deferred tax claims relating to temporary differences pertain mainly to tangible assets and activated capital insurance. Deferred tax liabilities relating to temporary differences pertain to untaxed reserves. Group, SEK 000s

As per January 1, 2018 4,698 38,726

Changes in loss carry-forward -1,665 –

Changes in intangible fixed assets – 128

Changes in temporary differences -478 6,116

TOTAL AS PER DECEMBER 31, 2018 2,555 44,970

Of which fall due in more than one year 2,555 39,577

As per January 1, 2019 2,555 44,970

Changes in loss carry-forward -853 –

Changes in intangible fixed assets – -769

Changes in temporary differences 2,634 4,039

TOTAL AS PER DECEMBER, 31 2019 48,240 48,240

Of which fall due in more than one year 2,634 42,454

Deferredtax claims

Deferred tax liabilities



NOTE 15: Participations in Group

Company Corp. ID no. Reg. office Shareholding % of equity 2019 2018

Knowit Architecture AB 556910-9068 Stockholm 5,000 100 21,464 21,464Knowit AS 997725646 Oslo 6,000 100 186,700 186,700 Knowit Amende AS 1) 991513833 Oslo 31,146 25 9,477 9,477 Knowit Consulting Bergen AS 996 865 770 Bergen – – – – Knowit Dataess AS 945865318 Oslo – – – – Knowit Decision Oslo AS 986 011 080 Oslo – – – – Knowit Experience AS 2) 916 834 926 Bergen – – – – Knowit Experience Bergen AS 914 727 170 Bergen – – – – Knowit Experience Oslo AS 914 727 340 Oslo – – – – Knowit Insight AS 3) 919 074 469 Oslo – – – – Knowit Metaforce AS 922941734 Oslo – – – – Knowit Objectnet AS 980 713 520 Oslo – – – – Knowit Sor AS 993 075 841 Kristiansand – – – – Knowit Quality Management Oslo AS 998 295 831 Oslo – – – – Knowit Reaktor AS 974 849 856 Bergen – – – – Knowit Reaktor Solutions AS 911 954 656 Bergen – – – – Knowit Secure AS 4) 913 513 657 Oslo – – – – Knowit Solutions Norway AS 815 837 932 Oslo – – – – Knowit Stavanger AS 993 579 572 Oslo – – – –Knowit Business Consulting AB 556666-4818 Linkoping 1,000 100 33,241 33,241Knowit Business Growth AB (liquidated Jan 2019) 556930-5203 Gothenburg – – – 525Knowit Dalarna AB 556411-6985 Borlange 2,000 100 2,739 2,739Knowit Danmark Holding A/S 39005611 Copenhagen 500 100 644 644 Knowit A/S 35028633 Copenhagen – – – – Knowit Decision Danmark A/S 36501480 Copenhagen – – – – Knowit Experience Danmark A/S 39006065 Copenhagen – – – –Knowit Dataunit AB 556436-6259 Stockholm 200,000 100 24,963 24,963Knowit Dataunit GmbH 6012011626 Bremen 100 224 224Knowit Decision AB 556313-5291 Karlstad 1,000 100 6,950 6,950 Knowit Decision Göteborg AB 556643-7892 Gothenburg – – – – Knowit Decision Stockholm AB 556568-9188 Karlstad – – – – Knowit Karlstad AB 556515-8069 Karlstad – – – –Knowit Decision Helikopter AB 556524-1014 Stockholm 100,000 100 62,115 62,115Knowit Defence Technology AB 559006-4589 Stockholm 1,000 100 100 100Knowit Development AB 556531-0454 Stockholm 5,000 100 161,951 161,951Knowit Digital Law AB (liquidated Jan 2020) 559122-5809 Stockholm 50,000 100 50 50Knowit Energy Management AB (liquidated Jan 2020) 556904-5593 Gothenburg 100 100 2,921 2,111Knowit Experience All Rise AB 559015-7094 Stockholm 1,000 100 5 000 5,000Knowit Experience CRM AB 559189-7680 Malmo 100 100 50 –Knowit Experience eCommerce AB (liquidated Jan 2019) 559018-4072 Malmo – – – 1,572Knowit Experience Linköping AB 556908-2158 Linkoping 50,000 100 3,027 4,127Knowit Experience Norrland AB 559128-6934 Sundsvall 100 100 50 50Knowit Experience Stockholm AB 556432-9679 Stockholm 100,000 100 10 120 10,120Knowit Experience Sverige AB 559026-1987 Stockholm 100 100 50 50Knowit Gävleborg AB 556633-4305 Gavle 1,000 100 4,299 4,299Knowit Göteborg Group AB 556277-9479 Gothenburg 750,000 100 702 702 Knowit Experience Göteborg AB 556879-4290 Gothenburg – – – – Knowit Systems Development Göteborg AB 5) 556762-7129 Gothenburg – – – –Knowit HRM AB 556964-0963 Stockholm 1,000 100 50 50Knowit Insight Group AB 556806-0460 Gothenburg 1,000 100 50 50Knowit Insight Syd AB 559182-5665 Malmö 100 100 50 50Knowit Insight Technology Management AB 556768-7859 Stockholm 3,000 100 10,625 10,625Knowit Insight Öst AB (formerly Knowit Insight Management AB) 556831-5294 Linkoping 1,000 100 100 100Knowit IT Management AB 559006-4571 Stockholm 1,000 100 1,500 1,500Knowit IT Strategy AB 556948-4388 Gothenburg 1,000 100 36,169 36,168Knowit Jönköping AB 556568-2779 Jonkoping 1,000 100 10,890 10,890Knowit Norrland AB 556534-3174 Sundsvall 13,250 100 16,847 16,847Knowit Oy 1053026-7 Helsinki 555 100 47,616 47,616 Knowit Experience Oy 3094594-5 Helsinki – – – – Knowit Solutions Oy 3094596-1 Helsinki – – – –Knowit Project & Quality Management AB 556914-5799 Gothenburg 100,000 100 1,690 1,690Knowit Require AB 556793-9987 Stockholm 100,000 100 15,829 13,320Knowit Secure AB 556866-3248 Stockholm 1,000 100 16,365 16,365Knowit Solutions Linköping AB (formerly Knowit Decision Linköping AB) 556672-9488 Linkoping 1,000 100 1,944 1,944Knowit Solutions Sverige AB 559035-9179 Stockholm 100 100 100 100Knowit Stockholm Group AB 556911-6717 Stockholm 50,000 100 85 85Knowit Syd Group AB 556640-6772 Malmo 1,670 100 68,804 68,804 Knowit Cloud AB 556891-0573 Malmo – – – – Knowit Experience Malmö AB 556587-2198 Malmo – – – – Knowit Quality Services AB 6) 556943-4904 Malmo – – – – Knowit Skåne AB 556943-4953 Malmo – – – – Knowit Core Skåne AB (liquidated Jan 2020) 556942-4848 Malmo – – – – Knowit Core Syd AB 556943-4912 Malmo – – – – Knowit Mobile Syd AB 556710-2172 Staffanstorp – – – –Knowit Technology Management i Göteborg AB (liquidated Jan 2019) 556582–3399 Gothenburg – – – 6,850Knowit Test Solutions AB 556779-8193 Stockholm 1,000 100 23,369 23,369Knowit Transformation Management AB 556930-5179 Stockholm 910 91 4,376 4,376Knowit Uppsala AB 556736-0622 Uppsala 1,000 100 13,238 1,542Knowit Uppsala Solutions AB (liquidated Jan 2020) 556645-4442 Uppsala 1,833 100 2,282 13,978Knowit Örebro AB 556930-5211 Orebro 500 100 3,567 2,164TOTAL, SUBSIDIARIES 812,380 817,657

1) Knowit AS owns 75% and Knowit AB owns 25%. 2) Knowit AS owns 75.44%. 3) Knowit AS owns 51%.4) Knowit AS owns 94.35%. 5) Knowit Göteborg Group AB owns 94%. 6) Knowit Syd Group AB owns 65%.

Carrying amount of holdingParent Company’s holdings


NOTE 15: continued

NOTE 16: Other long-termreceivables

Group, SEK 000s 2019 2018

Deposits for rented premises 1,194 1,554

Other long-term receivables 528 –

TOTAL 1,722 1,554

NOTE 17: Accounts receivable

Group, SEK 000s 2019 2018

Accounts receivable have fallen due as follows

Accounts receivable not overdue 441,936 430,377

Accounts receivable overdue 1-15 days 100,502 89,685

Accounts receivable overdue 16-45 days 27,333 24,638

Accounts receivable overdue more than 45 days 6,308 8,766

Reserves for impaired receivables -726 -1,205

TOTAL ACCOUNTS RECEIVABLE 575,353 552,261

Change in reserves for impaired receivables

At start of year -1,205 -1,138

Realized receivables 598 277

New unsure receivables -533 -450

Reversed, unused reserves 414 106

TOTAL -726 -1,205

Knowit’s clients consist mainly of larger companies and organizations with strong financial positions, meaning that credit risks are assessed to be low. See Note 2.

NOTE 18: Prepaid expensesand accrued income

SEK 000s 2019 2018 2019 2018

Accrued income 34,782 46,758 – 871

Prepaid rent – 8,195 4,912 4,428

Prepaid insurance 7,931 4,985 468 670

Prepaid licenses 6,583 5,600 1,497 1,482

Prepaid lease – 621 26 23

Other items 10,366 8,025 2,418 727

TOTAL 59,662 74,184 9,321 8,201


NOTE 19: Contract balancesINFORMATION ON CLAIMS, CONTRACTUALASSETS, AND CONTRACTUAL LIABILITIESTO CLIENTS

SEK 000s Note 2019 2018 2019 2018

Contractual assets 3,826 4,676 – 87

Contractual liabilities 27 38,422 33,688 2,383 592

The contractual assets include the items encompassing work that has been done, but where some criteria in the client contract are yet to be fulfilled before invoicing. Accrued income, see Note 18, includes revenue that has not yet been invoiced, but where nothing remains to be delivered to the client. Contractual liabilities refer to prepaid revenue for which the revenue is reported over time, SEK 38.4 million which have been reported as contractual liabilities at the end of the period will be recognized as revenue during 2020. Contractual liabilities reported at the end of the period last year have been recognized as revenue during 2019.

Parent Company, SEK 000s 2019 2018

Accumulated costs

Opening balance 1,101,991 1,079,996

Acquisitions 4,771 60,796

Sales and liquidations -10,048 -38,801

CLOSING BALANCE 1,096,714 1,101,991

Accumulated write-downs

Opening balance -284,334 -279,984

Write-downs for the year – -4,350

CLOSING BALANCE -284,334 -284,334

TOTAL 812,380 817,657



NOTE 21: Long-term liabilities

NOTE 20: Equity

Group / Parent Company, SEK 000s 2019 2018

Share capital

Opening balance, share capital 19,253,760 19,139,217

New share issue after acquisitions – 114,543

OPENING BALANCE, SHARE CAPITAL 19,253,760 19,253,760

As per December 31 2019, there were 19,253,760 shares with a quota value of SEK 1, all shares carry the same number of votes and rights to dividends.

OTHER PAID-IN CAPITAL

Other paid-in capital totaling SEK 591,791,000 (591,791,000) is equity paid-in by owners.

Group SEK 000s 2019 2018

Translation reserves

Opening balance, translation reserves -38,959 -48,880

Translation reserves for the year 15,615 9,921

CLOSING BALANCE, TRANSLATION RESERVES -23,344 -38,959

Hedging reserves

Opening balance, hedging reserves 6,007 6,386

Cash flow hedges

Reported directly in total results – -379

CLOSING BALANCE, HEDGING RESERVES 6,007 6,007

Total reserves

Opening balance, reservesr -32,952 -42,494

Translation reserves 15,615 9,921

Hedging reserves – -379

CLOSING BALANCE, RESERVES -17,337 -32,952

TRANSLATION RESERVES

The translation reserves encompass all the exchange rate differences that arise upon translation of financial reports from foreign operations which have drawn up their financial reports in a currency other than Swedish kronor. HEDGING RESERVES

The hedging reserves encompass the effective share of the accumulated net change to the fair value of a cash flow instrument attributable to hedging transac-tions that have not yet occurred.

ACCRUED EARNINGS INCLUDING PROFIT FOR THE YEAR

The accrued earnings including profit for the year, SEK 631,358,000 (513,288,000), encompass earned profits in the Parent Company and its subsidiaries. Past provisions to statutory reserves are included in this equity item.


SEK 000s 2019 2018 2019 2018

Interest-bearing long-term liabilities

Loans, SEK – 1,600 – 1,600

Finance leases 135,831 16,734 – –

Future consideration/ dividends 28,576 43,329 7,880 –

Future synthetic options – 17,850 – –

Other long-term provisions

Deferred taxes 48,240 44,970 – –

Other long-term provisions 2,472 – 2,388 –

TOTAL 215,119 124,483 10,268 1,600

All long-term liabilities fall due within five years. Upon acquisition of newly founded companies from non-controlling interest, the consideration is usually paid 3-5 years after the company is founded, when all shares are acquired. Consideration is paid in 2-3 parts, all based on the outcome in results. In other acquisitions, from external parties, a fixed consideration is often paid at acquisition and additional consideration is based on actual outcome in results. In 2013, three synthetic options in subsidiaries were drawn up in subsidiaries, which fall due in 2015, 2017 and 2019. The options were acquired at commercial con-ditions, according to Black and Scholes’ evaluation method. When options are used, cash payment is made, esti-mated as the market value of the affected companies in Knowit Syd Group AB and the redemption price was determined using the same market conditions as when the options were drawn up. The options are evaluated annually per Black and Scholes, where the change is reported against financial items in the income statement. Knowit has during the year fulfilled the covenant made by the bank in connection with loans.


NOTE 22: Financial assets and liabilitiesREPORTED VALUE IN BALANCE SHEET AND FAIR VALUE AS PER THE FOLLOWING: Loan and account Financial Financial receivables assets Other liabilities valued at accrued valued at financial valued at Reported Fair Group, 2019 SEK 000s Note acquisition cost fair value liabilities fair value value value

Assets in balance sheet

Other long-term securities holdings – 311 – – 311 311

Other long-term receivables 16 1,723 – – – 1,723 1,723

Accounts receivable and other receivables 658,848 – – – 658,848 658,848

Cash and cash equivalents 278,372 – – – 278,372 278,372

TOTAL 938,943 311 – – 939,254 939,254

Liabilities in balance sheet

Future additional considerations and options 23 – – 14,637 52,016 66,653 66,653

Other interest-bearing liabilities 23 – – 203,553 – 203,553 203,553

Accounts payable – – 110,795 – 110,795 110,795

Other liabilities – – 254,583 – 254,583 254,583

TOTAL – – 583,568 52,016 635,584 635,584

Group, 2018 SEK 000s Assets in balance sheet

Other long-term securities holdings – 301 – – 301 301

Other long-term receivables 16 1,554 – – – 1,554 1,554

Accounts receivable and other receivables 639,783 – – – 639,783 639,783

Cash and cash equivalents 194,609 – – – 194,609 194,609

TOTAL 835,946 301 – – 836,247 836,247


Future additional considerations and options 23 – – 41,646 28,170 69,816 69,816

Other interest-bearing liabilities 23 – – 36,473 – 36,473 36,473

Accounts payable – – 115,394 – 115,394 115,394

Other liabilities – – 245,906 – 245,906 245,906

TOTAL – – 439,419 28,170 467,589 467,589

FAIR VALUE BASED ON CATEGORIZATION

Group, 2019 SEK 000s Level 1 Level 2 Level 3 Fair value


Other long-term securities holdings – 311 – 311

TOTAL – 311 – 311


Future additional considerations and options – – 66,653 66,653

TOTAL – – 66,653 66,653

Group, 2018 SEK 000s


Other long-term securities holdings – 301 – 301

TOTAL – 301 – 301


Future additional considerations and options – – 69,816 69,816

TOTAL – – 69,816 69,816


NOTE 22: continued

NOTE 23: Interest-bearing liabilities

FAIR VALUE OF ASSETS AND LIABILITIES

Fair values are described below, the sums showed areunrealized and will not necessarily be realized. Accounts receivable and accounts payable Because of the short duration of accounts receivableand accounts payable, the reported value is assumedto be the best approximation of fair value. Interest-bearing liabilities Financial liabilities have a floating interest rate, for whichreason reported values are assessed to correspond tofair value. Future considerations, additional considerationsand optionsFair values of future considerations are based on anassessment of expected result development, changesare reported in equity. Fair values of additional conside-ration are based on an assessment of expected profitdevelopment, with the change reported against financialitems in the income statement. Fair values of options arebased on the Black and Scholes’ evaluation method,changes are reported against financial items in theincome statement. Hierarchy for fair value Financial instruments are valued at fair value per valuationmethod, the different levels are defined as follows: LEVEL 1: Financial instruments where fair value is deter-mined based on prices listed on an active market for the same instruments. Examples of such instruments are: Shares, bonds, standardized options which are actively traded, etc. LEVEL 2: Financial instruments where fair value is deter-mined, either directly (based on prices) or indirectly (dedu-ced from prices), using observable market data not inclu-ded in level 1. Examples of such instruments are: Bonds and certain OTC-traded products such as interest swaps, exchange futures, interest corridors, shares, etc. LEVEL 3: Financial instruments where fair value is dete-mined using input not observable on the market. Examples of such instruments are: Additional consideration, unlisted shares, options where the underlying instruments are not priced on an active market.

Interest rate, % on balance Group, SEK 000s sheet day 2019 2018

Long-term liabilities

Finance lease liabilities 2.08/1.42 135,831 16,734

Loans, SEK – / 1.41 – 1,600

Future consideration/dividends and synthetic options 1.20/ 1.70 28,576 61,179

TOTAL 164,407 79,513

Current liabilities

Finance lease liabilities 2.08/ 1.42 67,722 7,964

Loans, SEK – / 1.41 – 7,200

Future consideration/dividends and synthetic options 1.20/ 1.70 38,077 11,612

TOTAL 105,799 26,776

TOTAL INTEREST-BEARING LIABILITIES 270,206 106,289

LEASE LIABILITIES

Finance lease liabilities, including fees, pertaining mainly to car leases, fall due for payment as follows:

Minimum Minimum lease lease Group, SEK 000s fees Interest Principal fees Interest Principal

Within one year 71,950 4,228 67,722 8,315 351 7,964

Between one and five years 140,067 4,236 135,831 17,097 363 16,734

OTHER INTEREST-BEARING LIABILITIES

Other interest-bearing liabilities refers to expected futureconsiderations for contracted acquisitions of non-controllinginterests and synthetic options in subsidiaries.

Group, SEK 000s Interest Principal Interest Principal

Within one year 549 38,077 944 11,612

Between one and five years 834 28,576 1,349 61,179

LIABILITIES TO CREDIT INSTITUTIONS

The interest rate on the loan in SEK is floating. Loans are amortized as follows:

Group, SEK 000s Interest Principal Interest Principal

Within one year – – 61 7,200

Between one and five yearsr – – 6 1,600

Parent Company, SEK 000s Interest Principal Interest Principal

Within one year – – 61 7,200

Between one and five years – – 6 1,600

2019 2018

2019 2018

2019 2018

2019 2018


NOTE 26: Information regardingcash flow analysis

NOTE 27: Pledged assets andcontingent liabilities

SEK 000s 2019 2018 2019 2018

Pledged assets for credit institutions

Pledged accounts receivable None None None None

Chattel mortgages None None None None

Equipment used under finance leases 25,408 22,243 None None

TOTAL 25,408 22,243 NONE NONE

Contingent liabilities

Capital adequacy guarantee None None None None

Sureties None None None None

TOTAL NONE NONE NONE NONE


NOTE 24: Other liabilities

SEK 000s 2019 2018 2019 2018

Value-added tax 94,624 86,849 – –

Taxes and social fees 98,400 78,343 1,389 1,443

Other non- interest-bearing liabilities 13,187 15,628 61 33

TOTAL 206,211 180,820 1,450 1,476

NOTE 25: Accrued expenses anddeferred income

SEK 000s 2019 2018 2019 2018

Accrued salaries 176,646 184,268 1,809 4,015

Accrued social security expenses 70,020 57,244 1,484 2,559

Deferred income 38,422 33,688 2,383 592

Other items 13,712 32,464 1,148 6,643

TOTAL 298,800 307,664 6,824 13,809


INTEREST AND DIVIDENDSRECEIVED AND INTEREST PAID

SEK 000s 2019 2018 2019 2018

Interest received 2,587 979 2,416 1,244

Dividends received – – 106,277 3,502

Interest paid -1,660 -1,525 -2,707 -1,648

TOTAL 927 -546 105,986 3,098

CASH FLOW IN CHANGESOF INTEREST-BEARING LIABILITIES

Future Long- Short- consi- term term deration liabilities liabilities Financial and to credit to credit leasing synthetic SEK 000s institutions institutions liabilities options Total

Opening balance Jan 1, 2019 8,800 14,207 23,379 103,860 150,246

Cash flow – -14,207 -6,172 -56,435 -76,814

Items not affecting cash flow

Change in deferred loan costs -7,200 7,200 7,491 25,366 32,857

Exchange rate differences – – – – – Total interest- bearing liabilities Dec 31, 2019 1,600 7 200 24 698 72 791 106 289

Cash flow – -8,800 -68,380 -10,024 -87,204

Items not affecting cash flow

Change in deferred loan costs -1,600 1,600 247,235 3,886 251,121

Exchange rate differences – – – – – Total interest-bearing liabilities Dec 31, 2019 – – 203,553 66,653 270,206




NOTE 28: Earnings per share

NOTE 30: Appropriations anduntaxed reserves

Parent Company, SEK 000s 2019 2018

Appropriations

Provision to tax allocation reserve -19,100 -11,000

Difference between book depreciation and depreciation according to plan 199 -3,416

TOTAL -18,901 -14,416

Untaxed reserves

Tax allocation reserve 107,000 87,900

Accelerated depreciation 4,779 4,978

TOTAL 111,779 92,878

NOTE 29: Transactions withrelated partiesA company affiliated with the CEOs of Knowit Mobile Syd AB, Axel Holtås, and Knowit Core Syd AB, Jonas Svensson, has during 2019 received compensation for services in office maintenance, totaling SEK 734,000 (556,000). A company affiliated with the CEO of Knowit Project & Quality Management AB, Teresa Thorsson, has during 2019 received compensation for education and analysis totaling SEK 49,000 (100,000).

2019 2018 Profit for the year attributable to shareholders of the Parent Company

Before dilution 12.06 11.62

Diluted 12.06 11.62

Average number of shares, 000s

Before dilution 19,254 19,191

Diluted 19,254 19,191

Number of shares on balance sheet date, 000s

Before dilution 19,254 19,254

Diluted 19,254 19,254

NOTE 31: Acquired businessesIn July 2019, Knowit acquired the operations of the Swedish Salesforce agency 4front through acquisition of assets and liabilities. No acquisitions of subsidiaries have occurred during 2019. For the acquired company in 2018, the total value of acquired assets and liabilities, purchase considerations and effect on the Group’s cash and cash equivalents of the business acquired was as follows:

2019 2018 SEK 000s Total Total

Consideration

Paid with shares in Knowit AB – 5,000

Provisions for additional consideration/ deferred consideration – 28,170

Total consideration – 33,170

Fair value, acquired net assets – -1,433

Goodwill and other non-current assets – 31,737

Goodwill is attributable to the high profitability of the ac-quired company and the expected synergies with otherKnowit firms. Other intangible assets are attributable tothe client relationships of the acquired business. Assets and liabilities included in the acquisition wereas follows:

2019 2018 SEK 000s Total Total

Property, plant and equipment – 96

Current assets – 3,312

Equity – 2,241

Other liabilities – -4,216

Identified net assets – 1,433

Consideration settled in cash – –

Equity in acquired companies – 2,241 Effects of this years’ acquisitions on the Group’s cash and cash equivalents – 2,241

Considerations paid for in respect of acquisitions of assets and liabilities for the year 500 –

Additional consideration paid in respect of previous years, acquisitions1) -10,024 -56,435

Effect of acquisitions on the Group’s cash and cash equivalents -10,524 -54,194

1) Includes amortization of interest-bearing liabilities attributable to companies acquired or established in previous years. These amortizations are small sums per company and therefore not reported separately. ACQUIRED BUSINESSES AFTER BALANCE SHEET DAY

In January 2020, Knowit acquired the shares in Invativa, a consultancy firm with specialists in digital business and service development. The company has around 25 con-sultants based in Göteborg, with branches in Östersund and Sundsvall. The consideration totals SEK 70.0 million, of which surplus value is SEK 62.1 million. The acquisition analysis is preliminary. If the acquired company had been part of the Group in 2019, it would have contributed with SEK 29.0 million in net sales and SEK 8.2 million in profit before amorti-zation of intangible assets (EBITA). Acquisition costs tota-ling SEK 155,000 have been recognized by the Group as other external costs.


NOTE 32: LeasingThe effect of the transition to IFRS 16 on the Group’s leasing contracts is described in Note 1 Accounting principles. The transition method selected by the Group in the transition to IFRS 16 means that the financial information for 2018 is not recalculated. USUFRUCT ASSETS

The Group’s leasing contracts cover mainly assets like offices and vehicles. The offices held by the Group are rented on fair market conditions. No leasing contracts include covenants or other limitations aside from security in the leased asset.

COMPARATIVE FIGURES AS IF IAS 17 HAD BEEN APPLIED IN 2019 JAN-DEC JAN-DEC JAN-DEC SEK 000s 2019 2019 2018

Operating profit before depreciation of property, plant, and equipment 392.5 330.7 327.0

Depreciation of property, plant, and equipment -73.3 -13.3 -11.9

Operating profit before amortization of intangible assets (EBITA) 319.2 317.4 315.1

Amortization of intangible assets -6.1 -6.1 -6.1

Financial net 0.1 3.8 -5.4

PROFIT/LOSS AFTER FINANCIAL ITEMS 313.2 315.1 303.6

PROFIT/LOSS 241.7 243.2 231.9

Assets

Usufruct assets 213.1 – –

Other property, plant, and equipment 21.2 46.6 42.5

TOTAL PROPERTY, PLANT, AND EQUIPMENT 234.3 46.6 42.5

TOTAL ASSETS 2,226.2 2,051.9 1,922.6

EQUITY 1,241.1 1,242.6 1,106.3

Liabilities

Long-term leasing liabilities 135.8 – –

Other long-term interest-bearing liabilities 28.6 48.0 79.5

Total long-term interest-bearing liabilities 164.4 48.0 79.5

Current leasing liabilities 67.7 – –

Other current interest-bearing liabilities 38.1 46.5 26.8

TOTAL CURRENT INTEREST-BEARING LIABILITIES 105.8 46.5 26.8

TOTAL LIABILITIES AND EQUITY 2,226.2 2,051.9 1,922.6

Cash flow

Cash flow before changes in operating capital 313.1 255.6 250.9

Change in operating capital -8.1 -8.1 23.2

Cash flow from operating activities 305.0 247.5 274.1

Cash flow from investment activities -25.9 -25.9 -68.0

Cash flow from financing activities -195.4 -137.9 -113.8

CASH FLOW FOR THE PERIOD 83.7 83.7 92.3

Group, SEK 000s 2019 Cost of acquisition brought forward 34,290

Purchases 261,454

Sales/disposals -12,044

COST OF ACQUISITION CARRIED FORWARD 283,700 Depreciation brought forward -12,047

Sales/disposals 6,955

Depreciation for the year -66,208

Translation difference 495

ACCUMULATED DEPRECIATION CARRIED FORWARD -70,805

TOTAL PLANNED RESIDUAL VALUE CARRIED FORWARD 212,895 Of the residual value carried forward, SEK 187.7 million pertains to offices and SEK 25.2 million to vehicles.

LEASING LIABILITIES

Group, SEK 000s 2019

Long-term 135,831

Current 67,722

TOTAL 203,553

For an analysis of maturity, see Note 23, Interest-bearing liabilities.

SUMS RECOGNIZED IN THE RESULT


Depreciation, vehicles -6,158

Depreciation, offices -59,992

Interest on leasing liabilities -4,178

Costs for leases of low value, not short-term leases of low value -1,473

Costs for short-term leases -503

TOTAL -72,304 Variable leasing fees not included in the valuation of the leasing liabilities are missing.

SUMS RECOGNIZED IN THE CASH FLOW REPORT


Total cash flows attributable to leasing contracts -68,380

TOTAL -68,380

IFRS 16 IAS 17


NOTE 33: Proposed dividend

Parent Company, SEK 000s

At the disposal of the AGM

Share premium reserve 471,289,982

Retained earnings after dividend -306,018,040

Result for the year 174,838,135

TOTAL 340,110,077

The Board of Directors and the President propose that the funds be treated as follows

Balance carried forward 340,110,077

TOTAL 340,110,077

PROPOSED DIVIDEND

The Board proposes that profit is carried forward in its enti-rety, thus retracting its proposal for dividends. The decision is made to prioritize the Company’s financial stability, given the uncertain situation regarding the covid-19 pandemic.

NOTE 34: Events after the end of the financial yearIn January 2020, Knowit acquired the shares in Invativa, a consultancy firm with specialists in digital business and service development, see Note 31. The covid-19 pandemic is hard to predict and Knowit is following the development of this situation carefully. In order to protect the health of employees and clients, the corporate management team and Company adhere to the recommendations of the Public Health Agency of Sweden. After the end of the reporting period, the covid-19 pandemic has begun. In order to protect the health of employees and clients, the management team and Com-pany adhere closely to the recommendations of the Public Health Agency of Sweden. Local deviations exist, if these are stricter than the aforementioned recommen-dations and justified for operational reasons. The covid-19 pandemic remains hard to predict, although it is clear that it has had far-reaching effects on society, with a large number of restrictions being implemented. These restrictions will likely have a significant impact on Knowit’s operations as well as on the Company’s services and demand for them. The Company has, at the time of publication of this annual report, not been able to make a reasoned assess-ment of the impacts on the operations and financial development. The management team and Board con-tinuously monitor the development of the operations in this context, in order to quickly and effectively manage the risks and challenges that may arise. The Board retracts its proposal for dividends. The deci-sion is made to prioritize the Company’s financial stability, given the uncertain situation regarding the covid-19 pandemic.

NOTE 35: Alternative key figuresKnowit uses the following alternative key figures, which supplement the measures defined in rules applicable to the financial reporting, when we feel that they serve to complement and provide clearer, more in-depth informa-tion related to our consultancy operations. These mea-sures are used to follow up on our long-term financial targets and to provide a fair view of Knowit’s earnings and financial position to the Board, management team, shareholders and other stakeholders on the financial market. The Board has, i.a., determined that the EBITA result shall exceed net debt, that the EBITA margin shall exceed a ten percent average over a five-year period and that equity shall be greater than the intangible assets. We also monitor employed capital, as it is an important part of how working capital is tied up. The key figures that Knowit’s management team follows up on are selec-ted to give an overview of both profitability, growth, and cash flow. Through these measures, it is ensured that the Board’s long-term goals are achieved in the opera-tions. For more information on our long-term financial targets and definitions of our key figures, see the Annual report for 2019, pages 12 and 101.


Certification

The Board of Directors and the CEO certify that the consolidated ac-counts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and provide a true and fair view of the Group’s financial position and results of operations. The annual report has been prepared in accordance with generally ac-cepted accounting standards and provides a true and fair view of the Parent Company’s financial position and results of operations.

The Directors’ Report for the Group and the Parent Company provides a true and fair overview of the operations, financial position and results of the Group and the Parent Company and describes the substantial risks and uncertainties faced by the Parent Company and companies in the Group.

The annual report and consolidated financial statements have been approved for release by the Board of Directors on April 6 2020.

The income statements and balance sheets of the Group and the Parent Company are subject to the approval of the Annual General Meeting on April 28 2020.

STOCKHOLM, APRIL 6 2020

MATS OLSSON CAMILLA MONEFELDT KIRSTEIN GUNILLA ASKER

Chairman Director Director STEFAN GARDEFJORD JON RISFELT PEDER RAMEL

Director Director Director KIA ORBACK PETTERSSON PER WALLENTIN Director CEO

OUR AUDIT REPORT HAS BEEN SUBMITTED ON APRIL 6 2020 KPMG AB

HELENA ARVIDSSON ÄLGNE

Authorized Public AccountantAuditor-in-Charge


Auditor’s reportTo the general meeting of the shareholders of Knowit AB (publ), corp. id 556391-0354

Report on the annual accounts and consolidated accountsOPINIONS

We have audited the annual accounts and consolidated accounts of Knowit AB (publ) for the year 2019, except for the corporate governance statement on pages 57-60. The annual accounts and consolidated accounts of the company are included on pages 52-95 in this document. In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act, and present fairly, in all material respects, the financial position of the parent company as of 31 December 2019 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consoli-dated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 De-cember 2019 and their financial performance and cash flow for the year then ended in accordance with Interna-tional Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 57-60 The statutory administration report is consistent with the other parts of the annual accounts and consoli-dated accounts. We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.

Our opinions in this report on the the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.

BASIS FOR OPINIONS

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audi-ted company or, where applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

KEY AUDIT MATTERS

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were add-ressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.

Valuation of goodwill in the Group and participation in Group companies for the Parent companySee disclosure 10 and accounting principles on pages 73-74 in the annual account and consolidated accounts for detailed information and description of the matter.

DESCRIPTION OF KEY AUDIT MATTER

The carrying value of goodwill in the Group is SEK 957 million per 31 December 2019, which represents 42% of total assets. At least annually, goodwill shall be subject toimpairment testing which is both complex and involves signi-ficant elements of judgement from Group management. According to current regulations, the prescribed method for carrying out impairment tests involves management making forecasts for how internal as well as external con-ditions and plans may impact the future of the organisation. Examples of such forecasts include future cash in- and out-flows, which in turn require assumptions to be made about future market conditions. Another important assumption to evaluate is which dis-count rate to use in order to correctly reflect the time value of money of forecast future cash in-flows, which carry a certain level of risk.

The carrying amount of participation in Group companies in the Parent company is SEK 812 million per 31 December 2019, which represent 64% of total assets. In the case of theparticipations equity is below the value of the participation,an impairment test is performed. This area, therefore, involves significant levels of judge-ment which are in turn significant to the Group’s accounting. RESPONSE IN THE AUDIT

We have inspected the company’s impairment testing in order to assess whether it is in line with the prescribed methodology. Furthermore, through review of management’s written plans and documentation, we have assessed the reasonableness of future cash flows and the assumed discount rate and growth rate. We have conducted discus-sions with Company management and evaluated previous year’s estimates compared to actual outcomes. A critical part of our work has also been evaluation of the sensitivity analysis performed by management that shows how changes in the assumptions can affect the overall valu-ation and performance of our own sensitivity analysis. We have also considered the Annual Report disclosures for completeness and assessed whether they are in line with the assumptions used by Company management in theirimpairment testing and whether the information is sufficient to provide understanding of management’s judgements.


AUDITOR’S REPORT

Act and, concerning the consolidated accounts, in accor-dance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and con-solidated accounts that are free from material misstate-ment, whether due to fraud or error. In preparing the annual accounts and consolidated accounts The Board of Directors and the Managing Director are responsible for the assessment of the com-pany’s and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intend to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Director’s responsibilities and tasks in general, among other things oversee the company’s financial reporting process. AUDITOR’S RESPONSIBILITY

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect

Other Information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-51 and 100-104. The Board of Direc-tors and the CEO are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regar-ding this other information. In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtai-ned in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts

Revenue recognitionSee disclosure 3 and 4 and accounting principles on pages 71-72 and 75-76 in the annual account and consolidated accounts for detailed information and des-cription of the matter.

DESCRIPTION OF KEY AUDIT MATTER

Sales comprise mainly consultancy and operating services. For services that are invoiced as expenses are incurred, which make up the majority of the Group’s income, uninvoiced work is recognised as sales in the period in which the work was performed. Part of the Group´s revenue are derived from projects where the Group has an obligation to perform the pro-jects to a fixed price. Revenues and costs for fixed price contacts are recognized successively as the project progresses in accordance with the stage of completion, which is calculated on the basis of accumulated expenses in relation to estimated accumulated project expenses upon completion. Anticipated losses are immediately recognized as a cost. Fixed-price projects total approx-imately 11% of the Group's revenue. Accounting of fixed-price engagements is therefore based on estimation of the total project income and expenditure in relation to the project’s completion. Consequently, changes in the underlying assumptions can significantly affect the the income and result for theperiod. Unforeseeable expenses may be included in these assumptions in order to take into consideration possible risks or disputed claims, ie uncertain items.

The Group regularly evaluates these uncertain items for each contract agreement period and adjusts its calculations where required. This area, therefore, involves a certain level of judgement which is in turn important to the Group’s ac-counting of income and profits. These judgements relate to income forecasts, accounting based on level of completion of projects and evaluating unforeseeable expenses.

RESPONSE IN THE AUDIT

We have developed an understanding of and evaluated management’s project review routines, including the process of identification of loss-making projects and/or high-risk projects, as well as the income and costs estimation process. We have sample-tested projects for evaluation and tested the most significant areas of judgement. The sample com-prises primarily larger projects and projects wherein risks have been identified. For these sampled projects we have:

• Challenged judgements made by management, including their estimated forecasts and how they have considered unforeseeable expenses• Evaluated whether risks and opportunities have been reflected in a balanced manner in the project valua- tions, and• Evaluated loss-making contracts and whether the reserve for losses reflects the risks connected with the project, and challenged management’s considerations of these areas of judgement.

We have also assessed the completeness of the disclo-sures in the Annual Report.


a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and conso-lidated accounts. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepti-cism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresen- tations, or the override of internal control.• Obtain an understanding of the company’s internal control relevant to our audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors and the Managing Director.• Conclude on the appropriateness of the Board of Directors’ and the Managing Director's, use of the going concern basis of accounting in preparing the annual accounts and consolidated accounts. We also draw a conclusion, based on the audit evidence obtained, as to whether any material uncertainty exists related to events or conditions that may cast significant doubt on the company’s and the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our opinion about the annual accounts and consolidated accounts. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company and a group to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the annual accounts and consolidated accounts, including the disclosures, and whether the annual accounts and consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation.• Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions. We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.

We must also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to commu-nicate with them all relationships and other matters that may reasonably be thought to bear on our independen-ce, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are there-fore the key audit matters. We describe these matters in the auditor’s report unless law or regulation precludes disclosure about the matter.

Report on other legal and regulatory requirementsOPINIONS

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the admi-nistration of the Board of Directors and the Managing Director of Knowit AB (publ) for the year 2019 and the proposed appropriations of the company's profit or loss. We recommend to the general meeting of sharehol-ders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

BASIS FOR OPINIONS

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsi-bilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR

The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requi-rements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group’s equity, consolidation requi-rements, liquidity and position in general. The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company’s financial affairs otherwise are con-trolled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors'

AUDITOR’S REPORT


guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the mana-gement of assets in a reassuring manner.

AUDITOR’S RESPONSIBILITY

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

• has undertaken any action or been guilty of any omis- sion which can give rise to liability to the company, or• in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accor-dance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act. As part of an audit in accordance with generally accep-ted auditing standards in Sweden, we exercise profes-sional judgment and maintain professional scepticism throughout the audit. The examination of the administra-tion and the proposed appropriations of the company’s profit or loss is based primarily on the audit of the ac-counts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company’s situation. We examine and test decisions undertaken,

support for decisions, actions taken and other circum-stances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors’ proposed appropriations of the company’s profit or loss we examined the Board of Directors' reasoned statement and a selection of sup-porting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

THE AUDITOR'S EXAMINATION OF THE CORPORATE GOVERNANCE STATEMENT

The Board of Directors is responsible for that the corpo-rate governance statement on pages 57-60 has been prepared in accordance with the Annual Accounts Act. Our examination of the corporate governance state-ment is conducted in accordance with FAR´s auditing standard RevU 16 The auditor´s examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions. A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act. KPMG AB, Box 382, 101 27, Stockholm, was appoin-ted auditor of Knowit AB (publ) by the general meeting of the shareholders on the 26 April 2019. KPMG AB or auditors operating at KPMG AB have been the compa-ny's auditor since 2018.

STOCKHOLM APRIL 6, 2020 KPMG AB HELENA ARVIDSSON ÄLGNE

Authorized Public Accountant

AUDITOR’S REPORT


NoticeNotice of the Annual General Meeting is published inPost- och Inrikes Tidningar and in Dagens Industry, aswell as on the Company website, knowit.eu.

DateThe AGM will take place on Tuesday April 28, 2020 at 1 PM. Registration opens at 12.30 PM.

LocationKnowit AB’s office, Klarabergsgatan 60, Stockholm.

ParticipationTo be entitled to vote at the meeting, shareholders must

be entered in the register of shareholders, have notified the Company.

Registration in registerof shareholdersShareholders must be recorded in the register of share-holders maintained by VPC no later than WednesdayApril 22, 2020. Shareholders whose shares are registered in the name of a trustee must temporarily re-register the shares in their own names with VPC. Shareholders who want to re-register must inform their trustee well in advance of April 22 2020.

NotificationShareholders must notify the Company of their intention to participate at the meeting by 4 PM (CET) by Wednesday April 22 2020 at the following address: Knowit AB (publ), Box 3383, SE-103 68 Stockholm, Sweden or by tele-phone +46-8-700 66 00 or e-mail: [email protected]. Shareholders are asked to include their name, address, personal identification number, and number of shares registered.

Financial calendarINTERIM REPORT JANUARY – MARCH

April 28, 2020, 8.30 AM

AGM

April 28, 2020, 1 PM

INTERIM REPORT JANUARY – JUNE

July 15, 2020, 8.30 AM

INTERIM REPORT JANUARY – SEPTEMBER

October 22, 2020, 8.30 AM

YEAR-END REPORT 2020

February 5, 2021, 8.30 AM.

Information about the AGM


EBITA RESULT

Profit before amortization of intangible non-currentassets (313.1 + 6.1 = 319.2).

EBITA MARGIN

Profit before amortization of intangible non-current as-sets (EBITA) in relation to net sales for the period (319.2 / 3,335.1 = 9.6%).

OPERATING RESULT (EBIT)

Profit before financial items (EBIT).

PROFIT MARGIN

Profit after financial items expressed as a percentage ofsales (313.2 / 3,335.1 = 9.4%).

EQUITY/ASSETS RATIO

Equity as a percentage of total assets (1,241.1 / 2,226.2 = 55.7%).

AVERAGE EQUITY

The average of the period’s opening equity balanceand the period’s closing equity balance ((1,241.1 + 1,106.3) / 2 = 1,173.7).

CAPITAL EMPLOYED

Equity plus interest-bearing liabilities (1,241.1 + 164.4 + 105.8 = 1,511.3).

RETURN ON EQUITY

Profit after full tax as a percentage of average equityincluding non-controlling interests (241.7 / 1,173.7) = 20.6%).

RETURN ON CAPITAL EMPLOYED

Profit after financial items plus financial expenses expres-sed as a percentage of average capital employed ((313.2 + 15.4) / ((1,511.3 + 1,212.6) / 2) = 24.1%).

NET CASH AND CASH EQUIVALENTS

Cash and bank balances plus short-term investmentsless interest-bearing liabilities (278.4 - 105.8 - 164.4 = SEK 8.2 million).

ACID TEST RATIO

Current assets excluding inventories in relation to cur-rent short-term liabilities (996.9 / 770 = 1.3 multiples).

NET DEBT

Interest-bearing debts less financial interest-bearingassets (164.4 + 105.8 - 278.4 = SEK -8.2 million).

NET DEBT/EQUITY RATIO

Interest-bearing liabilities less financial interest-bearingassets in relation to equity (-8.2 / 1,241.1 = -0.01 multiples).

RETURN ON TOTAL CAPITAL

Profit after financial items plus financial expenses expres-sed as a percentage of average total capital ((313.2 + 15.4) / ((2,226.2 + 1,922.6) / 2) = 15.8%).

EARNINGS PER SHARE

Profit for the year after tax in relation to the averagenumber of shares.

EQUITY PER SHARE

Equity in relation to the number of shares on the balancesheet date (1,241.1 / 19.3 = SEK 64.46 million).

P/E RATIO

Share price on the balance sheet date in relation toearnings per share.

AVERAGE NUMBER OF EMPLOYEES

Average number of employees during the year (2,213 employees).

NET SALES PER EMPLOYEE

Net sales in relation to average number of employees(3,335.1 / 2,213 = SEK 1.5 million).

EARNINGS AFTER FINANCIAL NET PER EMPLOYEE

Earnings after financial net divided by average numberof employees (313.2 / 2,213 = SEK 0.1 million).

VALUE ADDED PER EMPLOYEE

Operating profit after depreciation and amortizationplus payroll expenses, including payroll overhead, inrelation to the average number of employees((313.1 + 2,122.0) / 2,213 = SEK 1.1 million).

BILLING RATIO

Number of hours invoiced in relation to possible hoursbased on normal working hours less vacation hourstaken.

Definitions


GRI indexGRI STANDARD NUMBER INDICATORS COMMENTS PAGE

102- GENERAL DISCLOSURES

ORGANIZATIONAL PROFILE

102-1 Name of the organization 104

102-2 Activities, brands, products, and services 20

102-3 Location of headquarters 104

102-4 Location of operations 15

102-5 Ownership and legal form 36

102-6 Markets served 78

102-7 Scale of the organization 32

102-8 Information on employees and other workers 31

102-9 Supply chain 46

102-10 Significant changes to the organization and its supply chain 52

102-11 Precautionary Principle or approach 50

102-12 External initiatives External initiatives lacking at the group level

102-13 Membership of associations Memberships of associations lacking at the group level

STRATEGY

102-14 Statement from senior decision-maker 9

102-15 Key impacts, risks, and opportunities 50 and 77 (note 2)

ETHICS AND INTEGRITY

102-16 Values, principles, standards, and norms of behavior 46

102-17 Mechanisms for advice and concerns about ethics 48

GOVERNANCE

102-18 Governance structure 37

102-34 Nature and total number of critical concerns 47

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups 50

102-41 Collective bargaining agreements 363 employees in nine Swedish subsidiaries

102-42 Identifying and selecting stakeholders 50

102-43 Approach to stakeholder engagement 50

102-44 Key topics and concerns raised 50

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements 86 (note 15)

102-46 Defining report content and topic boundaries 70 (note 1)

102-47 List of material topics 50

102-48 Restatements of information 51

102-49 Changes in reporting 51

102-50 Reporting period 51

102-51 Date of most recent report 51

102-52 Reporting cycle 51

102-53 Contact point for questions regarding the report 51

102-54 Claims of reporting in accordance with the GRI Standards 51

102-55 GRI content index 102

102-56 External assurance 51


GRI INDEX

GRI STANDARD NUMBER INDICATORS COMMENTS PAGE

200- ECONOMIC TOPICS

ECONOMIC PERFORMANCE

103-1 Explanation of the material topic and its boundary 15

103-2 The management approach and its components 52

103-3 Evaluation of the management approach 57

201-1 Direct economic value generated and distributed 7 and 61

300- ENVIRONMENTAL TOPICS

GHG EMISSIONS




305-1 Direct (Scope 1) GHG emissions 45

305-2 Energy indirect (Scope 2) GHG emissions 45

305-3 Other indirect (Scope 3) GHG emissions 45

305-4 GHG emissions intensity 45

400- SOCIAL TOPICS

EMPLOYMENT




401-1 New employee hires and employee turnover Not reported

OCCUPATIONAL HEALTH AND SAFETY




403-2 Diversity of governance bodies and employees 42

NON-DISCRIMINATION




405-1 Incidents of discrimination and corrective actions taken 43

HUMAN RIGHTS ASSESSMENT

103-1 Explanation of the material topic and its boundaryr 46



406-1 Incidents of discrimination and corrective actions taken 47

HUMAN RIGHTS ASSESSMENT

103-1 BExplanation of the material topic and its boundaryr 46



412-2 Number of employees who have undergone a Code of Conduct training 46

CUSTOMER PRIVACY




418-1 Substantiated complaints concerning breaches of customer privacy or losses of customer 44

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KNOWIT AB (PUBL)KLARABERGSGATAN 60BOX 3383103 68 STOCKHOLM+46 (8) 700 66 [email protected]

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