Global Warning Systems (GWS.ST)

COMPANY ANALYSIS 19 May 2016

Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report.

Redeye, Mäster Samuelsgatan 42, 10tr, Box 7141, 103 87 Stockholm. Tel +46 8-545 013 30. E-post: [email protected]

Key Financials

List: First North Market Cap: 146 MSEK Industry: Information Technology CEO: Andreas Rodman Chairman: Lars Lidgren

7.0 points 9.0 points 7.5 points 0.0 points 4.0 points

Share information

Share price (SEK) 10.3

Number of shares (m) 14.2

Market Cap (MSEK) 146

Net debt (MSEK) -16

Free float (%)

55 %

Daily turnover (’000) 20

Analysts:

Johan Ekstrom [email protected]

Tomas Otterbeck [email protected]

A journey into an emerging industry GWS offers a mobile-based safety service which uses innovative

technology to alert and inform travelers of security threats. The

service is targeting individuals on leisure trips and companies that

want to protect their traveling employees.

GWS has completed the product development and is now

entering a phase of expansion. To seize the market opportunity

and grow quickly GWS has decided to distribute its service

through partnerships within a number of verticals. Contracts have

recently been signed in the insurance, security, telecom and travel

industry. GWS is currently in discussions with a number of

additional international partners.

Our Base case projections are based on already signed contracts

and conservative expectations of additional new partnerships. This

gives us a motivated fair value of 12 SEK. The Bear and Bull case

scenario renders a value of 6 SEK and 20 SEK respectively.

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18-May 16-Aug 14-Nov 12-Feb 12-May

OMXS 30 GWS

Management Ownership Profit outlook Profitability Financial strength

Summary

Global Warning Systems (GWS.ST)

Redeye Rating (0 – 10 points)

2014 2015 2016E 2017E 2018E

Revenue, MSEK 2 6 12 32 54

Growth -10% 197% 94% 167% 68%

EBITDA -10 -15 -11 5 29 EBITDA margin -463% -249% -91% 16% 54%

EBIT -10 -17 -16 -1 16 EBIT margin -475% -281% -130% -3% 29%

Pre-tax earnings -10 -17 -16 -1 16 Net earnings -10 -17 -16 -1 16 Net margin -484% -281% -130% -3% 29%

2014 2015 2016E 2017E 2018E

P/E adj. 0.0 -8.6 -9.3 -161.4 9.3 EV/S -7.9 18.6 10.8 4.5 2.6 EV/EBITDA 1.7 -7.5 -11.8 28.1 4.7

2014 2015 2016E 2017E 2018E

Dividend/Share 0.00 0.00 0.00 0.00 0.00 EPS adj. -0.96 -1.22 -1.10 -0.06 1.11

GWS

Company analysis 2

Redeye Rating: Background and definitions

The aim of a Redeye Rating is to help investors identify high-quality companies with attractive valuation.

Company Qualities

The aim of Company Qualities is to provide a well-structured and clear profile of a company’s qualities (or

operating risk) – its chances of surviving and its potential for achieving long-term stable profit growth.

We categorize a company’s qualities on a ten-point scale based on five valuation keys; 1 – Management, 2 –

Ownership, 3 – Profit Outlook, 4 – Profitability and 5 – Financial Strength.

Each valuation key is assessed based a number of quantitative and qualitative key factors that are weighted

differently according to how important they are deemed to be. Each key factor is allocated a number of points

based on its rating. The assessment of each valuation key is based on the total number of points for these

individual factors. The rating scale ranges from 0 to +10 points.

The overall rating for each valuation key is indicated by the size of the bar shown in the chart. The relative size of

the bars therefore reflects the rating distribution between the different valuation keys.

Management

Our Management rating represents an assessment of the ability of the board of directors and management to

manage the company in the best interests of the shareholders. A good board and management can make a

mediocre business concept profitable, while a poor board and management can even lead a strong company into

crisis. The factors used to assess a company’s management are: 1 – Execution, 2 – Capital allocation, 3 –

Communication, 4 – Experience, 5 – Leadership and 6 – Integrity.

Ownership

Our Ownership rating represents an assessment of the ownership exercised for longer-term value creation. Owner

commitment and expertise are key to a company’s stability and the board’s ability to take action. Companies with

a dispersed ownership structure without a clear controlling shareholder have historically performed worse than

the market index over time. The factors used to assess Ownership are: 1 – Ownership structure, 2 – Owner

commitment, 3 – Institutional ownership, 4 – Abuse of power, 5 – Reputation, and 6 – Financial sustainability.

Profit Outlook

Our Profit Outlook rating represents an assessment of a company’s potential to achieve long-term stable profit

growth. Over the long-term, the share price roughly mirrors the company’s earnings trend. A company that does

not grow may be a good short-term investment, but is usually unwise in the long term. The factors used to

assess Profit Outlook are: 1 – Business model, 2 – Sale potential, 3 – Market growth, 4 – Market position, and 5 –

Competitiveness.

Profitability

Our Profitability rating represents an assessment of how effective a company has historically utilised its capital to

generate profit. Companies cannot survive if they are not profitable. The assessment of how profitable a company

has been is based on a number of key ratios and criteria over a period of up to the past five years: 1 – Return on

total assets (ROA), 2 – Return on equity (ROE), 3 – Net profit margin, 4 – Free cash flow, and 5 – Operating

profit margin or EBIT.

Financial Strength

Our Financial Strength rating represents an assessment of a company’s ability to pay in the short and long term.

The core of a company’s financial strength is its balance sheet and cash flow. Even the greatest potential is of no

benefit unless the balance sheet can cope with funding growth. The assessment of a company’s financial strength

is based on a number of key ratios and criteria: 1 – Times-interest-coverage ratio, 2 – Debt-to-equity ratio, 3 –

Quick ratio, 4 – Current ratio, 5 – Sales turnover, 6 – Capital needs, 7 – Cyclicality, and 8 – Forthcoming binary

events.

GWS

Company analysis 3

Table of contents

Investment Case Summary .................................................................................. 4

Travel Safety Services; An emerging market .......................................................... 4

GWS safety product ....................................................................................... 4

Entering a phase of growth .............................................................................. 4

Valuation ................................................................................................... 5

Company profile .................................................................................................. 6

Background ................................................................................................ 6

Product and Services ..................................................................................... 7

Business Model and Sales ............................................................................. 15

Corporate market - Safeture Pro ................................................................... 16

Consumer market - Safeture ........................................................................ 17

Team ...................................................................................................... 18

Ownership ................................................................................................ 19

Market and opportunity ..................................................................................... 21

Robust growth in traveling.......................................................................... 22

Insecurity creates demand for safety services.................................................... 24

Market for travel insurance is growing ........................................................... 24

Increase in distribution channels .................................................................. 25

Conclusion ............................................................................................... 26

Competition .............................................................................................. 26

Market opportunity ..................................................................................... 28

Financial projections ......................................................................................... 30

Revenue projections per vertical ...................................................................... 31

Insurance .............................................................................................. 31

Security ................................................................................................ 34

Telecom ................................................................................................ 35

Travel................................................................................................... 36

International congress ............................................................................... 37

Costs ...................................................................................................... 39

Summary ................................................................................................. 40

Valuation ............................................................................................................ 41

DCF – Base Case ................................................................................................................... 41

Multiples – Base Case ........................................................................................................... 42

Bull and Bear Scenarios ........................................................................................................ 43

Appendix ........................................................................................................... 44

Board ...................................................................................................... 44

Competitors .............................................................................................. 45

Summary Redeye Rating ................................................................................... 49

GWS

Company analysis 4

Investment Case Summary

Travel Safety Services; An emerging market

People are increasingly travelling to countries where they are exposed to

various security threats. The information available on the ground is often

limited or inaccurate. Concerns about risks and threats among business and

leisure travellers are rising which creates demand for safety services. In

addition, awareness of the value and safety of employees combined with

increasing Duty of Care responsibilities is growing among companies.

Despite these trends, there are only a handful of companies today that

provide security and travel assistance services. This creates a window of

opportunity for GWS comprehensive and innovative safety product.

GWS safety product

GWS AB was founded in 2009, after noticing a lack of vital information and

timely warnings to people on the ground during the global SARS epidemic,

the tsunami in the Indian Ocean and the terror attack in Mumbai. GWS

discovered a need for a mobile-based safety service for companies that want

to protect their traveling employees and for private individuals on leisure

trips. Their service uses innovative solutions and state of the art technology

to alert and inform travelers of security threats and to provide management

at international companies with overview and communication tools. The

services are based on GWS patented mobile phone positioning technology

and intelligence systems and are available on all mobile platforms.

Entering a phase of growth

GWS has recently completed a period of intense product development and

is now focusing on increasing its user base, both in the corporate and

consumer markets. In order to seize the market opportunity and grow

quickly GWS has decided to distribute its security service through

partnerships within a number of verticals. Contracts have recently been

signed in the insurance, security, telecom and travel industry. GWS is in

discussions with a number of additional international partners which

suggests prospective announcements of new partnerships.

An increasingly insecure

world is driving the

demand for security

services among business

and leisure travelers

GWS uses innovative

solutions and state of the

art technology to alert

and inform travelers of

security threats

GWS is in discussions with

a number of additional

international partners

GWS

Company analysis 5

Valuation

Making revenue forecasts for a newly launched product in an industry that

is emerging is difficult and hazardous. However, GWS has showed a strong

momentum in announcing a number of partnership agreements in the last

year. We assume this will continue and our base case scenario relies on

revenue growth in both existing and new partnerships.

Signing up with new additional clients should be easier since GWS now can

refer to existing agreements with large, international clients within each

vertical. GWS safety product has attracted great interest since the product

offers ancillary revenues with high margins for their partners. An

increasingly insecure world also increases the demand among end users.

We consider it positive that GWS is increasing the number of clients and

thereby diversifies future revenue streams. Another factor that underpins

our growth assumptions is that new contracts are expected to include a

lower discount versus the agreements with reference clients.

Our Base case scenario implies a fair value of 12 SEK per share while the

Bear and Bull scenarios indicate a value of 6 SEK and 20 SEK

respectively. The large spread between the bull and bear scenarios owes to

the high uncertainty when making revenue forecasts for a new product in

an industry that is just emerging. GWS safety service was recently launched

and has thereby generated limited revenue. However, the number of

contracts signed with large international companies, in a fairly limited

amount of time, shows the high demand and perceived quality of GWS

product.

Positive future triggers would be announcements of new partnerships

within the targeted verticals. Also, when GWS starts showing profitability

that should bring down the WACC which is depressing the net present value

today.

The base case scenario

indicates a value of 12

SEK per share while the

bear and bull scenarios

indicates 6 SEK and 20

SEK respectively.

The number of contracts

signed with large

international companies

shows the high demand

and perceived quality of

GWS product

GWS

Company analysis 6

Company profile

Background

GWS AB was founded in 2009, after discovering a lack of vital information

and timely warnings to people on the ground during a global SARS

epidemic, the tsunami in the Indian Ocean in 2004 and the terror attack in

Mumbai. At the formation of the company, Andreas Rodman was hired as

acting CEO. He immediately initiated the technical development of the

security service and the optimisation of the business model. The

development was focused on two areas;

a) Developing a software for the retrieval and processing of real-time

information

b) Safe and reliable distribution of messages across country borders.

The design, product features and business model was determined in

cooperation with market experts and potential clients.

By 2011, a beta version of the GWS Service had been developed and was

named Safeture. In March the same year, a powerful earthquake occurred

off the coast of Japan during the first beta test of the GWS service. The

earthquake led to a tsunami and a nuclear disaster in which over 15,000

people died and thousands were injured or missing. The betaversion of

Safeture issued warnings to mobile telephones throughout the system as

early as 46 minutes before the tsunami reached land. In September 2011, a

limited pilot version was launched on the corporate market in Sweden.

In March 2012, a partnership agreement was signed with G4S Sweden and

in September a security service was launched under the brand name “G4S

Global Warning System”. This was paramount for GWS since the

agreement was a confirmation of the need for and the technological quality

of their product. Another positive development in 2012, was that the app

was approved for both iPhone and Android.

In early 2013, the partnership with G4S Sweden resulted in the signing of

contracts with several internationally known Swedish export companies.

This was important since GWS acquired over 1,000 reference customers in

the form of active users.

In February 2014, GWS launched its Windows app and in October they

announced the listing on NASDAQ First North. In November 2014,

GWS also launched the Safeture app for private consumers on the Swedish

market.

By 2011 a beta version of the

GWS Service was developed

and named Safeture

The partnership

agreement with G4S was

a confirmation of the need

for and the technological

quality of their product

GWS

Company analysis 7

April 2015 was an eventful month where GWS was awarded the highly

prestigious Red Herring Top 100 Europe Award, which honors the

most promising technology companies in Europe. In the same month GWS

strenghtened the cooperation with G4S through a global mutual exclusive

agreement for a joint approach targeting the world’s professional security

market. The partnership included joint product development and sharing of

revenues.

In June 2015, GWS received a guaranteed order for a value of SEK 15

million from ERV, one of the largest specialized companies in Europe for

private and business travel insurance. The order includes development and

operations for a first roll-out of a Safeture technology based App to seven

million subscribers which may increase over time.

In February 2016, GWS announced that the agreement with London based

G4S to jointly address the global market will be terminated during 2016.

The agreement and cooperation with G4S Sverige/Sector Alarm will

continue. Behind the decision were organizational changes within G4S

global headquarter. From the perspective of GWS, the global contract with

G4S turned out to limit and complicate the international expansion and the

release of new products and services.

Today, GWS has reached a more mature state where the company has

established platforms for expansion in a number of verticals; namely

insurance, security, telecom, travel and international congress operators. In

addition to announcing a steady flow of new partnershps in these verticals

GWS has also established regional sales offices in Asia and South America.

Product and Services

People are increasingly travelling to countries where they are exposed to

various security threats. Often they cannot speak the local language and the

information available on the ground is often limited or non-existent. The

increasing number of disturbances are not only environmental disasters,

but also accidents, outbreaks of infection and political unrest. Companies in

turn often lack an accurate overview of the destination and safety of their

travelling employees. Warnings from the authorities of threats and disasters

are usually given through TV and radio – a method which does not reach all

those affected in time. Also, efforts to locate travelers in an affected region

was made manually, for example by checking airline and hotel reservations,

when information about a disaster was received. This is a time consuming

process that is also complicated by the fact that travelers change the

itinerary and that some travels must be booked locally after arrival.

GWS

Company analysis 8

Service description

This is the reason GWS saw a need for a mobile-based security service for

companies that want to protect their traveling employees and for private

consumers on leisure trips. The security service is gathered under the brand

name Safeture or, when in cooperation with partners, under white label

brands such as ERV Travel and Care. The service uses innovative

solutions and advanced technology to alert and inform clients on security

threats and provide management with communication and overview tools.

The services are based on GWS patented mobile phone positioning

technology and intelligence systems. In short, GWS service gives access to

specific country information before a journey and on arrival, colour-coded

safety warnings which include detailed information about incidents,

tracking of travellers, improved communication opportunities and local

emergency numbers, all directly into a mobile phone.

Source: GWS

A more detailed presentation of the service is given below;

Regional information

Regional information sent as soon as the traveler arrives in a new country.

This includes current safety-related information about the country,

including emergency numbers, recent threats and incidents, risk

classifications and general background information. All information is also

available at the preparation for the visit abroad. Companies can also add

company-specific information, such as addresses for local offices, taxis and

hotels which the company has agreements with.

The service is marketed

under the brand name

Safeture or, when in

cooperation with

partners, under other

brands such as G4S

TravelAware

GWS

Company analysis 9

Source: GWS

Security Alerts

Security alerts are being sent when an incident occurs that may be relevant

to the traveler's safety. The messages are color coded and contains

important information about what happened and how to act. The alerts are

divided into different categories depending on the severity of the situation;

- Green/General; General events that may affect the traveller, eg

major traffic incidents at airports.

- Yellow/Severe; Events that the traveler should be aware of, but

may not require immediate action. Eg, political unrest,

demonstrations or severe weather conditions.

- Red/Critical; Serious events that may require immediate action

by the traveler. Eg, a tsunami, epidemic infectious outbreaks,

environmental disasters, extreme weather conditions or terrorist

attacks.

Source: GWS

GWS

Company analysis 10

The critical security alerts are sent through both as SMS and push

notifications to ensure that the information will arrive and the alerts will

reach the user disregarding even if data roaming is turned off.

Tracking

Tracking the traveler can be displayed in real time on a map on the detailed

address. The system reports the user's position once every hour (once every

minute for one hour if the traveler is using the SOS button). When roaming

data is off, the traveler's last position is known. The position determines the

security alerts that are sent out.

Source: GWS

When a safety incident occurs or a security threat emerges somewhere in

the world the security officer or management of an organization need

immediate answers about their employees in that affected region. The

Safeture ISO is a tool for security officers and management to immediately

access this information and interact with employees on location. As an ISO

user the security manager recive a SMS if he or her have personel in an area

where a serious incident occurs. The easy-to-use Safeture ISO is provided

through geographical information systems (GIS) and in plain text.

SMS communication

SMS delivery service is specifically designed to improve the ability to

communicate in damaged or congested mobile networks. Safeture uses

highly reliable SMS delivery methods for critical messages. The SMS

delivery technology is based on multiple operator routes to the mobile

phone which empowers Safeture to send SMS to a user when ordinary

operator services cannot. This is especially important when a disaster or a

major security incident occur since mobile networks often get overloaded

and become inoperative. The SMS high quality information delivery

channel is available to management so that they can use a reliable

communication channel to employees abroad and can access it by

themselves. Safeture provides an SMS information channel to all users per

country. This information sends SMS messages in a more reliable manner

Safeture ISO is a tool for

management to

immediately access

information and interact

with employees

GWS

Company analysis 11

than ordinary SMS services and also provides reports on whether or not an

SMS has been received by the recipient.

SOS Response

SOS numbers are made easily accessible for immediate contact with local

emergency numbers and immediate contact with the internal security

organization.

Source: GWS

Your quick link to local help when you feel unsafe, ill or get injured. Tap to

share your location and connect directly with local ambulance, police and

fire teams. Every second saved counts when you are in an emergency. One

click not only connects you with local ambulance, police and fire teams. You

also share your exact position so you get help fast.

Geolocation

Check-in to let family, friends and colleagues see your exact position and

track as you travel to new destinations. Send the position allows the system

to know the traveler's exact position at a given target date. In certain

situations (for example, loss of data connection, or the direct threat), it is

important to be able to send the exact location. Check-in to share your exact

GPS location and travel movements. A map shows where your family,

friends and colleagues are located.

Support service

Safeture provides a 24/7 call-in support service for clients in need of advice,

general information or threat updates. The expert support service is a useful

tool and asset to enable the user to be prepared for a private or business trip

abroad. GWS operators provide assistance about security, transportation

and culture. The direct call-in service can aid security directors and decision

makers during a situation of crisis - or simply by providing or clarifying

specific information of interest.

Check-in shares the exact

position and tracks the

traveller to new

destinations

Safeture provides a 24/7

call-in support service for

clients in need of advice

GWS

Company analysis 12

Local news

Get up-to-date news in English for the country you are visiting.

Source: GWS

The services above are packaged into two service offerings targeting the

consumer market and the corporate market;

Consumer market - Safeture

The Safeture app targeting private individuals is available for Android and

iPhone platforms. Safeture gives the user the possibility, via a “Track Me

Now” function, to allow friends and family to follow the user’s position

virtually. Safeture also contains an automatic translation option with local

information and alerts in 90 different languages, along with several other

features.

Corporate market - Safeture Business Solution

The Safeture Business Solution includes two security tools:

a) The Safeture Pro App

b) The Safeture Instant Security Overview (ISO) system

The Safeture Pro App ensures personal security for the employee through

real-time warnings, alerts and and information as well as one-click

connection to local SOS emergency response services. Wherever the

employee is traveling in the world, the app uses positioning to identify his

or her current location and send local area alerts and security information.

In addition, local organization- or company-specific information can be

automatically and directly linked to individual traveling employees via the

ISO system.

The Safeture Instant Security Overview (ISO) system allows central and

local security managers to locate and communicate with employees

The services are packaged

into two offerings

targeting the Consumer

and the Corporate market

GWS

Company analysis 13

anywhere in the world in real-time via the Safeture Pro app. Through GWS

patented positioning technology, the ISO directly links to travelling

employees through the organization’s Safeture account. Security managers

get precise data and statistics about company travelers and assets. The ISO

system therefore provides internationally active companies with integrated

communication tools and an instant security desktop system that will help

keep their personnel and assets safe in any surrounding.

Currently the Safeture Pro mobile application is available for Android,

iPhone, Blackberry and Windows Phone.

The process

When an incident occurs information is being sourced by GWS software.

Security experts in GWS control center reads and evaluates the information

about the incident. The security experts swiftly publish summaries that are

being distributed to both the app user on the ground and to security

personnel at the employees company. The user in the affected area can

make urgent security measures on the ground and security personnel at the

company can make decisions based on the received information. The

decisions can then be communicated to the employee through the reliable

sms service.

Source: GWS

The warning message has a “read receipt” function which is patented in

Europe until 2026. A patent has also been filed for an innovative technology

that enhances the system's functions for positioning and message

distribution. This technology strengthens the positioning function by

utilizing multiple methods in a global mobile network in order to provide a

more reliable position and prevent operators from blocking messages that

are mistakenly classified as spam.

The security experts

publish summaries that

are distributed to the app

user and to security staff

at the employees company

GWS

Company analysis 14

Today, modern digital media, the Internet and social media rapidly spread

large amounts of rumors, inaccuracies and other information without

evaluation of the source. This means that travelers can be reached with

information that is misleading and potentially dangerous. The need to

distinguish reliable information from the global information noise is

therefore one important cornerstone of the security service. GWS therefore

uses frontline content providers, data mining capabilities and state of the

art communication tools to provide their clients with processed and vetted

intelligence on safety matters globally. Examples of information providers

are govermental organisations, national rescue organisations, institutes,

news media (regional and international), social networks etc. GWS patented

software is especially developed to gather and distribute relevant and

accurate security information.

Source: GWS

The Safeture ISO World service offers unique security information on a

national level with risk- and advice -information integrated with employee

and asset localization data. GWS Safeture service also contains a number of

additional important factors that are difficult to copy. The functions behind

are trade secrets that solve, manage and compensates including the

following:

Unique Features

- Turned off data roaming

- Different restrictions in different mobile platforms and versions of

operating systems

- Battery life for regular location

- Reach out with alert messages globally through poor network

connections, blocking spam filters and congested mobile networks

- False positioning example due to errors in positioning data

- Real-time monitoring of news and data

- Processing Tools to achieve a fast and reliable process for the

production of content

The need to distinguish

reliable information from

information noise is an

important cornerstone of

GWS security service

GWS

Company analysis 15

- Adaptive technology to compensate for connection problems

between networks. The majority of the above functions are already

implemented and improvements are made regularly

- GWS also has a clear ambition to work with multiple language

support. A large part of the country information is available in

multiple languages as eg, English, Spanish, Chinese, German,

Swedish, Danish and Polish and additional languages will be added

subsequently.

- The 24/7 alerts are currently in English due to the extra cost to

handle real time translation around the clock. However, all alerts

include an autotranslate function in 90 languages. This optionality

is also available for the country information. 24/7 real time

translation can be an option when GWS has reached sufficient size

to cover the additional cost.

Business Model and Sales

GWS has completed a period of intense product development and is now

shifting its focus on increasing its user base, both in the corporate and

consumer markets. In order to seize the market opportunity and grow

quickly GWS has decided to distribute its security service through

partnerships. The advantage of this is that the partners already have

established relationships with their clients. This makes it an easy sell since

GWS product is added into the partner’s product offering. GWS product

increases the value of the partners’ product at the same time as GWS can

benefit from quickly reaching large volumes of clients of various sizes and

in different geographical markets. Reaching large volumes is of essence to

GWS in order to become a leader in its niche and since the business model

has strong economies of scale. An increase in user volumes does not affect

the operational cost to a large extent, which means that a significant

leverage effect will boost profits.

The partnership strategy is used in industry verticals where there is a

market for GWS Safeture service. The targeted verticals are security,

telecom, travel, insurance, congress/events and directly to private

consumers through agents. The figure below shows the current

partnerships entered into within each vertical as of today. Usually the first

partnership within a vertical, eg ERV in insurance, creates a valuable

reference client which facilitates additional partnerships within that same

vertical.

Reaching large volumes is

of essence to GWS in

order to become a leader

in its niche

GWS

Company analysis 16

Source: GWS

It is also important to note that since GWS is targeting large global

corporations the sales and implementation processes are usually long. The

time from initial contact to signed contract is usually as long as 12 months

due to negotitations and lengthy internal decision processes within the

potential partner. The time from signed contract to product launch is

usually another 12 months.

The partnership strategy is used when targeting the two market segments;

companies and private individuals.

Corporate market - Safeture Pro

In the company segment, GWS main target is large, international

companies. Within this group demand for GWS product is expected to be

higher since they usually have large numbers of employees based in, or

traveling to, regions with a risk to be affected by disasters and threats.

These companies often have a security budget for this type of service and

"Duty of care" and "Social responsibility" is winning traction as guiding

principles. In some countries, such as the US, Britain and other former

commonwealth countries, it is now punishable if deficiencies in the security

routines of an organization lead to hazards or injuries.

When selling their service to a company the business model is based on a

license per end user with a price per user per month, an entire company

license or alternatively, per user and per day abroad, according to the model

SaaS (Software as a Service).

To grow quickly GWS has

decided to distribute its

security service through

partnerships

In Britian it is punishable

if deficiencies in the

security routines of an

organization leads to

hazards or injuries

GWS

Company analysis 17


The Safeture app enables the user, via a “Track Me Now” function, to allow

people to follow the user’s position virtually. Safeture also contains an

automatic translation option with local information and alerts in 90

different languages, along with several other features.

In the market for private individuals there is a great need for security as

well. This has attracted interest from insurance companies, travel agencies

and telecom operators who see an opportunity to increase margins by

offering services to enhance personal safety. In the consumer market, GWS

is in dialogue with a number of insurance companies and telecom

operators. A partnership with a telecom operator could provide fast access

to a large number of users. A small telecom operator, for example, has

about two million users, while a large operator has over 50 million users.

The consumer-oriented GWS service will contain fewer features than the

business edition. This brings down the pricing per customer but this is

compensated by the fact that the consumer market contains significantly

larger volume of travelers.

Source: GWS

In the European market, GWS is marketing its services directly while other

markets will be serviced through local partners. Examples of the latter

strategy is the announced local sales offices in Brazil and Malaysia. The

local partners will sell and market GWS services throughout South America

and the Asian Pacific.

Europe and North America is currently prime focus but other interesting

future markets are the Middle East and Asia. GWS intention is to establish a

foothold in the Middle East and has recently started a subsudiary in

Singapore.

Insurance companies,

travel agencies and

telecom operators see an

opportunity to increase

margins by offering

safety services

Europe and North

America is currently

prime focus

GWS

Company analysis 18

Team

Andreas Rodman was hired as acting CEO at the formation of GWS in

2009. He hand-picked the current management team and they initiated the

technical development of the security service and the optimisation of the

business model. The operative management is supported by the board

which consists of the founders and people with expertise in international

security and marketing. The operative management is presented below and

an overview of the board members is given in the appendix.

Andreas Rodman – CEO (1973)

Andreas Rodman is a M.Sc. in Computer Science from the University of

Lund. Andreas was the CEO, founder and largest private owner of Bokks

AB, a company that was sold in 2007 to the Swedish stock listed company

MultiQ AB. Andreas has been GWS CEO since 2009. Mr Rodman has a

shareholding of 1 274 340 through related party, related company and

privately and also holds 120 000 options.

Andreas Larsson – CTO (1978)

Andreas Larsson studied Computer Science at Lund University and has

previously worked as Chief Architect and Software Design Manager at

MultiQ. Before that he co-founded and developed Bokks AB together with

Andreas Rodman. Andreas has served as GWS CTO since 2014. Mr Larsson

has a shareholding of 10 158 shares and 50 000 warrants through related

party, related company and privately.

Johan Tinnerholm – COO (1985)

Johan Tinnerholm studied Political Science and Intelligence Analysis at

Lund University and the University of North Carolina at Chapel Hill (UNC).

He previously worked as the Director of the Swedish Association of

International Affairs. Johan has served as GWS Director of Analysis and

Services since 2011. Mr Tinnerholm has a shareholding of 4500 shares and

50 000 warrants through related party, related company and privately.

Morgan Widung – VP Global Sales & Marketing (1970)

Morgan Widung has a M.Sc in Electrical Engineering from Lund University.

He has worked predominately in business and sales management positions

for companies within the telecom/semiconductor and renewable energy

sectors, such as InnoVentum AB as Head of Global Sales and RF Micro

Devices as SonyEricsson Global Account Manager. Mr Widung has a

shareholding of 7500 shares and 50 000 warrants through related party,

related company and privately.

The operative

management is supported

by the board which

consists of the founders

and people with expertise

in international security

GWS

Company analysis 19

Åke Knutsson – CFO (1955)

From 2009 to 2011, Mr Knutsson was the Chief Financial Officer of the

Prestando Group which supplies pressed high-grade steel parts to the

European and US automotive industry. Between 2006 and 2009, he was

managing director of A Clean Partner International AB, a company which

develops and sells industrial cleaning substances. From 2000 to 2006, Mr

Knutsson was the vice-managing director and chief operating officer of

Biomet Cementing Technologies AB, part of the international Biomet Group

which is one of the world´s leading medical device manufacturers. From

1980 to 1999, he held various finance and accounting positions in the

Scandimed Group, Lidaris Group, Ateljé Lyktan AB, the Ministry of

Forestry of Sweden, Kone Cranes AB and ASG AB. Åke has served as GWS

Chief Financial Officer since 2014. Mr Knutsson has a shareholding of 5

000 shares and 25 000 warrants through related party, related company

and privately.

Ownership

The Company's shares are listed on Nasdaq First North in Stockholm under

the ticker GWS. As of December 31 2015, the number of shares was

14,248,033. The table below shows the ownership of the five largest

shareholders.

Diamonex Ltd. is 100% owned by founder and chairman Lars Lidgren.

Academic Medical Group is owned by Chairman Lars Lidgren through the

companies Diamonex Ltd 53.09%, Seagles Aktiebolag 2.66% and Algora AB

4.98%. Director Sven Holmgren owns 1.88% (through related party),

member of the Board Wolter Mannerfelt owns 0.51% (via Acuzena Ltd.),

director Hans Skalin owns 2.55% (through affiliates) and CEO Andreas

Rodman owns 8.95% (private) in Academic Medical Group AB. Academic

Medical Group acquired the shares of the fully owned subsidiary AM E-

Consulting in June 2015.

The ownership of GWS is therefore to a large extent concentrated to the

operative management, the founder and members of the board which is

decidedly positive. In the coming years, it would also be positive to see

additional institutional investors with long term investment perspective and

strong financial resources in the event of capital need.

Ownership % of capital No of shares

Diamonex Ltd 24,5% 3 488 174

Emirates Advanced Investment Trading 6,7% 960 374

Academic Medical Group AB 4,9% 692340

Lundaklostret AB 4,7% 676 119

Andreas Rodman 4,1% 577 500

Others 55,1% 7 853 526

100,0% 14 248 033

Source; GWS

The ownership is

concentrated to the

operative management,

the founder and members

of the board

GWS

Company analysis 20

On April 9 2015, the Extraordinary General Meeting decided on a directed

issue of warrants to employees and key personnel for a maximum of

650,000 warrants of series 2015/2019. The increase in the company's share

capital upon exercise of the warrants amounts to no more than 52 000. The

warrants were issued at a price of SEK 0.13 per warrant. The subscription

price for utilization of the warrants is 16.56 per share. 427,885 warrants

were subscribed up to the 17th of April 2015, which was the last day of

subscription. The warrants can be utilized for subscription of newly issued

shares in the company during the utilization period, which runs from and

by 15 March 2019 to and including March 29, 2019, One (1) warrant entitles

to subscribe for one (1) new share.

On June 17 2015, the Annual General Meeting decided on a directed share

issue comprising 40 000 warrants of series 2015/2019 issued to Sven

Holmgren, Hans Skalin, Paul Degerlund and Wolter Mannerfelt. The

warrants were issued at a price of SEK 0.31 per warrant. Warrants entitle to

subscription of 40,000 new shares of the Company. The warrants can be

utilized during the period from July 8, 2019 to July 24 2019. The

subscription price for the use of warrants is 31.11 per share.

GWS

Company analysis 21

Market and opportunity

There are several factors that together create a benign market for GWS

security product. As can be seen below, the global security market is

showing steady growth in all international regions.

Combined, the global security industry has a turnover of around 155 billion

USD per year. The majority of this revenue, nearly 131 billion USD, is

coming from securing physical buildings and other tangible assets. As can

be seen below, less than 1 bn USD is spent on employees’ safety.

However, companies are now beginning to realize that the infrastructure is

interchangeable with a relatively low cost, while the staff's lives and their

skills represent a significant investment that must be protected. Hence, as

the global economy is getting more dependent on employee skills the

spending on employee safety will increase in the future.

Security Market Growth - 190 bn GBP by 2021

Source; G4S

Security spending per segment (bn USD)

Source; GWS

131 bn USD

24 bn USD

< than 1 bn

0

20

40

60

80

100

120

140

Offices and buildings IT and Information Employees

The global security

market is showing steady

growth in all regions

Spending on employee

safety will increase in the

future

GWS

Company analysis 22

There are also initiatives coming from international, governmental and

health care organisations to increase the awareness of the employer’s

responsibility for the health, safety, security and well-being of their globally

mobile employees, ie Duty of care. The world can be a dangerous place

and companies must apply their Duty of Care responsibilities for managing

different staff (business travelers, locals, expatriates, international

assignees and dependents). Companies may be held liable for their

”negligent failure to plan” or the omission of a Duty of Care plan, either

intentionally or unintentionally, as a result of an employee injury or death.

In more advanced and developed markets, the legal framework for Duty of

Care is well defined (chart below) 1. However, still today only an average

level of awareness exists among organizations and key stakeholders.

Companies around the world fail to engage in the full spectrum of managing

employee travel risk, and still have a long way to go when it comes to

implementing a Duty of Care culture. In Ernst & Young’s latest Global

Mobility Effectiveness Survey 50% of companies thought their global

mobility team was understaffed and only 30% have a system in place for

tracking business travellers.

Robust growth in traveling

According to a study by the Global Business Travel Association

Foundation (GBTA), global business travel spending overall will reach a

record $1.25 trillion in 2015, a 6.5% rise over 2014. Next year should be a

banner year, with just under a 7% increase forecast. Growth will remain

strong through 2019, with year-over-year increases of 6% in 2017, 6.4 % in

2018 and 5.8% in 2019.

1 An employer’s Duty of Care responsibility for employees who travel across borders on business is documented by Professor Lisbeth Claus of Willamette University in a 2009 White Paper entitled, Duty of Care of Employers for Protecting International Assignees, their Dependents and International Business Travelers, published by International SOS.

Duty of Care Responsibility

Source; "Duty of Care of Employers for Protecting International Assignees, their Dependents and Intl Business Travelers"

Governmental and health

organisations work to

increase the awareness of

the employer’s

responsibility for their

globally mobile

employees, ie Duty of care

GWS

Company analysis 23

Companies in North America spent $318 billion on business traveling in

2014, with 90% coming from the U.S. Business travel spending in Asia

Pacific, the biggest market overall, totaled $459 billion in 2014. Travelers in

Western Europe spent $271 billion on business travel in 2014 and Latin

American business travel totaled $52 billion in 2014, led by Brazil, which

totaled $32 billion. The Middle East, and Africa, accounted for $77 billion

in business travel spending in 2014 combined.

Tourist traveling is also showing robust growth. According to the World

Tourism Organization, there were >1 billion worldwide international

tourist arrivals in 2013, an increase of 5% from 2012 and >57% from 2003.

Industry data from IATA, graph below, clearly shows that both business and

tourism travels combined is growing steadily in spite of international

shocks like, for instance, the global financial crisis and 9/11.

Global Business Travel spending (bn USD)

Source; Global Business Travel Association (GBTA)

1 174

1 250

1 338

1 418

1 508

1 596

1 000

1 100

1 200

1 300

1 400

1 500

1 600

1 700

2014 2015 2016 2017 2018 2019

bn

USD

Global Air Passenger Traffic, 1950-2014

Source; IATA

Growth in business travel

spending will remain

strong

GWS

Company analysis 24

Insecurity creates demand for safety services

In 2015, nearly half of Americans (48%) surveyed by the US Travel

Insurance Association said they are more concerned than in the past about

traveling, in light of recent world developments such as the Ebola virus

outbreak, or civil unrest in places like Ukraine or the Middle East. Of

Americans who voiced more concern about traveling because of world

events, nearly half (45%) said they were more likely to purchase travel

insurance. Also, it wouldnt be a bold statement to assume that these figures

have increased significantly after the recent terror attacks in Paris and

Brussels.

Among those most likely to purchase travel insurance, the types of coverage

that interested them most were for medical and cancellation (77% and 74%

respectively), followed by travel interruptions or delays (72%), and

emergency medical evacuation coverage (65%). 67% expressed interest in

travel assistance services. This is good news for GWS since it indicates a

strong demand for their product. Safeture is also more comprehensive than

the few competing products in this new market. Another advantage is that

Safeture is costing the travelling consumer a fraction of the cost compared

to eg emergency evacuation, cancellation, etc

Market for travel insurance is growing

According to research published by Finaccord, the global market for stand-

alone travel insurance and assistance2 was worth around USD 13.8 billion in

2013, and this figure is expected to rise to a staggering USD 18.1 billion by

2017.

Based on extensive primary research across over 40 individual countries,

Finaccord calculates that in 2013 gross written premiums from travel

2 excluding policies linked to credit cards and bank accounts.

High demand for travel assistance services

Source; Survey by US Travel Insurance Association

77%

74%

72%

65%

67%

55% 60% 65% 70% 75% 80%

Medical

Cancellation

Travel delays

Emergency evacuation

Travel assistance services

67% expressed interest in

travel assistance services

GWS

Company analysis 25

insurance and assistance policies sold on a stand-alone basis were divided

regionally as follows: the Americas (34.6%), Europe (33.2%), Asia-Pacific

(29.7%) and Africa and the Middle East (2.5%).

The United States was still the world's largest travel insurance and

assistance market in terms of gross written premiums from stand-alone

policy sales in 2013, followed by Canada, the UK, Japan and then Australia.

The 2010-2012 Travel Insurance Market Survey revealed that Americans

spent nearly $1.9 billion on all types of travel insurance in 2012,

representing a sales growth of 14%. 29 million people covered by travel

insurance policies Approximately 21 million travel insurance policies were

sold by UStiA member companies, providing coverage for some 29 million

people in 2012.

The market in Europe is being assessed in Finaccord’s study titled “Travel

Insurance and Assistance in Europe”. The value of the market for stand-

alone travel insurance and assistance across 20 European countries was

EUR 3.86 billion in 2014 in terms of gross written premiums and is forecast

to rise to EUR 4.54 billion by 2018. The UK market is by far the most

valuable as it was worth more than twice as much in 2014 as Germany, the

next-largest country.

Increase in distribution channels

Travel insurance is sold and distributed through an increasing number of

channels. This trend is visible in the US market where traditional travel

suppliers like travel agencies and tour operators still accounts for more than

half of all travel insurance premium volume. However, other outlets are

gaining ground, as Americans are buying their travel insurance from a

wider array of sources. Online travel agencies and airlines now accounts for

25% of travel insurance sold. Internet aggregators (companies that sell

Gross premiums from travel insurance and assistance in 2013

Source; Finaccord

35%

33%

29%

3%

Americas

Europe

Asia-Pacific

Africa and MiddleEast

GWS

Company analysis 26

travel insurance products from various providers), direct to consumer, sales

from brokers and others accounts for 12%.

While still reflecting a small share of the overall market, internet

aggregators, along with brokers and other channels grew by nearly 38%

between 2010 and 2012. Direct to consumer sources were close behind,

with a sales growth of 36%, while online travel agencies and airline sales

grew by nearly 19%. The tradidional suppliers grew, as a group, by 11% in

sales.

Mike Meeks, COO of Berkshire Hathaway Travel Insurance with a focus on

the American 2 bn USD market, notes that the industry develops new

products to appeal to more clients. He also points to the fact that insurance

is an ancillary product which can earn agents substantial commissions. This

will increase the number of agents selling newly developed travel insurance

products and be a key part of the industry’s expansion.

Conclusion

The security market is growing steadily and the market for travel and safety

services in particular. The driving forces are;

- Increased business and tourism traveling

- Increased awareness of employee value combined with Duty of Care

responsibilities

- Higher concerns about risks and threats among business and

leisure travellers

- New distribution channels and high margins will increase the

marketing, and the awareness, of safety products like Safeture

Competition

The first question that comes to mind when assessing GWS product is if

search engines on the Internet can serve as a substitue. There are a

number of reasons why this is not the case;

- Finding information takes time and time is valuable in a situation

of crisis

- Information distributed on the web can be incorrect and of poor

quality

- Safeture provides a push-function that alerts the traveller. A

traveller relying on Internet is initially unaware of a potential crisis

or accident

- Safeture locates the traveller through its gps-system and the

employer or family can keep track of the traveller

New products can earn

agents substantial

commissions

GWS

Company analysis 27

- Safeture has a secure text messaging system if there is no Internet

connection - Safeture has an assistance and rescue function often provided

through their partners

Today, there is no dominant global provider of safety services. There are a

number of small providers of security services but the market is just

emerging and therefore far from saturated. Competition in the app market

in general is fierce since the barriers to entry are relatively low. This can

often lead to an oversupply of apps and the chances of success is low if the

product doesnt have a competitive advantage. We believe GWS has found

an interesting niche with a good product in a market where competition is

still relatively small. Security, however, is sacred for most and a security app

therefore requires a brand with a strong credibility.

We have scanned the global market for travel security apps and the table

below lists the most advanced apps. As can be seen, GWS has found a

unique position in their product mix. The most uncommon services

provided by competitors is real time warnings delivered as SMS and

hospital recommendations. According to GWS their real time positioning

also has a minimum battery consumption function. This is important as

positioning services drastically drain the battery life which would be

detrimental in an urgent situation. GWS has an "all-purpose" approach with

their app Safeture. The main focus is to resolve several needs for people

who are located in places where uncertainty is high.

GWS Safeture

Travel Navigator

Blue Cross: Hospital finder

Red Cross: Emergency

Guardly Mobile

Safety Map Worldwide

Global rescue

Travel Guardian

BTA Help (Allianz Help)

AON WorldAware

Critical Trac (iJet)

Everybridge;

- Mobile Aware

- Safety Connection

Red24 (HRG Worldwide)

International SOS

Geografiskt nischade

FEMA

CodeRED Mobile Alert

Emergency Networks

Life360

RT Warnings

iMapWeather Radio

Disaster Alert

Hurricane Tracker

Källa: Redeye Research

Alert

movement

RT Warning

(SMS)

Local

SOS

Country

info

Hospital

Recom

RT Warning

(Data)

RT Local

News

Safety Functions Share

position

The market is just

emerging and therefore

far from saturated.

GWS

Company analysis 28

Another popular thing among security apps are "Emergency Networks".

Here, the service focus on positioning and communication with friends,

family and business for people who are in an unsafe area. The network is

created by the users themselves and for obvious reasons is more focused on

the local home area. We therefore believe that the majority of the existing

providers of digital security and safety services don’t offer the same

combination of services as GWS in terms of;

a) high quality information

b) fast and reliable distribution

c) safe communication

d) tracking

As with travel insurance in general, there should be room for several

suppliers of security and safety services in the global market. Probably with

a small number of dominant suppliers in each geographical market.

However, the barriers of entry are relatively low for a company with

extensive resources. GWS has a technological advantage as companies in

the security and insurance market usually does not have the needed

technological expertise in-house. In any case, GWS needs to grow quickly

and this is why management has decided to distribute Safeture through

partnerships with global reach.

Market opportunity

It is difficult to assess the market opportunity for a newly developed

product in a new, emerging market. However, as described above, several

trends indicate a huge potential for GWS product and this has already been

materialised in signed contracts with international partners. The reasoning

below will be an attempt to show the sales potential for GWS rather than

being an assessment of the total potential market size.

GWS is currently focusing on the European and North American markets.

Based on the research above, the market for travel insurance and assistance

in 2017 is expected to reach 12 bn USD in US and Europe. Prices for travel

insurance and assistance vary considerably but the average price is most

probably several times higher than for GWS security service.

If we assume that an average travel insurance is 10 times more expensive

than the security service app the potential market would be 1.2 bn USD (if

all who bought travel insurance also bought a security service app). GWS

security app is considerably cheaper than a traditional travel insurance.

Despite this, we still assume that one out of four travellers buying the travel

insurance and also buys the secuity app. This brings the potential market

opportunity in the US and Europe to 300 mUSD. If we then assume that

GWS, through its partnerships and leading technological position, takes

As with travel insurance

in general there should be

room for several suppliers

of safety services

Multiple themes indicate a

huge potential for the

service and this has

already been materialised

in signed contracts

GWS

Company analysis 29

10% of this market that would render 30 mUSD, corresponding to roughly

240 mSEK, in annual revenues.

GWS

Company analysis 30

Financial projections

GWS product has quite recently been launched on the market and has

thereby generated limited revenue up to now. However, the recently signed

contracts are now starting to contribute to revenue growth. As mentioned

previously, GWS services are packaged into two service offerings targeting

the consumer market and the corporate market.


The Safeture app targeting private individuals is available for both the

Android and iPhone platforms. Safeture allows friends and family, via a

“Track Me Now” function, to follow the user’s position. Safeture also

contains an automatic translation option with local information and alerts

in 90 different languages, along with several other features.

GWS has decided to package this service in large ”offer to subscriber” deals.

The client buys a package where they can offer its subscribers access to

GWS software. As an expample, ERV has acquired the right to offer 7

million of its clients the right to use Safeture. It is important to note that

ERV pays for the number of users which have access to the software, not the

number of users which actually download and use the app. The minimum

revenue GWS is receiving is thereby preset in the initial contract and not

dependant on downloading rates and usage. If the client wants to offer

more of its subscibers access to the service, this will generate additional

revenue for GWS. Naturally, GWS is focusing on clients with large

consumer bases. The targeted annual revenue per “offer to subscriber” is

roughly 1-2 USD. A contract offering access to Safeture for one million

subscribers would consequently generate an annual revenue of 1-2 mUSD.

Corporate market - Safeture Business Solution

The Safeture Business Solution includes two security tools:

a) The Safeture Pro App

b) The Safeture Instant Security Overview (ISO) system

The Safeture Pro App ensures personal security through real-time

warnings, alerts and and information as well as one-click connection to

local SOS emergency response services. In addition, local organization- or

company-specific information can be automatically and directly linked to

individual traveling employees via the ISO system. The Safeture Instant

Security Overview (ISO) system allows central and local security managers

to locate and communicate with the individual anywhere in the world in

real-time via the Safeture Pro app.

As opposed to the consumer service, the client pays for the number of actual

downloads of the Safety Pro app. In this product category, GWS is focusing

GWS

Company analysis 31

on finding partnerships with companies that offer high security services to

their customers, eg security companies. The targeted annual average

revenue per Safeture Pro is 75 USD (50 SEK per month). The revenue is

shared with the distributor but GWS keeps around 60% for managing the

service.

As mentioned earlier, GWS has decided to distribute its service through

partnerships in order to grow quickly. Management has defined a number

of verticals where their product has a natural and value adding fit with the

partners’ business model. GWS has recently signed a number contracts with

partners in these verticals. Below, we are displaying our projections for both

existing and new potential contracts within each vertical.

Revenue projections per vertical

Insurance

Insurance is the largest vertical by revenue at this point due to the contract

with ERV. In June 2015, GWS signed an exclusive agreement with ERV

whereby ERV bought Safeture for 7 million of their customers. ERV is one

of the largest specialised companies in Europe for personal and business

travel insurance and the initial order value is 15 mSEK. The full roll-out will

start in Q2 2016 so limited revenue from this contract has been received up

to now. The 15 mSEK is guaranteed and ERV will bundle Safeture with their

existing product in order to increase the value of their travel insurance.

Apart from increasing the perceived value of the insurance product,

Safeture adds value to ERV in a number of ways;

Safeture enables ERV to save costs and improve margins

When ERVs clients are using Safeture, the probability of being involved in

accidents should decrease and hence decrease potential redemptions paid

to the insurance taker. However, more importantly, ERV has agreements

with a network of 40 000 hospitals and doctors. Using Safeture, ERV can

direct their clients to these hospitals and doctors with predetermined

treatment fees. Also, the network has been carefully evaluated and provides

high quality treatment which decreases the risk for rehabilitation costs and

costly mistreatment.

Potential to increase revenues

The app can be used as a sales channel whereby ERV can offer additional

services. Eg, if a client is arriving in a country where ERVs insurance is not

valid the app could send a notification of additional insurance coverage.

This is possible since the locationing system can sense where the user is

traveling.

GWS

Company analysis 32

User statistics

ERV will receive valuable user metrics which can be used in tailoring service

offerings to their clients. The safety service is obviously a competitive

advantage vs plain vanilla travel insurance. The service also offers a positive

interaction with the client (caring and helping) as opposed to the traditional

negative contact of an insurance company (paying the premium and getting

redemption after an accident).

The agreement with ERV runs over an undisclosed time period and GWS’s

goal is to continue to grow from the initial seven million subscribers via

ERV’s owner Münich Re. ERV is a leading international travel insurance

company with 1100 employees, head quarter in Germany and with

operations in over 20 countries. It is part of the ERGO insurance group,

which is a 100 % subsidiary of Munich RE, a global and financially robust

reinsurer and risk carrier with more than 40,000 employees. Safeture will

initially be distributed in Sweden, Denmark and Germany.

In the revenue forecast for ERV, the following assumptions are being

made;

- The guaranteed contract is assumed to run for 3 years. 15 mSEK in

total guaranteed contract value is therefore assumed to generate 5

mSEK per year.

- This gives ERV the right to distribute Safeture to 7 million clients.

This implies that GWS is receiving roughly 0,70 SEK in annual

revenue per consumer. The reason for the discount is that ERV is a

global company with a large client base and a highly valuable

reference in the insurance segment. Additional users from ERV will

also be assumed to generate 0,70 SEK per year.

- Additional users from ERVs client base is assumed grow from the

initial 7 million and reach a total subscriber base of 12 m at the end

of 2017.

The reference contract with ERV has now resulted in the first fully priced

partnership with the German travel insurance provider, Dr Walter. Dr

Walter has a smaller customer base than ERV but the revenue per user is

more than 10 times higher. We expect to see more contracts similar to the

one with Dr Walter in the future with a fixed revenue per user around 10

SEK anually.

ERV (Retail)2016 2017 2018

Users 7 000 000 9 000 000 12 000 000

Yearly revenue (SEK) 5 000 000 6 300 000 8 400 000

Revenue per user (SEK) 0,70 0,70 0,70

GWS share (100%) 3 675 000 6 300 000 8 400 000

Source: Redeye Research

GWS

Company analysis 33

In March 2016, a partnership contract was signed with California-based

International Care. The company is a multidisciplinary broker of global

insurance, travel and risk management services. The agreement is based on

a combination of revenue sharing and commission. The contract should be

seen as a strategic partnership for GWS expansion into the large US market.

In addition, Safeture Pro will also be distributed to international markets

like Costa Rica, Hong Kong, Thailand and South Africa through

International Cares partners’ local sales offices.

In addition to the existing contracts above we have made assumptions of

potential new contracts and users. GWS has indicated that the insurance

vertical is one of the verticals where they see a high possibility for growth.

Our total projections for the insurance vertical are presented in the table

below.

Dr Walter (Retail)

Q3 2016 2017 2018

Users 50 000 50 000 50 000

Yearly revenue (SEK) 500 000 500 000 500 000

Revenue per user (SEK) 10 10 10

GWS share (100%) 250 000 500 000 500 000


International Care (Pro)2016 2017 2018

Users 200 1 000 1 500

Yearly revenue (SEK) 120 000 600 000 900 000


GWS share (100%) 72 000 360 000 900 000


TOTAL INSURANCE

2016 2017 2018

Current contracts 3 997 000 7 160 000 9 800 000

Potential contracts 1 000 000 7 000 000 13 000 000

Total estimated revenue 4 997 000 14 160 000 22 800 000


GWS

Company analysis 34

Security

The second client segment that is relatively mature is the security vertical.

GWS has signed a number of contracts with partners in the security

industry and the expectation is for this to continue. The security companies

have clients with advanced security requirements and GWS advanced

Safeture Pro is therefore the suitable product for this client category. The

security companies usually offer tailor-made service for a small exclusive

group of clients. The number of licences that GWS can potentially sell is

therefore more in the thousands rather than millions. This is to some extent

compensated by the higher price tag and margin per user. As mentioned

above, the usual price is set to 600 SEK per user for Safeture Pro and GWS

receives 60% of the revenue.

GWS has so far signed contracts with two Swedish companies,

Scandinavian Risk Solutions (SRS) and 2Secure. The service is

already up and running with both partners. SRS also offers Safeture Pro to

the general public under the white label brand, ”SRS Alert”, which is

available in the app store. Below we present our revenue expectation per

contract.

GWS recently signed the first international contract within the security

vertical with German Business Protection (GBP). GBP is a personal

security specialist within the KÖTTER group which is a large security

service provider in Germany with approximately 16.700 employees. The

agreement with GBP is based on revenue sharing and GBP will offer the

GWS Safeture Pro service to their existing and potential business clients.

The partnership is of significance because of the size of the German market

but also because Germans are among those who spend most money in the

world on traveling.

2Secure (Pro)2016 2017 2018

Users 800 1 600 2 400

Yearly revenue (SEK) 480 000 960 000 1 440 000


GWS share (60%) 288 000 576 000 864 000


SRS (Pro)2016 2017 2018

Users 500 2 000 3 000



GWS share (60%) 180 000 720 000 1 080 000


GWS

Company analysis 35

Our revenue projections from existing and potential new contracts in the

security vertical are summarized berlow.

GWS obviously has a very attractive product for security companies.

However, when it comes to volumes and revenue potential it makes more

sense for GWS to focus on contracts with bigger immediate reach. This is

also the strategy of GWS management and the vertical where we expect to

see most new deals with significant impact on revenues is in the insurance

vertical.

Telecom

An attractive industry vertical with distribution potential in the millions is

through telecom operators. GWS product can be used to increase the

competitive edge of the operator (free service) or used as a means to

increase revenues (charged additional service). An example of a partnership

with immediate distribution potential to millions of users is the contract

with a Middle Eastern operator. GWS consumer offering Safeture will

be offered as a value adding service to more than 3 million subscribers. The

agreement is based on a revenue sharing business model. As can be seen in

the table below, we have assumed a low user penetration starting at 0,5% in

2016 and moving to 2,0% in 2018. We expect GWS to receive 0,5 USD per

month and user after revenue sharing.

GBP (Pro)2016 2017 2018

Users 400 600 800



GWS share (60%) 144 000 216 000 288 000


TOTAL SECURITY2016 2017 2018

Current contracts 612 000 1 512 000 2 232 000

Potential contracts 250 000 2 000 000 4 000 000

Total estimated revenue 862 000 3 512 000 6 232 000


Middle East Operator (Pro)Q2 2016 2017 2018

Users 3 000 000 3 060 000 3 121 200

User penetration (%) 0,30 1,00 2,00

User penetration 9 000 30 600 64 424

Yearly revenue (SEK) 432 000 1 468 800 2 996 352


GWS share (60%) 259 200 881 280 1 797 811


GWS

Company analysis 36

In February 2016, GWS announced a partnership with US-based PicCell

Wireless group. GWS service offering Safeture Pro has been re-branded

to Safey, customized for the study abroad market, and added to the PicCell

Wireless global product portfolio. The agreement is based on revenue

sharing where we assume GWS to recevice 60% of revenues. The

penetration is expected to move from 10% to 20% in 2016-18.

Total revenue projections for the telecom vertical are summarised below.

Travel

Another industry vertical with natural distribution partners is within the

travel industry. The industry is struggling with low margins and additional

services related to travel is obviously highly interesting. In January 2016,

GWS therefore announced its first large partnership with the on-line travel

company, Travellink. Travellink is part of one of the world’s largest online

travel companies, eDreams Odigeo. The partnership will cover the

group’s offer to the corporate segment in Europe. The strategy is to offer the

advanced service offering, Safeture Pro, to eDreams Odigeo’s business

customers and share the proceeds. As is seen in the table below, we use a

conservative penetration rate of 0,1%-0.2% in 2016-18 but see potential for

higher rates and revenue from this partnership.

Safey (Pro)Q2 2016 2017 2018

Users 50 000 52 500 55 125

User penetration (%) 5 15 20

User penetration 2 500 7 875 11 025Yearly revenue (SEK) 750 000 3 150 000 4 410 000


GWS share (60%) 450 000 1 890 000 2 646 000


TOTAL TELECOM

2016 2017 2018





eDreams ODIGEO (Pro)Q2 2016 2017 2018

Users 16 000 000 16 800 000 17 640 000

User penetration (%) 0,01 0,02 0,03

User penetration 1 600 3 360 5 292

Yearly revenue (SEK) 960 000 2 016 000 3 175 200


GWS share (60%) 576 000 1 209 600 1 905 120


GWS

Company analysis 37

In December 2015, GWS acquired 51% in Travelogix with an option to

acquire the remaining 49% in four years. Travelogix is a UK based

company, specialized in developing and selling SaaS (Software as a Service)

solutions for processing travel data in order to reduce costs for corporate

travel managers. GWS will by the acquisition add to their technology

knowledge by integrating the Travelogix expertise in processing travel data.

By this, the GWS technology platform will be answering to the future

customer needs of both the personal security and travel segments, since the

travel industry is moving towards adding security and safety information,

while at the same time the security industry is moving towards managing

travel security. Moreover, the merging of GWS Safeture service concept

with Travelogix’ travel optimization software, will create a new generation

of business travel tools, improving the security aspects of traveling while at

the same time making travel management more efficient and cost effective.

A summary of our projections for the travel vertical is displayed in the table

below.

International congress

Another vertical with potenital users in the millions is the global congress

industry with its international business travelers. GWS explored this

vertical and announced a partnership with international congress operator

MCI in November 2015. MCI is headquartered in Geneva but have offices

in over 32 countries across Europe, the Americas, Asia-Pacific, India, the

Middle East and Africa. Every year, MCI arrange congresses in more than

60 countries which is visited by more than 350 000 international business

travelers.

The app is now available through the digital subscription channel that MCI

uses for each Congress and the partners will share the revenues. At this

point it is difficult to project potential revenues and we have therefore

assumed no revenue in 2016 and low usage in the coming years.

TOTAL TRAVEL2016 2017 2018





GWS

Company analysis 38

Finally, total projections for all verticals are summarised in the table below.

Revenues from licences are coming from several verticals and from a

number of clients within these verticals. We have therefore assumed that

the growing revenue streams will, on average, follow a linear quarterly

progression. Revenue from capitalised development costs, ”Aktiverat

arbete för egen räkning”, is assumed to stay at the same levels as in 2015,

approximately 1 mSEK per quarter.

TOTAL REVENUE

2016 2017 2018

Insurance 4 997 000 14 160 000 22 800 000

Travel 1 176 000 5 209 600 11 905 120

Telecom 1 009 200 4 771 280 7 443 811

Security 862 000 3 512 000 6 232 000

Congress 0 500 000 1 500 000

GWS Revenue 8 044 200 28 152 880 49 880 931


Total Revenue 2016 2017 2018

(mSEK) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Revenue licenses 1,2 1,7 2,3 2,8 4,0 6,0 8,0 10,1 10,7 11,4 13,1 14,6

Capitalised costs 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0

Other revenue 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

TOTAL Revenues 2,2 2,7 3,3 3,8 5,0 7,0 9,0 11,1 11,7 12,4 14,1 15,6


Quarterly Revenue progression (mSEK)


0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Revenue licenses Capitalised costs Other revenue

GWS

Company analysis 39

Costs

GWS has a highly scalable business model as they process and distribute

digital information, not physical goods. Management has declared that the

level of cost coverage for additional revenue is as high as 90%. The reason is

that most of the operational costs are fixed, the actual service per user is not

labor intensive and the cost for setting up an additional user is low.

However, during the phase of high growth, additional costs will inevitably

arise. Examples of costs that will increase when servicing large clients are

client support, administration of the growing client base, development and

maintenance of the product. Also, capitalised development costs have to be

amortised. In the yearly report, GWS gave some more detail on the different

cost segments.

Direct operational costs (Tjänster och handelsvaror), amounted to 2,0

mSEK in 2015 and are costs directly related to the production of GWS

service. Even though these costs are related to the production of the service,

a large part is still fixed as for example IT-security, server maintenance,

purchasing of content, etc.

Other external costs (Övriga Externa kostnader), amounted to 10,0

mSEK in 2015 and this is an aggregation of mostly fixed costs. Eg office

rent, administration, accounting, legal costs, etc. One component with a

correlation to sales growth is costs for external consultants.

Cost for staff (Personalkostnader), amounted to 9,6 mSEK in 2015. The

number of employees at the end of 2015 was 14 vs 7 in 2014. This resulted

in a doubling in costs from 4,2 mSEK in 2014. Management expects this to

increase slightly in 2016 due to a strenghtening in the teams for sales and

processing of content.

Amortisation and depreciation will increase gradually as revenues

grow.

At this point in time, GWS has the advantage of having insignificant

financing costs. On the 31st of December 2015, GWS had a cash position

amounting to 39,7 mSEK and has a deferred taxbase amounting to 32,6

mSEK by 31st of December 2015.

As a large part of costs are fixed, we expect an increase in total costs from

21,6 mSEK in 2015 to 25,5 mSEK in 2016, 28,5 m SEK in 2017 and

31,9 mSEK in 2018. The increase is mainly due to direct operational costs

and increase in staff. The ambition of management is to convert external

consultants to fixed employees in order to decrease costs.

GWS has a highly scalable

business model as they

process and distribute

information, not physical

goods

GWS

Company analysis 40

Summary

The combined result of increasing revenues and costs for the period 2016-

18 are summarised below.

As can be seen in the table below, GWS is expected to reach profitability in

the middle of 2017. GWS had a cash position of 39,7 mSEK at the end of

2015. This will give the company the possibility to reach profitability with a

wide margin in terms of funding needs.

SUMMARY

(mSEK) Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 Q1 Q2 Q3 Q4 2018

Revenues 2,2 2,7 3,3 3,8 12,0 5,0 7,0 9,0 11,1 32,2 11,7 12,4 14,1 15,6 53,9

EBITDA -4,1 -3,6 -3,1 -2,7 -13,4 -1,7 0,1 1,8 3,5 3,7 4,0 4,6 6,1 7,3 22,0

EBIT -4,5 -4,1 -3,6 -3,5 -15,6 -2,7 -1,0 0,6 2,2 -0,9 2,6 3,1 4,5 5,6 15,8

Earnings -4,5 -4,1 -3,6 -3,5 -15,6 -2,7 -1,0 0,6 2,2 -0,9 2,6 3,1 4,5 5,6 15,8


Summary Revenues, EBITDA, Earnings (mSEK)


2,22,7

3,33,8

5,0

7,0

9,0

11,111,7

12,4

14,1

15,6

- 4,1- 3,6

- 3,1 - 2,7- 1,7

0,1

1,8

3,5 4,04,6

6,17,3

- 4,5 - 4,1- 3,6 - 3,5

- 2,7

- 1,0

0,6

2,2 2,6 3,1

4,55,6

- 10,0

- 5,0

0,0

5,0

10,0

15,0

20,0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Revenues EBITDA Earnings

GWS

Company analysis 41

Valuation

Making revenue forecasts for a newly launched product in an industry that

just recently emerged is difficult and hazardous. This is the reason for the

conservative assumptions that lead to an aggregated revenue of 32 mSEK in

2017 and 54 mSEK in 2018. We consider it positive that GWS is increasing

the number of clients and thereby diversifying the future revenue streams.

GWS is also currently in negotiations with a number of large, international

clients within the targeted verticals. Signing up with new additional clients

should be easier since GWS now can refer to existing agreements with large,

international clients within each vertical. GWS safety product has attracted

great interest since the product offers ancillary revenues with high margins

for their partners. An increasingly insecure world also increases the

demand among end users.

GWS has announced a number of partnership agreements in the last year.

We assume this will continue and our base case scenario relies on revenue

growth in both existing and new partnerships. This is described in further

detail in the previous section. This leads to the valuation presented below.

DCF – Base Case

Our base case valuation relies on the assumptions outlined in the financial

projections section and the following additional parameters.

- WACC; GWS is launching a newly developed product in an industry

that is just emerging. The company is not profitable and the risk is

therefore relatively high. These factors lead to a high WACC of

16,4% which depresses future cash flows.

- Top-line growth is growing quickly from a very low base in the

coming years, 2016-18. This is gradually faded down from 30% in

2019 to the long-term growth of 3% in 2025.

- GWS has a highly scalable business model and the EBIT-margin

therefore reaches 34% in 2019 and stays at this level.

The assumptions above renders a DCF-valuation for our Base case scenario

of 11,9 SEK per share.

Base Case

Assumptions DCF-Värde

WACC 16,4%

Year 2016 - 2025 EV 130

Average Sales growth 49% Net cash 16

Average EBIT-margin 11% DCF-värde 146

No of shares 14,2

Long term (2025 -) Värde per aktie 11,9

Long term revenue growth 3% Aktiekurs idag 10,5

Long term EBIT-margin 34% Risk/potential 13%


Our base case DCF-

valuation indicates a

value of 11,9 SEK per

share.

GWS

Company analysis 42

Multiples – Base Case

Since GWS is introducing a new product in a recently emerging industry

there are no appropriate and listed peers. We could however make a

comparison to companies with similar business models and characteristics.

Like other software companies, GWS has developed a scalable product with

significant economies of scale. The table below displays a compilation of

companies with the same dynamics as GWS.

As can be seen in the table above, GWS has a higher average revenue

growth in the coming years, 2015-18. The reason is that GWS is growing

from a low base and the strong momentum in announcements of

partnerships. Another reason is also that new contracts are expected to

include a lower discount than in the agreements with the first reference

clients. Due to the scalability of GWS business model, the company will also

reach a high EBIT-marginal compared to the peers above.

This leads to a discount for GWS vs the peers when comparing EV/Sales

and EV/EBIT in 2018. However, the peers are established companies with

recurring revenues and proven business models and a discount is therefore

motivated. The size of the discount is debatable and dependant on

subjevtive views of the risk in future earnings. On one hand, the discount

should be high due to the lack of historic revenues and profitability. On the

other hand, the already signed long-term contracts with established,

international partners decreases the earnings risk. The discount is around

20% and 40% in 2018 for the EV/sales and EV/EBIT multiple respectively.

We believe this supports our DCF-valuation of around 12 SEK per share for

GWS.

Peer valuation GWSRev Cagr

Company 2016E 2017E 2018E 2016E 2017E 2018E 15-18E 2016E 2017E 2018E

NetEnt 12,2x 10,2x 8,8x 33,0x 27,5x 23,5x 22% 37% 37% 37%

Evolution Gaming 9,5x 7,6x 6,5x 29,0x 23,4x 20,1x 28% 33% 33% 32%

Kambi 6,4x 5,0x 4,2x 23,6x 17,0x 14,2x 28% 27% 29% 30%

Enea 2,8x 2,6x 2,5x 12,5x 11,6x 11,0x 6% 22% 23% 22%

Micro Systemation 4,0x 3,7x 3,4x 19,7x 16,9x 14,7x 6% 21% 22% 23%

Formpipe 1,2x 1,1x 1,1x 17,5x 13,5x 11,3x 6% 7% 8% 9%

Verisec 4,0x 3,5x 3,1x n.m. n.m. n.m. 21% -7% -4% -1%

Stillfront 3,7x 3,1x 2,3x 35,3x 21,6x 17,8x 41% 11% 14% 13%

Median 4,0x 3,6x 3,2x 23,6x 17,0x 14,7x 21% 22% 22% 23%

GWS 11,1x 4,6x 2,6x -8,5x -147,5x 8,5x 106% -130% -3% 29%

Source: Bloomberg & Redeye Research

EV/Sales EV/EBIT EBIT margin

The discount is around 20%

and 40% in 2018 for the

EV/sales and EV/EBIT

multiple which we believe

supports our DCF-valuation

New contracts are

expected to include a

lower discount vs the

agreements with the

reference clients

GWS

Company analysis 43

Bull and Bear Scenarios

In the Bear case scenario, GWS will only receive users from already

established partnerships. This is a pessimistic scenario as management has

indicated a considerable interest from large, international companies within

the targeted verticals. The bear case scenario renders an expected value of 6

SEK per share. GWS currently had 39,7 mSEK in cash at the end of 2015.

The negative scenario also entails a longer period to profitability and there

could consequently be a risk for additional funding needs.

In the Bull case scenario, we keep the assumptions for the coming years

(2016-2018) but prolong the period of high revenue growth (2019-2025).

Instead of fading down from 30% revenue growth in 2019, we gradually

fade down from 50% in 2019 to the long term growth of 3% in 2025. The

bull case scenario renders an expected value of 20 SEK per share.

The Bear case scenario

indicates a share price of

6 SEK.

The Bull case scenario

indicates a share price of

20 SEK.

GWS

Company analysis 44

Appendix

Board

Lars Lidgren

Founder & Chairman of the board

Lars Lidgren is a M.D. Ph.D. Professor at the University Hospital of Lund,

Sweden. Lars initiated the UN/WHO Bone and Joint Decade initiative and

has founded the companies Bone Support AB, Scandimed AB and AMeC

AB. Lars has been GWS Chairman of the board since 2009 . He was born in

1943. Professor Lidgren has a shareholding of 3 663 104 shares through

related party, related company and privately. He also owns 60.73% of

Academical Medical Group AB which (the company), owns 692 340 shares

in GWS.

Wolter Mannerfelt

Senior Member of the board

Wolter Mannerfelt has been a technical attaché in Japan and held several

CEO positions. He is now a management consultant, primarily working

with global telecom. Wolter was recently a partner at Carta, acquired by

Booz Allen Hamilton. Wolter has been part of the GWS board since 2010.

He was born in 1944. Mr Mannerfelt has a shareholding of 33 000 shares

and 10 000 options through related company and privately. He also owns

0,51% of Academical Medical Group AB which (the company), owns 692

340 shares in GWS.

Hans Skalin

Member of the board

Mr. Skalin has worked as Director and General Counsel for the Inter IKEA

Group, responsible for the legal structure within the Kamprad sphere in

general and for the creation of Inter IKEA Systems B.V.- owner and

worldwide franchisor of the IKEA Concept – as CEO and Chairman in

specific. He is also a member of the board of companies within the Inter

IKEA, the INGKA and the IKANO Groups, as well as external companies

and organizations. Hans has been part of the GWS board since 2013. He

was born in 1943. Mr Skalin holds 10 000 options in GWS. He also owns

2,55% of Academical Medical Group AB through related party which (the

company), owns 692 340 shares in GWS.

Sven Holmgren

Member of the board

Sven Holmgren obtained his law degree (LLM) from Lund University in

1989. After two years of court practice, he worked for eight years as a

solicitor and corporate lawyer at the Lindahl law firm. Since 1998 he has

held various positions within the Volito Group, a medium-sized Swedish

investment company specializing in real estate, aviation, structured finance

GWS

Company analysis 45

and industry. Sven has been part of the GWS board since 2014. He was born

in 1961. Mr Holmgren has a shareholding of 62 897 shares and 10 000

options through related party and privately. He also owns 1,88% of

Academical Medical Group AB which (the company), owns 692 340 shares

in GWS.

Paul Degerlund (1948)

Member of the board

Maj Gen (Major General) Degerlund served the Swedish Armed Forces

between 1974-2004. During his time in the armed forces Paul among other

positions worked as the Chief of the Planning Department of the Army and

as Army, Brigade Commander, Chief of the Army Combat School, Chief of

Staff of the Swedish Army and Commander of the Southern Military

District. He has worked as Marketing Director and Senior Military adviser

for BAE Systems Hägglunds and as Senior Advisor at Midroc International

AB. Paul is currently CEO at Advanced Technology Investments

Scandinavia (ATIS AB) in Sweden. Paul has been part of the GWS board

since 2014. Major General Degerlund has 1 371 shares and 10 000 options

in GWS.

Competitors

iJet

iJET’s tailored solutions integrate threat intelligence, innovative

technology, and response services to help organizations avoid threats and

mitigate risk. In 1999, iJET became one of the first companies to offer

intelligence-driven risk management to the travel industry. The proprietary

technology and network of security, intelligence and geopolitical experts

allows iJet to deliver custom intelligence, preparedness and response

solutions that help clients protect their people, facilities, suppliers and

information around the world.

iJet has more than 50 intelligence analysts and subject matter experts

across 5 continents. More than 21,000 sources of information in more than

30 languages and 24x7 global monitoring across 10 threat categories. iJet

has processed more than 110 million travel transactions per year and

tracked 14 million trips and 100,000 assets annually.

Control Risk Group/International SOS

Control Risks is a global risk consultancy based in the UK which is

specialising on helping organisations manage political, integrity and

security risks in complex and hostile environments. CRG also offers a Travel

Security Management Service. Through a joint venture, Control Risks and

International SOS combine their experience, staff and infrastructure to

GWS

Company analysis 46

provide security support and services to keep their clients international

travellers and expatriates safe.

The capabilities are reinforced and supported by the global network of

International SOS’ and Control Risks’ 78 worldwide offices and 350 remote

sites. This includes the embedded security and medical resources at

International SOS’ 27 Assistance Centres and four regional aviation units

that can support small to large-scale security evacuations, and Control

Risks’ security consultants on the ground in over 150 countries at any given

time. The 24/7 regional analysis teams ensure timely reporting on security

threats and travel disruption anywhere in the world. They monitor and

analyse shifting political and social situations, as well as natural disasters,

to provide security advice for travellers, including country and city risk

ratings and daily updates on incidents and developments.

A tracking system consolidates travel data from multiple sources into one

place to give the client a global view of where the traveling employees are

and their scheduled trips, as well as a means for communicating with them

by phone, email or SMS. With features that assist you to communicate your

corporate travel policy, this is an essential risk management tool.

Globalsecur/FoneTrac/IMG

GlobalSecur is an international travel management service offered by

Incident Management Group (IMG). IMG is an employee and executive

security consulting company. Since 1995, IMG has provided risk

management and security services to hundreds of clients to protect their

brand, people, products and customer interests. IMG manages and provides

oversight of the traveling employees. IMG’s system constantly monitor

employee locations as well as any threats or issues that may affect the

employee people. Each traveler has 24/7 one-number access to a US-based

Emergency Control Center. Overseas services for your employees range

from help with minor issues and questions, up to and including medical and

political evacuation.

IMG's innovative and easy to use FoneTrac® system works with all

smartphones and provides more accurate location information on your

global monitoring map. The FoneTrac App has features that include Panic

Alert, manual and automatic check-in and built-in contact numbers for

routine help and advice. Options include panic notifications sent to US-

based, 24/7 control centers and access to IMG GlobalSecur for advice on

travel-related topics.

Maxwell Lucas

Maxwell Lucas is an innovative global security company specialising in

travel risk management, consultancy and assistance services. The

company’s product range includes award winning powerful and information

GWS

Company analysis 47

led, high-impact online programmes, a global network of mutli-disciplined

consultants and our strategic partnerships with carefully vetted

organisations at the regional, national and provincial level. The company

provides services to in excess of 23,000 multinational organisations

ensuring our clients reduce the health, safety and security risks facing their

organisation and employees who travel and work internationally. This

capability increases stakeholder confidence through a demonstrable duty of

care by adopting an industry best practice approach to security risk

management.

HRG Worldwide

HRG Security Suite is the umbrella brand name for the security solutions

offered in-house and through the association with the global security

specialist, red24. The services offered within HRG Security Suite cover pre-

trip destination intelligence, traveller tracking and security training,

through to international emergency response services.

HRG has corporate travel service operations in 25 markets throughout

Europe, North America and Asia Pacific, and a partner network extending

to 120 countries. HRG Traveller Assist is a 24 hour support service,

providing assistance, information and advice to travellers outside normal

office hours. An online traveller tracking tool, HRG Travel Watch, enables

travellers to be located quickly.

red24 are specialists in global security assistance and risk assessment. They

have a global network of over 400 security experts delivering a

comprehensive range of security solutions to organisations around the

world. Comprehensive range of solutions red24 provide a number of

intelligence options to ensure that your organisation and employees are

well prepared for any business travel. Services include emergency response

capabilities, as well as online country intelligence and security advice which

can be tailored to the organisation or individual itinerary. red24 are also

experts in the provision of security training and consulting, including crisis

rehearsals, and travel policy review.

Allianza/TravelSmart Mobile App

The Travel Smart app is a rather simple service providing emergency

numbers for different markets, an international drug dictionary, first aid

terms translated into multiple languages and hospital listings by country.

Aon WorldAware Solutions App

World Aware solutions app provides travel risk analysis, safe travel policies,

training and incident response. The online Travel Management System

enables the client to track and manage their employees’ business travel,

define and deliver safe travel procedures, evaluate travel to high risk

locations.

GWS

Company analysis 48

Global Rescue

Global Rescue mobile app features include the following;

Destination Reports – Detailed information on over 200 countries,

including: health and security risk assessments, entry and exit

requirements, exchange rates, important phone numbers, weather

conditions and other essential information. Travelers can access recent

regional events, compiled by Global Rescue’s in-house intelligence analysts.

Real-time Alerts – Travelers can review real-time alerts delivering critical

information on locations of interest. Global Rescue enterprise clients can

configure their alerts by event severity, category and destination and

immediately know which travelers are impacted.

Status and Location Updates – Travelers are able to indicate that they’re

okay or in need of assistance by “checking-in” by using their mobile device

to transmit their message with their GPS coordinates to Global Rescue’s

operations centers and those they designate.

In-App Text Messaging – Secure two-way text messaging with Global

Rescue’s operations professionals who are standing by 24/7 to answer

travelers’ questions.

Emergency Notification – A one-touch emergency button that immediately

alerts Global Rescue’s operations teams that a traveler is in distress with the

GPS coordinates of the traveler’s location.

GWS

Company analysis 49

Summary Redeye Rating

The rating consists of five valuation keys, each constituting an overall

assessment of several factors that are rated on a scale of 0 to 2 points. The

maximum score for a valuation key is 10 points.

Rating changes in the report

Management 7.0p

Management has a good understanding of the emerging safety market and the potential for its service app. Managment has also delivered on and been consistent in communicating its vision. However, the lack of history holds back the rating but with increasing track record there is potential for increases in this rating.

Ownership 9.0p

GWS has a strong and committed board where the founder, Lars Lidgren, has the largest holding in the company. Remaining board members has significant holdings and relevant experience. At this point in time there is no institutional investor in the ownershp base.

Profit outlook 7.5p

GWS has a clearly defined growth strategy, a business model with significant leverage and high gross margins. The possibility to deliver considerable organic growth through partnerships in this emerging market segment is therefore high. However, the market is new and the barriers to entry are not high. A clear market leadership and signs of steady growth could increase the rating for GWS.

Profitability 0.0p

GWS has completed a period of product development and just recently launched its product. When GWS starts showing positive cash flow and consistency in devliering profits this rating will increase.

Financial strength 4.0p

GWS has a strong balance sheet with a cash position at 39,7 mSEK at the end of 2015. The factors bringing down the rating is that GWS currently lacks stable and recurring revenues and sufficient diversity in the client base.

GWS

Company analysis 50

Income statement 2014 2015 2016E 2017E 2018E

Net sales 2 6 12 32 54

Total operating costs -12 -22 -23 -27 -25 EBITDA -10 -15 -11 5 29

Depreciation 0 -1 0 0 0

Amortization 0 -1 -5 -6 -13

Impairment charges 0 0 0 0 0 EBIT -10 -17 -16 -1 16

Share in profits 0 0 0 0 0

Net financial items 0 0 0 0 0

Exchange rate dif. 0 0 0 0 0 Pre-tax profit -10 -17 -16 -1 16

Tax 0 0 0 0 0

Net earnings -10 -17 -16 -1 16

Balance 2014 2015 2016E 2017E 2018E

Assets

Current assets

Cash in banks 19 40 24 23 39 Receivables 2 3 4 8 11

Inventories 0 0 0 0 0

Other current assets 0 0 0 0 0

Current assets 21 43 28 31 50

Fixed assets Tangible assets 0 0 0 1 1

Associated comp. 0 0 0 0 0

Investments 1 1 1 1 1

Goodwill 0 0 0 0 0 Cap. exp. for dev. 0 0 0 0 0

O intangible rights 4 6 7 16 22

O non-current assets 0 0 0 0 0

Total fixed assets 5 7 8 18 24

Deferred tax assets 0 0 0 0 0

Total (assets) 26 49 36 49 74

Liabilities

Current liabilities Short-term debt 3 5 8 22 31

Accounts payable 0 0 0 0 0

O current liabilities 0 0 0 0 0

Current liabilities 3 5 8 22 31

Long-term debt 0 0 0 0 0 O long-term liabilities 0 0 0 0 0

Convertibles 0 0 0 0 0

Total Liabilities 3 5 8 22 31

Deferred tax liab 0 0 0 0 0

Provisions 0 0 0 0 0

Shareholders' equity 23 44 28 27 43 Minority interest (BS) 0 0 0 0 0

Minority & equity 23 44 28 27 43

Total liab & SE 26 49 36 49 74

Free cash flow 2014 2015 2016E 2017E 2018E Net sales 2 6 12 32 54

Total operating costs -12 -22 -23 -27 -25

Depreciations total 0 -2 -5 -6 -13

EBIT -10 -17 -16 -1 16

Taxes on EBIT 0 0 0 0 0 NOPLAT -10 -17 -16 -1 16

Depreciation 0 2 5 6 13

Gross cash flow -10 -15 -11 5 29

Change in WC -1 -1 -1 -4 -3

Gross CAPEX 1 -4 -6 -15 -20

Free cash flow -10 -21 -18 -15 7

Capital structure 2014 2015 2016E 2017E 2018E

Equity ratio 89% 89% 78% 56% 59%

Debt/equity ratio 12% 12% 28% 80% 71% Net debt -17 -34 -16 -1 -8

Capital employed 6 9 12 26 35

Capital turnover rate 0.1 0.1 0.3 0.7 0.7

Growth 2014 2015 2016E 2017E 2018E

Sales growth -10% 197% 94% 167% 68%

EPS growth (adj) 0% 28% -10% -94% -1,842%

Profitability 2014 2015 2016E 2017E 2018E ROE -82% -52% -43% -3% 45%

ROCE -62% -47% -37% -2% 26%

ROIC -152% -275% -165% -7% 61%

EBITDA margin -463% -249% -91% 16% 54%

EBIT margin -475% -281% -130% -3% 29% Net margin -484% -281% -130% -3% 29%

Data per share 2014 2015 2016E 2017E 2018E

EPS -0.96 -1.22 -1.10 -0.06 1.11

EPS adj -0.96 -1.22 -1.10 -0.06 1.11 Dividend 0.00 0.00 0.00 0.00 0.00

Net debt -1.56 -2.41 -1.13 -0.10 -0.59

Total shares 10.56 14.25 14.25 14.25 14.25

Valuation 2014 2015 2016E 2017E 2018E

EV -16.5 115.3 130.0 144.7 137.7

P/E 0.0 -8.6 -9.3 -161.4 9.3 P/E diluted 0.0 -8.6 -9.3 -161.4 9.3

P/Sales 0.0 24.2 12.1 4.5 2.7

EV/Sales -7.9 18.6 10.8 4.5 2.6

EV/EBITDA 1.7 -7.5 -11.8 28.1 4.7 EV/EBIT 1.7 -6.6 -8.3 -159.9 8.7

P/BV 0.0 3.4 5.2 5.4 3.4

Share information

Reuters code GWS.ST

List First North

Share price 10.3 Total shares, million 14.2

Market Cap, MSEK 146.0

Management & board CEO Andreas Rodman

CFO Andreas Larsson

IR Andreas Rodman

Chairman Lars Lidgren

Financial information

Q1 report May 27, 2016

Q2 report August 26, 2016

Q3 report November 25, 2016

Analysts Redeye AB

Johan Ekstrom Mäster Samuelsgatan 42, 10tr [email protected] 111 57 Stockholm

Tomas Otterbeck

[email protected]

DCF valuation Cash flow, MSEK

WACC (%) 16.4 % NPV FCF (2016-2018) -23

NPV FCF (2019-2025) 85

NPV FCF (2026-) 74 Non-operating assets 40

Interest-bearing debt -5

Fair value estimate MSEK 170

Assumptions 2016-2022 (%)

Average sales growth 47.8 % Fair value e. per share, SEK 11.9 EBIT margin 4.8 % Share price, SEK 10.3

Share performance Growth/year 14/16e

1 month -3.8 % Net sales 140.2 %

3 month -20.2 % Operating profit adj 25.6 %

12 month 62.7 % EPS, just 7.2 % Since start of the year -58.0 % Equity 11.0 %

Shareholder structure % Capital Votes

Others 55.1 % 55.1 %

Diamonex Ltd 24.5 % 24.5 %

Emirates Advanced Investment Trading 6.7 % 6.7 % Academic Medical Group AB 4.9 % 4.9 %

Lundaklostret AB 4.8 % 4.7 %

Andreas Rodman 4.1 % 4.1 %

GWS

Company analysis 51

Revenue & Growth (%) EBIT (adjusted) & Margin (%)

Earnings per share Equity & debt-equity ratio (%)

Sales division Geographical areas

Conflict of interests Company description

Johan Ekstrom owns shares in the company: No Tomas Otterbeck owns shares in the company : No

Redeye performs/have performed services for the Company and

receives/have received compensation from the Company in connection with this.

-50,0%

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

0

10

20

30

40

50

60

2013 2014 2015 2016E 2017E 2018E

Net sales Net sales growth

-600,0%

-500,0%

-400,0%

-300,0%

-200,0%

-100,0%

0,0%

100,0%

-20

-15

-10

-5

0

5

10

15

20

2013 2014 2015 2016E 2017E 2018E

EBIT adj EBIT margin

-1,5

-1

-0,5

0

0,5

1

1,5

-1,5

-1

-0,5

0

0,5

1

1,5

2013 2014 2015 2016E 2017E 2018E

EPS, unadjusted EPS, adjusted

-50,0%

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

300,0%

350,0%

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

1

2013 2014 2015 2016E 2017E 2018E

Equity ratio Debt-equity ratio

GWS

Company analysis 52

DISCLAIMER

Important information

Redeye AB ("Redeye" or "the Company") is a specialist financial advisory boutique that focuses on small and mid-cap growth companies in the Nordic

region. We focus on the technology and life science sectors. We provide services within Corporate Broking, Corporate Finance, equity research and

investor relations. Our strengths are our award-winning research department, experienced advisers, a unique investor network, and the powerful

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Authority.

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This document was prepared for information purposes for general distribution and is not intended to be advisory. The information contained in this

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Recommendation structure

Redeye does not issue any investment recommendations for fundamental analysis. However, Redeye has developed a proprietary analysis and rating

model, Redeye Rating, in which each company is analyzed and evaluated. This analysis aims to provide an independent assessment of the company in

question, its opportunities, risks, etc. The purpose is to provide an objective and professional set of data for owners and investors to use in their decision-

making.

Redeye Rating (2016-05-19)

Rating Management Ownership Profit outlook

Profitability Financial Strength

7,5p - 10,0p 40 42 20 7 18

3,5p - 7,0p 68 58 88 33 40

0,0p - 3,0p 4 12 4 72 54

Company N 112 112 112 112 112

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