CEO Terje Mjøs. Oslo, 8 February Q Presentation

Transcription

1 CEO Terje Mjøs Oslo, 8 February Presentation

2 Part I ` Report o Group o Segments Part II Cost improvements o Revenue and margin analysis o Future proof Part III Outlook o Market o Company Summary 2 presentation 2

3 EVRY 2 Part I Group figures

4 2 Highlights Revenue NOK 3,248 million (-6%) o Weaker demand for IT services in Sweden in EBITA improved 9% (*) to NOK 223 million Improved operational cash flow NOK 657 million (NOK 623 million) NOK 29 million in one-offs o NOK 1 million on Digoff and NOK 3 million related to reduced overhead and simplified organisation o Write down of NOK 67 million linked to old solution portfolio Proposed dividend NOK.35/ share 2 presentation (*) Adjusted for NOK 28 million in pension effect in 2 4

5 Key consolidated figures for the Group (NOK million) 2 2 Change (%) 2 2 1) Change (%) Operating revenue 3,248 3,478-6% 3),731,81 % 3) EBITDA 2) % 1,163 1,253-7% EBITA before non recurring items 2) % % EBITA % before non recurring items 2) 6.9% 6.7% 5.6% 6.1% EBIT before non recurring items 2) % % Non-recurring items EBIT 2) % % Net financial items EBT 2) % EPS Employees 4) 9, ,873 9,518 1) Proforma figures 2) Incl positive pension effect of NOK 28 mill in 2 and NOK 1 mill full year 2 3) Organic growth 4) Actual reported figures 2 presentation 5

6 2 Key figures EBITA development rolling last four quarters Cash flow development, rolling last four quarters NOK million Q1 371 Q figures adjusted for change in pension Q Q Organic revenue growth Group Percent Organic revenue growth Norway Percent Q1 Q1 Organic revenue growth Sweden Percent Q1 Q1 Pro forma figures in 2 Q1 Q1 Pro forma figures in 2, including global sourcing 2 presentation 6

7 Key financials Working capital CAPEX Percent of revenue 8 6,5 6,7 6, ,7 6,3 6, 5 4,8 4 3, Q1 Q1 Average last 4 quarters Target 213 4% (NOK million) Q1 2 2 = last 4 quarters Percent of revenue Target corridor Gearing ratio at 2.73 in 2 compared to 2.85 last quarter 2 presentation 7

8 Modest growth in Norway and more challenging IT services market in Sweden Market development o Modest growth in Norway with positive signs in project services affecting our Consulting and Solution segments o Slower growth in the Swedish economy gave reduced demand for IT services in 4Q` New signings o Norway NOK 2,8 million o Sweden NOK 8 million Main signings o Gjensidige NOK 7 million o Strategic agreements with several Nordic banks NOK 58 million o Gassco NOK 25 million o Riksbanken SEK 22 million Organic revenue growth 2 compared to market (*) Percent Market actual 2, 2, Norway -2, EVRY Sweden 5, (*) Source: IDC, outsourcing and project services Back-log NOK 15.3 bn vs NOK 15. bn previous quarter NOK billion Later IT Operations Solutions Consulting 2 presentation 8

9 EVRY Status renewal of key customers Activity Neg./transition New contract Current contract Neg./transition New contract Current contract Neg./transition New contract Current contract Neg./transition New contract Tentative decision 6 years 5 years 5 years 5 years 2 presentation 9

10 EVRY 2 Segments

11 Highlights & Key figures Solutions Revenue NOK 1,138 million (-3%) o Sweden -13% o Norway +1% EBITA NOK 9 million (+%) o o Reduction in sub-contractors in Sweden compensated for revenue decline Strong and increasing margin Continued positive development in bank and finance NOK million 2 2 1) Y/Y Revenue 1,138 1,173-3%(*) EBITA 9 16 % EBITA margin 1.5% 9.% CAPEX Employees Nordic Global Sourcing *Organic growth 1) Proforma figures 2,139 2,44 Margin development Solutions Percent 4,5 4, 4,5 6,2 2,18 2, 8,2 8,6 8,7 8,5 8,9 Target corridor 1 Q1 Q1 EBITA-margin - moving average last 4 quarters 2 presentation

12 Highlights & Key figures Consulting Organic growth -2% o Norway +4% o Sweden -9% EBITA unchanged at NOK 75 million o Norway NOK 52 million (39), margin 8.5% o Sweden NOK 24 million (36), margin 5.9% Hourly rates increased 3% in Norway and reduced 6% in Sweden NOK million 2 2 Y/Y Revenue 1,7 1,26-2%(*) EBITA % EBITA margin 7.5% 7.3% Utilisation Working days Employees 2,5 2,571 *Organic growth Margin development Consulting Percent 5,9 6,1 5,8 5,8 5,9 6,1 6,3 6,3 6,3 1 Q1 Q1 EBITA-margin - moving average last 4 quarters Target corridor 2 presentation

13 Highlights & Key figures IT Operations Revenue NOK 1,484 million (-5% ) o Norway; -6% o Sweden; -2% EBITA NOK 73 million (-1%) o Continued strong margin in Sweden; +1,6% o SME +6% organic growth and margin in corridor o Bank & Finance margin in corridor o Continued weak performance in Enterprise (excl Bank) & Public Norway Increased off-shoring according to plan Country ` ` (*) Based on customer and regulatory restrictions Target 2 Target 214 Norway 8% % 14% 13% 3%* Sweden 28% 32% 33% 33% 5% NOK million 2 2 Y/Y Revenue 1,484 1,57-5%(*) EBITA % EBITA margin 4.9% 5.2% CAPEX Employees 2,498 2,555 *Organic growth Performance last months Margin Growth Regional/SME Sweden Bank & finance Enterprise & public Margin development IT Operations Percent 5,5 5,2 5,2 5,3 5,4 5,1 4,9 4,9 4,8 1 Q1 Q1 Target corridor 2 presentation 13

14 EVRY 2 Geography

15 Highlights & Key figures Sweden Weaker demand in Sweden in Revenue NOK 932 million (-8%) o IT Operations -2% o Solutions -13% o Consulting -9% NOK million 2 2 Y/Y Revenue 932 1,21-8%(*) EBITA % EBITA margin 9.6% 9.3 % CAPEX Employees 2,523 2,534 *Organic growth Organic revenue growth Sweden EBITA NOK 89 million (-6%) o Negative impact from lower hourly rates and fewer working days o Compensating for lower sales with reduction in sub-contractors o Continued strong margin in IT Operations Sustained EBITA-margin 9,6% Percent Q1 Q1 EBITA Sweden, rolling last four quarters 3 25 Solid order backlog NOK 3.5 bn Q1 Q1 2 presentation 15

16 Highlights & Key figures Norway Revenue NOK 2,317 million (-6%) o Solutions (+1% ) o Consulting (+4%) o IT Operations (-6%) EBITA NOK 134 million (+22%*) Order backlog slightly increased to NOK.8 bn EBITA Norway*, rolling last four quarters Q1 Q1 NOK million 2 2 1) Y/Y Revenue 2,317 2,457-6%* EBITA** % EBITA margin 5.8% 5.6% CAPEX 19 8 Employees Norway Global Sourcing 4,91 2,44 4,973 2, *Organic growth ** Including pension NOK 28 million in 2 1) Pro forma figures Organic revenue growth Norway Percent Q1 Q1 Pro forma figures in 2, all figures including global sourcing (*) Adjusted for NOK 28 million in pension effect in 2/2 2 presentation 16

17 EVRY 2 Highlights & key figures 2

18 Highlights & Key figures EVRY full year 2 NOK million 2 2 1) Y/Y Revenue,731,81 %* EBITA** % EBITA margin 5.6% 5.2% 1) Pro forma figures,*organic growth, ** Adjusted for NOK 1 million in pension effect in 2 EBITA development * NOK million * Adjusted for NOK 1 million in pension effect Cash flow development NOK million Organic growth Segment Change Organic growth Geography Change Solutions 4% Norway -2% Consulting 3% Sweden +5% IT Operations -3% EBITA increasing in areas with high value creation 3% 35 3% 3% 32% 2 32% 32% Proposed dividend NOK. 35/ share 5 Solutions Consulting IT Operations presentation 18

19 EVRY 2 Part II IT Operations analysis and Cost improvements

20 IT Operations 2 Three of four areas are on track Sweden on track SME and Bank & Finance in Norway on track % MNOK MNOK 1 +1% % 8,9 +4% +6% 8 3 5, , % Share of revenues % Share of revenues Enterprise & Public Norway underperforming -% -24% MNOK % Share of revenues 2 presentation 2

21 IT Operations 2 Declining revenue from Enterprise & Public area MNOK Continuing decline in revenue from Enterprise customers o IS Partner contracts diminishing o Activities temporary reduced with some customers due to RFP-process Churn in Public sector o After-effects of engagements discontinued 21 o Major customers select multisourcing strategies o Lack of focus Lost volumes leading to falling margins for Enterprise & Public in Norway 21

22 IT Operations 213 Enterprise & Public area to bottom out by YE 213 MNOK ~ (E) IS partner portfolio to be stabilised RFP processes due to be concluded New organisation with strong focus on growth in verticals (incl Public) Expect negative growth to be turned around to positive growth in

23 Transformation program Future Proof incl Datacenter Reducing IT Operations costs and improving quality Specialised and heterogeneous 18 Datacenters Renegotiated contracts Gjensidige, Posten, Storebrand, DNB Industrialisation Sourcing/partnerships Offshoring New Delivery Model Virtualisation Automation New bids New services Standardised and Cloud based Industrialised IT Operations Cost effects, yearly run rate MNOK Transformation Migration Automation Datacenter Offshoring Procurement Other presentation 23

24 EVRY 2 Market outlook

25 Nordic market trends Customers demand a high return on capital before making investment decisions Customers are willing to pay a higher price for industry domain competencies Increased hourly rates in some parts of the market, but price pressure from global players in other segments Nordic IT Services Forecast (CAGR) Revised CAGR per country SE: +3,6% vs 4,1% NO: +3,8% vs 4,% FI: +3,2% vs 3,5% DK: +2,4% vs 2,4% CAGR 3,2% Global players are now serious contenders in the Enterprise AM outsourcing market SME and large/mid-market are not exposed to the same global competition, and we expect continued growth in these customer segments Source: IDC Jan presentation 25

26 Market outlook Sweden EVRY expects Swedish IT demand to stay low in Q1 and in 213, but pick up 2H o Economic indicators have turned positive for consumers, but industry is still lagging o Positive financial markets also indicates an upturn in 213 Increased interest in outsourcing as an enabler for lower costs and more flexible structure Market outlook Norway GDP growth in Norway expected to continue o Consulting and Solutions positioned to leverage growth in Project services o Outsourcing continues to be flattish o SME continues to grow faster than Enterprise o Modest growth in Public sector and Banking & Finance SME and Enterprise continue to grow at the same growth rate A cautious approach by Swedish customers has reduced demand for consultants and delayed investment in new software 26 2 presentation

27 EVRY Earlier guiding revisited Guiding 2: Segment IT Operations is not expected to improve until 214 Confirmed Capital markets day, Feb 2: Target working capital of 4% in 213 Confirmed Capital markets day, Feb 2: EBITA of NOK 1.3 bn in presentation 27

28 EVRY EBITA 215 target considerations Solutions and Consulting segments: Solutions ahead of plan Consulting slightly behind Solutions and Consulting in total on track IT Operations segment: Three out of four areas on track (75%) Enterprise & Public far behind, both growth and margin IT Operations lagging behind Macroeconomics affecting Sweden in 213 Reduced short term growth affecting 215 EBITA contribution 2 presentation 28

29 EVRY Updated guiding Guiding 2: Segment IT Operations is not expected to improve until 214 Confirmed Capital markets day, Feb 2: Target working capital of 4% in 213 Confirmed Capital markets day, Feb 2: EBITA of NOK bn in 215 Revised 2 presentation 29

30 2 presentation 3

31 Summary ` New segments from 213 Revenue NOK 3,248 million (-6%) EBITA improved 9% (*) to NOK 223 million Improved operational cash flow NOK 657 million (623) Proposed dividend NOK.35/ share Proforma figures 2 split by quarter will be distributed medio March 213 The new segments are: o Norway o Sweden o Financial Services o Additional information on service groups will also be provided Norway Financial Services Sweden 31 2 presentation

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