INTERIM REPORT FIRST QUARTER 2017 CEO ARNE MJØS CFO BENT HAMMER OSLO, 27 APRIL 2017 1
HIGHLIGHTS OF THE FIRST QUARTER Revenue NOK 119 (106) million Growth of 12% y-o-y EBITDA EBITDA of NOK 16.1 (10.4) million, 13.6% (9.8%) margin EBIT EBIT of NOK 11.3 (3.8) million, 9.7% (3.6%) margin Significant events 22% growth of top 30 customers Net recruitment of 24 employees NOK -0.8 (-3.5) million cash from operations Dividends Proposed dividend of NOK 0.18 per share based on 2016 results. Ex-dividend on May 23. Revenues NOK million EBIT NOK million 2
FINANCIAL REVIEW 3
2017 2016 Change Change 2016 NOK Million Q1 Q1 % FY Operating revenue 118.6 105.6 12.9 12 % 424.8 Cost of sales 14.7 15.0-0.3-2 % 63.5 Gross Profit 103.8 90.6 13.2 15 % 361.3 Personnel expenses 74.7 69.7 4.9 7 % 263.3 Depreciation 4.9 4.9-0.1-1 % 19.8 Other operating expenses 13.0 10.5 2.5 24 % 42.3 Total operating expenses 107.3 100.2 7.1 7 % 389.0 STATEMENT OF INCOME Operating profit before non-recurring items 11.3 5.5 5.8 106 % 35.8 Non-recurring items 0.0 1.6-1.6-100 % 1.6 Operating profit (EBIT) 11.3 3.8 7.4 194 % 34.1 Net financial income -0.3-0.5 0.2 33 % -1.4 Profit before tax 11.0 3.4 7.6 226 % 32.8 Tax 2.6 0.8 1.8 221 % 7.5 Net profit for the period 8.3 2.5 5.8 227 % 25.3 Continuing operations showed 12% top-line growth, while EBIT improved by 194% Q1 2017 has 4 more working days than 2016 due to Easter NOK 1 mill. non-recurring included in Other opex 5
Operating revenue NOK million Employees End of period QUARTERLY DEVELOPMENT EBITDA NOK million Margin EBIT NOK million Margin 6
REVENUE Revenue increased by 12% y-o-y Service revenues from own consultants increased by 18% to NOK 74 million Subscription revenue decreased by 4% to NOK 32 million 3 rd party service revenue increased by 109% to NOK 6 million Other revenue decreased by 4% to NOK 7 million Revenue split (quarterly figures) MNOK Revenue percentage split (rolling 12 months) MNOK 7
STATEMENT OF CASH FLOW 2017 2016 2016 NOK Million Q1 Q1 FY Cash flow from operations (EBITDA) 16.1 10.4 55.6 Change in balance sheet items -16.9-13.9-55.6 Net cash flow from operating activities -0.8-3.5 0.0 12 month rolling cash flow from operations Net cash flow from investment activities -2.7-2.9-12.2 Purchase of own shares 0.0 0.0-3.6 Borrowings repaid -2.3-2.1-8.6 External dividend paid 0.0 0.0-21.9 Net cash flow from financing activities -2.3-2.1-34.1 Net change in bank deposits and cash -5.8-8.5-46.1 Bank deposits at the end of the period 65.3 59.8 0.0 New borrowing related to leasing 0.8 2.2 6.4 Cash flow from operations NOK -0.8 million in Q1 12 month rolling cash flow from operations was NOK 52 million 8
NOK 0.15 in additional dividend was paid out in Q4 Current holding of own shares is unchanged from Q3 at 965 445 shares The Board is proposing to pay out an ordinary dividend for 2016 of NOK 0.18 per share following the General Meeting on May 22 Total distribution to shareholders of NOK 3.92 per share during 2005-2017 DIVIDENDS AND OWN SHARES 9
Group equity ratio of 29 (28) % per March 31 Cash balance of MNOK 65 (60) STATEMENT OF FINANCIAL POSITION Assets Non-current assets Receivables and WIP Equity and Liabilities Current liabilities Non-current liabilities Cash Equity 10
BUSINESS REVIEW 11
MASSIVE GROWTH IN DATA VOLUMES 35x By 2020, information will be used to reinvent, digitalize or eliminate 80% of business processes and products from a decade earlier. Source: Gartner 1 8x 2015 2020 2025 12
TOWARDS THE INTELLIGENT ENTERPRISE INTERACT ENGAGE ECOSYSTEMS ANALYZE CUSTOMER INTELLIGENCE INFORMATION «THINGS» SENSE 13
THE PLATFORM ECONOMY Smart meter Smart home Smart City API Aggregator Outside-in banking $ ehealth. PSD2 Fintech Smart phone.. Smart mobility Smart grid 14
A FULL RANGE OF SERVICES Define strategy and new concepts through lean startup and service design Create great experiences by combining communication and technology skills Design, build, integrate and test new innovative apps and solutions ehealth Smart mobility Smart home Smart City Take life-cycle responsibility that embrace cloud solutions and data protection issues.. Smart grid. $ Combine hybrid sourcing for high scalability and cost effectiveness Explore new opportunities through big data, IoT and predictive analytics Outside-in banking Apply Testing-asa-Service (TaaS) to launch new services on the fly 15
WE FOCUS ON OUR CUSTOMER S CUSTOMER WE WORK IN MULTIDISCIPLINARY TEAMS THROUGH CUSTOMER JOURNEYS AND LEAN STARTUP THAT HAVE BOTH COMMUNICATION AND TECHNOLOGY SKILLS HOW WE MAKE A DIFFERENCE WE TAKE LIFE-CYCLE RESPONSIBILITY WE INVOLVE SEAMLESS NEARSHORING THAT EMBRACE CLOUD AND DATA PROTECTION ISSUES FOR GREATER SCALABILITY AND COST EFFECTIVENESS 16
Order intake from existing and new customers ORDER INTAKE Book-to-bill ratio* ) of 0.9 in Q1 2017 *) The book-to-bill ratio is the ratio of orders received to the amount of revenue for a specific period for Itera units 17
STRATEGIC COMPETENCE DEVELOPMENT GLOBAL INSIGHT FROM LEADING CONFERENCES RECOGNIZED EXPERTISE EARLY ADAPTOR CUSTOMERS STRATEGIC PARTNERSHIPS 18
Share of revenue from top 30 customers up by 7 points y-o-y INCREASING VISIBILITY Benefits of higher revenue per customer: Increased revenue visibility Improved operational efficiency Lower sales and overhead costs 19
Nearshore ratio % of all staff located nearshore NEARSHORE RATIO Nearshore ratio of 37 % in Q1 Target >50% Mixed teams of onshore and nearshore are increasing our price flexibility as well as providing access to a very large resource pool 20
OUTLOOK 21
OUTLOOK Customer demand remains strong in all Nordic markets Profitable growth and cash flow are key focus areas Digitalization creates a strong market demand in all sectors where Itera is operating Larger projects and customers expected to continue to increase revenue visibility, efficiency and scalability Itera does not provide guidance to the market on future prospects 22
TOP 20 SHARE- HOLDERS Arne Mjøs Invest AS (investment company of Arne Mjøs, CEO of Itera) also has future contracts for 2,100,000 shares with expiration date on 15 June 2017 24