NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE LOCAL SECURITIES LAWS OR REGULATIONS OF SUCH JURISDICTION. EVRY intends to apply for a listing on Oslo Børs Oslo, 23 May 2017: EVRY AS 1 ( EVRY or the Company ) today announces its intention to launch an initial public offering (the "IPO") of its ordinary shares and to apply for a listing on Oslo Børs. The IPO will support EVRY s strategy and growth plans, through contributing to further enhancement of EVRY s public profile, and providing greater flexibility to expand as opportunities arise. Furthermore, the IPO will allow the Company to diversify its ownership structure, and is expected to contribute to a sustained strong, diverse and long-term shareholder base for the Company. The current majority owner in the Company, Lyngen BidCo AS, will remain a substantial shareholder after the IPO. EVRY is a leading provider of IT services and software in the Nordic region with a strong local presence throughout Norway and Sweden. The Company is the leading IT services provider in the Norwegian market and a leader in providing IT services and solutions to a number of industry sectors in Sweden. The Company is also the largest provider of IT services and software to the banking industry in the Nordic region. EVRY has a large and stable portfolio of over 10,000 customers in the Nordic region, ranging from local and central governments to large global and regional corporate customers, including the 30 largest banks in Norway, as well as small and medium-sized enterprises. The Company operates with a highly customer-centric approach, through dedicated personnel who possess in-depth technical insight and expertise within a number of industry sectors, including banking and financial institutions, the public sector, healthcare and insurance. The Company offers customers a comprehensive portfolio of services and software designed to meet all of their needs, including advisory and consulting services, industry-specific software and the design, implementation and maintenance of customised solutions and IT operations. Over the past couple of years, EVRY has successfully executed a transformation plan including multiple strategic initiatives including: Instituting an operational excellence programme to improve efficiency; Establishing a strategic partnership with IBM in order to provide clients with competitive and state-of-the-art infrastructure outsourcing services; Refocusing and streamlining the Company's organisational structure; Implementing an acquisition strategy to add complementary skills and sector experience; and Focusing on becoming a leader in digitalisation through investments in next-generation technology. EVRY is headquartered in Norway and had approximately 8,200 full time equivalent employees as of 31 March 2017. For the year ended 31 December 2016, the Company reported operating revenue of NOK 12,246 million and adjusted EBITA 2 of NOK 1,322 million. Björn Ivroth, CEO of EVRY, commented: EVRY has made significant progress in its transformation and has achieved a leadership position as one of the largest IT companies in the Nordics. I am very proud and highly impressed by the work that EVRY s employees and management team have done in delivering on our strategic goals and in building our current strong market positions. 1 The Company plans to be converted to a public limited liability company (ASA) and thereby change its name to EVRY ASA prior to the IPO. 2 Before separately disclosed items. Separately disclosed items are items of income and/or expense recognized in a given period that, due to their nature, size or frequency, are disclosed separately to provide a more comparable view of period-to-period underlying performance. Separately disclosed items comprise items that the Company classifies as other income and expenses and do not reflect the underlying operating performance of the business.
Today, EVRY is very well positioned to further develop our leading competitive situation. Our ability to make use of our extensive presence in local markets, in-depth knowledge and long-standing customer relationships, and our ability to draw on its global capabilities, differentiates us from our competitors and helps our customers to achieve their digital transformations. Our primary objective going forward is to continue to accelerate our growth and secure our role as our customers preferred partner for their digital transformations. Salim Nathoo, Chairman of EVRY and Partner in the Tech & Telco team at Apax Partners, commented: When Apax invested in EVRY in 2015, we were impressed by the Company s strong regional footprint, well-established customer base and leading technical expertise. We saw significant potential to further develop the strong aspects of the business and to establish EVRY as the pan-nordic champion in its markets. We have supported the new management team in developing and executing multiple strategic initiatives to improve EVRY's operational and financial performance and transform the business. These initiatives have been highly successful, leading to improved profitability, increased cash flow generation and a return to revenue growth. We believe the Company has a bright future ahead as a listed company, and are excited about new investors being invited to join on the path towards strengthened market leadership in the Nordics, and in a new and important phase for EVRY. Investment Highlights Clear leader in the attractive and growing Nordic IT services and software markets o Market-leading provider of IT services and solutions across the Nordic region, with a 6.7 percent 3 market share o The leading IT services provider in Norway with operating revenue that is 4.3 times 4 the revenue of its closest competitor, and a key challenger well positioned to capture additional market share in Sweden o The largest provider of IT software and solutions to the banking sector both in the Nordic region overall and in Norway High visibility into sustainable organic growth to drive further operational leverage o All-time high backlog of approximately NOK 20.8 billion as of 31 December 2016 o High visibility of potential future operating revenue based on strong customer relationships, recent contract renewals and long-term contracts o Significant portion of recurring revenues, estimated by management to be approximately two-thirds of revenues for the year 2016 Differentiated, IP-based vertical platform approach with clear leadership in financial services o A relatively high proportion of the Company s operating revenue is generated by sales of software and solutions based on own proprietary software or other IP, estimated by management to be approximately 22 percent of operating revenue in 2016 o In particular, the Company has developed a differentiated and highly scalable suite of banking and payments IT software based on proprietary IP, which is mainly delivered to customers through a SaaS model o The Company has successfully secured multi-year contracts to deliver its new core banking platform to a number of its existing customers, including Handelsbanken and Sparebank1, which support the long-term growth of the financial services business o The IP-based vertical platform approach generates recurring revenues and increasing operational leverage, strengthens customer relationships and supports strong customer retention, which can enable cross-selling and up-selling of additional services and software, and enhance margins 3 IDC, Norway, Sweden, Denmark and Finland IT Services Market Size and Vendor Shares, 2015, November 2016, Converted to EUR from SEK, NOK and DKK, based on the following average 2015 currencies: EUR/NOK 0.11191, EUR/SEK 0.10687, EUR/DKK 0.13407. 4 IDC, Norway IT Services Market Size and Vendor Shares, 2015. November 2016 update.
Modern and highly flexible cloud platform and dynamic digital services to address customer digitalisation strategies o The Company offers a full portfolio of digital services and customised cloud solutions through its strategic partnerships with inter alia Microsoft, Google, Amazon Web Services and IBM, taking advantage of the capabilities of the leading global providers of infrastructure, cloud and next generation technologies o The strategic partnership with IBM has enabled the Company to provide a full range of competitive infrastructure outsourcing solutions to customers and to move to a more "asset-light" business model, by focusing on developing digital capabilities and investing in next generation technologies o Through regained cost competitiveness and a highly flexible solution, the Company has been able to renew key contracts with large enterprises such as the Norwegian Postal Service and Telenor, successfully competing against Nordic and global competitors Clear path to further margin expansion and high cash generation o The execution and implementation of a number of strategic initiatives have enabled the Company to increase its adjusted EBITA margins, and have provided a platform from which to further grow margins o The transformation has also led to a more robust, flexible and adaptable business model, with a clear strategy to provide higher value-added services to customers and a more flexible cost base o The Company converts its strong margins efficiently into cash through an asset-light and cash-generative business model Re-energised organisation led by an experienced and trusted management team o An experienced management team with strong operational experience and execution capabilities from leading international companies and competitors o Over the past two years, the team has streamlined the business and re-energised the organisation, delivering tangible operational and financial improvements ahead of schedule o The Company's transformation has fostered a high-performance culture, as evidenced by improved operational and financial performance and an increase in overall employee satisfaction and improvements in customer satisfaction Financial Highlights As a result of its focus on operational excellence and other key strategic initiatives, EVRY's adjusted EBITA margin has expanded from 6.4 percent in 2014 to 10.8 percent in 2016 and the Company's cash conversion rate 5 has improved from 68 percent in 2014 to 80 percent in 2016. Furthermore, the portion of EVRY's cost base that constitutes fixed costs has decreased, resulting in a more flexible cost base. The weak revenue development from 2014 to 2016 reflects the internal focus on the transformation of the Company as well as the loss of operating revenue related to the non-renewal of the DNB nonmainframe contract. EVRY believes that it is well-positioned to deliver further revenue growth and adjusted EBITA margin expansion going forward. The Company reported positive constant currency revenue growth 6 both in the fourth quarter of 2016 (2.2 percent) and the first quarter of 2017 (6.6 percent). NOKm 2014 2015 2016 Q1 2016 Q1 2017 Revenues 12,773 12,860 12,246 3,058 3,177 % Growth 0.1% 0.7% -4.8% -6.1% 3.9% Adj. EBITDA 1,290 1,278 1,583 329 408 % Margin 10.1% 9.9% 12.9% 10.8% 12.8% 5 Cash conversion rate represents adjusted EBITDA less net capital expenditures as a percentage of adjusted EBITDA. 6 Constant currency revenue represents operating revenue at constant currency, excluding revenue from the DNB nonmainframe contract. For the sake of good order, please note that the revenue growth figures in the table relates to actual reported revenue figures, i.e. not constant currency revenues.
Adj. EBITA 813 811 1,322 257 345 % Margin 6.4% 6.3% 10.8% 8.4% 10.9% Offering Highlights The IPO will support EVRY s strategy and growth plans, through contributing to further enhancement of EVRY s public profile, and providing greater flexibility to expand as opportunities arise. Furthermore, the IPO will allow the Company to diversify its ownership structure and is expected to contribute to a sustained strong, diverse and long-term shareholder base for the Company. The IPO will comprise a public offering to institutional and retail investors in Norway, an offering to the Company s eligible employees, and a private placement to certain institutional investors internationally. The IPO is expected to consist of an issue of new shares to raise gross proceeds of approximately NOK 3 billion. In addition, the current majority owner in the Company, Lyngen BidCo AS, a company controlled by funds advised by Apax Partners, intends to reduce its ownership in EVRY in connection with the IPO. Lyngen BidCo AS will remain a substantial shareholder after the IPO. ABG Sundal Collier ASA, Goldman Sachs International and Morgan Stanley & Co. International plc are acting as Joint Global Coordinators and Joint Bookrunners in the IPO; Credit Suisse Securities (Europe) Limited, DNB Markets (a part of DNB Bank ASA) and UBS Limited are acting as Joint Bookrunners in the IPO. Lazard & Co., Limited is acting as financial advisor to EVRY. Further announcements relating to the process will be made in due course. The exact timing of the proposed IPO remains subject to receiving the relevant approvals from the Oslo Stock Exchange and the Norwegian Financial Supervisory Authority (Finanstilsynet), as well as the prevailing equity capital market conditions. Enquiries Björn Ivroth, CEO of EVRY, +47 06500 Geir Remman, VP Corporate Communications, +47 97055017 About EVRY EVRY is one of the leading IT companies in the Nordic region and has a strong local and regional presence in 50 Nordic towns and cities. Through its insight, solutions and technology, EVRY contributes to the development of the information society of the future and so creates value for the benefit of its customers and for society as a whole. EVRY combines in-depth industry knowledge and technical expertise with local delivery models and international strength. EVRY has some 8,200 full-time employees, and the Company is committed to demonstrating that Nordic customers are best served by a supplier that understands Nordic business from the inside. EVRY has annual turnover of more than NOK 12 billion. Important Notice The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. None of ABG Sundal Collier ASA, Goldman Sachs International, Morgan Stanley & Co. International plc, Credit Suisse Securities (Europe) Limited, DNB Markets (a part of DNB Bank ASA) or UBS Limited (the Joint Bookrunners ) or any of their respective affiliates or any of their respective directors, officers, employees, advisors or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever
arising from any use of this announcement or its contents or otherwise arising in connection therewith. This announcement has been prepared by and is the sole responsibility of the Company, Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, Japan, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement does not contain or constitute an offer to sell or a solicitation of any offer to buy or subscribe for any securities referred to in this announcement to any person in any jurisdiction, including the United States, Australia, Canada, Japan or South Africa or any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act ), and may not be offered or sold in the United States absent registration or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any securities referred to herein in the United States or to conduct a public offering of securities in the United States. Any offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is an advertisement and is not a prospectus for the purposes of Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the Prospectus Directive ). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. Copies of any such prospectus will, following publication, be available from the Company's registered office and, subject to certain exceptions, on the website of the Company. In any EEA Member State other than Norway that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive ("Qualified Investors"), i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. This communication is only being distributed to and is only directed at persons in the United Kingdom that are Qualified Investors and that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Order ) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons ). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so. Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to the Company and no one else in connection with the IPO and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Lazard & Co., Limited nor for providing advice in relation to the IPO or any other matters referred to in this announcement. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited in connection with this announcement, any statement contained herein or otherwise. Credit Suisse Securities (Europe) Limited, Goldman Sachs International, Morgan Stanley & Co. International plc and UBS Limited are authorised by the Prudential Regulation Authority (the "PRA") and regulated by the FCA and the PRA in the United Kingdom. The Joint Bookrunners and their affiliates are acting exclusively for the Company and the selling shareholders and no-one else in connection with the intended IPO. They will not regard any other person as their respective clients in relation to the intended IPO and will not be responsible to anyone other than the Company and the selling shareholders for providing the protections afforded to their respective
clients, nor for providing advice in relation to the intended IPO, the contents of this announcement or any transaction, arrangement or other matter referred to herein. In connection with the contemplated IPO, the Joint Bookrunners and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of the Company or related investments in connection with the contemplated IPO or otherwise. Accordingly, references in any prospectus, if published, to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, such Joint Bookrunners and any of their affiliates acting as investors for their own accounts. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as believe, aims, expect, anticipate, intends, estimate, will, may, continue, should and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. The Company, each of the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise. The IPO may be influenced by a range of circumstances, such as market conditions, and there is no guarantee that the IPO will proceed and that the listing will occur. Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.