INTERIM REPORT FOURTH QUARTER 2017 CEO ARNE MJØS CFO BENT HAMMER OSLO, 16 FEBRUARY 2018

Transcription

1 INTERIM REPORT FOURTH QUARTER 2017 CEO ARNE MJØS CFO BENT HAMMER OSLO, 16 FEBRUARY

2 HIGHLIGHTS OF THE FOURTH QUARTER Solid organic revenue growth NOK 135 (117) million Growth of 15% y-o-y EBIT improved EBIT of NOK 13.8 (13.3) million, 10.2% (11.3%) margin Cash flow somewhat behind last year NOK 32.7 (36.8) million cash flow from operations Continued recruitment to secure growth capacity Number of employees up by net 16 in Q4 and 96 last 12 months Dividends Proposed ordinary dividend of NOK 0.25 per share Revenues NOK million EBIT NOK million 2

3 FINANCIAL REVIEW 3

4 KEY FIGURES High growth in own service revenue, especially in nearshore deliveries and Nordic countries outside of Norway 24% growth in employees, 5 pts increase in nearshore ratio to 43% in Q4 Deferred profitability from high capacity increase 4

5 STATEMENT OF INCOME Double-digit growth in Service revenue across all geographies and onshore/nearshore Personnel expenses outgrew top line, reflecting onboarding costs of significantly more new hires 5

6 Operating revenue NOK million Employees End of period QUARTERLY DEVELOPMENT EBITDA NOK million Margin EBIT NOK million Margin 6

7 REVENUE Revenue increased by 15% y-o-y Service revenues from own consultants increased by 25% to NOK 90 million Subscription revenue increased by 1% to NOK 33 million 3 rd party service revenue increased by 11% to NOK 6 million Other revenue decreased by 17% to NOK 7 million Revenue split (quarterly figures) MNOK Revenue percentage split (rolling 12 months) 7

8 STATEMENT OF CASH FLOW 12 month rolling cash flow from operations (MNOK) Cash flow from operations NOK 32.7 (36.8) million in Q4 12 month rolling cash flow from operations was NOK 49 million 8

9 The Board will recommend an ordinary dividend for 2017 of NOK 0.25 per share (68% of net profits) and an option to pay out an extraordinary dividend later in the year A total dividend of NOK 0.43 per share was paid during 2017 Share price was NOK 7.14 on Dec. 31, up NOK 1.94 (37%) from 2016 Current holding of own shares is unchanged at shares Total distribution to shareholders of NOK 4.17 per share during DIVIDENDS AND OWN SHARES 9

10 Group equity ratio of 24% (26%) per December 31 Cash balance of MNOK 60 (71) Receivables high due to delay in invoicing STATEMENT OF FINANCIAL POSITION Assets Non-current assets Receivables and WIP Cash Equity and Liabilities Current liabilities Non-current liabilities Equity 10

11 BUSINESS REVIEW 11

12 2017 HIGHLIGHTS + 96 EMPLOYEES NEW MARKET: ICELAND TOP 5 IN INNOVATION HIGH VISIBILITY: 2 MILLION EXPOSURES IN SoMe MULTIDISCIPLINARY PROJECTS HIGH CUSTOMER SATISFACTION:

13 We are on a journey HYBRID SCALABILITY #1 IN CREATING DIGITAL BUSINESS 2016 TOP 5 IN INNOVATION 2015 GREAT EXPERIENCES FOR THE CUSTOMER S CUSTOMER ONE ITERA 2012 CUSTOMER CENTRICITY

14 ITERA TOWARDS 2020 #1 in creating digital business WE FOCUS ON OUR CUSTOMERS CUSTOMER WE WORK IN MULTIDISCIPLINARY TEAMS WE TAKE LIFE-CYCLE RESPONSIBILITY WE INVOLVE SEAMLESS NEARSHORING through customer journeys and lean startup combining communication & technology skills embracing cloud and data protection issues for greater scalability and cost-efficiency

15 TWO SPEED Feedback User experience Tech Lean service design Customer centric Identifying specific challenges that are relevant to the customer s customers, solving them with the customer and partners, and realise the full potential with digitalisation Launch Identify Nordic front office Creating great experience for customer s customer Continuous innovation BUSINESS MODEL TWO SPEED AND HYBRID HYBRID Hybrid delivery Industrialised delivery, efficiency and scalability Life Cycle Management DevOps, hybrid cloud and security Cross-border delivery Works are done what makes sense, executed by cross border delivery management

16 THE PLATFORM ECONOMY Smart meter Smart home Smart City API Aggregator Outside-in banking $ ehealth. PSD2 Fintech Smart phone.. Smart mobility Smart grid

17 CES 2018 TRENDS IN THREE PARTS The world s largest trade show in Las Vegas shows a massive array of new consumer technologies and products. Ingredient technologies AI Robotics and drones VR/AR In the market Voice becomes the preferred UI Smart homes Self-driving vehicles (car, airtaxi) Emerging Tech Smart city platforms (i.e. Ford) Sports innovation (i.e. Intel) The invisible doctor

18 DIGITAL PLATFORMS In 2018, more than 50% of large enterprises will create and/or enter into partnerships in creating industry platforms (IDC). Horisontal platforms Vertical industry platforms (500+) Digital Health Platform Transportation Mobility Cloud Smart Cities, Buildings & Homes Veracity Industry Platform

19 DELIVERING INNOVATIVE SOLUTIONS The new digital platforms and ecosystems drive innovation at the fraction of time and costs of traditional approaches Needs Unrealised needs Real-time customisation Microservices 1000 s of SW vendors Unrealised needs Customisation Applications System SW Platforms - Business services (i.e. collaboration; ERP) - Appl services (i.e. AI, big data, IoT) - System SW (i.e. hyperscale, cloud) Vertical platforms (i.e. ehealth, transportation, etc.) Global horizontal platforms (i.e. Microsoft, Google, AWS, Apple) Traditional The Itera way

20 Order intake from existing and new customers ORDER INTAKE Book-to-bill ratio* ) of 1.1 in Q4 and 1.2 for 2017 *) The book-to-bill ratio is the ratio of orders received to the amount of revenue for a specific period for Itera units 20

21 CUSTOMER DEVELOPMENT New business Existing clients accounted for 94.9% of revenues in Q New customers won over the past year generated revenues of NOK 6.9 million in Q4 2017, representing 40% of the total growth Increasing visibility Share of revenue from top 30 customers up by 4 points y-o-y to 78% Benefits of higher revenue per customer: Increased revenue visibility Improved operational efficiency Lower sales and overhead costs Revenue customers split MNOK Share of revenue * Existing customers defined as customers that were invoiced in the corresponding quarter last year ** New customers (Rolling Twelve Months) defined as customers won since end of corresponding quarter last year 21

22 Nearshore ratio % of all staff located nearshore NEARSHORE RATIO Nearshore ratio of 43 % in Q4 Target >50% Mixed teams of onshore and nearshore are increasing our price flexibility as well as providing access to a very large resource pool 22

23 TAPPING GLOBAL #4 IT LABOUR POOL The Nordics as the world s most fast growing digital societies Reykjavik ICELAND Increasing shortage of digital skills in most industries Itera is tapping in the global #4 largest IT pool after US, India and Russia The quality of labor pool in our nearshore region is ranked as global #2 *) after Argentina IT pool: Global #4 Quality: Global #2 *) Analysis by Magne Jørgensen, Professor at the University of Oslo and Chief Research Scientist at Simula Research 23

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25 OUTLOOK 25

26 Customer demand remains strong in all Nordic markets Profitable growth and cash flow are key focus areas Digitalisation 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 OUTLOOK Itera does not provide guidance to the market on future prospects 26

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28 * TOP 20 SHARE- HOLDERS *Arne Mjøs Invest AS holds a future contract expiring 15 March 2018 on shares currently owned by DNB Markets, AKS DNB BANK ASA. The total controlling interest of Arne Mjøs Invest AS is thus (29.6%). 28