third quarter 2017 · *arne mjøs invest as holds a future contract expiring 15 march 2018 on 4 300...
TRANSCRIPT
INTERIM REPORT
FOURTH QUARTER 2017CEO ARNE MJØS
CFO BENT HAMMER
OSLO, 16 FEBRUARY 2018
1
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
2
RevenuesNOK million
EBITNOK million
FINANCIAL REVIEW
3
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
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 hires5
QUARTERLY DEVELOPMENT
Operating revenueNOK million
EBITDANOK million
EmployeesEnd of period
EBITNOK million Margin
Margin
6
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
• 3rd party service revenue increased by
11% to NOK 6 million
• Other revenue decreased by 17% to NOK
7 million
Revenue percentage split (rolling 12 months)
7
Revenue split (quarterly figures)MNOK
STATEMENT OF CASH FLOW
Cash flow from operations NOK 32.7 (36.8) million in Q4
12 month rolling cash flow from operations was NOK 49 million
12 month rolling
cash flow from
operations (MNOK)
8
• 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 213 935 shares
• Total distribution to shareholders of NOK 4.17 per share during
2005-2017
DIVIDENDS AND OWN SHARES
9
STATEMENT OF FINANCIAL POSITION
• Group equity ratio of 24% (26%) per December 31
• Cash balance of MNOK 60 (71)
• Receivables high due to delay in invoicing
10
Cash Equity
Non-current
liabilities
Non-current
assets
Receivables
and WIP
Current
liabilities
Assets Equity and Liabilities
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: 4.1
We are on a journey
CUSTOMER CENTRICITY
ONE ITERA
TOP 5 IN INNOVATION
HYBRID
SCALABILITY
#1 IN CREATING
DIGITAL
BUSINESS
GREAT EXPERIENCES FOR
THE CUSTOMER’S CUSTOMER
2012
2018
2020
2017
2016
2015
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
TWO SPEED AND HYBRID
Hybrid delivery Industrialised delivery, efficiency and scalability
Nordic front office Creating great experience for customer’s customer
Identify
Feedback
Lean service
design
User
experience
Continuous
innovation
Tech
Launch
Customer centricIdentifying specific challenges that are
relevant to the customer’s customers, solving
them with the customer and partners, and
realise the full potential with digitalisation
Life Cycle ManagementDevOps, hybrid cloud and security
BUSINESS MODEL
Cross-border deliveryWorks are done what
makes sense, executed by
cross border delivery management
TWO SPEED
HYBRID
THE PLATFORM ECONOMY
.
.
.
Smart home
Smart City
Smart meter
eHealth
Smart mobility Smart grid
PSD2 Fintech
Smart phone
API
$
Aggregator
Outside-in
banking
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
Emerging Tech
• Smart city platforms (i.e.
Ford)
• Sports innovation (i.e.
Intel)
• The invisible doctor
In the market
• Voice becomes the
preferred UI
• Smart homes
• Self-driving vehicles
(car, airtaxi)
CES 2018 TRENDS IN THREE PARTS
DIGITAL PLATFORMS
Horisontal platforms Vertical industry platforms (500+)
Transportation Mobility Cloud
Digital Health Platform
Smart Cities, Buildings & Homes
Veracity Industry Platform
In 2018, more than 50% of large enterprises will create and/or enter into
partnerships in creating industry platforms (IDC).
System SW
Applications
Customisation
Unrealised needs
Platforms- Business services (i.e. collaboration; ERP)
- Appl services (i.e. AI, big data, IoT)
- System SW (i.e. hyperscale, cloud)
Microservices
Real-time customisation
Unrealised needs
1000’s of
SW vendors
Global horizontal platforms(i.e. Microsoft, Google, AWS, Apple)
Vertical platforms (i.e. eHealth, transportation, etc.)
DELIVERING INNOVATIVE SOLUTIONSThe new digital platforms and ecosystems drive innovation at the fraction of
time and costs of traditional approaches
Needs
The Itera wayTraditional
• Book-to-bill ratio*) of 1.1 in Q4 and 1.2 for 2017
ORDER INTAKE
Order intake from existing and new customers
*) The book-to-bill ratio is the ratio of orders received to the amount of revenue for a specific period for Itera units
20
CUSTOMER DEVELOPMENT
21
• New business• Existing clients accounted for 94.9% of
revenues in Q4 2017
• New customers won over the past year generated revenues of NOK 6.9 million in Q4 2017, representing 40% of the total growth
Revenue customers splitMNOK
Share of revenue• 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
* 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
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
Nearshore ratio% of all staff located nearshore
22
TAPPING GLOBAL #4 IT LABOUR POOL
• 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
23
IT pool: Global #4
Quality: Global #2
The Nordics as the world’s most
fast growing digital societies
*) Analysis by Magne Jørgensen, Professor at the University of Oslo
and Chief Research Scientist at Simula Research
ICELAND
Reykjavik
24
OUTLOOK
25
OUTLOOK
• 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
• Itera does not provide guidance to the market on future
prospects
26
TOP 20 SHARE-HOLDERS
*Arne Mjøs Invest AS holds a future contract expiring 15 March 2018 on 4 300 000 shares currently
owned by DNB Markets, AKS DNB BANK ASA. The total controlling interest of Arne Mjøs Invest AS is
thus 24 327 688 (29.6%).28
*