Itera

Earnings Release • Apr 27, 2016

Profit improvement and growth

Profit improvement and growth

Oslo, 27th April 2016: Itera continued the strong trend from

the end of 2015 and achieved good growth and profitability

improvements at all continuing units in the first quarter of

Easter fell in the first quarter of 2016. In addition to

more holiday taken, this meant that there were 2.5 fewer

working days in the first quarter of 2016 than in the first

quarter of 2015. This impacted operating revenue and

profitablity. Taking into account the fact that Easter was

in the first quarter of this year and the second quarter of

last year, the Group achieved a good improvement in growth

and profitability.

Pro forma operating revenue was NOK 104.1 million (99.3) for

the first quarter of 2016, equivalent to revenue growth of

5%. In percentage terms Itera's Danish and nearshore units

achieved the strongest revenue growth, but revenue was also

up at all the Group's Norwegian units.

The pr forma operating result before depreciation and

amortisation (EBITDA) for the first quarter of 2016 was a

profit of NOK 11.0 million (a profit of NOK 9.8 million in

Q1 2015), and the operating result before non-recurring

items (EBIT) was a profit of NOK 6.1 million (a profit of

NOK 5.1 million in Q1 2015). The EBIT margin was 5.9% as

compared to 5.1% in the first quarter of 2015.

Cash flow from operating activities was NOK -3.5 million

(-8.1) for the first quarter of 2016.

A key part of Itera's strategy is to maintain and develop

the Group's largest and most strategic relationships across

national borders and areas of expertise. Itera has a strong

customer portfolio in the Nordic region, where many

customers are served from more than one of Itera's various

locations.

Like previous quarters, the Group is experiencing that

digitization is a rapidly growing market trend, with

interest and demand in virtually all industries and sectors.

Customers are committed to delivering great user experiences

to their customers, and request the ability to innovate, a

"lean" development approach and a range of competencies

spanning over communications, technology and service design.

This makes the Group well positioned to continue to build a

strong position in the area.

- The simplification of the Group with a reduced number of

delivery units has helped to reinforce the positive trend

from the end of last year, as planned. We are very satisfied

with the development in the continuing units, with strong

performance particularly in Denmark and in our nearshore

operations, says Arne Mjøs, CEO of Itera.

The revenue from Itera's 30 largest customers grew by 6% in

the first quarter of 2016 and accounted for 71% of the

Group's operating revenue, up from 68% in the first quarter

of 2015.

The proportion of Itera's capacity that is located nearshore

(its nearshore ratio) was 36% (29%) at the end of the first

quarter. The Group's development centre in Bratislava

provides great flexibility with regard to meeting the target

of achieving a nearshore ratio of 50% in the future.

For more information:

Arne Mjøs, CEO

+47 905 23 172

arne.mjos@itera.no

Bent Hammer, CFO

+47 982 15 497

bent.hammer@itera.no

About Itera - great user experiences for the customers'

customers

Itera is a communication and technology company that

delivers services in the strategy and consulting, design and

development, and operations and management areas. The

customers are Nordic organisations that aim to deliver great

user experiences to their customers, and that see the

instrumental contribution of innovation, efficient

communication and good technology use can make to achieving

their goals. Itera is headquartered in Oslo, and has about

450 employees across the Nordics and in Ukraine and

Slovakia. Itera is listed on Oslo Stock Exchange under the

ticker ITE.