INVL Technology — Investor Presentation 2021

Apr 26, 2021

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Novian group's results for 2020

2021

www.novian.io

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The Novian group combined its capabilities in 2020

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Novian companies act in 3 areas

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• NOVIAN | Systems

• Andmevara AS | Tallinn, Estonia

• NOVIAN | Technologies

• Andmevara Services OÜ | Tallinn, Estonia

• Andmevara SRL | Chișinău, Moldova

• Zissor | a Novian company

• Drammen, Norway

Novian group is strengthening its international presence and increasing value for its clients by offering integrated services.

For that purpose, Novian has refined its operational competencies – the group’s companies operate in three areas.

The market is also being offered integrated services under the shared name of Novian:

At the end of 2020, BAIP became Novian Technologies and Algoritmų Sistemos – Novian Systems.

Acena, a provider of business analytics and process automation solutions, was merged into Novian Systems.

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Focus on regional markets and technological advances

Main directions of the Novian group:

• Expand the geography of the activities of the group’s companies giving priority to the Baltic and Nordic markets.
• Increase the companies’ competencies in the areas of high-performance computing devices, digital transformation, big data and artificial intelligence.

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Services and solutions integrated for unique needs

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Business

1. Organization's need for digitalization
2. The Novian approach
3. Optimization
4. Past implementation combining the Novian companies’ experience, capacity and services.

Public sector

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Clients benefit from over 80 solutions and services

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Key events in 2020

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Key events

• In the beginning of 2020, through an internal transaction, Algoritmu Sistemos acquired the business analytics and process automation solutions company Acena from BAIP. The transaction strengthened the systems development area within the Novian group.
• Since 28 September 2020, Evaldas Rėkus has been the CEO of Novian. He replaced Artūras Zdanavičius who had been acting CEO since 1 August 2020 in place of the company’s previous head Giedrius Cvilikas.
• As digital transformation gains momentum, the Novian group aims to strengthen its positions internationally and increase value for clients by offering integrated services. For that purpose, Novian’s main companies, BAIP and Algoritmu Sistemos, changed their names and as of 8 December 2020 began operating as Novian Technologies and Novian Systems respectively.
• In December 2020, the new Novian group website www.novian.io was launched.
• Novian has strengthened its information systems development company Novian Systems. Following the merger of Acena, a provider of business analytics and process automation solutions, into Novian Systems at the end of 2020, Novian Systems offers a broader range of software services.

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A new Novian space on the web: www.novian.io

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2020 financial results

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Novian group companies' financial indicators (thousands of EUR)

	Novian4	Technologies area				Software services area						Media monitoring and digitization area
			Novian Technologies UAB		Andmevara Services OU/ „Andmevara SRL“5		Novian Systems UAB		Andmevara AS		Acena UAB6		„Zissor AS“
	2019	2020	20198	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020
Revenue	23,492	24,113	17,072	18,223	673	651	2,759	2,824	1,023	789	1,257	915	708	711
Gross Profit	5,591	5,737	2,549	2,850	672	651	993	1,144	450	190	347	250	580	652
EBITDA	1,556	1,788	1,258	1,628	93	65	339	463	(108)	(256)	(12)	(69)	78	108
EBIT	755	995	684	1,065	76	49	234	338	(171)	(318)	(18)	(74)	43	88
Net Profit (loss)7	385	595	462	774	41	30	190	299	(229)	(374)	(20)	(74)	34	68

4 The unaudited aggregated results of the Novian group are presented, which include the results of the companies and the results of Novian UAB. The standalone financial statements of Novian Technologies UAB, Novian Systems UAB and Zissor AS are audited.
5 Represents results of Andmevara Services OU and Andmevara SRL.
6 Acena UAB was merged into Novian Systems UAB on 31 December 2020. The Acena UAB merge has completed the liquidation procedures, and all the rights and obligations of Acena have been assumed by Novian Systems UAB, which continues Acena UAB activities after the reorganization. The standalone financial statements of Acena UAB will not be prepared and published. The information in this report is presented separately for both companies in order to disclose the actual activities of the companies in 2020 and ensure comparability of data with 2019.
7 Adjusted net profit is represented after eliminating one-off impairments of investments in subsidiaries recognized in standalone reports of Novian Technologies UAB and Novian Systems UAB. In 2019 Novian Technologies UAB eliminated the impairment of Acena UAB EUR -117 thousand (additional deferred income tax income- EUR 18 thousand), Novian Systems UAB eliminated the impairment of Andmevara AS EUR -150 thousand (additional deferred income tax income - EUR 23 thousand). In 2020 Novian Systems UAB eliminated the impairment of Andmevara AS EUR-64 thousand (additional deferred income tax income EUR 10 thousand) and impairment of Acena UAB EUR -27 thousand (additional deferred income tax income of EUR 4 thousand). The aggregated net profit of the Novian group was adjusted accordingly.
8 Revenue and profit items (excluding net profit) of 2019 are adjusted by eliminating EUR 409 thousand revenue. Following IFRS requirements the revenue need to be recognized due to withholding tax revenue earned in the foreign countries, the corporate tax costs need to be recognized accordingly. Adjustment enables to present company performance better.

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Novian group companies' financial indicators (thousands of EUR)

	Novian⁴	Technologies area				Software services area						Media monitoring and digitization area
			Novian Technologies UAB		Andmevara Services OU / Andmevara SRL⁵		Novian Systems UAB		Andmevara AS		Acena UAB⁶		Zissor AS
	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020
Tangible Assets	1,251	1,007	897	611	12	19	296	227	34	138	9	7	1	3
Intangible Assets	1,861	1,840	65	62	4	3	1,768	1,773	2	1	1	-	20	-
Other non-current assets	681	712	812	512	-	-	177	419	-	-	-	-	132	104
Current assets	11,404	9,820	7,793	7,021	153	134	1,818	2,199	456	248	875	292	273	426
Of which cash	3,540	2,344	2,016	1,323	29	37	595	377	218	21	596	119	70	274
Total assets	15,197	13,379	9,567	8,206	169	156	4,059	4,618	492	387	885	299	426	533
Equity	5,122	5,708	2,591	3,365	(47)	(19)	2,745	2,966	(218)	(592)	139	65	318	365
Non-current liabilities	687	751	336	175	-	-	351	450	-	86	-	-	-	40
of which financial debt	483	360	328	147	-	-	155	87	-	86	-	-	-	40
Current liabilities	9,388	6,920	6,640	4,666	216	175	963	1,202	710	893	746	234	108	128
Of which financial debt	1,746	1,042	1,205	209	130	50	66	495	345	729	-	-	-	-
Total liabilities and equity	15,197	13,379	9,567	8,206	169	156	4,059	4,618	492	387	885	299	426	533

⁴ The unaudited aggregated results of the Novian group are presented, which include the results of the companies and the results of Novian UAB. The value of investments in subsidiaries was eliminated by aggregating balance sheet items. The standalone financial statements of Novian Technologies UAB, Novian Systems UAB and Zissor AS are audited..
⁵ Represents results of Andmevara Services OU and Andmevara SRL.
⁶ Acena UAB was merged into Novian Systems UAB on 31 December 2020. The Acena UAB merge has completed the liquidation procedures, and all the rights and obligations of Acena have been assumed by Novian Systems UAB, which continues Acena UAB activities after the reorganization. The standalone financial statements of Acena UAB will not be prepared and published. The information in this report is presented separately for both companies in order to disclose the actual activities of the companies in 2020 and ensure comparability of data with 2019.

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Novian group main financial indicators (thousands of EUR)

Revenue

EBITDA

Thousands of EUR	2016	2017	2018	2019	2020
Revenue	14,555	15,776	20,317	23,492	24,113
EBITDA*	774	791	1,138	1,556	1,788

• The Novian group's revenue and EBITDA mainly grew organically. In the 2016-2020 period there was an additional acquisition of the company Zissor, whose impact is not material (annual revenue of approx. EUR 700,000).
• Most of the Novian group's growth is due to the recent more successful development of Novian Technologies. Strong attention is being given to Novian Systems' area of operations as well, which it is hoped will also start to demonstrate stable growth in coming periods.
• The activities of Novian Technologies are diversified between the public and private sector, while most of Novian Systems' activities are concentrated in the public sector.

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• IFRS 16 was implemented in 2019 with an impact on the size of EBITDA, thus the EBITDA indicators for 2016-2018 and 2019-2020 are not directly comparable.

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Revenue of Novian group by country (thousands of EUR)

Thousands of EUR	2019	2020	Change
Lithuania	14,330	17,186	2,856
Other countries	9,162	6,927	(2,235)
Total	23,492	24,113	621

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Revenue of Novian group according to the sectors. Number of the countries

Revenue of Novian group according to the sectors

Novian group: countries of operations

Over the last three years, the Novian group's earnings in the financial and private sectors have grown.

In 2020, revenues in the private and financial sectors made up 56% of all the Novian group's revenues.

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The geography of Novian's companies and projects

Offices operate in 5 countries

The companies' projects in 2016-2020 took place in 50 countries

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Technologies business area

Novian Technologies (Lithuania), Andmevara Services OU (Estonia) and Andmevara SRL (Moldova)

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Technologies business area

Solutions and services:

• Critical IT infrastructure design, deployment and maintenance
• Critical IT infrastructure maintenance managed services
• Cloud computing strategy and transformation implementation
• Data storage, recovery and archiving solutions
• Modern digital workplace strategy and implementation
• Supply-chain and infrastructure lifecycle management

Industries where active:

• Finance and insurance
• Wholesale and retail trade
• Logistics and warehousing
• ITT
• Energy
• Manufacturing
• Public sector
• Scientific institutions

Technologies and methodologies:

• Methodologies: CIMF v.3, Migritis
• Technology partners:
• Dell EMC, NVIDIA, Lenovo, IBM, Cisco, Zabbix, Prometheus, Oracle
• Microsoft Azure, Google Cloud, RedHat Openshift
• Commvault, Veritas, Quantum
• Mobile Iron, Solarwinds, Kyocera.

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Technologies business area*: key income statement and balance sheet items (thousands of EUR)

	Novian Technologies UAB		Andmevara Services OU / Andmevara SRL**
	2019***	2020	2019	2020
Revenue	17,072	18,223	673	651
Gross profit	2,549	2,850	672	651
EBITDA	1,258	1,628	93	65
EBIT	684	1,065	76	49
Net profit (loss)***	462	774	41	30
	Novian Technologies UAB		Andmevara Services OU / Andmevara SRL**
	2019	2020	2019	2020
Tangible Assets	897	611	12	19
Intangible Assets	65	62	4	3
Other non-current assets	812	512	-	-
Current assets	7,793	7,021	153	134
Of which cash	2,016	1,323	29	37
Total assets	9,567	8,206	169	156
Equity	2,591	3,365	(47)	(19)
Non-current liabilities	336	175	-	-
Of which financial debt	328	147	-	-
Current liabilities	6,640	4,666	216	175
Of which financial debt	1,205	209	130	50
Total liabilities and equity	9,567	8,206	169	156

*Includes Novian Technologies (Lithuania), Andmevara Services OU (Estonia) and Andmevara SRL (Moldova).
** Includes the results of Andmevara Services OU and Andmevara SRL.
*** Adjusted net profit is represented after eliminating one-off atypical impairment of investment in subsidiaries. Impairment of Acena UAB EUR -117 thousand (additional deferred income tax income – EUR 18 thousand) is eliminated in 2019 Novian Technologies UAB.
*** Revenue and profit items (excluding net profit) of 2019 are adjusted by eliminating EUR 409 thousand revenue. Following IFRS requirements the revenue need to be recognized due to withholding tax revenue earned in the foreign countries, the corporate tax costs need to be recognized accordingly. Adjustment enables to present company performance better.

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Technologies business area: main financial indicators (thousands of EUR)

Revenue

EBITDA

Thousands of EUR	2016	2017	2018	2019	2020
Revenue	9,736	10,065	14,111	17,745	18,874
EBITDA*	341	730	839	1,351	1,693

The companies of Novian technologies business area show stable growth due to the ability to operate in Lithuanian and foreign markets, allowing to choose the most favorable operating scenario based on market conditions.

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*IFRS 16 was implemented in 2019 with an impact on the size of EBITDA, thus the EBITDA indicators for 2016-2018 and 2019-2020 are not directly comparable.

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Technologies business area: revenue by country (thousands of EUR)

Thousands of EUR	2019	2020	Change
Lithuania	10,447	13,561	3,114
Other countries	7,298	5,313	(1,985)
Total	17,745	18,874	1,129

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Technologies business area: revenue according to the sectors. Number of the countries

Revenue according to the sectors

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Main projects in 2020

KORFA

Luminor

RAHVUSARHIV

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Project	Vilnius University High-Performance Computing Cluster	Maintenance and servicing of critical IT infrastructure and workstations	Supply, installation and maintenance of “netKiosk” infoterminals	Project to digitize archive materials	Creation of the IT infrastructure for GovCloud services
Work performed	Equipment chosen, 2-level data-storage solution designed, software module for service management, self-service and connection installed. Business plan prepared.	Maintenance of IT infrastructure taken over from in-house unit, maintenance and administration tools deployed and CIMF methodology put in place. Following an audit, changes to IT infrastructure were implemented.	Custom infoterminal solution developed for the bank, taking care of supply, installation and maintenance; 69 „netKiosk“ self-service terminals operate in Lithuania, Latvia and Estonia.	Approximately 1.8 million archive documents related to the establishment and reestablishment of Estonian statehood were digitized and public access to the documents was provided.	Oracle virtualization and integration of a monitoring and backup solution for IT systems.
Benefits	Overall computing performance of the cluster increases by a factor of 12. Speed at which computational and storage resources exchange information doubles. The solution will allow VU to participate in EuroHPC and similar projects.	More efficient use of resources and security of IT systems ensured.	The bank’s customers can obtain services quickly and conveniently. The bank is using its resources more efficiently.	Improved access to Estonia’s information and cultural heritage is one more step in the development of the electronic services of the National Archive.	Deployment and integration of the government cloud. Consolidation of equipment permits easy maintenance and efficient resource use.

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Software services business area

Novian Systems (Lithuania),
Andmevara AS (Estonia)

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Software services business area

Solutions and services:

• Development and maintenance of information systems
• Information systems integration
• Business process digitization
• Performance analytics solutions
• Robotic process automation
• Big data
• Consulting

Industries where active:

• E-governance
• E-tax
• Regulatory institutions
• E-health
• Environmental protection
• Smart cities
• Corporations
• Scientific institutions

Technologies:

• Programming in Oracle/Java and Microsoft.NET
• Low-code solutions with Microsoft Power Apps
• Process robotization
• Big data and performance analytics, artificial intelligence

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Software services business area*: key income statement and balance sheet items (thousands of EUR)

	Novian Systems UAB		Andmevara AS		Acena UAB**
	2019	2020	2019	2020	2019	2020
Revenue	2,759	2,824	1,023	789	1,257	915
Gross profit	993	1,144	450	190	347	250
EBITDA	339	463	(108)	(256)	(12)	(69)
EBIT	234	338	(171)	(318)	(18)	(74)
Net profit (loss)***	190	299	(229)	(374)	(20)	(74)
	Novian Systems UAB		Andmevara AS		Acena UAB**
	2019	2020	2019	2020	2019	2020
Tangible assets	296	227	34	138	9	7
Intangible assets	1,768	1,773	2	1	1	-
Other non-current assets	177	419	-	-	-	-
Current assets	1,818	2,199	456	248	875	292
Of which cash	595	377	218	21	596	119
Total assets	4,059	4,618	492	387	885	299
Equity	2,745	2,966	(218)	(592)	139	65
Non-current liabilities	351	450	-	86	-	-
Of which financial debt	155	87	-	86	-	-
Current liabilities	963	1,202	710	893	746	234
Of which financial debt	66	495	345	729	-	-
Total liabilities and equity	4,059	4,618	492	387	885	299

Includes Novian Systems (Lithuania), Andmevara AS (Estonia), Acena (Lithuania).
** Acena UAB was merged into Novian Systems UAB on 31 December 2020. The Acena UAB merge has completed the liquidation procedures, and all the rights and obligations of Acena have been assumed by Novian Systems UAB, which continues Acena UAB activities after the reorganization. The standalone financial statements of Acena UAB will not be prepared and published. The information in this report is presented separately for both companies in order to disclose the actual activities of the companies in 2020 and ensure comparability of data with 2019.
**Adjusted net profit is represented after eliminating one-off atypical impairments of investments in subsidiaries recognized in standalone reports of Novian Systems UAB. In 2019 Novian Systems UAB eliminated the impairment of Andmevara AS EUR -150 thousand (additional deferred income tax income - EUR 23 thousand). In 2020 eliminated the impairment of Andmevara AS EUR-64 thousand (additional deferred income tax income EUR 10 thousand) and impairment of Acena UAB EUR -27 thousand (additional deferred income tax income of EUR 4 thousand).

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Software services business area: main financial indicators (thousands of EUR)

Revenue

EBITDA

Thousands of EUR	2016	2017	2018	2019	2020
Revenue	4,819	5,711	6,206	5,039	4,528
EBITDA*	435	103	392	219	138

The area's main company, Novian Systems, is operating stably (CAGR 2016-2020: revenue $6.3\%$ , EBITDA $2.4\%$ ), through the group's revenue has been negatively affected by a significant reduction in the revenue of Acena UAB in 2019-2020. The drop in EBITDA was mainly due to a loss-making project at Andmevara AS and Acena's negative operating results for 2019-2020.

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• IFRS 16 was implemented in 2019 with an impact on the size of EBITDA, thus the EBITDA indicators for 2016-2018 and 2019-2020 are not directly comparable.

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Software services business area: revenue by country (thousands of EUR)

Thousands of EUR	2019	2020	Change
Lithuania	3,885	3,606	(279)
Other countries	1,154	922	(232)
Total	5,039	4,528	(511)

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Software services business area: revenue according to the sectors. Number of the countries

Revenue according to the sectors

Countries of operation

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Main projects in 2020

Project	Development and deployment of an intelligent control process management subsystem	Intuitive personal income declaration – within a few minutes	Development of Services Controlled by Lithuanian Speech – LIEPA 2	Digitalization of the 2021 Lithuanian population and housing census	E-prescriptions will allow medicines to be obtained in all European Union countries
	Development and deployment of a new system for the management of the disease. Development of a new system for the management of the disease. Development of a new system for the management of the disease. Development of a new system for the management of the disease. Development of a new system for the management of the disease. Development of a new system for the management of the disease.	Development of a comprehensive personal income tax information system (GYPAS).	Adaptation of speech recognition and synthesis engines and/or components of them for mobile devices – mobile phones, tablets, smart watches, and a humanoid robot.	System created enabling the population and housing census to be carried out using data from the 19 main national registers and information systems.	An information system is being developed, integrated with the ESPBI IS, to enable the exchange of e-prescriptions and e-documents on dispensing medicinal products between the Republic of Lithuania and other European Union countries.
Benefits	Allows the tax authority to move from classical control to tax collection based on operational information with ability to perform checks and react quickly. Enhances the prevention of tax violations and increases tax collection.	Simplified collection of personal income tax data, together with other updates, allows personal income tax returns to be submitted within minutes.	Increases accessibility of Lithuanian-language e-products and services by developing tools for Lithuanian speech-controlled services in a mobile setting (mobile phones, tablets, smart watches, robots).	To conduct the 2021 Lithuanian population census, 5 specialists will be enough. By comparison, the 2011 census was carried out by 6,000 interviewers.	Will increase access to better healthcare for EU citizens visiting Lithuania. Lithuanian citizens travelling through EU countries will be able to buy medicines according to an e-prescription.

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Media monitoring and digitization area

Zissor (Norway)

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Media monitoring and digitization area

Solutions and services:

• Media (press, online, broadcast, social networks) monitoring software
• Software to segment and digitize the contents of printed and/or scanned documents
• Media PDF file conversion to XML for other communication channels

Industries where active:

• Providers of media monitoring services
• Magazine and newspaper publishers
• National archives and libraries

Technologies:

Zissor intellectual products

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Revenue of Zissor by country (thousands of EUR)

United Kingdom
Sweden
Norway
Germany
Greece
Lithuania
Other (2 countries)

Thousands of EUR	2019	2020	Change
Lithuania	-	19	19
Other countries	708	692	(16)
Total	708	711	3

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Main projects in 2020

Magnolia Clipping & Broadcast Monitoring Service

MOTOR

Sykepleien

DH

Project	Use of Zissor monitoring software by the U.S. company Magnolia Clipping & Broadcast Monitoring	Digitization of the Norwegian magazine “Motor”	Digitization of the Norwegian magazine “Sykepleien”	Conversion of the Danish weekly “Handelsblad” from PDF to XML
Work performed	Installed the Zissor Media System and an Oracle database. They went into operation a month later, after data conversion, testing and training.	Digitization of the Norwegian magazine “Motor” published from 1930 to 2020. Automated digitization was performed using the Zissor Content System, with scanning handled by Andmevara (Estonia).	Digitization of the Norwegian magazine “Sykepleien” issues published from 1912 to 2007. Automated digitization was performed using the Zissor Content System, with scanning handled by Andmevara (Estonia).	The weekly FTP upload of the publication is automatically digitized, separating images and text, for presentation as an article in XML format. All that is transferred to the e-solution and makes it easier to view articles.
Benefits	The largely manual process until now was replaced by an automated solution, leading to a significant increase in the volume and quality of information prepared.	The magazine’s entire history is available in image, PDF and XML formats, enabling inclusion on the magazine’s website in a way that is searchable and readable.	Issues of the magazine are available in image, PDF and XML formats, enabling their inclusion on the magazine’s website in a way that is searchable and readable.	The publication is easier to read on a computer, tablet or mobile phone, as articles are adapted to devices in terms of the formatting of text and images.

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Thank you

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