Itera

Earnings Release • Aug 24, 2016

Solid improvement of operating result and cash flow

Solid improvement of operating result and cash flow

Oslo, 24 August 2016: The progress achieved in the first

quarter continued and strengthened in the second quarter,

and the Group delivered solid growth. Growth was

particularly strong in Denmark and at the Group's nearshore

activities, but all units in Norway also achieved

profitability improvements.

The Group reports pro forma operating revenue for continuing

operations of NOK 110.0 million (NOK 99.7 million) for the

second quarter of 2016 and of NOK 214.1 million (NOK 198.9

million) for the first six months of 2016. This represents

revenue growth of 10% and 8% respectively. In percentage

terms Itera's Danish unit and its nearshore activities

achieved the strongest revenue growth, but revenue was also

up at all the Group's Norwegian units.

The Group's operating result before depreciation and

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

profit of NOK 15.6 million (a profit of NOK 11.0 million in

Q2 2015), and for the first six months of 2016 was a profit

of NOK 26.7 million (a profit of NOK 20.8 million in H1

2015). For these same periods the Group's operating results

before non-recurring items (EBIT) were a profit of NOK 10.7

million (a profit of NOK 6.1 million in Q2 2015) and a

profit of NOK 16.8 million (a profit of NOK 11.2 million in

H1 2015) respectively. The EBIT margin was 9.7% (6.2%) for

the second quarter of 2016 and 7.9% (5.7%) for the first six

months of the year.

Cash from operating activities was NOK 10.7 million (NOK

-6.6 million) for the second quarter of 2016 and NOK 7.2

million (NOK -14.7 million) for the first six months of the

year.

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. An example of this

from the second quarter is Itera's development of new web

solutions for Nets, which is a centrally important customer

for the Group. Itera has total responsibility for developing

an entirely new universe of internet solutions to maintain

Nets' corporate branding in five countries as well as in

relation to a global English version. 'Total responsibility'

means that most of Itera's areas of expertise and service

spectrum is being used, which represents part of the core of

the Group's strategy.

"We are very satisfied that the progress achieved in the

first quarter continued in the second. We are becoming more

and more efficient at using resources and units across the

Group. Local presence is becoming less critical, and it is

becoming easier to grow in conjunction with our customers

regardless of where delivery teams are physically located",

comments Arne Mjøs, CEO of Itera.

The revenue from Itera's 30 largest customers grew by 7% in

the second quarter of 2016 and accounted for 73% of the

Group's operating revenue, up from 69% in the second quarter

of 2015.

The proportion of Itera's capacity that is located nearshore

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

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 experiences for the customer's customers

Itera is a communication and technology company that

delivers services in the strategy and consulting, design and

development, and operations and management areas. Its

customers are Nordic organisations that aim to deliver great

user experiences to their customers, and that see the

instrumental contribution that innovation, efficient

communication and good technology use can make to achieving

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

400 employees across the Nordics and in Ukraine and

Slovakia. Itera is listed on Oslo Stock Exchange under the

ticker ITE.