Itera

Earnings Release • Oct 23, 2019

Focus on technology platforms lifts results

Focus on technology platforms lifts results

Oslo, 23rd October 2019: Third-quarter operating revenue from Itera’s core digital business was up 10 percent, with an EBIT margin of 9.9 percent. Itera's total operating revenue, including the traditional data center operations, increased by 6 percent and operating profit increased by 54 percent.

The Group’s operating revenue was NOK 128.3 million (NOK 121.3 million) for the third quarter of 2019, which represents a growth of 6 percent. This growth was predominantly from Itera’s core digital business, the revenue from which increased to NOK 93.5 million from NOK 85.2 million (+10 percent), while the revenue generated by Itera’s traditional data centre operations decreased by 4 percent from NOK 36.2 million to NOK 34.8 million. Gross profit increased from NOK 102.1 million to NOK 111.1 million, representing an increase of 9%.

The Group's operating revenue in the core digital business accounted for 73 percent of total revenue in the third quarter of 2019, representing an increase of 3 percentage points compared to the same period last year. This is in line with Itera's transformation program where existing customers are transferred from traditional data centers to cloud-based solutions.

Itera’s total operating expenses in the third quarter of 2019 increased by 3 percent to NOK 118.4 million (NOK 114.9 million).

The operating result before depreciation and amortisation (EBITDA) for the third quarter of 2019 was a profit of NOK 19.1 million (NOK 11.8 million). The operating result (EBIT) for the third quarter was a profit of NOK 9.9 million (NOK 6.4 million). The EBIT margin for the third quarter of 2019 was 7.7 percent as compared to 5.3 percent in the third quarter of 2018.

Itera’s earnings from its core digital business were NOK 9.3 million (NOK 5.7 million), giving an EBIT margin of 9.9 percent (6.7 percent). Itera’s earnings from its traditional data centre operations were NOK 0.6 million (NOK 0.7 million), giving an EBIT margin of 1.7 percent (1.9 percent). The transformation program to shift Itera’s data centre operations to cloud offerings is progressing in line with the plan.

Net cash flow from operating activities was NOK 15.0 million (NOK 1.5 million) in the third quarter of 2019. Cash and cash equivalents amounted to NOK 46 million (NOK 20 million) end of September.

As much as 13 percent of Itera's revenue in the third quarter of 2019 came from new customers as a result of the company's expansion in Bergen and new sectors. The 30 largest customers accounted for 77 percent of the Group's revenue, down from 82 percent in the third quarter of 2018.

- The demand for expertise in cloud-based technology platforms is high in all sectors Itera is represented. We have partnered with both Microsoft Azure, Google Cloud and Amazon Web Services, and have full focus on competence development. By the end of the quarter, more than 100 of Itera’s employees have passed platform courses and certifications. Itera’s platform expertise strategy covers all employees across all areas of expertise due to the wide range of features and functionality offered by these platforms, including big data analytics, the internet of things (IoT), machine learning, artificial intelligence (AI) and natural language processing. The certifications and trainings being undertaken by Itera’s employees are accordingly not limited to the area of technology, and the Group is also offering training courses tailored to its designers, UX experts, content experts, project managers, business advisors and testing experts, says Arne Mjøs, CEO of Itera.

In the third quarter, Itera was named as one of Norway's most innovative companies across all industries for the fourth year in a row. The jury's assessment included the following comments: “Itera once again impresses the jury with a mature and open innovation model that focuses on the needs of demanding customers and the opportunities related to good, digital user experiences. Itera proves that leadership-driven innovation combined with a pro-active attitude towards innovative technology is a good fit.”

The Board of Directors of Itera ASA utilised the authority granted by the Annual General Meeting to approve the payment of an additional dividend of NOK 0.30 per share. The shares will be trading ex-dividend from 25 October 2019, and the dividend will be paid on 1 November 2019.

Itera’s headcount at the end of the third quarter of 2019 was 505 as compared to 493 at the end of the third quarter of 2018. The proportion of Itera’s capacity located in Slovakia and Ukraine was 48 percent (44 percent) at the end of the third quarter.

Further information:

Arne Mjøs, CEO | arne.mjos@itera.no | +47 905 23 172

Bent Hammer, CFO | bent.hammer@itera.no | +47 982 15 497

About Itera – specialists in creating digital business

Itera is a specialist in creating digital business, with communication, technology and innovation as its core competency tools. Itera delivers projects and services in cross-functional teams to Nordic organisations that see the instrumental contribution that innovation, efficient communication and smart utilization of technology can make to achieving their goals. Itera’s core sectors are banking and insurance, public, healthcare, the service industry, energy and utility. Itera is headquartered in Oslo and is listed on Oslo Stock Exchange under the ticker ITE.