1. Highlights of the quarter
1. Business review
1. Financial review
1. Outlook
1. Q&A

Arne Mjøs CHIEF EXECUTIVE OFFICER

Bent Hammer CHIEF FINANCIAL OFFICER

Q4 in brief

Key figures

02 Business review

While the pace of spending has changed, the fundamentals have not

Digital transformation

Cloud towards business necessity
Intelligent applications
Industry cloud platforms
End-to-end customer journey
Sustainability and ESG

AI everywhere

Democratized Generative AI
The drive to automate
AI-augmented development
The end of legacy IT

Shifting business models

Everything as a service intensifies
The digital business imperative
Machine customers

9.3% 20%+ 27% 70%

Growth of European IT market in 20241) .

Compound annual growth rate (CAGR) for 2023-2027 in digital transformation spending in the Nordics. 16% in Europe and worldwide %2 ) .

Growth in cloud spending in Europe in 20243) .

70%

Reduction in modernization costs in 2027 by using Gen AI to explain legacy applications and create appropriate replacements4) .

Share of enterprises that will use industry cloud platforms in 2027, up from 15% in 20235) .

1) and 3) Gartner Oct 2023: Gartner Forecasts IT Spending in Europe to Record 9% Growth in 2024 2) IDC Nov 2023; Worldwide Digital Transformation Spending Forecast to Continue Its Double-Digit Growth Trajectory, According to IDC Spending Guide

4) Gartner Symposium Barcelona November 2023

5) Gartner Nov 2023: Gartner Forecasts Worldwide Public Cloud End-User Spending to Reach \$679 Billion in 2024

We are specialists in sustainable digital transformation

The Nordics is often positioned as digital and sustainable front-runner that show the way globally.

We are growing together with international customers and partners based on our ONE Itera model across borders.

Our Digital Factory with cross-functional teams across border was recognised as best in the world by Global Sourcing Association in 2018.

Our steady growth organic model

We have built a strong international ONE Itera operating model and will see more of divergence in the linearity between headcount and revenue growth.

Our profitable growth trajectory is amongst the top peers in our industry and reflects our strong position to deliver on the promise of sustainable digital transformation for our customers.

Our priorities in 2024

Strengthen demand generation through customer squads

Leverage Digital Factory and cloud journeys

Explore and capitalize on growth opportunities in data, Low-Code and AI

Build on our strong position to grow outside Norway

Being smart in cost discipline

Community of practices and people development

Operational excellence

The next era: We shape AI and AI shapes us

We are assisting numerous customers for setting goals for using AI to ensure that they will be in the best competitive position for the short-term (Everyday AI) and long-term (Game-changing AI).

The Gartner AI opportunity radar Source: Gartner Symposium Barcelona November 2023

Itera's AI toolbox for increased efficiency

Itera's data and AI experts have been working on establishing a proprietary platform for generative AI throughout Q4.

The platform will offer efficient configuration of advanced and specialised AI assistants, which will both be utilised in customer engagements and in Itera's daily operations.

The proprietary platform will represent an addition to commonly available AI tools in daily use, such as GitHub CoPilot and Microsoft 365 Copilot.

We are growing together with international customers and this proprietary AI platform will not only enhance the value delivered to our customers during engagements, but also contribute to improving our operations across various use cases.

We plan to launch the platform internally during Q1, and further details will be provided in our next quarterly report.

Improving operational efficiency with Generative AI

Recent advancements in generative AI have led forward-thinking companies like BAHR, one of Norway's Tier 1 law firms, to be proactive in exploring how technology such as LLM-models can be used to increase value creation, improve operational efficiencies, and solidify their competitive advantage.

In collaboration with Itera, the firm introduced a chatbot named Bahrry to their employees, a specialized AI-driven digital assistant built on Azure Open AI Services.

Bahrry is customized to streamline document processing, facilitate information retrieval, and handle complex legal questions by processing internal data. This is accomplished while maintaining control over the data flow and ensuring reliable protection of sensitive information.

Bahrry can enhance operational efficiency through the power of generative AI and paves the way for using even more time and effort toward providing additional value to their clients.

Exploring the potential of AI in the Icelandic Fintech community

Together with Reykjavik Fintech Cluster, we invited the Icelandic financial services community to a breakfast seminar called "The AI Advantage", highlighting trends and players pushing the frontiers of digital innovation.

Industry experts attended, and media coverage followed. Following the seminar, we conducted an exclusive workshop for Landsbankinn.

The CIO praised Itera's commitment, and these insights will shape their AI endeavors.

Transforming power grid monitoring with AI

Laki Power, an Icelandic company, partnered with Itera to enhance ice monitoring services through machine learning, improving icing forecasts and real-time ice-load measurements.

Laki Power creates line-powered monitoring systems for overhead power lines, offering innovative solutions to some of today's most pressing challenges faced by power grid operators.
By leveraging AI and machine learning, Laki Power's improved system predicts icing conditions and enables power grid operators to take preventive measures.
This reduces costs associated with emergency repairs, downtime, and operational inefficiencies. Consequently, this increased efficiency can lead to financial savings.

– This project has showcased the immense potential of AI and machine learning in the power grid monitoring industry. Laki Power has already made significant discoveries by harnessing the power of data and images.

Inga Stefánsdóttir, Head of Research and Analytics, Laki Power

GenAI supercharges legacy modernization

– By 2027, GenAI tools will be used to explain legacy business applications and create appropriate replacements, reducing modernization costs by 70%.

Rajib Gupta, Anne Thomas, Howard Dodd, Svetlana Sicular and Van Baker

Source: Gartner Symposium Barcelona November 2023

Digital Factory at Scale: Doing more with less

Bergen Chamber of Commerce Annual Conference

Itera was invited to the 2023 Annual Conference held by Bergen Chamber of Commerce and Industry at Grieghallen.

Arne Mjøs spoke about our commitment to and support for Ukraine, highlighting how the Western Norway region has a unique opportunity to take a prominent role in the country's reconstruction. For instance, procuring IT services from Ukraine is a valuable way for businesses to contribute to Ukraine's development

Arne Mjøs shared the stage with Jan Christian Vestre (Minister of Trade and Industry), Monica Mæland (CEO of Bergen Chamber of Commece and Industry), as well as Hilde Gran and Sonja Skeistrand Sunde (TV 2 reporters).

Itera represented at COP28

Especially invited by the Ukrainian government, Itera was represented by Jon Erik Høgberg at COP28, the 28th United Nations Climate Change conference held in Dubai.

Together with the EU, Ukraine has created an ambition to become the new green energy and digital hub in Europe with a total of 360 GW renewables in 2050, of which 40% will be exported to the EU in the form of green hydrogen, green ammonia and electricity.

This international event brought together a diverse group of 80,000 accredited executives, politicians, ministers, kings, sheikhs, and other prominent figures from around the world.

Jon Erik Høgberg, Group COO Itera, to the left, in a panel debate. Over the course of three impactful days, Jon Erik engaged in intensive and inspiring discussions, panel debates, and talks centered around climate change.

Meeting President Zelensky in Oslo

President Volodymyr Zelensky met 14 Norwegian companies in Oslo to discuss how Norwegian businesses can contribute to the reconstruction of Ukraine.

The reconstruction of Ukraine will require enormous efforts over a long period of time. The authorities cannot accomplish this on their own, and the private sector will have a vital role to play.

During his visit in Oslo, President Zelensky also joined Nordic-Ukrainian Summit. During the summit, the Nordic leaders pledged to provide additional political, economic and military support to Ukraine.

President Zelensky met representatives of the Norwegian business community - regjeringen.no

President Zelensky, Prime Minister Støre and Norway's Minister of Defence Bjørn Arild Gram.

Strong Nordic support for Ukraine - regjeringen.no Prime Minister Støre and President Zelensky also joined the Prime Ministers of Denmark, Iceland and Sweden and the President of Finland at a Nordic-Ukrainian Summit.

President Zelensky, Ukraine's Minister of Defence Rustem Umerov and CEO & founder Arne Mjøs of Itera.

Participants at the meeting on 13 December in Oslo included representatives of the Confederation of Norwegian Enterprise and the Norwegian-Ukrainian Chamber of Commerce as well as company leaders from Equinor, Yara, Statkraft, DNB, Aker, Itera, DNV, NFM, Scatec, TietoEvry, Kongsberg, Teledyne, Emergy, and Nammo.

Order intake

Order intake from selected new and existing customers.

Book-to-bill ratio*) of 1.7 in Q4 and 1.0 for the last 12 months

Customer development

New business

Existing customers accounted for 93.9% (88.2%) of revenues in Q4 2023
New customers won over the past year generated revenues of NOK 13.5 (24.3) million in Q4 2023 (6.1% share)

Good visibility

Share of revenue from top 30 customers 84% (82%)
High customer concentration signifies
- Strategic relationships
- Full range of services
- Distributed delivery across borders

Revenue customers split (in MNOK)

Largest customers' share of revenue

* Existing customers defined as customers that were invoiced in the corresponding quarter last year

** New customers defined as customers won since end of corresponding quarter last year

Skilled and innovative employees

762 employees at the end of the quarter

Up by 60 (81) last twelve months
65% of the FTE growth in the Nordics

Nearshore ratio of 51% (52%)

▪ Our distributed delivery model of onshore and nearshore consultants are increasing our price competitiveness as well as providing high scalability through access to a very large talent pool

Number of employees end of quarter by shore

Rolling 12 months net FTE growth

03 Financial review

Key financials

	2023	2022	Change	2023	2022	Change
NOK Million	10-12	10-12	%	1-12	1-12	%
Operating revenue	222 1	205 5	8%	871 6	735 8	18%
profit Gross	206 2	191 9	7%	813 7	684 2	19%
Personnel expenses	162 5	145 5	12%	634 4	515 1	23%
Other opex	17 1	18 2	-6%	68 7	60 1	14%
Of which one-offs	3 0	0 0		3 0	0 0
Adjusted EBITDA	29 5	28 2	5%	113 7	109 0	4%
Margin	13 3%	13 7%	-0 4pts	13 0%	14 8%	-1 8pts
Depreciation	8 5	8 8	-3%	32 3	31 8	2%
Adjusted EBIT	21 1	19 4	8%	81 4	77 2	5%
Margin	9 % 5	9 % 5	0 pts	9 3 %	10 % 5	2 -1 pts
cash flow from operations Net	2 57	41 4	38%	95 7	0 76	26%
Cash and cash equivalents	49 2	41 9	17%	49 2	41 9	17%
Employees end of period at	758	698	9%	758	698	9%
Employees in average	760	700	9%	741	669	11%

Organic revenue growth of 8%
Personnel expenses driven by FTE growth, NOK depreciation, salary growth and one -off optimization costs
Opex decrease following business optimization program
Adjusted EBIT of MNOK 21.1 (19.4)
Adj. EBIT margin of 9.5% (9.5%)
Cash flow from operations MNOK 57.2 (41.4)
No. of FTEs 758 (+60)

Revenue and earnings development

Last 12-months growth and margin

Strong sales growth year over year with 2-year CAGR of 21.2% and an average of 9.9% adjusted EBIT margin

Opportunities for margin expansion

Normalization of utilization
Reaching critical business volume Cloud & Application Services
- Promising pipeline entering 2024
Expansion in Sweden
- Core team established and several new customers acquired
Full impact of business optimization program
Ukraine recovery

Statement of cash flow

	2023	2022	2023	2022
Million NOK	10-12	10-12	1-12	1-12

EBITDA	26 5	28 2	110 7	109 0
Change in balance sheet items	30 6	13 2	(14 9)	(32 9)
cash flow from operating activities Net	57 2	41 4	95 7	76 0

cash flow from investment activities Net	(3 9)	(3 6)	(19 4)	(15 2)

Purchase of shares own	(11 8)	(8 5)	(11 9)	(9 1)
Sale of shares own	-	-	6 2	6 6
Equity settlement of options contract	2 7	-	2 9	-
Principal elements of lease payments	(4 3)	(3 9)	(15 2)	(15 5)
Instalment of sublease receivable	-	-	-	1 8
borrowings Long-term	(0 3)	-	4 8	-
External dividend paid	(32 2)	(24 4)	(56 9)	(40 5)
cash flow from financing activities Net	(45 8)	(36 7)	(70 0)	(56 8)

change in bank deposits and cash Net	7 1	0 9	7 3	4 5

Bank deposits the end of the period at	49 2	41 9	49 2	41 9

▪ Cash flow from operations NOK 57.2 (41.4) million in Q4

▪ 12-month rolling cash flow from operations was NOK 95.7 (76.0) million

▪ Cash conversion from EBITDA of 86% last 12 months

Dividend and own shares

A supplementary dividend of NOK 0.40 per share for 2022 to paid on 10 Nov. Proposed ordinary dividend of NOK 0.40 per share for 2023
Share price was NOK 12.05 at the end of Dec 2023, a change of -3% incl. dividends from NOK 13.20 at the end of Dec 2022
Current holding of own shares is 1,654,281. Value at 31 Dec 2023 was MNOK 19.9
Consistent high distribution of earnings.

EBIT in 2021 and 2022 is excluding discontinued operations of -0.23 and -0.17 per share

Equity ratio of 16% (21%) per 31 Dec 2023
- 21% (24%) excl. IFRS 16 Leasing
Right-of-use assets up MNOK 46 from new facility agreements
Cash balance of MNOK 49 (MNOK 42)
Total balance increased by MNOK 63 to MNOK 296

04 Outlook

Q4 REPORT 2023

Outlook

Underlying strong demand for digital transformation through existing and new customers but softer total market

Continued attention to business optimization to mitigate current market situation

Readiness to migrate and operate larger scale cloud transformations.

Connecting Ukraine and the Nordics to enable the green energy shift

Profitable growth and cash flow are key focus areas.

ITERA | 31

Itera does not provide guidance to the market on future prospects.

Top 20 shareholders

No	Name	%	Nat	Shareholding
1	MJØS ARNE INVEST AS	33 29	NOR	27 363 031
2	OP CAPITAL AS	5 64	NOR	4 635 242
3	GIP AS	5 23	NOR	4 300 000
4	SEPTIM CONSULTING AS	4 83	NOR	3 970 874
5	BOINVESTERING AS	3 59	NOR	2 947 862
6	GAMST INVEST AS	3 15	NOR	2 590 070
7	Privatbank DZ S A	2 68	LUX	2 200 000
8	JØSYRA INVEST AS	2 68	NOR	2 200 000
9	EIKESTAD AS	2 43	NOR	2 000 000
1 0	ITERA ASA	2 01	NOR	1 654 281
1 1	HØGBERG JON ERIK ,	1 46	NOR	1 197 356
2 1	AANESTAD PANAGRI AS	1 16	NOR	950 000
1 3	FRAMAR INVEST AS	0 98	NOR	802 800
1 4	NYVANG JETMUND GUNNAR ,	0 87	NOR	714 600
1 5	ALTEA AS	0 85	NOR	700 000
1 6	JENSEN LARS PETER ,	0 78	NOR	639 850
1 7	MORTEN JOHNSEN HOLDING AS	0 73	NOR	600 000
1 8	SOBER KAPITAL AS	0 70	NOR	575 786
1 9	HAMMER BENT ,	0 69	NOR	566 695
2 0	A/S FRATERNITAS	0 63	NOR	514 413
	TOP 20	74 37		61 122 860