Itera Asa · OSL:ITERA
Itera Asa — Q3 2020 Earnings Presentation
36 slides from Itera Asa's earnings presentation, 2020
Slide 1: Q3 Interim Report 2020
Q3 INTERIM REPORT 2020 1 Itera | Q3 2020
Slide 2: Presenters and Agenda
PRESENTERS AND AGENDA Arne Mjøs Highlights of the quarter Chief Executive Officer Business review Bent Hammer Financial review Chief Financial Officer Outlook 2 Itera | Q3 2020
Slide 3: Highlights of the Third Quarter
HIGHLIGHTS OF THE THIRD QUARTER High growth and Total business COVID-19 Grow people Dividend profitability in Revenue NOK Moderate Top 25 most Strong 12 core digital 138.2 (128.3) impact from innovative month rolling business (80% million, up by COVID-19 companies cash flow from of total) 8% y-o-y a
Slide 4: Highlights of the Third Quarter
HIGHLIGHTS OF THE THIRD QUARTER Core digital business: Total business: • Gross profit growth of 8.8% (11.4% YTD) • Gross profit growth of 9.2% (10.8% YTD) • EBIT margin of 10.2% (12.5% YTD) • EBIT margin of 10.5% (11.0% YTD) Revenues EBIT NOK million NOK million 162 143 151 143 146 138 19.2 18.6 128
Slide 5: Business review
Business review 5 Itera | Q3 2020
Slide 6: The Specialist in Creating Sustainable Digital Business
THE SPECIALIST IN CREATING WE UNDERSTAND THE USER SUSTAINABLE New use cases DIGITAL BUSINESS WE UNDERSTAND THE WE UNDERSTAND THE BUSINESS TECHNOLOGY Data centric Artificial intelligence 6 Itera | Q3 2020
Slide 7: Make a Difference: Why We Are Here and How
WHY WE ARE HERE MAKE A DIFFERENCE FOR OUR EMPLOYEES, OUR CUSTOMERS, THEIR CUSTOMERS AND SOCIETY AS A WHOLE Skilled people and multidisciplinary teams Platform first HOW? ONE Itera across borders Entrepreneurship and local ownership Sustainability focus
Slide 8: Our Digital Journey
OUR DIGITAL JOURNEY CREATING SUSTAINABLE DIGITAL BUSINESS DIGITAL INDUSTRIAL TRANSFORMATION DIGITALISATION B2C B2B • Banking • Power & Utilities • Insurance • Oil & gas towards green transition • Public • Manufacturing • Retail • Maritime • Others • Fishery 8 Itera | Q3 2020
Slide 9: The 4th Industrial Revolution
THE 4TH INDUSTRIAL REVOLUTION Social Transportation, Traffic, Municipal Parking, Vehicles Command & Factory Control Center Optimization Economy SUSTAINABLE Environment DIGITAL Housing, BUSINESSES Buildings Smart Logistics Grid Optimization Responsive Building Optimization Traffic Flow Store Optimiza
Slide 10: Everything becomes software
Everything becomes Aker will make a quantum leap software from oil and offshore to IT in the next five years Kjell Inge Røkke, chairman Aker ASA Linking the physical and digital world could generate up to USD 4 Trillion a year in economic value by 2025 McKinsey 10 Itera | Q3 2020
Slide 11: Itera and Cognite Join Forces
ITERA AND COGNITE JOIN FORCES • Itera is a strategic end-to-end provider of services to Cognite to drive industrial digitalisation of heavy assets industries across the world, such as: • Oil & Gas towards the green economy • Power & Utility • Manufacturing • Shipping • Typical use cases are within:
Slide 12: Itera and Cognite Strategic Partnership
“Itera has a very skilled team “Based on Cognite's fantastic that collaborates with us to industrial data platform and build applications for our with a team of Itera's customers on Cognite Data designers, developers, STRATEGIC PARTNERSHIP Fusion, our industrial data platform. Together, we have arch
Slide 13: Head of Hybrid Cloud Services Bjørnar Engebretsen
HEAD OF HYBRID CLOUD SERVICES BJØRNAR ENGEBRETSEN • In response to drive industrial digitalisation, Bjørnar Engebretsen is appointed as Head of Hybrid Cloud Services at Itera. • Bjørnar comes from the position as Director Cloud at Microsoft Norway, where he had the overall local responsibility to su
Slide 14: Cloud Centre of Excellence
• Itera is implementing Cloud Centre of Excellence with a scaling engine for massive data to enable industrial digitalization CLOUD • Using public cloud services managed as CENTRE OF code • This requires a software development mindset and EXCELLENCE capabilities and security by design. • Managing ev
Slide 15: Cloud First Is Mainstream
CLOUD FIRST IS MAINSTREAM 88% of all organisations have a cloud first strategy 1% • COVID-19 has created a new inflection 11% point that requires every company to dramatically accelerate the move to the cloud as a foundation for digital YES transformation. NO DON'T KNOW • Hence, Itera is also accele
Slide 16: Itera Data Center Transition
ITERA DATA CENTER TRANSITION • Our low margin Data Centre Operation subscription services will be reduced from current monthly run rate of NOK 7.2 million to less than NOK 3 million by January next year, of which approximately 37% are cost of sales and leasing of assets • Most of the remaining custo
Slide 17: Growing International Traction
GROWING INTERNATIONAL TRACTION TOP 25 MOST INNOVATIVE TOP 1 IN THE WORLD IN TOP 1 IN EUROPE WITHIN COMPANY IN NORWAY CROSS-BORDER DELIVERY PROJECT MANAGEMENT Award by Innovasjonsmagasinet across Award by Global Sourcing Association Award by Global PMO Alliance in 2020 all industries in Norway 2016,
Slide 18: Panel Debate at Arendalsuka
PANEL DEBATE AT ARENDALSUKA Covid-19 reinforces the need to accelerate the digitalisation of society. In connection with Arendalsuka, Itera invited some of Norway's most prominent representatives from business and politics, to discuss how we as a nation, society and individuals can contribute to dig
Slide 19: Steady Growth Despite COVID-19
STEADY GROWTH DESPITE COVID-19 • Itera welcomed 31 master’s students into • During the third quarter we also welcomed summer internship as originally planned. and onboarded 18 graduates across our • The students were engaged in real customer range of services. projects within energy optimisation, be
Slide 20: Order Intake from New and Existing Customers
ORDER Order INTAKE intake FROM from selected NEW new AND and existing EXISTING CUSTOMERS customers ORDER INTAKE Book-to-bill ratio*) of 1.0 in Q3 for core digital business 20 Itera | Q3 2020 *) The book-to-bill ratio is the ratio of orders received to the amount of revenue for a specific period for
Slide 21: Customer Development
CUSTOMER DEVELOPMENT Revenue customers split (in MNOK) • New business 100% 90% 6 7 14 18 17 20 20 16 11 • Existing customers accounted for 91.1% 80% 70% (86.7%) of revenues in Q3 2020 60% 50% 116 134 129 134 127 • New customers won over the past year 40% 126 111 126 142 30% generated revenues of NOK
Slide 22: Skilled and Innovative Employees
SKILLED AND INNOVATIVE EMPLOYEES Number of employees end of quarter by shore 600 50% • 556 employees at the end of the quarter 500 48% • Up 26 from last quarter and 51 from same 400 46% period last year 300 44% • 6 quarters of sequential growth 200 42% 100 40% 0 38% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 23: Financial review
Financial review 23 Itera | Q3 2020
Slide 24: Key Figures
2020 2019 Change 2020 2019 Change 2019 NOK Million 7-9 7-9 % 1-9 1-9 % FY Sales revenue 138.2 128.3 8% 450.9 414.3 9% 560.3 Gross profit 121.4 111.1 9% 394.1 355.8 11 % 483.0 Personnel expenses 86.3 82.3 5% 281.9 260.5 8% 348.3 Other opex 10.4 9.7 7% 32.5 31.4 3% 42.7 EBITDA 24.6 19.1 29 % 79.7 64.0
Slide 25: Business Segments
Revenue growth Q3 YTD Core digital business 8.2 % 9.5 % Data centre transformation 6.1 % 6.2 % Total 7.7 % 9.3 % Share of revenue Gross profit growth Q3 YTD Core digital business 8.8 % 11.4 % 20 % Data centre transformation 11.6 % 6.6 % Total 9.2 % 11.5 % Data centre transformation Core digital busi
Slide 26: Revenue and Earnings Development
REVENUE AND EARNINGS DEVELOPMENT Quarterly Revenue and EBIT margin Last 12 months Revenue and EBIT margin 200 14% 700 12% MNOK MNOK 12% 600 10% 150 10% 500 8% 8% 400 100 6% 6% 300 4% 200 4% 50 2% 100 2% 0 0% 0 0% Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q3-19 Q3-
Slide 27: Revenue Split
REVENUE SPLIT Revenue split (quarterly figures) NOK Million Services Subscriptions 3rd party services Other 38 Revenue increased by 9% y-o-y 33 33 33 35 35 35 36 37 38 39 34 • Service revenues from own consultants 33 112 104 increased by 9% to NOK 91 million 67 90 86 87 75 88 95 96 83 99 91 • Subscr
Slide 28: Statement of Cash Flow
STATEMENT OF CASH FLOW 2020 2019 2020 2019 2019 NOK Million 7-9 7-9 1-9 1-9 FY 12 month rolling cash flow from operations Cash flow from operations (EBITDA) 24.6 19.1 79.7 64.0 92.0 (NOK Million) Change in balance sheet items (8.2) (4.2) (15.6) (27.1) (12.0) Net cash flow from operating activities 1
Slide 29: Dividend and Own Shares
• The Board has announced an additional dividend of NOK 0.40 per share to be paid on 4 November 2020 • Share price was NOK 13.95 at the end of Q3 2020, an increase of 74% from NOK 8.0 at the end of Q3 2019. • Current holding of own shares is 1,269,136 shares, a net decrease of 422,458 in the quarter
Slide 30: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION • Equity ratio of 24% (24%) per 30 September (28% excl. IFRS 16 Leasing) • Cash balance of MNOK 58 (MNOK 46) • Total balance unchanged at MNOK 240 Assets Equity and Liabilities 300 250 Right –of- 45 use assets 38 200 Non-current 54 Current 57 143 MNOK assets 152 liabi
Slide 31: Outlook
Outlook 31 Itera | Q3 2020
Slide 32: Outlook
• Recovery in many sectors with the re-openings in the Nordics, but still high global uncertainty due to Covid-19. • Underlying attractive market with high demand for digitalisation in all Nordic markets. • Itera well positioned to gain market shares through the attractive hybrid delivery model. • A
Slide 33: Q&A session
Q&A session 33 Itera | Q3 2020
Slide 34: Top 20 Shareholders
No. Name % Nat. Shareholding 1 ARNE MJØS INVEST AS* 28.44 NOR 23 375 272 2 OP CAPITAL AS 5.42 NOR 4 457 110 3 GIP AS 4.69 NOR 3 858 000 4 EIKESTAD AS 4.26 NOR 3 500 000 5 DnB NOR Bank ASA 4.08 NOR 3 350 000 6 SEPTIM CONSULTING AS 3.52 NOR 2 890 000 7 BOINVESTERING AS 3.21 NOR 2 640 000 8 GAMST INVES
Slide 35: Copyright and Disclaimer
COPYRIGHT AND DISCLAIMER Copyright Copyright of all published material including photographs, drawings and images in this document remains vested in Itera and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor use
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