Atea Asa · OSL:ATEA
Atea Asa — Q3 2014 Earnings Presentation
53 slides from Atea Asa's earnings presentation, Oct 22, 2014
Slide 1: Q3 2014 presentation
22 October 2014 Q3 2014 presentation
Slide 2: Agenda
Agenda • Highlights • Financial overview • Market outlook
Slide 3: Q3 Highlights
Q3 Highlights • Revenue of NOK 5,173 million, up 10.9% • EBITDA* of NOK 205 million, up 29.5% • EBITDA* margin of 4.0%, up from 3.4% • Cash flow from operations of NOK -94 million, up from NOK -97 million • Acquisition of Datatech in Norway • Dividend of NOK 3 per share to be paid on 28 October * Be
Slide 4: Group revenue
Group revenue Strong growth driven by increased sales of hardware Q3 growth YTD growth +10.9% +11.7% 5 173 17 039 NOK in million NOK in million 4 664 15 250 Q3 13 Q3 14 YTD 13 YTD 14
Slide 5: Group hardware revenue
Group hardware revenue Growth vs corresponding quarter last year 17.1 % 14.5 % 9.2 % 9.9 % 3.2 % Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Gross margin development 13.6 % 12.2 % 12.7 % 12.7 % 11.9 % Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Slide 6: Group software revenue
Group software revenue Growth vs corresponding quarter last year 21.7 % 13.0 % 9.7 % 3.4 % -1.6 % Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Gross margin development 17.1 % 15.4 % 10.5 % 10.3 % 9.1 % Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Slide 7: Group services revenue
Group services revenue Growth vs corresponding quarter last year 13.1 % 11.4 % 6.5 % 1.8 % 0.8 % Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Margin development 68.1 % 66.0 % 65.7 % 66.1 % 66.5 % Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Slide 8: Group EBITDA
Group EBITDA* Higher revenue and improved operating efficiency drives profitability Q3 growth YTD growth +29.5% +28.0% 205 563 NOK in million NOK in million 440 158 Q3 13 Q3 14 YTD 13 YTD 14 * Before share-based compensation, expenses/income related to acquisitions and restructuring
Slide 9: Norway
Norway Improved earnings, based on higher gross margin and lower opex Revenue EBITDA* b +1.0% b +26.2% 1 514 57 1 498 NOK in million NOK in million 45 Q3 13 Q3 14 Q3 13 Q3 14 * Before share-based compensation, expenses/income related to acquisitions and restructuring
Slide 10: Sweden
Sweden Rapid sales growth, with improved gross margin and operating efficiency Revenue EBITDA* +14.1% b +46.8% b 1 972 51 SEK in million 1 728 SEK in million 35 Q3 13 Q3 14 Q3 13 Q3 14 * Before share-based compensation, expenses/income related to acquisitions and restructuring
Slide 11: Denmark
Denmark Revenue accelerates, with sharp reduction in operating expenses Revenue EBITDA* +17.5% b +31.5% b 1 283 77 1 091 DKK in million DKK in million 59 Q3 13 Q3 14 Q3 13 Q3 14 * Before share-based compensation, expenses/income related to acquisitions and restructuring
Slide 12: Finland
Finland Turnaround in progress, with improved financial results Revenue EBITDA* +19.2% b +271.8% b 39 0.6 EUR in million 32 EUR in million 0.2 Q3 13 Q3 14 Q3 13 Q3 14 * Before share-based compensation, expenses/income related to acquisitions and restructuring
Slide 13: The Baltics
The Baltics Fewer high margin projects, but EBITDA margin remains over 4% Revenue EBITDA* -0.3% b -48.0% b 21 21 1.7 EUR in million EUR in million 0.9 Q3 13 Q3 14 Q3 13 Q3 14 * Before share-based compensation, expenses/income related to acquisitions and restructuring
Slide 14: Group cash flow from operations
Group cash flow from operations Improved cash flow in Q1 – Q3 2014; high seasonal cash flow in Q4 1 073 NOK in million 449 -97 -94 -141 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Slide 15: Why Atea is becoming more relevant
Why Atea is becoming more relevant • ICT investments are the key driver for growth in the EU – accounting for 50 % of the productivity growth the last decade • The Nordics lag behind the EU average (25%), suggesting that they are not getting the most out of their ICT investments • ICT investments ar
Slide 16: NOK ~15 B public investments in ICT
NOK ~15 B public investments in ICT ICT represents only 4% of Norway’s NOK ~400 B … but that amounts to NOK ~15 B public investments public procurement… in ICT every year ICT as share of Norway’s total public procurement, 2012 Public ICT procurement in Norway, 2012 (B NOK) 18 16 Hospitals 14 Higher
Slide 17: ICT investments are key to effective health care
ICT investments are key to effective health care Areas of growth Key drivers of growth • More efficient allocation of resources to reduce patient wait times Health care logistics • Digital workflows and processes to eliminate paperwork • Patients increasingly book their own doctor appointments onlin
Slide 18: Patients are increasingly moving online
Patients are increasingly moving online Individuals seeking online information about health Making an appointment online with a health practitioner Share of individuals aged 16-74 (percent) Share of individuals aged 16-74 (percent) 70 EU27 60 50 NO 40 SE 30 20 FI 10 DK 0 2008 2009 2010 2011 2013 0 1
Slide 19: ICT in schools teaches students relevant skills
ICT in schools teaches students relevant skills Areas of growth Key drivers of growth • Teacher, students and parents collaborate and interact after class Teacher student co-creation • Inverse classrooms: web-based studying at home, e.g., in Sweden • Teachers increasingly use online tests: Finnish h
Slide 20: Different ICT investment levels in Nordic schools
Different ICT investment levels in Nordic schools Computers for educational purposes: 4th grade Computers for educational purposes: 11th grade Number of computers per 100 students (percent) Number of computers per 100 students (percent) 140 120 100 80 60 40 40 30 20 20 10 0 0 DK NO SE FI EU27 DK NO
Slide 21: eGovernment
eGovernment Areas of growth Key drivers of growth Effective • Ability to deliver better, faster and more consistent services to delivery of citizens at lower cost services • Digital workflows and processes to eliminate paperwork • Increasing demand for measuring the effectiveness and impact of servi
Slide 22: eGovernment
eGovernment Citizens sending filled forms to public authorities Transparency Score of eGovernment Services1 Share of citizens aged 16-74 (percent) 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 2008 2009 2010 2011 2012 2013 FI SE DK NO EU28 DK EU27 FI NO SE 1 Definition: The Transparency score ind
Slide 23: Summary
Summary • Continued strong growth in revenue • High focus on operating efficiency • Strong growth in EBITDA • Strong cash flow and maintaining financial strength • Dividend of NOK 3 per share to be paid on 28 October
Slide 24: ATCR
ATCR
Slide 25: Q3 2014 Fact pack
Q3 2014 Fact pack ATCA
Slide 26: Key numbers - Group
Key numbers - Group Q3 Q3 YTD YTD Full year 2014 2013 2014 2013 2013 Group revenue (NOK in million) 5,173.5 4,663.6 17,039.1 15,250.2 22,095.8 Gross margin (%) 24.6 25.5 23.6 24.7 24.1 EBITDA (NOK in million) * 205.2 158.4 562.7 439.7 800.3 EBITDA margin (%) * 4.0 3.4 3.3 2.9 3.6 EBIT (NOK in millio
Slide 27: Consolidated statement of financial position - Group
Consolidated statement of financial position - Group NOK in million 30 Sep 2014 30 Sep 2013 31 Dec 2013 ASSETS Property, plant and equipment 492.2 405.2 520.1 Deferred tax assets 557.2 580.2 557.6 Goodwill 3,045.0 3,078.9 3,132.4 Other intangible assets 275.6 339.1 325.6 Other long-term receivables
Slide 28: Full-time employees - Group
Full-time employees - Group Net committed workforce 30 Sep 2014 30 Sep 2013 Norway 1,607 1,716 Sweden 1,802 1,865 Denmark 1,319 1,405 Finland 329 354 Baltics 559 565 Logistics 211 204 Atea Global Services 319 276 Atea ASA 12 17 Atea Group 6,158 6,402
Slide 29: Financial performance actual – Segment (NOK million)
Financial performance actual – Segment (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Norway 1,435.2 1,555.4 1,498.2 2,080.7 1,569.6 1,614.6 1,513.9 Sweden 1,784.5 2,128.6 1,589.5 2,447.7 2,137.6 2,332.6 1,764.7 Denmark 1,331.7 1,354.7 1,169.4 1,748.9 1,548.3 1,487.
Slide 30: Financial performance proforma – Segment (NOK million)
Financial performance proforma – Segment (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Norway 1,448.2 1,555.4 1,498.2 2,067.7 1,569.6 1,614.6 1,513.9 Sweden 1,801.7 2,128.8 1,589.7 2,447.8 2,137.6 2,332.6 1,764.7 Denmark 1,331.7 1,354.7 1,169.4 1,748.9 1,548.3 1,48
Slide 31: Income statement actual - Group (NOK million)
Income statement actual - Group (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 2,868.5 2,757.6 2,929.3 3,908.0 3,283.1 3,030.7 3,430.4 Total software revenue 1,107.3 1,530.3 661.5 1,552.6 1,347.3 1,728.6 650.7 Products revenue 3,975.7 4,287.9
Slide 32: Income statement proforma - Group (NOK million)
Income statement proforma - Group (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 2,896.9 2,771.4 2,941.9 3,915.5 3,295.9 3,030.6 3,430.4 Total software revenue 1,111.5 1,533.4 663.6 1,556.5 1,349.7 1,728.6 650.7 Products revenue 4,008.5 4,304.
Slide 33: Income statement actual – Norway (NOK million)
Income statement actual – Norway (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 783.2 896.0 947.3 1,287.8 925.4 910.5 998.2 Total software revenue 256.7 248.1 201.1 366.2 257.2 312.3 168.3 Products revenue 1,039.9 1,144.2 1,148.4 1,654.0 1,182
Slide 34: Income statement proforma – Norway (NOK million)
Income statement proforma – Norway (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 794.0 896.0 947.3 1,276.9 925.4 910.5 998.2 Total software revenue 256.7 248.1 201.1 366.2 257.2 312.3 168.3 Products revenue 1,050.8 1,144.2 1,148.4 1,643.2 1,1
Slide 35: Income statement actual – Denmark (DKK million)
Income statement actual – Denmark (DKK million) (amounts in DKK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 819.5 700.4 702.2 977.4 850.0 740.5 869.4 Total software revenue 223.9 320.0 109.5 275.6 223.3 305.7 123.5 Products revenue 1,043.4 1,020.4 811.7 1,253.0 1,073.3
Slide 36: Income statement proforma – Denmark (DKK million)
Income statement proforma – Denmark (DKK million) (amounts in DKK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 819.5 700.4 702.2 977.4 850.0 740.5 869.4 Total software revenue 223.9 320.0 109.5 275.6 223.3 305.7 123.5 Products revenue 1,043.4 1,020.4 811.7 1,253.0 1,073.
Slide 37: Income statement actual – Denmark (NOK million)
Income statement actual – Denmark (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 816.4 716.9 748.8 1,066.5 950.7 813.3 965.2 Total software revenue 223.0 325.6 122.3 301.3 249.8 336.9 137.3 Products revenue 1,039.5 1,042.5 871.2 1,367.8 1,200.
Slide 38: Income statement proforma – Denmark (NOK million)
Income statement proforma – Denmark (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 816.4 716.9 748.8 1,066.5 950.7 813.3 965.2 Total software revenue 223.0 325.6 122.3 301.3 249.8 336.9 137.3 Products revenue 1,039.5 1,042.5 871.2 1,367.8 1,20
Slide 39: Income statement actual – Sweden (SEK million)
Income statement actual – Sweden (SEK million) (amounts in SEK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 1,169.7 1,007.7 1,069.5 1,320.1 1,184.4 1,107.8 1,269.1 Total software revenue 440.2 912.2 261.3 784.6 596.3 975.8 290.7 Products revenue 1,609.9 1,919.9 1,330.8 2
Slide 40: Income statement proforma – Sweden (SEK million)
Income statement proforma – Sweden (SEK million) (amounts in SEK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 1,175.6 1,007.7 1,069.5 1,320.1 1,184.4 1,107.8 1,269.1 Total software revenue 442.2 912.2 261.3 784.6 596.3 975.8 290.7 Products revenue 1,617.8 1,919.9 1,330.8
Slide 41: Income statement actual – Sweden (NOK million)
Income statement actual – Sweden (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 1,023.6 896.9 977.8 1,221.2 1,116.1 1,003.3 1,142.8 Total software revenue 385.2 807.6 247.6 722.9 561.9 891.7 252.8 Products revenue 1,408.8 1,704.5 1,225.3 1,944
Slide 42: Income statement proforma – Sweden (NOK million)
Income statement proforma – Sweden (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 1,028.8 896.9 977.8 1,221.3 1,116.1 1,003.3 1,142.8 Total software revenue 387.0 807.6 247.6 722.9 561.9 891.7 252.8 Products revenue 1,415.7 1,704.5 1,225.4 1,9
Slide 43: Income statement actual – Finland (EUR million)
Income statement actual – Finland (EUR million) (amounts in EUR million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 20.6 20.1 18.3 23.1 21.0 24.4 24.3 Total software revenue 31.6 19.2 9.2 15.9 32.4 21.6 9.2 Products revenue 52.2 39.3 27.5 39.0 53.4 45.9 33.5 Total services reve
Slide 44: Income statement proforma – Finland (EUR million)
Income statement proforma – Finland (EUR million) (amounts in EUR million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 21.9 21.6 19.4 24.8 22.6 24.4 24.3 Total software revenue 31.9 19.6 9.5 16.3 32.7 21.6 9.2 Products revenue 53.8 41.1 28.9 41.1 55.3 45.9 33.5 Total services re
Slide 45: Income statement actual – Finland (NOK million)
Income statement actual – Finland (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 153.0 153.3 145.9 189.0 175.5 200.2 201.0 Total software revenue 234.4 147.1 77.5 132.5 270.5 176.3 75.7 Products revenue 387.5 300.4 223.5 321.5 446.0 376.5 276.
Slide 46: Income statement proforma – Finland (NOK million)
Income statement proforma – Finland (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 162.7 164.3 154.8 202.9 188.3 200.1 201.0 Total software revenue 237.0 150.1 79.7 136.4 273.0 176.3 75.7 Products revenue 399.6 314.5 234.5 339.3 461.3 376.3 27
Slide 47: Income statement actual – the Baltics (EUR million)
Income statement actual – the Baltics (EUR million) (amounts in EUR million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 12.3 13.1 13.7 17.8 12.5 12.1 13.7 Total software revenue 3.6 2.1 2.6 3.4 3.9 3.3 3.1 Products revenue 15.9 15.2 16.2 21.2 16.4 15.4 16.9 Total services reven
Slide 48: Income statement proforma – the Baltics (EUR million)
Income statement proforma – the Baltics (EUR million) (amounts in EUR million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 12.7 13.5 14.1 18.4 12.5 12.1 13.7 Total software revenue 3.6 2.1 2.6 3.4 3.9 3.3 3.1 Products revenue 16.2 15.6 16.7 21.8 16.4 15.4 16.9 Total services rev
Slide 49: Income statement actual – the Baltics (NOK million)
Income statement actual – the Baltics (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 91.4 99.8 108.1 144.7 104.2 99.4 113.7 Total software revenue 26.4 16.4 20.6 27.9 32.7 26.7 25.7 Products revenue 117.8 116.1 128.7 172.6 136.9 126.0 139.4 To
Slide 50: Income statement proforma – the Baltics (NOK million)
Income statement proforma – the Baltics (NOK million) (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 94.1 102.4 111.7 149.1 104.2 99.4 113.7 Total software revenue 26.4 16.4 20.6 27.9 32.7 26.7 25.7 Products revenue 120.5 118.8 132.4 177.0 136.9 126.0 139.4
Slide 51: Income statement actual – Shared services (NOK million)
Income statement actual – Shared services (NOK million)* (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 887.1 747.1 957.1 1,081.9 983.3 927.1 1,091.9 Total software revenue 1.9 2.6 1.1 2.0 2.2 2.1 1.7 Products revenue 888.9 749.7 958.2 1,083.9 985.6 929.2 1
Slide 52: Income statement proforma – Shared services (NOK million)
Income statement proforma – Shared services (NOK million)* (amounts in NOK million) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Total hardware revenue 887.1 747.1 957.1 1,081.9 983.3 927.1 1,091.9 Total software revenue 1.9 2.6 1.1 2.0 2.2 2.1 1.7 Products revenue 888.9 749.7 958.2 1,083.9 985.6 929.2
Slide 53: ATCR
ATCR