EVRY: Stronger EBITA and improved cash flow
(Thomson Reuters ONE) -
(Oslo, 22 October 2013) EVRY reports a 10% increase in EBITA to NOK 197 million
for the third quarter of 2013. Cash flow from operations before restructuring
costs was NOK 232 million for the third quarter of 2013, representing an
improvement of NOK 61 million.
"We are pleased to see that the trend of improving profitability continued again
in this quarter. We have applied cost controls, while at the same time working
on developing greater focus on industry verticals and other measures to move
EVRY higher up the value chain", comments Terje Mjøs, CEO of EVRY.
EBITA margin increased from 6.2% in the third quarter of 2012 to 6.9% in the
third quarter of 2013. Pre-tax profit (EBT) increased from NOK 123 million in
the third quarter of 2012 to NOK 138 million in the third quarter of 2013,
equivalent to growth of 12%.
At the close of the third quarter, EVRY reports a significant reduction in the
number of reported operational incidents affecting banking customers in Norway
this year.
"We have made significant investment in our 'Turn every stone' program of
quality improvement. It is pleasing to see that this is having the intended
effect and that we can now report a marked improvement. We are committed to
further improvement, and this has the highest priority", says Terje Mjøs, CEO of
EVRY.
Strong growth for EVRY Financial Services
The group reports operating revenue for the third quarter of NOK 2,863 million,
equivalent to a drop in organic revenue of 2%. The group's revenue was adversely
affected by the previously communicated reduction in revenue generated by IT
Operations from the large customer market in Norway (excluding the banking
sector), and this accounts for the entire reduction in revenue of 2% for the
quarter. Revenue was also adversely affected by the continuing challenging
economic situation in Sweden.
EVRY Financial Services reports acceleration in its revenue growth, with 12%
organic growth for the third quarter of 2013. Areas achieving good growth
include self-service solutions, card services and ATM services in Sweden.
The SME market for IT operating services also reports a good performance, with
revenue growth for the seventh successive quarter. EVRY operates a separate
sales and delivery unit that focuses on SME and regional customers, and this
unit won a number of important contracts in the third quarter that serve to
strengthen the company's position in this growth market.
Key figures and main features
* EBIT of NOK 197 million, an increase of 10% from the third quarter of 2012
* Operating revenue NOK 2,863 million, an organic decline of 2% from the third
quarter of 2012
* Improvement in EBITA for the segments EVRY Norway and EVRY Financial
Services
* Cash flow from operations of NOK 232 million (NOK 171 million for the third
quarter of 2012)
* Free cash flow for the last four quarters was NOK 380 million as compared to
NOK 33 million for the previous 12 months
Third quarter 2013 figures for EVRY's business areas
The EVRY Financial Services segment reports operating revenue of NOK
858 million for the third quarter of 2013 as compared to NOK 765 million in the
third quarter of 2012. EVRY Financial Services produced operating profit before
intangible asset amortisation (EBITA) of NOK 95 million in the third quarter of
2013, an increase of NOK 4 million from the third quarter of 2012.
The EVRY Sweden segment reports operating revenue of NOK 708 million for the
third quarter of 2013 as compared to NOK 727 million in the third quarter of
2012. EVRY Sweden produced EBITA of NOK 43 million in the third quarter of 2013
compared to NOK 48 million in the third quarter of 2012.
The EVRY Norway segment reports operating revenue of NOK 1,404 million for the
third quarter of 2013 as compared to NOK 1,487 million in the third quarter of
2012. EVRY Norway produced EBITA of NOK 94 million in the third quarter of 2013
compared to NOK 88 million in the third quarter of 2012.
Company outlook
The IT services market is currently affected by uncertainty in both Norway and
Sweden. There continue to be marked differences in performance between the
different segments of the market. Growth in demand for operating services and
outsourcing is principally being driven by demand from customers in the SME
market, where outsourcing is used as a tool to achieve cost savings and to free
up resources. However, in the Swedish market it is apparent that the weak
economic situation is having an adverse effect on the usual pattern of
supplementary sales in the operating services area. The market for general
consulting services is affected to some extent by the uncertain market outlook,
with a trend towards shorter assignments and decisions to delay the start of new
projects. However, there is still good demand for specific technological
expertise in service areas that strengthen customers' competitiveness.
The IT services markets in Norway and Sweden are affected by global trends. This
is driven to a large extent by two major trends that originate in the consumer
market, namely the wider and greater use of mobile devices and growth in the use
of mobile applications or 'apps'. Companies use cloud technology in addition to
their traditional IT solutions to deliver these solutions. Against this
background, EVRY anticipates good demand for expertise and advice on the
implementation of new solutions, combined with demand for upgrading network
infrastructure and the advanced security solutions that are required. Given its
broad customer base, EVRY is well positioned to capture its share of the growth
in demand driven by these trends. With our extensive expertise and understanding
of crucial local factors, we are less exposed to downward pressure on prices
from global competitors, and EVRY expects a stable outlook for the consulting
area with a modest upward trend for hourly rates over the coming quarters. The
increasing use of technology to support cloud-based solutions and mobile
infrastructure also represents good opportunities to develop additional business
with our existing operating services customers.
For the IT services market in Norway, we anticipate a high level of activity in
the public sector. The views expressed by the new government in Norway support
this view, with specific commitments on the launch of a number of major projects
that will represent improved growth opportunities for EVRY. It also seems likely
that the new government will open up new opportunities and greater interest in
the use of outsourcing for operating services. EVRY offers efficient operating
service concepts specifically designed for medium-sized companies, and the
inflow of orders from this segment leads EVRY to expect continuing sound growth
in this area. In the large customer segment of the market, EVRY's Future Proof
operations concept has already proved attractive to a number of customers, but
future prospects depend to some extent on the outcome of the renegotiation with
DNB of its current contract. As previously communicated, the company does not
expect any improvement in EBITA from the services area IT Operations in 2013
relative to 2012.
Conditions in the Swedish IT services market continue to be challenging even
though the economic situation is showing steady improvement, albeit at a rather
slow pace. The level of risk associated with the economic outlook is generally
assumed to have reduced, principally in response to an easing in concern over
the outlook for Europe. Some parts of the Swedish export industry are still
affected by weak demand due to the weak economic situation in Europe. The
general view is that the anticipated more marked improvement has been delayed,
and is now not expected to materialise until the New Year. Customers continue to
prioritise investments that will improve efficiency and save costs rather than
investing in more growth-oriented areas. The anticipated upturn in the Swedish
economy is taking longer than expected to materialise. Accordingly, we do not
expect to see growth in the Swedish IT services market until 2014.
In respect of the overall future outlook for EVRY, the macroeconomic situation
will be a crucially important factor. In a climate of greater optimism,
increased demand from the SME market in particular will contribute to growth.
However, more intense competition for assignments for large customers will
continue to exert downward pressure on prices for operating services.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Contact persons:
Terje Mjøs, CEO EVRY, Tel: +47 06500
Eli Giske, CFO EVRY, tlf +47 908 44 189
Geir Remman, VP Corporate Communications, EVRY. Tel: + 47 970 55 017
About EVRY
EVRY is one of the leading IT companies in the Nordic countries, with a strong
local and regional presence in 50 Nordic towns and cities. Through its
knowledge, solutions and technology, EVRY contributes to the development of the
information society of the future, and so creates value for the benefit of its
customers and for society as a whole. EVRY combines in-depth industry knowledge
and technological expertise with a local delivery model and international
strength.
EVRY has some 10,000 employees, and the company is committed to demonstrating
that Nordic customers are best served by a supplier that understands Nordic
business from the inside. EVRY reports annual turnover approaching NOK 13
billion. The company is listed on the Oslo Stock Exchange and operates from
headquarters at Fornebu in Bærum, with major activities in both the Norwegian
and Swedish markets.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
3rd quarter 2013:
http://hugin.info/194/R/1737154/582376.pdf
Presentation of 3rd quarter 2013:
http://hugin.info/194/R/1737154/582377.pdf
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Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: EVRY via Thomson Reuters ONE
[HUG#1737154]
Unternehmensinformation / Kurzprofil:
Datum: 22.10.2013 - 08:00 Uhr
Sprache: Deutsch
News-ID 307889
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