EVRY: Good organic growth and increased profitability
(Thomson Reuters ONE) -
(Oslo, 31 October 2014) EVRY reports organic growth of 3%, taking operating
revenue to NOK 2,893 million for the third quarter of 2014. EBITA rose by 10% to
NOK 215 million in the same period, which corresponds to an EBITA margin of
7.4% for the third quarter of 2014.
"We are delighted that there has been top-line growth in all segments for four
consecutive quarters. This goes to show that the growth initiative EVRY has
launched is well-received in the market by our customers, and this approach will
remain a high priority going forward. At the same time, we are delighted with
the increase in profitability this quarter. We are seeing the results of the
improvement measures the company has implemented. We operate in a dynamic
industry, and it is important to be able to change and adapt to the market. It
is for this reason that EVRY is continuing to implement improvement measures
that will make the company more competitive", comments Terje Mjøs, CEO of EVRY.
Growth program delivering results
Demand is being driven by digitalisation in society. EVRY is well positioned to
benefit from this due to its significant operations in Norway and Sweden and
across the Nordic region as a whole in the bank and finance segment. End-
customers increasingly want more digital solutions, ideally on mobile devices.
The Norwegian Government showed in its recent State Budget proposal that it will
prioritise technology in its efforts to increase efficiency in the public
sector. EVRY's growth program targets profitable organic growth, and emphasises
the importance of industry verticals where EVRY has an unique expertise and can
differentiate itself from its competitors. EVRY's detailed growth plans were
presented as part of the Capital Markets day held on 11 June 2014.
EVRY signed new contracts totalling NOK 2.2 billion in the third quarter. It
ended the third quarter with a continuing high order backlog of NOK 17.3
billion.
Key figures and main features of the third quarter of 2014
* Operating revenue NOK 2,893 million, representing organic growth of 3% from
the third quarter of 2013
* All segments reported organic growth, with EVRY Sweden reporting the
strongest growth of 5%
* EBITA of NOK 215 million (NOK 196 million in the third quarter of 2013)
* Earnings per share (EPS) of NOK 0.44 (NOK 0.37 for the third quarter of
2013)
* Cash flow from operations NOK 157 million (NOK 223 million for the third
quarter of 2013)
* Group order backlog totalling NOK 17.3 billion at 30 September 2014
Third quarter 2014 figures for EVRY's business areas
The EVRY Financial Services segment reports operating revenue of NOK 889 million
for the third quarter of 2014 as compared to NOK 858 million for the third
quarter of 2013, representing organic growth of 4%. EVRY Financial Services
produced EBITA of NOK 115 million in the third quarter of 2014 compared to NOK
95 million in the third quarter of 2013.
The EVRY Sweden segment reports operating revenue of NOK 720 million for the
third quarter of 2014 as compared to NOK 708 million for the third quarter of
2013, representing organic growth of 5%. EVRY Sweden produced EBITA of NOK 51
million in the third quarter of 2014 compared to NOK 43 million in the third
quarter of 2013.
The EVRY Norway segment reports operating revenue of NOK 1,377 million for the
third quarter of 2014 as compared to NOK 1,385 million for the third quarter of
2013, representing organic growth of 1%. EVRY Norway produced EBITA of NOK 82
million in the third quarter of 2014 compared to NOK 93 million in the third
quarter of 2013.
Company outlook
The global economy has continued to grow moderately in the third quarter.
Geopolitical risk remains high related to the conflict in Ukraine and the
sanctions that have been implemented both against and by Russia. Confidence in
the Eurozone's ability to continue to grow is falling, largely because of a fall
in both consumer and retailer confidence. There are currently somewhat divergent
views on the prospects for growth in the Norwegian economy. A recent survey of
Norwegian CFOs commissioned by Deloitte concludes that they are now more
pessimistic about the prospects for growth than they were in the second quarter,
when they were relatively optimistic. In the Confederation of Norwegian
Enterprise's survey of the Norwegian economy in the third quarter, member firms
see a somewhat brighter overall picture for 2014 but still expect weak growth in
2015. This lack of confidence in the outlook for 2015 is a consequence of the
fact that investment in the oil industry appears to be falling sharply without
any signs of an increase in investment activities in the onshore economy. The
fall in investment in the oil industry is impacting the IT services market both
directly and indirectly.
In the case of the Swedish economy, the most recent survey by the National
Institute of Economic Research indicates that the manufacturing industry is
increasingly confident, with stronger growth both domestically and in the export
market. The International Monetary Fund has recently downgraded its economic
growth forecast for the Eurozone, while Statistics Norway and Statistics Sweden
have left unchanged their forecasts for GDP growth in Norway and Sweden at
approximately
2% and 2.5% respectively for the next two years. Turning to the IT services
market, EVRY has seen a slight shift in companies' focus, with more companies
now prioritising changes to their businesses and innovation over cost reduction.
As a consequence of this, we are experiencing increased demand for new
applications and software-based solutions. This trend has contributed to
moderate growth in the IT services market in the Nordic region. Furthermore,
there are clear signs that companies are choosing to purchase services rather
than invest in their own hardware and software. This trend is particularly clear
in relation to software, with cloud-based solutions increasingly favoured over
traditional licensed software. EVRY's view is that the market for its services
follows the trend of previous quarters. However, challenges remain in the
consulting services area in some regions in Norway, particularly as a result of
the reduced activity level of investment in the oil industry. Capacity
adjustments of approximately 40 FTE's in Norway in the fourth quarter will be
completed as a result of this. In Sweden, EVRY is growing strongly in consulting
services in the bank and finance market, and is winning market share in a
segment in which there is particularly strong competition for contracts. The
market in general is characterised by pressure on prices, with hourly charge out
rates (on average) appearing to track inflation as measured by the consumer
price index (CPI). With regard to the operating services market, strong growth
continues for medium-sized companies in both Norway and Sweden, with services
for large companies registering little growth due to any increases in sales
volumes being offset by falling unit prices. However, It has taken longer than
expected for Swedish consulting market in region West and South to turn and as a
consequence capacity adjustments will be made also here in the fourth quarter of
2014. Automation and improvements are expected to increase efficiency within
operations and adjustments will be done accordingly. In total this will lead to
a reduction of approximately 70 FTE's in Sweden in fourth quarter of 2014.
EVRY's consulting business in Denmark has been focused on SAP. This business has
been loss making for several years and the outlook has further developed
negatively. The financial results are also hampered by project losses. As a
consequence, an assessment of various options has been initiated, including a
controlled wind-down of EVRY Danmark AS. Related to this, non-recurring cost of
approximately 20-30 NOK Million is expected in the 4th quarter of 2014 EVRY sees
the outlook for the next quarter and the beginning of 2015 as moderately
positive. The pressure on prices for consulting services and for basic operating
services is expected to continue, with international competition being an
important factor in this. EVRY is pursuing a strategy of specialising in
specific industries and of having a local presence in regions that have good
growth prospects, and has made organisational changes in order to further
support these efforts. Expertise that is industry and customer-specific is
highly sought after, and is significantly less vulnerable to competition from
international suppliers. EVRY is seeing the results of this strategy, and this
supports our vision for growing our consulting-based priority areas going
forward. Demand from larger customers for large assignments is expected to
remain weak, but EVRY sees good possibilities for additional business with
existing customers. We are particularly experiencing a high level of activity
and demand for mobility solutions to be included in services for which we have
existing operations agreements, as well as in services provided to new
customers.
This information is subject to disclosure requirements pursuant to section 5-12
of the Norwegian Securities Trading Act.
Contact persons:
Terje Mjøs, CEO EVRY, Tel: +47 06500
Knut E. Røsjorde, CFO EVRY, Tel: +47 95205786
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.
Presentation of 3rd quarter 2014:
http://hugin.info/194/R/1867423/656185.pdf
3rd quarter 2014:
http://hugin.info/194/R/1867423/656187.PDF
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other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: EVRY via GlobeNewswire
[HUG#1867423]
Unternehmensinformation / Kurzprofil:
Datum: 31.10.2014 - 08:02 Uhr
Sprache: Deutsch
News-ID 348637
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