Norway's two largest IT companies present combined results
(Thomson Reuters ONE) -
(Oslo, 19 October 2010) EDB ErgoGroup reports consolidated revenue of proforma
NOK 2,823 million as compared to proforma NOK 2,835 million in the same quarter
of 2009. Operating profit before intangible asset amortisation (EBITA) was
proforma NOK 166 million for the third quarter of 2010, as compared to proforma
NOK 225 million for the third quarter of 2009. EDB ErgoGroup signed new
contracts with total contract value of NOK 1.4 billion in the third quarter, as
compared to new signings of NOK 1.0 billion in the same quarter last year.
"Today Norway's two largest IT companies meet the market with one face. The
merger has been finally approved, and we have started work on establishing a new
and powerful Nordic organisation. I look forward with great expectation to the
opportunities that the merged EDB ErgoGroup can create for the benefit of its
customers, employees and shareholders. We will put the Norwegian IT industry on
the world map, and demonstrate that Nordic customers are best served by people
that understand Nordic business and industry from the inside out", comments CEO
Terje Mjøs.
Merger to create a leading Nordic IT company
EDB Ergo Group is the result of a merger between Norway's two largest IT
companies, EDB Business Partner and ErgoGroup. The two companies were formally
merged on 14 October 2010 with the merged company initially taking the name EDB
ErgoGroup ASA, and report consolidated figures from and including the third
quarter of 2010. The background for the merger is a shared desire to create a
leading Nordic IT company that will be sustainable and competitive over the
longer term, with the capacity for continuing growth and the financial strength
that will make it possible to take advantage of strategic and structural
opportunities as they arise.
EDB ErgoGroup has established a strategy with three phases to achieve Nordic
leadership:
Phase 1, 2011: Focus on customers, successful integration of the businesses and
realising synergies.
Phase 2, 2012-2013: Accelerated growth in prioritised areas of focus.
Phase 3, 2014-2015: Establish the company's position as the leading Nordic IT
company with strong positions in all four Nordic countries.
"We are now entering an important phase as we bring together 50 years of IT
innovation to create the leading IT business in the Nordic region. I feel
confident that with our extensive delivery capacity, increased local presence
and strong competitiveness, we will be able to meet the expectations of our
customers and the market in the very best way", comments Terje Mjøs.
Consolidated proforma key figures and main features of the third quarter of
2010
* Merger formally completed, accounting effect from 30 September 2010
* Proforma revenue of NOK 2,823 million (NOK 2,835 million)
* Proforma EBITA NOK 166 million (NOK 225 million)
* Combined order backlog of NOK 18.1 billion
* Program for cost synergies of NOK 325 million
* EDB and ErgoGroup have carried out cost saving programs that will take full
effect from 2011
Consolidated third quarter 2010 proforma figures for the business areas of EDB
ErgoGroup
IT Operations: The IT Operations business area reports revenue of proforma NOK
1,749 million for the third quarter of 2010 as compared to proforma NOK 1,769
million for the same quarter in 2009. EBITA for the quarter was proforma NOK
137 million, as compared to proforma NOK 146 million in the third quarter of
2009.
Solutions: The business area reports revenue of proforma NOK 456 million for the
third quarter of 2010 as compared to proforma NOK 423 million for the same
quarter in 2009. EBITA for the third quarter was proforma NOK 53 million, in
line with the third quarter of 2009.
Consulting: The business area reports revenue of proforma NOK 800 million for
the third quarter of 2010 as compared to proforma NOK 811 million for the same
quarter in 2009. EBITA for the third quarter was proforma NOK 32 million, as
compared to proforma NOK 58 million in the third quarter of 2009.
Summary of the third quarter of 2010: EDB Business Partner
* Operating revenue NOK 1,679 million (NOK 1,716 million)
* EBITA NOK 70 million (NOK 150 million)
* Cash flow from operations NOK 117 million (NOK 30 million)
* CAPEX NOK 47 million (NOK 55 million)
IT Operations: The IT Operations business area reports revenue of NOK 1,013
million for the third quarter of 2010 as compared to proforma NOK 1,050 million
for the same quarter in 2009. EBITA for the quarter was NOK 66 million, as
compared to proforma NOK 102 million in the third quarter of 2009.
Solutions: The business area reports revenue of NOK 381 million for the third
quarter of 2010 as compared to NOK 343 million for the same quarter in 2009.
EBITA for the third quarter was NOK 10 million, as compared to NOK 44 million in
the third quarter of 2009.
Consulting: The business area reports revenue of NOK 390 million for the third
quarter of 2010 as compared to proforma NOK 401 million for the same quarter in
2009. EBITA for the third quarter was NOK 18 million, as compared to proforma
NOK 26 million in the third quarter of 2009.
Summary of the third quarter of 2010: ErgoGroup
* Operating revenue NOK 1,144 million (NOK 1,143 million)
* EBITA NOK 85 million (NOK 72 million)
* Cash flow from operations NOK 70 million (NOK 82 million)
* CAPEX NOK 41 million (NOK 53 million)
Operations & Infrastructure services: The Operations & Infrastructure services
business area reports revenue of NOK 772 million for the third quarter of 2010,
as compared to NOK 763 million in the third quarter of 2009. EBITA was NOK 69
million in the third quarter of 2010, as compared to NOK 44 million in the third
quarter of 2009.
Solutions & Application services: The business area reports revenue of NOK 458
million for the third quarter of 2010, as compared to NOK 458 million for the
third quarter of 2009. EBITA was NOK 19 million for the third quarter of 2010,
as compared to NOK 36 million for the third quarter of 2009.
Program for cost synergies
Over the course of the autumn, work on planning the merger has verified cost
synergies of NOK 325 million that will be realised over the course of 18 months.
A separate program has been established to realise these synergies, and this
will come into operation from 2011. The costs of realising the synergies are
estimated to be in the order of NOK 325 million.
EDB ErgoGroup plans a rights issue in Q4 2010
Reference is made to the announcement of the merger between EDB Business Partner
ASA and ErgoGroup AS 7 June 2010. As communicated in the merger announcement,
EDB ErgoGroup ASA ("EDB ErgoGroup") would undertake an equity issue of up to NOK
1 billion after completion of the merger. Following completion of the merger on
14 October 2010, EDB ErgoGroup currently plans to conduct the equity issue in Q4
2010.
The equity issue will be structured as a rights issue to secure equal treatment
of all shareholders. EDB ErgoGroup has a large number of smaller shareholders.
By structuring the transaction as a rights issue all shareholders are given an
equal opportunity to participate on equal terms, and, if they are not able to
subscribe in the rights issue, they could sell their subscription rights in the
market.
EDB ErgoGroup has a positive dialogue with its major shareholders and financing
banks.
The rights issue will be fully underwritten by the largest shareholders and a
bank syndicate.
DnB NOR Markets and SEB Enskilda have been retained as Joint Global Coordinators
and Joint Bookrunners for the rights issue.
Further details on final size, timing and terms of the rights issue will be
communicated to the market as soon as this has been resolved.
Future prospects
The Nordic IT services market showed a marked decline in 2009 due to reduced
demand, resulting in pressure on prices. Customers remain reluctant to commit to
new investment spending, and continuing downward pressure on prices in the
outsourcing segment meant that the IT services market again showed an overall
decline in the first half of 2010. There are, however, clear signs of growth in
a number of segments, and this has caused the decline in demand to level off.
The market research companies IDC and Gartner expect an improving trend in the
IT services market over the second half of 2010, with the prospect of moderate
growth in 2011.
In view of the continuing uncertain market situation, EDB ErgoGroup has launched
further cost saving measures. The Board of EDB ErgoGroup is maintaining a strong
focus on ensuring that the company continues to implement the measures necessary
to maintain satisfactory profitability and competiveness.
Any enquiries may be addressed to:
Terje Mjøs, CEO. Tel: + 47 23 14 54 96
Jon A. Elde, CFO. Tel: + 47 932 01 690
Geir Remman, EVP, Corporate Communications. Tel: + 47 970 55 017
About EDB ErgoGroup
EDB ErgoGroup ASA is one of the leading Nordic IT companies, with some 10,000
employees and annual turnover approaching NOK 13 billion. The company is listed
on the Oslo Stock Exchange and operates from headquarters in Oslo with major
activities in both the Norwegian and Swedish markets. In all, the company
operates from 135 offices in 16 countries around the world.
This information is subject to the disclosure requirements stipulated in §5-12
of the Norwegian Securities Trading Act.
[HUG#1452835]
Presentation of 3rd quarter 2010:
http://hugin.info/194/R/1452835/393537.pdf
3rd quarter 2010:
http://hugin.info/194/R/1452835/393536.pdf
This announcement is distributed by Thomson Reuters on behalf of
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: EDB ErgoGroup ASA via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 19.10.2010 - 08:01 Uhr
Sprache: Deutsch
News-ID 45877
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