(Oslo, 17 July 2012) EVRY ASA reports 3% organic growth in revenue to NOK 3,272 million in the second quarter of 2012. Consolidated operating profit before intangible asset amortisation (EBITA) was NOK 150 million. After adjusting for pension effects of NOK 28 million in the second quarter of 2011, this represents an increase of 9% from the same period in 2011.
"EVRY improved its profitability in the second quarter of 2012. In addition, we continued to win market share in Sweden, driven by strong growth in products and services for mobility and the healthcare sector and in outsourcing. We are well positioned to continue our profitable growth in Sweden, but growth in this market may be affected by the economic outlook", comments Terje Mjøs, CEO of EVRY.
"EVRY reports a positive trend in Norway, while at the same time continuing its program of improvement. We intend to improve the profitability IT Operations through industrialising processes and the continuing development of our services portfolio", adds Terje Mjøs, CEO of EVRY.
Key figures and main features of the second quarter of 2012
Operating revenue of NOK 3,272 million as compared to pro forma NOK 3,189 million in the second quarter of 2011. This represents overall organic growth of 3%, with organic growth of 12% in Sweden.
EBITA of NOK 150 million. After adjusting for pension effects, this represents an increase of 9%. The accounts for the second quarter of 2011 included a positive pension effect of NOK 28 million relating to an actuarial gain, and there are no such effects in 2012.
Continuing improvement in cash flow from operations, with second quarter cash flow of NOK 70 million as compared to pro forma NOK 63 million in the second quarter of 2011.
Continuing strong performance in Sweden, with organic growth of 12% and an increase in EBITA margin from 6.3% in the second quarter of 2011 to 6.8% in the second quarter of 2012.
Continuing strong growth in the Solutions segment, with organic growth of 13% but a 24% increase in EBITA to NOK 98 million in the second quarter of 2012.
New contracts totalling NOK 3.1 billion were signed in the second quarter. EVRY started the third quarter with an order backlog of NOK 15.3 billion.
Second quarter 2012 figures for EVRY's business areas
Solutions: The Solutions business area reported operating revenue of NOK 1,170 million as compared to pro forma NOK 1,047 million in the second quarter of 2011. EBITA was NOK 98 million in the second quarter of 2012 as compared to pro forma NOK 79 million in the second quarter of 2011.
Consulting: The Consulting business area reported operating revenue of NOK 928 million for the second quarter of 2012 as compared to NOK 923 million in the second quarter of 2011. EBITA was NOK 42 million as compared to NOK 40 million in the second quarter of 2011.
IT Operations: The IT Operations business area reported operating revenue of NOK 1,514 million for the second quarter of 2012 as compared to NOK 1,517 million in the second quarter of 2011. EBITA was NOK 68 million in the second quarter of 2012 as compared to NOK 76 million in the second quarter of 2011.
Performance in Sweden in the second quarter of 2012
Revenue in Sweden was NOK 978 million, equivalent to organic growth of 12% compared to the second quarter of 2011. All segments of the Swedish activities showed organic growth in the second quarter of 2012. EBITA was NOK 68 million as compared to NOK 57 million in the second quarter of 2011. IT Operations in Sweden reported a significant improvement in profitability compared to the second quarter of 2011.
The IT services market in Norway and Sweden has showed a positive trend over the first two quarters of the year, and despite some disparity between the economic outlook in the two countries, the market is expected to show continuing growth in the second half of the year.
The general economic outlook in Norway is on the one hand characterised by high levels of business investment, driven in particular by activity in oil-related sectors. On the other hand, Norwegian exporters are suffering from weak conditions in international markets, combined with a high cost level in Norway. In overall terms, Statistics Norway is of the view that Norway is currently in a period of moderate economic growth, and it now forecasts 2012 GDP growth for mainland Norway of 3.2% as compared to its earlier forecast of 2.7%.
Taking into account greater dependency on the outlook for global markets, the Swedish National Institute of Economic Research has become more pessimistic in its forecasts for the Swedish economy. Following a surprisingly strong increase in the first quarter, the Institute's economic tendency indicator has returned to a downward trend as a consequence of the turbulent conditions seen in the Euro zone in the spring months. The Swedish economy, with its healthy public finances and low borrowing, is well equipped to meet the challenges of a weaker economic outlook, but economic growth is expected to be weak with some increase in unemployment. GDP forecasts for 2012 have been revised upwards slightly from the first quarter to 0.7% rather than 0.4%, but the outlook remains uncertain.
It remains to be seen whether the uncertain market outlook will spill over into slower growth in the main markets for IT services. Estimates by IDC suggest that the IT services market has continued to grow so far this year, but with marked differences between Norway and Sweden. While the market for consulting services in Norway remains strong, with estimated growth of 5% in the first six months, the Swedish market does not show the same clear signs of improvement. The Swedish market is characterised by a cautious approach to new investment, particularly among export-oriented businesses, and this has had some adverse effect on the consulting market in the SMB segment. However, the market for operating services is more expansive in Sweden than in Norway. In overall terms, IDC expects the IT services markets in Norway and Sweden to grow by 2.2% and 2.6% respectively. In terms of the SMB market, there are marked similarities between Norway and Sweden, and this segment is expected to grow somewhat faster than the general market in both countries, although not by the same margin as in previous years.
A high level of activity in some segments of the private sector and in the public sector in general is reflected in generally good demand for consulting services. The operating services market continues to be adversely affected by a shortage of major contracts in the Norwegian market, but conditions are more promising in the Swedish market which has a higher percentage of IT operating environments that have not yet been exposed to outsourcing. This situation is expected to continue over the second half of 2012, and with its activities in both Norway and Sweden EVRY is well positioned to cater for this demand. Accordingly, the company expects the growth it has delivered for the first six months to continue over the course of the second half of the year, but this may be affected if there is any further deterioration in the economic outlook in Sweden.
Terje Mjøs, CEO, EVRY. Tel: + 47 06500
Eli Giske, CFO, EVRY. Tel: +47 908 44 189
Geir Remman, SVP Corporate Communications, EVRY. Tel: + 47 970 55 017
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 in Oslo, with major activities in both the Norwegian and Swedish markets.
EVRY is the result of the merger in 2010 of Norway's two leading IT companies, EDB Business Partner and ErgoGroup.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.