EDB delivering on strategy

Transcription

1 EDB delivering on strategy Acquisition of IS Partner 9 January 2008

2 EDB AFTER THE ACQUISITION: FAST INTERNATIONAL GROWTH Acquiring IS Partner NOK 1,192 million Long term strategic partnerships with StatoilHydro and Hydro Leading provider to Oil & Gas industry Significant cost and revenue synergies IS Partner provides EDB with World Class global project execution Total order backlog; NOK 15,4 billion 1 Notes: 1 Includes EDB's reported backlog as of and IS Partner Man agement's estimat ed backlog as of EDB Business Partner slide 2

3 TRANSACTION HIGHLIGHTS Price Enterprise value of NOK 1,192 million Pricing multiples EV/EBITA 5.0x (2007E) EPS accretive in Strategic rationale Strategic partner to StatoilHydro and Hydro Oil & Gas as new growth area for EDB Further international expansion Improving critical mass in IT Operations Capabilities to pursue larger IT assignments Notes: 1 EPS including amortisation, is expected to be 3-5% accretive in 2008 and 15-20% accretive in CEPS (excluding amortisation of intangibles) is expected to be approx. 15% accretive in Estimat ed amortisation of intangible assets of 20% over 5 years. EDB Business Partner slide 3

4 TRANSACTION HIGHLIGHTS Value proposition Expected cost synergies and efficiency improvements of approximately NOK million annually Expected revenue synergies from significant cross-selling opportunities and increased penetration of new vertical Reducing cost of capital Financing Financing from existing cash resources and new bank facilities Acquisition facility 100% underwritten Post the acquisition, EDB maintains comfortable leverage ratios Timing Transaction is subject to approval from the competition authorities in Norway Expected closing and consolidation during Q EDB Business Partner slide 4

5 PRO FORMA KEY FINANCIAL FIGURES P&L Figures* (NOK million) EDB* IS Partner** Total Revenue EBITDA EBITA EBIT before non-recurring items IS Partner's revenues and profitability development in 2007 have been significantly impacted by the StatoilHydro merger and contract compensation from Yara Management expectations for 2008 indicate 5-10% lower revenues and an EBIT margin of approximately 6-8% (Stand-alone with no synergies) * EDB Q Q ** Manag ement estimates 2007 full year EDB Business Partner slide 5

6 SUBSTANTIAL SYNERGIES AND SCALE Cost synergies Significant potential for utilising EDB's global sourcing capabilities Improved utilisation of overhead cost and administration Improved purchasing power towards suppliers in sw/hw Re-locations Sales synergies New vertical in a rapidly growing industry Change in ownership opens up for increased penetration Cost to achieve synergies are estimated at NOK 35 mill over two years, of which approximately 60% will be incurred in 2008 EDB Business Partner slide 6

7 ESTIMATED COST SYNERGY POTENTIAL ISP cost base 1H 2007 Synergy potential Global sourcing Global service delivery capability Overhead & Operations Early retirement Integrate ISP Operations with EDB Introduce EDB's operations improvement program (Lean) Early retirement option (58+) Restructuring pre-transaction and covered by seller Consultants Procurement synergies and efficiency Staff & Procurement Total cost base Re-locations, Office equipment, etc. Procurement NOK mill EDB expects to achieve annualised synergies of approximately NOK million, with half of the annualised savings achieved in 2008 Cost to achieve synergies are estimated at NOK 35 mill over two years, of which approximately 60% will be incurred in 2008 EDB Business Partner slide 7

8 TRANSACTION FINANCING 100% debt financing NOK million of new bank facilities raised to fund the offer Debt ratios post-acquisition are expected to remain comfortably within the existing covenants Pro Forma Net Debt / LTM EBITDA Debt Financing Facilities Post-Acquisition 0.7 bn 3.9 bn 3.2 bn 0.65x 3.25x Facility Credit NOKm Final maturity 2.60x Multi currency facility Bond i ssue Multi currency facility Multi currency facility Acquisition facility EDB Post- Acquisition Additional debt capacity Covenant To tal 3850 EDB Business Partner slide 8

9 OIL & GAS AS NEW INDUSTRY VERTICAL Growth area: Services EPIC 25% of Norwegian GDP Yards Equipm. Operators Statoi l Hydro, Norske Shell, Conoco Phillips, Total, Talisman, Chevron, DNO, Pertra, Revus, ExxonMobile Drilling Floating production Strong local players with international ambitions and global players External IT services spending NOK 25 bn (Nordics) EDB with unique position: Supply Subsea In-depth industry competencies Strong IT-competencies in key areas Source: Norwegian Petroleum Directorate Facts The Norwegian Petroleum Sector 2007 EDB Business Partner slide 9

10 GO-TO-MARKET MODEL IS Partner Bank & Finance Public sector Telecom Retail & Services Manufacturing Oil & Gas Application Services IT operations, network services & support services EDB Business Partner slide 10

11 FURTHER GEOGRAPHICAL EXPANSION USA 33 UK Norway 15 Continental Europe Sweden Denmark 650 Ukraine 20 Bulgaria India 550 Singapore 3 * After acquisition of IS Partner EDB Business Partner slide 11

12 TOGETHER TOWARDS NORDIC LEADERSHIP IT services Nordic + 1. IBM 2. TietoEnator 3. Logica 4. EDB 5. HP 6. CSC 7. KMD 8. Capgemini 9. Accenture 10. Ergo Group EDB Business Partner slide 12

13 STRONG CONTRACTED VOLUMES EDB backlog as of 3Q 2007: NOK 12,4 bn IS Partner estimated backlog as of 4Q 2007: NOK 3,0 bn Largest customers StatoilHydro Hydro Yara Borealis Kefling Total contracted volumes (NOK billion) 0 EDB IS Partner Total EDB Business Partner slide 13

14 INTEGRATION IN THREE STEPS Phase 1: Transfer (1-2 months) Phase 2: Transition (3-5 months) Phase 3: Transformation (6-18 months) Formal takeover during Q1 Securing customers, employees and ongoing deliveries Make a detailed plan for the Transition Phase Transition services from StatoilHydro Separation from StatoilHydro Integrate IS Partner into EDB governance structure and administrative systems Identify and plan for new cross selling opportunities Agree on revised business plan, profit targets and capabilities Establish IS Partner as Industry vertical in EDB Fuelling identified cross selling opportunities Carry through the decided structural changes Realise cost synergies EDB Business Partner slide 14

15 IS PARTNER IN BRIEF Third largest IT-service provider in Norway Key areas: Process and manufacturing industry Oil & Gas Industry/energy Chemicals 1,000 highly skilled employees 50 countries/5 continents Estimated backlog NOK 3 billion Key competencies World class project execution Structural change projects to customers In-depth industry competence Strong IT competencies in key areas EDB Business Partner slide 15