EDB Business Partner. Company update - Carnegie. Oslo 22 November, 2006 CEO Endre Rangnes / CFO Tore Valderhaug. EDB Business Partner

Transcription

1 Company update - Carnegie Oslo 22 November, 2006 CEO Endre Rangnes / CFO Tore Valderhaug

2 EDB COMPANY UPDATE AGENDA EDB status & strategy IT Services Market Trends EDB Financials Summary & outlook Slide 2

3 FAST START 4Q 2006 Customer Country NOK million Gjensidige Norway 150 LF Bank Sweden 50 4 Banks UK 25 Brødrene Dahl Norway 21 SEB Sweden 20 Nordea Norway 15 Norske Skog Norway 10 Posten Sweden 10 Total 301 Slide 3

4 HIGHLIGHTS GROUP Key figures YTD `06 Revenue 4,3 bn (+18% y/y) EBITA 9,1% Cost-reduction programs on track Acquisitions contributing to further growth EPS contribution 2006 of approx NOK 0.45/share Successful customer projects Telenor Ultra DNB NOR ITIP Oslo Stockholm Nordic leadership No.1 in Norway and No. 5 in Sweden No. 2 in IT Operations Nordics No. 4 in Project Services Nordics Göteborg Köbenhavn Malmö Slide 4

5 WELL DEFINED STRATEGY Large customer base expanding Nordic and global firms/ Cross-selling: ORGANIC GROWTH Nordic & European Building Solutions portfolio Building Application services Prepared to drive the structural agenda: STRUCTURAL GROWTH Nordic consolidation Establishing critical mass in IT-Operations Slide 5

6 CLEAR OVERALL STRATEGIC AMBITIONS Top line profitable organic growth NOK 8 billion in revenue in 2008 Growth through larger outsourcing contracts Larger geographical penetration on Solutions Prepared to drive the structural agenda Selected acquisitions within strategic focus Participate in structural discussions Cost decrease Cost leader in operational efficiency Significant reduction in overhead cost 4 5 Customer satisfaction Continuously improve customer satisfaction Employee satisfaction Attract, develop and retain good people Improve employee satisfaction Slide 6

7 WELL DEFINED GO-TO-MARKET-MODEL Industry specific solutions Bank and Finance Public sector Trade and Industry Telecom IT Consulting and Applications Services General services Business Support Services, IT Operations and Network Services Slide 7

8 LARGE NORDIC CUSTOMERS AS BASIS FOR ORGANIC GROWTH Slide 8

9 REVENUE DISTRIBUTION By business area By geography By industry Solutions 20 % Appl Services 16 % Sweden 21 % Banking and finance Public sector Retail and industry IT Operations 64 % Norw ay 79 % Telecom Per Per Slide 9

10 READY FOR FURTHER EXPANSION IN SWEDEN Revenue SEK 1,1 bn (+100% y/y) IT Operations: 53% Solutions and Application Services 47% Profitability at Group level SEK 600 million in new signings LF Bank, SEB, Samhall Strong performance in acquired units Guide on Top3 in new Survey (IT-Barometeren) Strategic IT Services Implementation of IT Projects System development Consolidation of EDB locations in Stockholm Slide 10

11 EXTENDED FOOTPRINT IN NORDIC, BALTIC AND UK Asset management Card solutions Card solutions, Internet banking components Internet banking components, price & product management Card solutions, automated customer information handling Corporate lending system Internet and office process solutions Credit process automation solution Banking office process automation solution Slide 11

12 IT Services Market Key figures and drivers for growth

13 KEY FIGURES NORDIC IT SERVICES MARKET Total market NOK 110 billion in 2006 IT services growth 5 6 % Strong demand and price increase in Project services (Solutions & Appl. Svcs) Strong demand for SW components and related Svcs Digital users drives development Customer and public oriented solutions IT Services Market 20 % 36 % 44 % Project services Outsourcing Support services Slide 13

14 EXPANDING SCALE OF OFFSHORING/ NEARSHORING Western Europe IT Spending 1% of IT spending off-shored ATOS/CMGLOGICA/CAPGEMINI; 3-7% of HC off-shored IBM/Accenture; 12-16% of HC off-shored Growing 17% CAGR EDB with experience from initial projects IT Operations Bank and Finance Application Services EDB - securing growth and profitability Ensures access to resources Contributes to greater competitiveness EDB - targets 2007 Increase customer offering Establishing captive unit Slide 14

15 CONSOLIDATION OF NORDIC IT MARKET CONTINUES Scandinavian IT Group + Novo Group Slide 15

16 Per 3 Quarter 2006 Highlights and Key Figures

17 KEY FIGURES Q GROUP (NOK million) Q Q Y/ Y Operating revenue 1,370 1,163 18% Operating costs 1,248 1,041 20% Operating profit before amortisation (EBITA) % EBITA % 8.9 % 10.5 % EBIT before non-recurring items % Non-recurring items Profit before tax Cash flow from operations Operational investments (CAPEX) EPS before non-recurring items (NOK) % No. of employees 3,928 2,707 Slide 17

18 KEY FIGURES YTD SEPTEMBER 2006 GROUP (NOK million) 30/09/ /09/2005 Y/Y Operating revenue 4,234 3,589 18% Operating costs 3,851 3,224 19% Operating profit before amortisation (EBITA) % EBITA % 9.1 % 10.2 % EBIT before non-recurring items % Non-recurring costs Profit before tax Cash flow from operations Operational investments (CAPEX) EPS before non-recurring items (NOK) % No. of employees 3,928 2,707 Slide 18

19 CASH FLOW FROM OPERATIONS GROUP NOK mill /12/ Slide 19

20 ORDER BACKLOG NOK 11.4 BILLION NOK million ORDER BACKLOG DISTRIBUTED Total order backlog 2006* Later IT Operations 9, ,937 2,692 1,803 1,399 Solutions 1, Application Services Total order backlog 11,373 1,212 3,556 3,043 2,034 1,528 % of total 11% 31% 27% 18% 13% * Includes Q4 Slide 20

21 KEY FIGURES IT OPERATIONS - YTD (NOK million) 30/09/ /09/2005 Y/Y Operating revenue 2,854 2,826 1% Cost of goods sold 1,034 1,012 Salaries and related costs Ordinary depreciation Other operating costs Total operating costs 2,610 2,572 1% Operating profit before amortisation % EBITA % 8.6 % 9.0 % Operational investments (CAPEX) No. of employees 1,897 1,687 Slide 21

22 KEY FIGURES SOLUTIONS - YTD (NOK million) 30/09/ /09/2005 Y/Y Operating revenue % Costs of goods sold Salaries and related costs Ordinary depreciation 9 5 Other operating costs Total operating costs % Operating profit before amortisation (EBITA) % EBITA % 15.2 % 18.5 % Operational investments (CAPEX) 8 3 No. of employees Slide 22

23 KEY FIGURES APPLICATION SERVICES - YTD (NOK million) 30/09/ * Y/Y Operating revenue % Costs of goods sold Salaries and related costs Ordinary depreciation 1 1 Other operating costs Total operating costs % Operating profit before amortisation (EBITA) % EBITA % 9.2 % 4.1 % Operational investments (CAPEX) 4 - No. of employees *Proforma Slide 23

24 APPLICATION SERVICES PRO FORMA REVENUES AND EBITA MARGIN NOK mill Revenues 3Q06; Organic growth 12 % YTD06; Organic growth 11 % % 14 % 12 % 10 % Q1 Q2 Q3 Q4 EBITA margin % 6 % 4 % 2 % 0 % Q1 Q2 Q3 Q Slide 24

25 Summary and Outlook

26 POSITIONED FOR GROWTH Lowering cost-base NOK 100 million lower cost-base in IT-Operations NOK 300 million cost-reduction programme (Group) on track Off-/Near-shoring initiatives Regained financial strength Q4 '06 and 2007 backlog; NOK 4.8 billion Global roll-out of EDB Financial Suite EDB Sweden on track ready for expansion IT Market consolidation continuous Slide 26