Presentation of EDB Business Partner ASA CEO Bjørn Trondsen

Transcription

1 Presentation of EDB Business Partner ASA CEO Bjørn Trondsen Norwegian Financial Analysts Association Oslo, 5 April 2000 This presentation can be found at

2 The EDB Group Largest supplier of IT services in Norway Proforma 1999 turnover NOK 4.6 billion Over 3,000 employees Largest consulting organisation in Norway Largest computer operator Norway Leading supplier of systems for banking and finance, telecommunications, public sector and call centres One of the largest IT companies listed on the Oslo Stock Exchange

3 Business vision and concept We intend to be a leading expertise-based IT business with a focus on systems, computer consultancy services and computer operating services We intend to contribute to the profitable use of information technology by offering cost-effective IT systems which give the customer a stronger competitive advantage in the network based economy We intend to use our expertise in particular areas as a basis for expansion beyond the Nordic countries

4 The EDB Group over the next 3 years Group Norway Nordic Global Annual turnover NOK 6-8 billion Operating margin 10% (before goodwill depreciation). Strong basic focus in selected segments of the Norwegian market, namely banking/finance, telecommunications and the public sector Specialist expertise/products provide a base for international expansion Leading Nordic player for applications, consultancy and computer operating services Growth through acquisitions Global player in applications for telecommunications and banking/finance (already established in Ireland and USA) Growth through acquisitions

5 Organisation chart EDB Business Partner BDC 38 % Ephorma 50 % EDB Fellesdata EDB Teamco EDB 4tel EDB Fundator EDB Dolphin EDB Infomedica EDB Novit EDB Stradec EDB 4tel Ireland EDB Maxware EDB Intech Telesciences

6 Company overview (inc. internal turnover) EDB Teamco Turnover NOK 1,770 million, 835 staff Computer operating services, ASP, ISP, FM EDB 4tel Turnover NOK 850 million, 721 staff Telecommunications SW and consulting EDB Fundator Turnover NOK 293 million, 331 staff Consultancy, ERP, Full-service EDB Fellesdata (inc. Novit) Turnover NOK 1,301 million, 690 staff Banking systems and consulting EDB Intech Turnover NOK 492 million, 205 staff System integration, HW, SW EDB MaXware Turnover NOK 74 million, 54 staff Internet and systems EDB InfoMedica Turnover NOK 55 million, 77 staff Systems for hospitals EDB Dolphin Turnover NOK 45 million, 41 staff Call Centre and IVR systems Ephorma Turnover NOK 362 million, 290 staff IT systems for the public sector BDC and Stradec Turnover NOK 127 million, 106 staff Consultancy, advisory services

7 Mergers, acquisitions and restructuring Bring together all computer operating services (operating services of EDB Fundator, EDB Novit and Fellesdata move to EDB Teamco) Refine the focus on consultancy services (Fundator, Stradec, BDC) Banking and finance related activities concentrated into EDB Fellesdata (Fellesdata and EDB Novit) All sales and service activities for hardware and standard software brought together in EDB Intech EDB InfoMedica to merge with Tietoenator Medical of Sweden with EDB as a minority owner

8 EDB s business model Consultancy Services Banking & Finance Telecoms Public sector Trade & industry Agriculture Oil Oil &Gas Transport Energy Service Computer operating services, outsourcing, ASP ASP Infrastructure

9 Locations USA: New Jersey Philadelphia Denver & San Diego Holland: Amsterdam Ireland: Dublin France: Paris Denmark: Copenhagen Norway: Bergen, Bodø, Bø, Drammen, Fredrikstad, Grenland, Kongsberg, Kristiansand, Lillehammer, Molde, Oslo, Stavanger, Tromsø, Trondheim & Tønsberg Sweden: Stockholm Poland: Warsaw.

10 Largest customers Telenor Christiania Bank Den norske Bank Fokus Bank Postbanken Visa Europay Statoil Shell Esso Coca Cola Norsk Hydro Norske Skog Alcatel Kongsberg Gruppen ABB Norske Meierier SAS The Norwegian IRS City of Oslo Storebrand Gjensidige Forsikring

11 Employee numbers Consultancy services 1,000 Outsourcing, ASP, infrastructure 700 Software development 600 Internet, E-business, WAP 400

12 Major shareholders (81.7% of 76.5 million shares) Telenor 54.3% Sparebankenes Sikr.fond 0.7% Morgan Stanley and Clients 6.5% Bank of New York 0.7% Folketrygdfondet 4.1% Gjensidige NOR 0.7% Cazenove & Co. New Issues 3.3% Rusten Invest 0.7% Storebrand Livsforsikring 2.7% Sig. Bergesen Alm.st. 0.5% Chase Manhattan Clients 1.2% Postbanken Aksjespar 0.5% Banque International Multi. 1.1% Chase Manhattan Lux. 0.5% Avanse Vekst 1.0% Storebrand AMS 0.5% Arendal Fossekompani 0.9% Fid. Funds Small B.B. 0.5% ABN Amro Equities 0.8% Gjensidige Invest 0.4%

13 EDB 4tel AS Managing Director Asbjørn Eide

15 Current trends in the telecom market CONVERGENCE TECHNOLOGY Mobile IP WAP, GPRS, UMTS IP Information & Communication Fixed line & Mobile Voice & Data REGULATION Domestic EU Financial Regulation Access CUSTOMERS Higher expectations New needs Choice of supplier Changing loyalties CHANGE IS THE ONLY CERTAIN FACTOR CULTURE Customer focus Market driven Pragmatic Open to change COMPETTION Price Competition/co-operation Innovation in all sectors ENVIRONMENT International co-operation Number portability DIFFERENT INTERSTS Shareholders Employees Customers Authorities

16 OSS needs of established telecom operators (Operating Support Systems) Established telecommunications operators Need to improve the quality of the services they offer their customers Need to reduce dependence on manual processes Need to manage their networks more efficiently (e.g. more open systems) Need to reduce erosion of market share Need to improve network data collection (CDR)

17 OSS needs of new telecom operators New telecom operators Need to win market share as quickly as possible through strong customer focus Want to differentiate themselves from established operators by offering new services quickly and cheaply Manage their networks more efficiently with TMN based systems Use information (on customers, services and network) as a tool to understand their market position and business results

18 EDB 4tel - brief description One of the largest software companies in Europe for specialist systems for telecommunications companies 900 specialists to attend to customer needs Spun-off from Telenor R&D in 1998 Part of Norway's leading IT group - EDB Business Partner Winner of IIR Best CCB Implementation Award in 1999

19 EDB 4tel - brief description - continued Represented in Norway, Ireland, France and the USA Existing contracts secure the company's income and investment capacity to the end of 2003 Expertise in telecommunications and IT, principally IT specialists with telecommunications knowledge, strong focus on research & development The company has access to the resources needed for rapid international expansion Existing partnerships with other companies (systems, technology suppliers, etc.) and a willingness to consider new partnerships where this will be profitable Provides customised systems to improve telecommunications operators competitive position and profitability EDB 4tel is a leading software supplier to telephone companies and is wellplaced for rapid growth in the international market

20 Geographic presence - international USA: New Jersey Philadelphia, Denver & San Diego Norway: Bergen, Bodø, Lillehammer, Oslo, Ireland: Dublin France: Paris

21 Geographic presence- Norway 80 Bodø 132 Bergen Lillehammer Oslo

22 4tel's business model Offers systems solutions, systems development and support services, consultancy services and outsourcing for the international telecommunications market Existing customers include both established telecommunications operators and larger new operators in this market Well-proven systems for project management and a high degree of delivery accuracy and reliability Platform-independent implementation of new functionality The capacity and expertise needed to help our customers improve their business processes as well as the business-critical systems Commercially efficient systems which help to increase competitiveness and profitability A good working environment and a commitment to be an attractive employer for our staff

23 Organisation chart EDB 4tel EDB 4tel Ltd EDB 4tel AS Telesciences, Inc. Logan Orviss Inc. Service & Support Business Consulting Customer Care & Billing Customer Relationship Management Network Management Sales & Marketing

24 Operational support for telecom operators Telephone customer Order management Retail billing & Interconnect Service provisioning Customer analysis Fault Handling Mediation Telephone network

25 Software Product Solutions Customer Care and Billing Order Management Event / Message Processing Billing Consulting System Integration Network Management Mediation Interconnect Fault Handling System Routing Management Customer Relationship Management 4CAST Customer Identifier EDB 4tel's product portfolio Tailored Support Package

26 Some reference customers Ameritech Belgacom BT CYTA Cyprus Evtelco Great Northern Lattelekom Lietuvos Telekomas MCI Worldcom One Rom Telecom Siemens Slovenia Telecom Sonera Southwest Bell Steria Storm Telecom TeleDanmark Telergy Telenor Bedrift Telenor International Telenor Mobil Telenor Nett Telenor Nextel Telenor Privat Telia Telstra TTCL Tanzania Uralsvjazinform US West Viag Interkom

27 Our employees 45% of 4tel's employees are in the age range 65% men/ 35% women 22 different nationalities Company languages: English and Norwegian Educational background: University and technical qualifications, principally in IT and telecommunications Internal training programs for telecommunications and IT Majority of technical managers and project managers are promoted internally Encourage all employees to play an active role in the company's development Very little staff turnover compared to other telecoms and IT companies

28 1999 World Billing Award for Best Billing Implementation Combination of IT, telecom and business expertise Strong focus on customer migration issues Reliable data integrity Focus on the telecom operator's customers Phasing out of older systems Training and motivating the telecom operator's service personnel

29 EDB 4TEL as a partner Unique combination of IT, telecommunications and business knowledge Broad range of products from initial consultancy advice through to product customisation and project management Competitive systems Partnership approach to other companies and systems, technology and IT services. Open to new partnership opportunities We are well able to adapt to a customer's corporate culture, priorities and working methods Training programs, documentation and in-depth knowledge are all adapted to meet specific customer requirements Long-term approach to co-operation

30 A global partner to meet customer needs Customer Front End Order Manager 4tel Traffic analysis 4tel Bill Presentation Interconnect Retail 4tel Billing 4tel AR/ Financials Resource allocation Service Delivery 4tel Service Activation Fault Handling Retail Rating 4tel Mediation 4tel Interconnect 4tel

31 EDB Fellesdata AS Managing Director Ole Trasti

33 The integration of Fellesdata and EDB EDB Novit to be integrated with Fellesdata. New company to be called EDB Fellesdata. Fellesdata's computer operating services transferred to EDB Teamco EDB Novit's computer operating services transferred to EDB Teamco

34 Banking & Finance EDB s strategy for Banking & Finance: The product strategy offers: - retail banking specialisation - systems for corporate banking through alliances - open architecture and open platforms - modular systems to give flexibility for the customer - both total systems and specific modules - expertise as a product in itself Particular areas of focus include: - international account system - self-service and payment services both through bank offices and the internet - workprocess-oriented systems for bank offices - "segment-of-one" systems for both retail corporate banking - further developing relationships with international partners

35 Geographic presence- Norway 690 employees at the following locations: Tromsø Bodø Trondheim Molde Bergen Stavanger Oslo

36 Customers Christiania Bank Den norske Bank Gjensidige NOR SpareBank 1 Gruppen Fokus Bank Postbanken Eika-gruppen Storebrand Nordlandsbanken Vår Bank & Forsikring Handelsbanken Bergensbanken Finansbanken Romsdal Fellesbank Voss Veksel- og Landmandsbank BN bank BnP Visa Europay Fõreningssparbanken MeritaNordbanken Bank of Scotland Societe Generale Powszechna Kasaoszczednosci Bank Pkobp Wielkopolski Bank Kredytowy SA Alliance Insurance SA

37 EDB Fellesdata - strategic goals Active customer marketing and development towards banks, finance companies and financial groups in Norway Establish Fellesdata as an international player for banking and finance IT systems Develop and increase the company's focus on consultancy services, customisation and outsourcing for IT development and systems management Develop a portfolio of banking and finance systems products in line with defined domestic and international ambitions Be recognised as an innovative company and an attractive employer

38 Differentiated offer for domestic and international markets Customer specific systems Customer A Customer B Customer C Standard systems Basic system Operations Infrastructure Customer D

39 Product portfolio Company network Internet Bank Telephone banking Minibanks Call Centres E-commerce BANK OFFICES FD Sales FD Credit FD Saving FD Daily Banking FD Cashier External network N e t w o r k Core Input CARDS Insurance & fund management Paper Electronic MANAGEMENT Fax SYSTEMS Accounting Budget Management info. Purchase ledger. Asset register Official reporting Customer Product Saving Deposits Lending Currency Cards Life insurance Data warehouse Distribution Reports Archive

40 Objectives for systems architecture : Independence of channels High level channel interface (XML) Appl.Server - Java components - JavaServlets -EJB - Wrapped COM - Wrapped 3.p. Bus.Log. (COM+) Bus.Log. (COM+) Low level interface (JSTG) JSTG-front-end P n P.. Pk EDB Fellesdata P i P.. P3 P2 P1

41 EDB Fellesdata: Staff and organisation 64% Employees 37% Higher education Staff turnover 60% 6% Sickness Training Average age 3.1% Program for managemnt and project leader training Trainee program 39.7

42 Powered The business model International solution Extremely short time to market (75 days) Pre-parameterised Tailored for.com banking Volume based pricing Shared risk and profit with customers

43 The concept Powered Phone Mobile Screenphone WEB E-business generic services One-to-one Authentication Authorisation server Core bank systems Payment services Branch automation

44 EDB Teamco AS Managing Director Bjørn Carlsen

46 EDB Teamco The EDB Business Partner group's company for computer operations Formed from the computer operating activities of Fellesdata, EDB Novit and EDB Teamco Core focus on operating services for business-critical IT systems Long experience of operating advanced IT systems to stringent customer requirements The largest and most up-to-date computer centre in Norway Quality assurance system certificated to NS-ISO 9001

47 'Family tree' EDB Teamco AS EDB Teamco AS EDB Teamco Fellesdata Drift EDB Novit Drift EDB ASA drift Telenor Dataservice Telenor Bedrift Nordata Nordata Trønderdata Vestdata Vestdata Data services EDB ASA drift Telenor Teamco Telenor Teamco Alliance Rogalandsdata Probus AS EDB drift Landbruksdata Samvirke Agderdata Rids Rogalandsdata Televerket IT Teamco IDA

48 Geographic breakdown - Norway 30 Bodø 60 Trondheim Bergen Stavanger Oslo Horte n 600

49 Our business vision: EDB Teamco intends to be the largest and most efficient computer centre in Norway. We intend to become a leading player in the Nordic region through co-operation with our fellow subsidiaries and partners as well as by making acquisitions, and will continue to grow profitably. We intend to be recognised as a company focused on achieving targets and profitability and characterised by expertise, commitment, service and customer orientation. Business concept: EDB Teamco will help to increase its customers' competitive strength by supplying reliable, high quality computer operating services on a day-to-day basis which accurately meet our customers' requirements in order to allow our customers to release resources for their own core activities and reduce their IT costs.

50 Markets/products/customers Main markets Telecommunications Banking and insurance Public sector admin. Trade and industry Oil and gas Transport Media Energy Agriculture Product areas Operation of IT systems and networks Data capacity/hosting Backup/disaster recovery Testing IT systems Publishing Consultancy advice and support Main operating platforms OS390 Unix NT/WIN2000 AS400

51 EDB Teamco as part of the EDB Group Advice, system integration and implementation Telecom - Banking/Finance - Public sector - Trade & Industry Industry specific solutions Industry specialist customer centre Operating services/asp EDB Teamco - Internet Data Centre

52 Key figures computer operating environment 10,000 MIPS of mainframe processing capacity 610 Unix servers 630 NT servers Disc storage capacity of ca. 50 TB Central automatically operated backup for 1,000+ servers Printing output of 400 million A4 pages per annum Ca. 600,000 clients/users

53 EDB Teamco's strategy for IT operating services The product strategy offers - operating systems for market leading technology - offering processing capacity on usage-based terms - market leading methods for centralisation and consolidation - operating systems specifically designed for Internet and ASP applications - high level of expertise in customer areas for specific sectors Our Particular areas of focus will help our customers by - releasing time for the own core activities - providing technological leadership - ensuring scalable, flexible and reliable operating systems - reliable round-the-clock access to IT systems - unique economies of scale - industry-specific ASP systems from EDB Business Partner

54 Advantages Profitable Release the customer's resources for its core activities Industrial scope of operations and economies of scale Processing capacity, storage and bandwidth 'as required' Secure, state-of-the-art facilities most up-to-date technology from leading suppliers secure under-ground operating facility with advanced warning systems HA (high availability) systems, imaging and disaster recovery systems for full-scale testing of critical software seamless operation, 24-hours/day, 365 days/year Rapid access and flexibility processing capacity and storage fully available in advance scalable systems to meet internet requirements graduated service level terms (SLA)

55 EDB Teamco as a proactive supplier of operating services 100 senior consultants focussed on developing the group's 'IT factory' and our customers' strategic use of IT Continuous process of infrastructure upgrading Monthly surveys of customer satisfaction and operational quality, with an on-going program of improvement response Development of next generation of computer bureau systems (ASP) in co-operation with fellow EDB subsidiaries and external partners Develop and supply complete telecommunications, data and operational systems in co-operation with Telenor

56 Technological development Distributed functionality Complexity becomes centralised Internet/Intranet Internet/Intranet Web Server Windows terminal Server WEB client klient ASP Bruker customer Internet/Intranet Internet/Intranet Applications Applikasjons- serverserver Database Server Menyer og portaler Computer centre centre

57 Ny generasjon servicebyrå A new generation of computer service bureau! Homeoffice Hjemmekontor Mobile users brukere ASP Application Service provider Internet International Internasjonale dept. avd. Customer/ Kunder/ leverandører suppliers Intranet Internal servers (possibly computer (possibl centre) ASP Kunde Company AS Local Lokaleusers brukere

58 POWERHOST First industrial scale Internet Data Centre in Norway An IT 'Power station' where customers access processing capacity, storage and bandwidth as and when required A service concept specifically designed for commercial internet systems The perfect operating environment for companies' internal ASP systems, intranets and portals

59 EDB Teamco: Staff and organisation Average age - 42 Split men/women - 20/80 Educational background - 48% have higher education qualifications Staff turnover - 5% Expertise development Target/profit management system Average training costs NOK 10,000 per employee Management development program

60 EDB Fundator AS Managing Director Knut Holmen

62 EDB s computer consultancy activities EDB Business Partner BDC (38%) EDB Fundator EDB Stradec

63 Geographic presence - Norway Inc. Stradec and BDC 27 Trondheim Bergen Osl Drammen Kongsberg o

64 Services Business model Sectors Advice Finance Project management Public sector Applications development Improving IT efficiency ERP Crit. syst. Primary industries Telecom Applications services Oil/Energy Outsourcing / ASP Trade/Industry/Transport Courses

65 EDB Fundator's major customers City of Oslo Norsk Hydro Telenor Arbeidsdirektoratet DnB Factoring Getronics AS Norske Shell Arcus Financial Services Assoc. Statoil Norge Bennett Reisebureau GjensidigeForsikring Tine Esso Norge Norkring AS Ministry of Public Admin.

66 EDB Fundator: Staff and organisation Employees 69.8% 30.2% Higher education. Staff turnover New recruits 38% 72.2% 27.8% Management 66.5% 11% Leavers 74% Sickness 3.2% Training expenditure per employee. 1995: NOK 7, : NOK 13,859 Average age 40.7

67 Consultancy activities Advice (mgt consulting) Business/industry expertise Concepts Solutions Products... as a system Expertise Methodology Tools Expertise and experience...

68 Consultancy activities Value creation Business partners Advice (mgt consulting) Business/industry expertise Recruitment Concepts Solutions Products... as a system "Sales" Expertise Methodology Tools Solution Resources Expertise and experience...

69 Consultancy activities EDB Stradec Indusry expertise/business concepts Business partners CRM (?) Knowledge Management (Computas) E-Business (1 Voice) (TIBE) EDB... EDB... Specialist expertise/niche companies Conceptual approach ERP (Enterprise Mgmnt.) (SAP) EDB Fundator BDC

70 Financial analysis CFO Eli Giske

71 EDB s current reporting structure Banking & Finance Consultancy Services Telecoms Public sector Trade & industry Agriculture Oil Oil &Gas Transport Energy Service 1 Computer operating services, outsourcing, ASP ASP Infrastructure 2

72 Consolidation (1) Subsidiaries are consolidated on the past equity accounting method Associated companies (BDC) are consolidated on the equity accounting method Jointly controlled companies (Ephorma) are consolidated on the the proportional consolidation accounting method

73 Consolidation (2) Fellesdata (FD) is consolidated into EDB s accounts with effect from 1 April 2000 (on the past equity accounting method) Quarterly reports in 2000 will also give proforma full year figures Figures in this presentation are based on proforma figures for 1999 and 1998, as if FD had been acquired 1 January 1998

74 Proforma figures for EDB and FD Take into account Goodwill depreciation arising from the acquisition (depreciated over 20 years) Depreciation of excess values related to properties Financial expense arising from the acquisition Do not take into account Synergy gains - estimated to amount to NOK million annually. Full effect expected from Q

75 Main figures profit and loss account (NOK million) EDB FD Acq. Proforma OPERATING REVENUES 3,416 1,182 4,598 EBITDA Depreciation EBITA Goodwill depreciation EBIT Other items Net financial items Tax and minority ints PROFIT FOR THE YEAR

76 Main figures - profit and loss account (NOK million) Change OPERATING REVENUES 4,597 3,734 23% EBITDA % Depreciation EBITA % Goodwill depreciation EBIT % Other items Net financial items Tax PROFIT FOR THE YEAR %

77 Balance sheet (including Fellesdata) (NOK million) EDB FD Acq. Proforma Goodwill 790-2,045 2,835 Other fixed assets ,128 Fixed assets 1, ,306 3,963 Liquid assets Other current assets ,060 Current assets 1, ,396 Assets 2, ,176 5,359

78 Balance sheet (including Fellesdata) (NOK million) EDB FD Acq. Proforma Equity 1, ,471 2,824 Liabilities (interest free) Sub loan Liabilities (interest bearing) Term liabilities ,424 Liabilities (interest free) ,110 Liabilities (interest bearing) Current liabilities ,111 Liabilities and equity 2, ,176 5,359

79 Balance sheet inc. FD (NOK million) Total fixed assets *) 3,963 3,743 Total current assets **) 1,396 1,200 TOTAL ASSETS 5,359 4,943 EQUITY 2,824 2,706 Long term liabilities 1,425 1,373 Current liabilities 1, TOTAL LIABILITIES AND EQUITY 5,359 4,943 *) Of which goodwill: 2,838-2,780 **) of which liquid assets:

80 Goodwill Booked at following acquisitions: NOK 2,835 million Relates to the Fellesdata NOK 2,045 million EDB ASA NOK 401 million Novit NOK 225 million Telesciences NOK 96 million Other acquisitions NOK 68 million

81 Liabilities Total liabilities NOK 2,535 million Interest bearing NOK 1,310 million (somewhat lower than 1998) Secured on property NOK 190 million Seller's loan for FD acq. NOK 450 million Bank loan for FD acq. NOK 200 million Other bank borrowing NOK 470 million

82 Cash flow (including Fellesdata) Operational activities Investment Financing Change in liquid assets Liquid assets at Liquid assets at

83 Investment in1999 Investments NOK 392 mill Businesses acquired NOK 159 mill Telesciences NOK105 million BDC NOK 25 million Other NOK 29 million Other investment NOK 233 million Production environment NOK166 million Other equipment NOK 67 million

84 Key figures 1999 EBITDA per share inc. FD 5.55 exc. FD 5.06 EPS (post tax, before gwill deprec) inc. FD 1.42 exc. FD 1.91 Cash flow per share inc. FD 5.34 exc. FD 4.89 Current ratio inc. FD 1.3 exc. FD 1.5 Operating margin (before gwill deprec) inc. FD 5.7 % exc. FD 5.6 %

85 Main accounting principles Costs of software and system development expensed as incurred Goodwill written-off over 5-20 years on following criteria Low vs. high risk Market share vs. product Established vs. new company Income recognition Goods as delivered, services as performed. Employer's payroll tax etc. on benefit of options Current provision made as per OSE circular

86 Share option program (1) The programme extends to all employees in companies owned more than 90%. Entitlement is earned over three years from 1 May 1999 and is exercised over five years up to May Years 2 and 3 are subject to AGM approval. Options granted on basis of salary. Option rights are tied to continuing employment. New employees join the plan pro rata to the remaining period.

87 Share option program (2) Option exercise price is market price when granted plus 1% per month to exercise date. 9.4 million options currently outstanding (12% of current total number of shares in issue) 2.8 million options may be exercised in May 2000 at exercise price of NOK 31 Employer's tax etc. on estimated profit provided for continuously (NOK 14 million in 1999)