EVRY: Good organic growth in the first quarter

(Oslo, 29 April 2014) EVRY reports organic growth in revenue of 3% to NOK 3,292 million for the first quarter of 2014. EBITA for the first quarter of 2014 was NOK 144 million as compared to NOK 141 million in the fourth quarter of 2013.

EVRY reports positive organic growth for all its segments in the first quarter of 2014. EBITA for the quarter was affected by the costs of building up the new operating services organisation (Future Proof), costs in connection with the new headquarters premises and project costs in EVRY Financial Services.

Cash flow from operations before non-recurring items in the first quarter of 2014 was NOK 47 million. In comparison, EVRY reported cash flow from operations before non-recurring items in the first quarter of 2013 of NOK 81 million, which also included a non-recurring positive effect of NOK 150 million.  

"EVRY reports good organic growth of 3% in the first quarter, and the EVRY Financial Services segment grew by 6%, which is well above the general rate of growth in the market. It is also pleasing to see stronger growth in the EVRY Norway segment. The move into our new headquarters at the start of the first quarter, combined with the introduction of new and more digital ways of working, with particular emphasis on greater collaboration, has been well-received. This provides the foundation for greater efficiency and a more proactive organisation", comments Terje Mjøs, CEO of EVRY.

"Thanks to good control of costs we have been able to maintain EBITA at last year's level. We continue to work on measures to make our organisation more efficient, in part  by implementing new industry-standard solutions with greater use of automation, self-service and offshoring in our operating services organisation. In parallel with this, we need to adapt our organisation to market conditions in areas where growth is still slow and in response to changes in our contracts portfolio", explains Terje Mjøs.

Key figures and main features of the first quarter of 2014

Operating revenue of NOK 3,292 million, representing organic growth of 3% from the first quarter of 2013All segments reported organic growthEBITA of NOK 144 million (NOK 141 million in the first quarter of 2013)Cash flow from operations of NOK 47 million (NOK 81 million in the first quarter of 2013)The group's order backlog amounted to NOK 16.5 billion at 31 March 2014, a decrease of NOK 100 million from the close of the fourth quarter of 2013.

First quarter 2014 figures for EVRY's business areas

The EVRY Financial Services segment reports operating revenue of NOK 885 million for the first quarter of 2014 as compared to NOK 831 million in the first quarter of 2013, representing organic growth of 6%. EVRY Financial Services produced EBITA of NOK 51 million in the first quarter of 2014 compared to NOK 56 million in the first quarter of 2013.

The EVRY Sweden segment reports operating revenue of NOK 903 million for the first quarter of 2014 as compared to NOK 810 million in the first quarter of 2013, representing organic growth of 3%. EVRY Sweden produced EBITA of NOK 54 million in the first quarter of 2014 compared to NOK 46 million in the first quarter of 2013.

The EVRY Norway segment reports operating revenue of NOK 1,651 million for the first quarter of 2014 as compared to NOK 1,588 million in the first quarter of 2013, representing organic growth of 4%. EVRY Norway produced EBITA of NOK 84 million in the first quarter of 2014 compared to NOK 73 million in the first quarter of 2013.

Company outlook

EVRY's market situation has not changed significantly from the more positive trend seen at the end of 2013. For most business areas, quarter-on-quarter growth is in line with the outcome seen in the fourth quarter of 2013. Demand for consulting and advisory services is stable, and hourly charge out rates are, on the whole, tracking the general price trend. However, there are some variations in both demand and hourly rates, principally determined by the degree of specialisation involved and the value of the services to customers. The market for operating services and outsourcing continues to grow in the SMB segment, but the situation is more challenging for the enterprise market. A continuing high level of activity in the bank and finance market is driving good demand for the entire range of EVRY's services, and the financial services segment has achieved growth comfortably in excess of overall market growth for the last three quarters.

There is a clear trend in the Nordic market for an increasing proportion of businesses' IT costs to be financed other than through IT budgets. As companies increase their focus on achieving growth in their own markets, they demand innovation and IT solutions that strengthen their competitiveness and their own specialists are playing a bigger role in encouraging innovation. Megatrends in IT, principally cloud computing and mobility, are now beginning to have an increasing effect on demand for IT services, and there is a clear trend for line management to look to new technology and business models to meet their requirements. This is supported by a number of surveys carried out by market analysis companies in the Nordic market (Gartner, Radar and IDC), and the priorities they identify provide the basis for the analysts to forecast double-digit percentage growth for the next generation of IT services. Growth for the IT services market as a whole is expected to be in the order of 2-3%.

EVRY continues to focus on, and invest in, new services in order to share in the growth driven by these megatrends. In parallel with this, the company's customer base offers good opportunities for growth as existing customers start to use new technology. EVRY is well equipped with valuable business and technology insight to support its customers in this process of change.

The company has previously reported that it has measures planned to adjust the cost base of its operating services organisation in Norway as a result of the reduction of revenue from DNB. In addition to initiating this task, EVRY announced on 4 April 2014 that the company also intends to make some adjustments to its other Norwegian and Swedish activities, resulting in an increase in the scale of the cost-reduction program of 100 full-time equivalent positions relative to the previous announcement. This will be achieved by accelerating work on the introduction of new industrialised delivery models that make greater use of automation. In parallel with this, customers are making greater use of self-service solutions. These developments pave the way to simplifying the company's organisation and reducing its overhead costs. In addition to the program of work to improve efficiency, EVRY will make some reductions to capacity in units in both Norway and Sweden that are experiencing weak demand. The company will also take steps to strengthen its focus on selected industries and the SMB market. The first phase of the program will be carried out in the second quarter of 2014, and will affect 160 full-time equivalent positions, of which up to 30 are in Sweden. EVRY will recognise a provision of NOK 40 million in its accounts for the second quarter of 2014 in relation to the first phase. It is expected that the full effect on earnings of this phase of the cost-reduction measures will first be seen in the third quarter of 2014. 

The company's focus on selected industries played an important role in the growth in revenue reported in the first quarter, and there are good prospects for continuing growth. EVRY is seeing a high level of activity by customers in the public sector, and particularly in the healthcare market where the company anticipates major opportunities in current and subsequent years. In the private sector, the insurance and banking industries stand out as growth segments.

In relation to general IT services, EVRY anticipates moderate growth in the consulting area, with hourly charge out rates increasing in line with the general price level. Operating services/outsourcing business for enterprise customers are expected to benefit from an increasing volume of assignments for transformation to new operating platforms. The good inflow of orders from the SMB segment towards the end of 2013 has continued in the first quarter of 2014, and this segment is expected to continue to show growth over the course of 2014.

This information is subject to disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Contact persons:

Terje Mjøs, CEO EVRY, Tel: +47 06500

Morten Frogner, Acting CFO EVRY, Tel: +47 95724959

Geir Remman, VP Corporate Communications, EVRY, Tel: + 47 970 55 017

About EVRY

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 at Fornebu in Bærum, with major activities in both the Norwegian and Swedish markets.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

 Presentation of 1st quarter 2014
1st quarter 2014


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Source: EVRY via Globenewswire
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