edb business partner asa - evry · edb business partner asa third quarter 2005. edb business...

EDB BUSINESS PARTNER ASA

Third quarter 2005

EDB Business Partner > slide 2

Q3 HIGHLIGHTS – EDB BUSINESS PARTNER

Strong growth and profitability– Revenue growing 18 percent year-on-year

– EBITA margin at 10.6%

Strong operational cash-flow

Strategic B2B e-invoicing agreement – transaction based

i-flex agreement signed – joint go-to-market plan

Launch of Public Sector initiatives

Gaining share in Midmarket IT Operations

Divestment of Telecom Solutions


Q3 HIGHLIGHTS SWEDEN

Revenue NOK 156 million (68 percent growth year-on-year)

Major wins– OP Bank

– Bona Kemi

– Draka Kabel

– Bofors

Regained profitability in Solutions

Profitability of IT Operations not satisfactory – cross border consolidation initiated


KEY FIGURES Q3 2005 – GROUP

NOK million Q3'05 Q3'04* Y/Y

Operating revenue 1 164 990 18 %Operating costs 1 041 868 20 %Operating profit before amortisation (EBITA) 123 122 1 %

EBITA % 10.6 % 12.3 %

EBIT 99 122

Profit before tax 92 115

Cash flow from operations 196 189 Operational investments (CAPEX) 105 49

Earnings per share (NOK) 0.70 0.90

No. of employees 2 707 2 546 *Adjusted for deconsolidation of Telecom business area

EBITA % adjusted for IFRS deferred revenue rec. 10.5 % 10.2 %


OPERATING REVENUE – GROUP

0

200

400

600

800

1 000

1 200

1 400

Q1 Q2 Q3 Q4

2003 2004 2005


REVENUE SPLIT BY SECTOR AND BUSINESS AREA

78 %

22 %

IT Operations Solutions

52 %

22 %

15 %

11 %

Bank & Finance (56%) Distribution (22%)Telecom (26%) Public (2%)

(2004-share)


EBITA-MARGIN – GROUP

-10 %

-5 %

0 %

5 %

10 %

15 %

Q1 Q2 Q3 Q4

2003 2004 2005


CASH FLOW FROM OPERATIONS – GROUP

-200

-100

0

100

200

300

400

Q1 Q2 Q3 Q4

2003 2004 2005


NET INTEREST BEARING LIABILITIES – GROUP

0

100

200

300

400

500

600

700

800

900

1000

Q1 Q2 Q3 Q4

2003 2004 2005


ROIC: RETURN ON INVESTED CAPITAL

0 %

5 %

10 %

15 %

20 %

25 %

30 %

Q1 Q2 Q3 Q4

2003 2004 2005


ORDER BACKLOG – NOK 12 BILLION

NOK million Order backlog Order backlog distributed30.09.2005 2005* 2006 2007 2008 Later

IT Operations 11 015 829 2 753 2 460 2 005 2 967

Solutions 1 640 263 597 422 190 168

Total order backlog 12 655 1 092 3 350 2 882 2 195 3 135

% of total 9 % 26 % 23 % 17 % 25 %

* Includes Q4

IT OPERATIONS


Q3 HIGHLIGHTS – IT OPERATIONS

Continuous profitable growth– Revenue up 14 percent year-on-year

– 9.4 percent EBITA-margin

B2B e-invoicing solution ready to be launched

Strong growth in Midmarket, new initiative launched

Continuous improvement program:– One Nordic mainframe operation

– Helpdesk consolidation

– Server Consolidation


KEY FIGURES – IT OPERATIONS

NOK million Q3'05 Q3'04* Y/Y

Operating revenue 920 805 14 %

Cost of goods sold 327 332 -2 %Salaries and related costs 265 223 19 %Ordinary depreciation 72 62 16 %Other operating costs 170 107 59 %Total operating costs 833 724 15 %

Operating profit before amortisation (EBITA) 86 81 6 %EBITA % 9.4 % 10.1 %

Operational investments (CAPEX) 97 49No. of employees 1 687 1 630* IFRS adapted


IT OPERATIONS – REVENUES

0

200

400

600

800

1 000

1 200

Q1 Q2 Q3 Q4

2003 2004 2005


IT OPERATIONS – EBITA-MARGIN

0 %

2 %

4 %

6 %

8 %

10 %

12 %

Q1 Q2 Q3 Q4

2003 2004 2005

SOLUTIONS


Q3 HIGHLIGHTS – SOLUTIONS

Strong profitable growth– Revenue growth 26 percent year-on-year

– Improved EBITA-margin – y-o-y comparison influenced by IFRS-accounting

Signing of i-flex agreement

Improved performance in Sweden

Positioned for growth in Public sector /

e-government


KEY FIGURES – SOLUTIONS

NOK million Q3'05 Q3'04 Y/Y

Operating revenue 265 210 26 %

Costs of goods sold 23 12 92 %Salaries and related costs 117 95 23 %Ordinary depreciation 2 2 0 %Other operating costs 72 47 53 %Total operating costs 214 156 37 %

Operating profit before amortisation (EBITA) 51 54 -6 %EBITA % 19.3 % 25.8 %

Operational investments (CAPEX) 1 3No. of employees 752 648* IFRS adapted

EBITA % adjusted for IFRS deferred revenue rec. 19.0 % 16.7 %


OPERATING REVENUES – SOLUTIONS

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4

2003 2004 2005


EBITA-MARGIN – SOLUTIONS

-40%-10 %

-5 %

0 %

5 %

10 %

15 %

20 %

25 %

30 %

Q1 Q2 Q3 Q4

2003 2004 2005

FUTURE PROSPECTS


FUTURE PROSPECTS

Midmarket outsourcing growth

e-invoicing business-to-business solution – Agreement with DnB NOR

i-flex - Strategic Nordic and Global Agreement


MIDMARKET OUTSOURCING GROWTH

Total Outsourcing market Norway, BNOK 8.9 Midmarket outsourcing drivers

– Core business focus

– Cost cutting

– Infrastructure Complexity

Current delivery model – High degree of customisation

– Low margins

Future Delivery model– Standardization

– Streamlining

– Cost efficiency

Mid market*

41 %

Enter-prise

Market59 %

Market share – mid market*

Tele-comp.

7 %

37 %

Ergo + Ementor

21 %

35 %EDBOther

* Definition mid market: < 4000 employeesSource: IDC CAGR 9% 2005-2008


Breakthrough in B2B e-invoicing

Invoice issuerJoint system for electronic management of invoices between Norwegian companies and public sector entities:

– Links corporate issuers and recipients of invoices through a common contact point

– Manages the exchange of electronic invoice payments to and from issuers’ and recipients’internet banking accounts via the contact point

– Can be linked to company accounting systems and current B2C solutions

– Will be presented as a banking product and distributed via internet banks

INTERNET BANK

INTERNET BANK

Invoice exchange(EDB’s solution)

Invoice recipient


e-invoicing solution offers cost savings and better control

Invoice management to the next level of efficiency– Potential company cost reductions of 50 % (payment and

invoice management)

– Improved cash management control

– Status of invoice flow at any time

– All invoice issuers and recipients that the company has a relationship with

– Industry standard technology

– High level of security


DnB NOR and EDB Agreement

Long term relationship with DnB NOR

Transaction-based price model

Revenue generation from 1Q 2006

Solution developed by EDB – limited additional investments

Strong growth in Nordic B2B e-invoicing segment– Non exclusive – EDB solution available for Nordic banks


BANKING & FINANCE – STRATEGIC DEVELOPMENT

i-flex/EDB - Joint Business Plan– Exclusive rights for Nordic region– Packaged Solution with FLEXCUBE from i-flex

and solutions and components from EDB– UNIX platform– Best-selling solution world-wide last three years– Choice of i-flex supported by Benchmark

study by IDC – Financial Insights

Investments in resources and integration of EDB componentsMarket potential

– Tier 1/2/3 with joint i-flex / EDB Target Solution– Tier 1 with Universal Bank Solution (UBS) from i-flex

Distribution of EDB Global components in next phase


SUMMARY AND OUTLOOK

Continued strong financial performance

Maintaining 2005/2006 Nordic IT Services Market outlook

Strong 4Q & 2006 Backlog

Organic and acquisition growth in Solutions

New initiatives– Midmarket operations

– B2B e-invoicing with DnB NOR

– i-flex

edb business partner asa - evry · edb business partner asa third quarter 2005. edb business...

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