Strong contract inflow brings backlog to NOK 13 billion

(Oslo, 17 July 2007) EDB Business Partner reports operating profit before intangible asset amortisation (EBITA) of NOK 155 million for the second quarter of 2007. This is an increase of 12% from the same quarter in 2006. Operating revenue grew by 6% to NOK 1,621 million. The order backlog at the end of the second quarter of 2007 was NOK 13,083 million, an increase of 18% from the first quarter of 2007. This is EDB's highest-ever order backlog.

"EDB is well positioned for further profitable growth. We are winning new contracts against tough international competition, and the record level of the order backlog ensures long-term stability for the company. We are improving profit margins in all business areas, and both the Application Services business area and EDB's Swedish activities report double-digit organic growth", comments Endre Rangnes, CEO of EDB.
 
Highlights of the second quarter of 2007
  • EBITA margin increased from 9.1% in the second quarter of 2006 to 9.6% in the second quarter of 2007. All business areas reported improved margins.
  • EDB's activities in Sweden reported organic growth of 10% in the second quarter of 2007. Turnover in Sweden passed the SEK 1 billion mark in the first six months, representing overall growth of 52%.
  • EDB is winning market share in application services, which is the most rapidly growing segment of the Nordic IT market. The Application Services business area reported growth of 24% in the second quarter of 2007, of which organic growth contributed 18%.
  • EDB signed international contracts worth NOK 250 million, including a Nordic-wide agreement with GE Money Bank with total contract value of NOK 160 million that represents a breakthrough for deliveries in collaboration with I-flex.
  • Strategic long-term contract signed with SpareBank 1 Alliance with total contract value up to NOK 3.6 billion.
  • Successful launch of new solutions for the public sector, with a contract signed for the City of Trondheim
  • The value of new contracts signed in the quarter is NOK 3.6 billion and brings EDB's order backlog to NOK 13,083 million, the highest ever.
 
Increased investment in nearshoring
EDB has today announced the acquisition of the Ukrainian IT company Miratech, with 220 highly certified employees. EDB will after the acquisition have 570 employees in total in the Ukraine. The acquisition strengthens EDB's delivery capacity and competitiveness, and ensures that the company is well positioned to meet competition in the IT market in the future.
 
"The acquisition of Miratech is a further step in our commitment to building a long-term strategy for Global Sourcing and developing a new delivery model for EDB's offer to its customers in the future", comments CEO Endre Rangnes.
 
Main figures for the second quarter of 2007
  • Operating revenue was NOK 1,621 million as compared to NOK 1,523 million in the same quarter of 2006, an increase of 6%.
  • Operating profit before intangible asset amortisation (EBITA) was NOK 155 million in the second quarter of 2007, as compared to NOK 138 million for the same quarter of 2006.
  • Profit before tax was NOK 95 million, as compared to NOK 94 million in the same quarter of 2006.
  • Cash from operations before restructuring payments increased by 7% to NOK 158 million.
  • Operational investment (Capex) was 40% lower at NOK 46 million. 
  • Earnings per share for the second quarter of 2007 was NOK 0.74, as compared to NOK 0.72 for the second quarter of 2006.
 
Business areas
IT Operations: The business area reports revenue of NOK 1,002 million, representing growth of 3% from the second quarter of 2006. EBITA was NOK 84 million as compared to NOK 81 million for the second quarter of 2006, representing growth of 4%.
Solutions: The business area reports revenue of NOK 361 million, with growth of 12% from the same quarter last year. EBITA was NOK 56 million as compared to NOK 50 million for the second quarter of 2006, representing growth of 12%.
Application Services: The business area reports revenue of NOK 309 million for the quarter, up by 24% from NOK 249 million in the second quarter of 2006. EBITA was NOK 33 million as compared to NOK 24 million in the same quarter last year, representing growth of 38%.
 
Future prospects
The Nordic IT services market showed good growth in the second quarter, and market conditions were in line with EDB's forecasts. The level of demand is expected to remain high throughout the second half of the year. The research companies IDC and Gartner continue to forecast growth of around 5% for 2007 as a whole. All the industries and sectors that EDB serves continue to show good interest in investing in IT.
 
Please see the attached quarterly report for more detailed accounting information.
 
Any enquires may be addressed to:
Endre Rangnes, CEO. Tel: + 47 22 77 21 01
Cathrine Telje, acting CFO. Tel: + 47 970 46 846
Geir Remman, EVP, Corporate Communications. Tel: +47 970 55 017
 
About EDB
EDB Business Partner is a leading stock exchange listed IT group for the Nordic region. The group has 3,800 employees, and reported turnover of NOK 5.8 billion in 2006. EDB delivers solutions that cover the entire range of business critical IT services from application services and industry-specific solutions through to IT operating services and network solutions. EDB is committed to being a close and attentive IT partner that helps its customers operate more efficiently and achieve their business objectives. EDB Business Partner is listed on Oslo Børs with the ticker code: EDBASA.
 
For further information see www.edb.com.
 
The first quarter 2007 interim report, including tables and the presentation of the results, can be downloaded from the following link:

Presentation of 2nd quarter 2007
2nd quarter 2007