Continuing strong growth and good profitability for EDB

EDB Business Partner reports operating profit before intangible asset amortisation (EBITA) of NOK 137 million for the third quarter of 2007. This is an increase of 12% from the same quarter in 2006. Operating revenue grew by 7% to NOK 1,465 million. Profit before tax was NOK 119 million as compared to a loss of NOK 60 million for the same period last year.

"EDB has made a good start to the second half of the year with a 50% increase in order inflow, and a further improvement in profitability in the third quarter. We are seeing positive effects from our nearshoring investment in the Ukraine, and we therefore intend to intensify our work on nearshoring", comments Endre Rangnes, CEO of EDB Business Partner.
 
Highlights of the third quarter of 2007
  • Improved EBITA margin for the group - up from 8.9% in the third quarter of 2006 to 9.3% in the third quarter of 2007.
  • Solutions and Application Services report strong organic growth of 10% and 16% respectively.
  • Order inflow up by 50%. New contracts signed in the quarter total NOK 720 million, and EDB is winning market share in important areas.
  • EDB's Swedish activities report 17% revenue growth, of which organic growth accounts for 14%.
  • Significant upscaling of nearshore activities in the Ukraine. EDB carried out extensive recruitment in the quarter to strengthen its delivery capacity for the Nordic market, and the company now has 600 employees in the Ukraine. In addition, EDB has established an IT operations centre in the Ukraine.
Main figures for the third quarter of 2007
  • Operating revenue was NOK 1,465 million as compared to NOK 1,370 million in the same quarter of 2006, an increase of 7%.
  • Operating profit before intangible asset amortisation (EBITA) was NOK 137 million in the third quarter of 2007, as compared to NOK 122 million for the same quarter of 2006.
  • Profit before tax was NOK 119 million, as compared to a loss of NOK 60 million for the same quarter of 2006.
  • Cash from operations before restructuring payments was NOK 72 million in the third quarter of 2007 as compared to NOK 124 million for the same quarter of 2006.
  • Operational investment (Capex) was NOK 1 million higher than in the third quarter of 2006. Operational investment for the year to date is 21% lower at NOK 165 million.
  • Earnings per share for the third quarter of 2007 was NOK 0.94, as compared to minus NOK 0.51 for the third quarter of 2006.
Business areas
IT Operations: The business area reports revenue of NOK 930 million, representing organic growth of 1% from the third quarter of 2006. EBITA was NOK 83 million as compared to NOK 85 million for the third quarter of 2006.
 
Solutions: The business area reports revenue of NOK 329 million, with organic growth of 10% from the same quarter last year. EBITA was NOK 47 million as compared to NOK 41 million for the third quarter of 2006.
 
Application Services: The business area reports revenue of NOK 248 million for the quarter, up by 23% from NOK 202 million in the third quarter of 2006. Organic growth for the business area was 16%. EBITA was NOK 26 million as compared to NOK 12 million in the same quarter last year.
 
Future prospects
The Nordic IT services market grew by 5% in the first half of 2007 according to IDC. This is in line with EDB's growth for the year to date. The research company expects this pace of growth to continue.
 
Looking to the future, a priority task for EDB is to strengthen its competitive position by making greater use of offshore and nearshore resources for all three business areas. The start of operations in Ukraine earlier in 2007 has given the company good access to highly certified employees. In parallel with building operations in the Ukraine, EDB is planning a presence in Asia in order to further strengthen the company's access to certified employees.
 
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
Kristian Kuvaas Johansen, EVP and CFO. Tel: + 47 476 03 334
Geir Remman, EVP, Corporate Communications. Tel: +47 970 55 017
 

Presentation of 3rd quarter 2007
3rd quarter 2007