EDB increases EBITA by 23% to NOK 168 million

(Oslo, 22 October 2008) EDB increased its operating profit before intangible asset amortisation (EBITA) by 23% to NOK 168 million in the third quarter of this year relative to the same period in 2007. Revenue was up by 27% to NOK 1,854 million. During the quarter the company signed new contracts with customers including REC, Expert, the City of Bergen and Nokia.

"EDB was little affected in the third quarter by the crisis in the world's financial market, and I am very pleased that we can yet again report sound growth in both turnover and earnings. At the same time, we are watching developments in the market very carefully. Through stable and reliable operations and high delivery quality, combined with strengthened partnership with our customers, EDB is well equipped to deal with future market conditions", comments Endre Rangnes, CEO of EDB.
 
EDB started the fourth quarter with a secure order backlog of NOK 13 billion.
 
Highlights of the third quarter of 2008:
  • Operating revenues up by 27% to NOK 1,854 million (NOK 1,465 million).
  • EBITA (operating profit before intangible asset amortisation) up by 23% to NOK 168 million (NOK 137 million).
  • Cash flow from operations up by 76% to NOK 127 million (NOK 72 million).
  • Earnings per share before non-recurring items of NOK 0.53 as compared to NOK 0.67 for the third quarter of 2007.
  • New contracts signed with customers including REC, Expert, the City of Bergen and Nokia helped to bring the value of new contracts in the quarter to NOK 750 million.
 
Results from the business areas for the third quarter of 2008
 
IT Operations: The business area reports revenue of NOK 889 million as compared to NOK 930 million for the same quarter of 2007. EBITA was NOK 77 million for the third quarter of 2008 as compared to NOK 83 million for the third quarter of 2007. EBITA margin for the quarter was 8.6% as compared to 8.9% in the third quarter of 2007.
 
Solutions: The business area reports revenue of NOK 325 million for the third quarter of 2008, as compared to NOK 329 million for the same period last year. EBITA for the third quarter of 2008 was NOK 51 million as compared to NOK 47 million for the same quarter of 2007. EBITA margin for the quarter was 15.6% as compared to 14.4% for the third quarter of 2007.
 
Application Services: The business area reports revenue of NOK 260 million for the third quarter of 2008 as compared to NOK 241 million for the third quarter of 2007. EBITA was NOK 11 million for the third quarter of 2008 as compared to NOK 24 million in the same quarter of 2007. This represents an EBITA margin of 4.1% as compared to 10.2% in the third quarter of 2007.
 
Global Sourcing: The business area reports revenue of NOK 56 million for the third quarter of 2008 as compared to proforma NOK 39 million for the third quarter of 2007. Revenue growth for the quarter was 45% and reflects increased activity with EDB's business areas as well as higher capacity utilisation for other customers. EBITA for the third quarter of 2008 was a loss of NOK 5 million.
 
IS Partner: The business area reports revenue of NOK 390 million for the third quarter of 2008, as compared to NOK 441 million for the same period in 2007. EBITA for the third quarter of 2008 was NOK 53 million as compared to NOK 66 million in the same quarter of 2007. EBITA margin for the third quarter was 13.6% as compared to 15.1% for the same period last year.
 
Future prospects
The turbulent conditions in the international financial markets affected the Nordic IT services market to a limited extent in the third quarter of 2008. Based on new forecasts of weaker international GDP growth, the research companies Gartner and IDC have reduced their growth forecasts for the entire IT market.
 
The IT services market, which makes up around half of the entire IT market, has grown by 5% annually over recent years. The revised forecasts envisage that growth will fall to 1-3% over the next two years. There is, however, some uncertainty attached to these forecasts since it is too early to judge how quickly the policy measures taken by the authorities will affect the real economy.
 
EDB is monitoring the market situation closely, and pays particular attention to the company's readiness to adapt rapidly to changes in market conditions if the situation so requires.
 
 
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
 
 
EDB Business Partner is one of the leading IT groups in the Nordic region. The company offers solutions for the full range of business-critical IT services. EDB aims to be a close and attentive partner that leverages its deep industry knowledge and international capabilities to help its customers realise the full potential of IT. The company has local presence in 13 countries, 6,000 employees and an annual turnover of NOK 8 billion. EDB Business Partner is listed on the Oslo Stock Exchange.
 

3rd quarter 2008
Presentation of 3rd quarter 2008