INTERIM REPORT

THIRD QUARTER 2017CEO ARNE MJØS

CFO BENT HAMMER

OSLO, 20 OCTOBER 2017

1

HIGHLIGHTS OF THE THIRD QUARTER

• Revenue

• NOK 108 (92) million

• Growth of 18% y-o-y

• Gross Profit• NOK 95 (79) million

• Growth of 19% y-o-y

• EBITDA

• EBITDA of NOK 11.5 (11.0) million, 10.7% (12.0%) margin

• EBIT

• EBIT of NOK 6.4 (6.3) million, 5.9% (6.9%) margin

• Cash flow

• NOK 11.9 (4.4) million cash flow from operations

• Capacity

• Number of employees up by 45 in Q3 and 89 last 12 months

• Dividends

• Additional dividend of NOK 0.25 per share with ex date Oct. 25

2

RevenuesNOK million

EBITNOK million

FINANCIAL REVIEW

3

KEY FIGURES

High investment into capacity growth to meet surge in demand

High growth in own service revenue, especially in nearshore

deliveries

Strong cash flow from operations

4

2017 2016 Change 2017 2016 Change 2016

NOK Million Q3 Q3 % YTD YTD % FY

Operating revenue 108.0 91.8 18 % 340.0 307.5 11 % 424.8

Gross profit 94.5 79.2 19 % 295.9 262.7 13 % 361.3

EBITDA 11.5 11.0 4 % 40.6 37.1 10 % 55.6

EBITDA margin 10.7 % 12.0 % -1.4 pts 11.9 % 12.1 % -0.1 pts 13.1 %

EBIT 6.4 6.3 1 % 25.5 20.9 22 % 34.1

EBIT margin 5.9 % 6.9 % -1 pts 7.5 % 6.8 % 0.7 pts 8.0 %

Net cash flow from operations 11.9 4.4 174 % 16.7 11.6 44 % 48.4

Cash and cash equivalents 59.1 51.6 15 % 59.1 51.6 15 % 71.1

Equity ratio 30.0 % 29.8 % 0.2 pts 30 % 30 % 0.2 pts 26.0 %

Employees at end of period 475 387 23 % 475 387 23 % 395

Employees in average 453 378 20 % 429 382 12 % 385

STATEMENT OF INCOME

High top-line growth

Personnel expenses outgrew top line, reflecting onboarding costs

of significantly more new hires

Adverse EBIT impact of about 1 MNOK from 1 less working day in

Q3 and year to date5

2017 2016 Change 2017 2016 Change 2016

NOK Million Q3 Q3 % YTD YTD % FY

Operating revenue 108.0 91.8 18 % 340.0 307.5 11 % 424.8

Cost of sales 13.5 12.6 7 % 44.1 44.7 -1 % 63.5

Gross Profit 94.5 79.2 19 % 295.9 262.7 13 % 361.3

Personnel expenses 71.9 58.5 23 % 219.2 195.3 12 % 263.3

Depreciation 5.1 4.7 9 % 15.1 14.5 4 % 19.8

Other operating expenses 11.1 9.7 14 % 36.2 30.3 19 % 42.3

Total operating expenses 101.6 85.5 19 % 314.6 284.9 10 % 389.0

Operating profit before non-recurring items 6.4 6.3 1 % 25.5 22.5 13 % 35.8

Non-recurring items 0.0 0.0 -100 % 0.0 1.6 -100 % 1.6

Operating profit (EBIT) 6.4 6.3 1 % 25.5 20.9 22 % 34.1

Net financial income -0.4 -0.4 -13 % -1.1 -1.2 11 % -1.4

Profit before tax 6.0 5.9 0 % 24.4 19.7 24 % 32.8

Tax 1.5 1.5 -2 % 5.9 5.0 20 % 7.5

Net profit for the period 4.5 4.4 1 % 18.5 14.7 25 % 25.3

QUARTERLY DEVELOPMENT

Operating revenueNOK million

EBITDANOK million

EmployeesEnd of period

EBITNOK million Margin

Margin

6

REVENUE

• Revenue increased by 18% y-o-y• Service revenues from own consultants

increased by 27% to NOK 67 million

• Subscription revenue increased by 4% to

NOK 33 million

• 3rd party service revenue increased by

10% to NOK 4 million

• Other revenue increased by 1% to NOK 4

million

Revenue percentage split (rolling 12 months)MNOK

7

Revenue split (quarterly figures)MNOK

STATEMENT OF CASH FLOW

Cash flow from operations NOK 11.9 (4.4) million in Q3

12 month rolling cash flow from operations was NOK 54 million

12 month rolling

cash flow from

operations (MNOK)

8

2017 2016 2017 2016 2016

NOK Million Q3 Q3 YTD YTD FY

Cash flow from operations (EBITDA) 11.5 11.0 40.6 37.1 55.6

Change in balance sheet items 0.4 -6.7 -23.9 -25.5 -7.1

Net cash flow from operating activities 11.9 4.4 16.7 11.6 48.4

Net cash flow from investment activities -4.0 -3.3 -10.2 -9.3 -12.2

Purchase of own shares 0.0 0.0 -1.6 -3.6 -3.6

Borrowings repaid -1.4 -2.1 -6.0 -6.4 -8.6

External dividend paid 0.0 0.0 -14.6 -9.7 -21.9

Net cash flow from financing activities -1.4 -2.1 -22.2 -19.7 -34.1

Net change in bank deposits and cash 6.6 -1.0 -12.0 -16.8 2.7

Bank deposits at the end of the period 59.1 51.6 59.1 51.6 71.1

New borrowing related to leasing 0.0 1.8 1.0 5.2 6.4

• The Board has decided on an additional dividend of NOK

0.25 per share with ex date on Oct. 25• An ordinary dividend of NOK 0.18 per share was paid in June

• Current holding of own shares is unchanged at 63 935

shares

• Consistent high distribution of earnings

DIVIDENDS AND OWN SHARES

9

STATEMENT OF FINANCIAL POSITION

• Group equity ratio of 30% (30) per September 30

• Cash balance of MNOK 59 (52)

• WIP high due to several implementation projects

10

Cash Equity

Non-current

liabilities

Non-current

assets

Receivables

and WIP

Current

liabilities

Assets Equity and Liabilities

BUSINESS REVIEW

11

DIGITAL IS #1 PRIORITY

Remap

Your Industry

Remodel

Your Enterprise

Remake

Yourself

Source: IDC Futurescape, “Worldwide IT Industry 2016 Predictions”, November 4, 2015

86% of CEOs consider digital their #1 priority. CEOs believe technology will

transform their business more than any other global trend.

How to bring digital to the core?

“By 2020, information will be

used to reinvent, digitalize or

eliminate 80% of business

processes and products from

a decade earlier.” Gartner

Massive data volum

2015 20252020

1

8x

35x

GROWTH OF CONNECTED DEVICES

20

2013 2014 2015 2016 2017 20192018

15

10

5

0PC, SMARTPHONE & TABLET

INTERNET OF THINGS

Bill

ion U

nits

CowsAutoStreet

sweepers

Aircrafts

Dogs

Power plants

Buses

ElevatorsTrucks Oil distribution

Postboxes

Smart meters

Surveillance

Smart grids

Factory floor

Engines

Power tools

Electric

charging

stations

Oil equipmentVending

machinesBuildings

Fryers

Medical

devices

Vaccine

dispensers

Racing

Mining

equipment

IoT

REAL INTERNET OF THINGS USE CASES

IoT: Internet of Things

THE PLATFORM ECONOMY

.

.

.

Smart home

Smart City

Smart meter

eHealth

Smart mobility Smart grid

PSD2 Fintech

Smart phone

API

$

Aggregator

Outside-in

banking

System SW

Applications

Customization

Unrealized needs

Platforms- Business services (i.e. collaboration; ERP)

- Appl services (i.e. AI, big data, IoT)

- System SW (i.e. hyperscale, cloud)

Microservices

Real-time customization

Unrealized needs

Unrealized

1000’s of

SW vendors

Global horizontal platforms(i.e. Microsoft, Google, AWS, Apple)

Vertical platforms (i.e. eHealth, transportation, etc.)

DELIVERING INNOVATIVE SOLUTIONSThe new digital platforms and ecosystems drive innovation at the fraction of

time and costs of traditional approaches

Needs

The Itera wayTraditional

GO HYBRID WITH ITERA

• Itera will help the customer to

develop its core connected

platform that supports all of its

products

• The connected central data hub

should be a fully scaled cloud

solution based upon Microsoft’s

Azure platform as a service

Itera

PRODUCT &

ARCHITECTURE

PROGRAM MANAGER

DEVELOPERS (?)

COMM LEAD

TECH LEAD

TESTERSTESTERS

DEVELOPERS

ON-SHORE NEARSHORE

NEARSHORE

COORDINATOR 0.2 > 1

A hybrid delivery setup with the right mix of onsite and nearshore

resources could reduce costs by 25-40%.

A sample team

TESTERSMANAGED SERVICES

Customer

• Book-to-bill ratio*) of 0.6 in Q3 and 1.2 YTD

ORDER INTAKE

Order intake from existing and new customers

*) The book-to-bill ratio is the ratio of orders received to the amount of revenue for a specific period for Itera units

18

CUSTOMER DEVELOPMENT

19

• New business• Existing clients accounted for 91.8% of

revenues in Q3 2017

• New customers won over the past year generated revenues of NOK 8.8 million in Q3 2017

Revenue customers splitMNOK

Revenue customers splitMNOK

Share of revenue• Increasing visibility

• Share of revenue from top 30 customers up by 4 points y-o-y to 79%

• Benefits of higher revenue per customer:

• Increased revenue visibility

• Improved operational efficiency

• Lower sales and overhead costs

* Existing customers defined as customers that were invoiced in the corresponding quarter last year

** New customers (Rolling Twelve Months) defined as customers won since end of corresponding quarter last year

NEARSHORE RATIO

• Nearshore ratio of 42 % in Q3

• Target >50%

• Mixed teams of onshore and nearshore are increasing our price flexibility as well as providing access to a very large resource pool

Nearshore ratio% of all staff located nearshore

20

21

OUTLOOK

22

OUTLOOK

• Customer demand remains strong in all

Nordic markets

• Profitable growth and cash flow are key

focus areas

• Digitalization creates a strong market

demand in all sectors where Itera is

operating

• Larger projects and customers expected to

continue to increase revenue visibility,

efficiency and scalability

• Itera does not provide guidance to the

market on future prospects

23

TOP 20 SHARE-HOLDERS

*Arne Mjøs Invest AS holds a future contract expiring 21 December 2017 on 3 900 000 shares currently

owned by DNB Markets, AKS DNB BANK ASA. The total controlling interest of Arne Mjøs Invest AS is

thus 22 476 998 (27,3%).25

*

No. Name %  Nat. Shareholding

1 ARNE MJØS INVEST AS* 23.21 NOR 19 076 998

2 OP CAPITAL AS 5.28 NOR 4 340 481

3 STOREBRAND VEKST VER JPMORGAN EUROPE LTD, 4.77 NOR 3 922 798

4 DNB NOR MARKETS, AKS DNB BANK ASA 4.75 NOR 3 900 000

5 GIP AS 3.88 NOR 3 189 700

6 SEPTIM CONSULTING AS 3.22 NOR 2 650 000

7 EIKESTAD AS 3.13 NOR 2 575 000

8 BOINVESTERING AS 2.78 NOR 2 282 698

9 JØSYRA INVEST AS 2.68 NOR 2 200 000

10 GAMST INVEST AS 2.52 NOR 2 068 787

11 MARXPIST INVEST AS 2.47 NOR 2 031 588

12 FRAMAR INVEST AS 1.22 NOR 1 000 000

13 AANESTAD PANAGRI AS 1.10 NOR 900 000

14 STOREBRAND NORGE I JPMORGAN EUROPE LTD, 1.05 NOR 862 203

15 ALTEA PROPERTY DEVEL 0.80 NOR 658 477

16 SÆTRANG MORTEN 0.74 NOR 606 784

17 JENSEN LARS PETER 0.73 NOR 600 000

18 MORTEN JOHNSEN HOLDI 0.73 NOR 600 000

19 NYVANG JETMUND GUNNAR 0.72 NOR 594 650

20 GRØSLAND KIM-KJETIL 0.70 NOR 572 000

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