CFO letter

Increasing our rate of growth

Technology and digital transformation are developing quickly, and the introduction of next generation technology is creating significant opportunities in a sizeable Nordic IT market. Over the last two years we have reorganized EVRY, both financially and structurally, which has positioned the company to take advantage of these opportunities.

In 2015 and 2016, EVRY’s primary focus was on addressing its challenging cost base. At the beginning of 2017, the company was back in a position where it once again was able to direct its attention to organic growth, innovation, customer centricity and adding business value to our cutomers.

On 21 June 2017 EVRY was listed on the Oslo stock exchange. Its re-entry into the equity market gives the business greater room to strengthen the position in the Nordic IT market, where making the best use of new technology and consolidation are crucial for further expansion.

EVRY has reversed its negative revenue trend, and delivered positive revenue growth throughout 2017. This revenue growth has been driven by higher demand for applications and digital services in both Norway and Sweden. In the EVRY Financial Services segment, we have seen good momentum and growth in card services.

EVRY reports total operating revenue for 2017 of NOK 12 596 million, as compared to NOK 12 246 million in 2016, representing organic revenue growth of 2.4 percent on an annual basis. This compares with a decrease in revenue of 1.4 percent in 2016. EVRY’s order backlog at the end of 2017 totalled NOK 18.0 billion.

In both Norway and Sweden EVRY is experiencing high activity in the public sector, due in part to more ambitious plans to digitise the services used by the public. In the private sector, strategic IT and digital market strategies are key themes for senior management and in boardrooms. This, in combination with the regulatory requirements associated with open banking (PSD2) and the General Data Protection Regulation (GDPR), will drive up IT investment spending in the time ahead.

EVRY also improved its profitability in 2017, with adjusted EBITA climbing from NOK 1 322 million in 2016 to NOK 1 569 million in 2017. This represents an improvement in adjusted EBITA of 18.7 percent. For 2017 as a whole, EVRY’s adjusted EBITA margin was 12.5 percent, an improvement from 10.8 percent in 2016.

"The focus ahead will be to continue with our transformation while simultaneously providing our shareholders with a competitive return."

Henrik Schibler

Chief Financial Officer (CFO)

EVRY will implement measures to ensure a sustained improvement in its margins in the digital services and applications area. In the infrastructure area in general, margins are under pressure, and EVRY expects this trend to continue. 

EVRY made good progress on cash flow in 2017. Free cash flow for 2017 was NOK 913 million as compared to NOK 964 million in 2016. Our dedicated focus on cash collection and the implementation of more efficient procedures and processes related to collection improvement has had a beneficial effect. At the beginning of 2017, days sales outstanding (DSO) was 40.9 days, while at the end of 2017 it was reduced to 36.3 days. Cash conversion in 2017 ended at 91.6 percent.

Our performance in 2017 proved that our transformation efforts have helped restore profitable growth. This is energising the organisation and we are seeing EVRY grow in attractiveness as an employer. This is of great significance for our ability to develop our business and is a prerequisite for the success of a number of our initiatives, including implementing  cloud solutions and cognitive services.

We will always ensure we have a competitive cost structure and will further develop the level of flexibility in our organisation in order to be able to invest in new opportunities – both in next generation technology and in vertical initiatives.

We work continuosly to assess which opportunities offer the best prospects for increase of value creation. At the same time, we are in the fortunate position of having a large existing customer base, a solid order backlog, and customers who want us to be with them on their digital transformation journeys. As a result, we think our prospects for profitable growth are good.