In third quarter 2007 the Ementor Group delivers an outstanding tripling of EBITDA at MNOK 82.5, up from MNOK 27.4 in third quarter of 2006. Strong service revenue growth of MNOK 70.5 (17.1%) y-o-y combined with improved gross margin on product revenue, up from 9.4% to 10.7% y-o-y, explains the strong improvement in EBITDA.
Total revenue for the Group of MNOK 2 590.4 corresponds to a satisfactory 3.6% y-o-y growth, equivalent to 5.6% when adjusted for currency effects.
Product revenue was up MNOK 20.5 (1.0%). However, adjusted for MNOK 60 loss of employee home-pc sales in Sweden due to legislative changes, total product revenue for the Group grew with 3.9% y-o-y. Total revenue grew with 8.0% adjusted for currency and employee home-pc sales in Sweden, and is the second quarter above market growth for the Group.
“It is a pleasure as Ementor’s new CEO to be able to continue the announcements of solid financial performance for the Group,” says Claus Hougesen, CEO Ementor ASA. “A focused IT infrastructure strategy combined with cost control and a localized business approach has created a sound foundation for growth, and the Ementor management is confident in the strategic direction chosen for the Group.”
Financial performance by country
“Ementor’s combination of value-added services and choice of market leading technology products is a key success factor,” says Claus Hougesen. “We are therefore constantly striving to improve the technology expertise available through our 58 locations across the Nordic region, in order to meet the continuously evolving needs of our partners and customers.”
Q3 2007 country highlights include:
Norway
Norway continues to deliver strong performance in third quarter 2007 with an impressive EBITDA of MNOK 40.5 (6.0%), up MNOK 36.1 y-o-y. Revenue grew by 33.9% and reflects strong growth in both services and products. Frame agreements won over the past 12-18 months yield significant results in third quarter. Overall, revenue growth combined with strong cost control explains the significant improvement in results.
Denmark
Denmark continues to deliver strong performance and third quarter 2007 EBITDA ended at MNOK 34.0 (3.5%) compared to MNOK 23.9 (2.5%) in the corresponding period last year. Strong increase in services revenue explains the major improvement of MNOK 10.1 (42.3%) in EBITDA. Services revenue grew by MNOK 43.8 (33.0%) y-o-y with 125 billable consultants hired since third quarter of 2006.
Sweden
Sweden reports third quarter EBITDA of MNOK 6.2 (0.9%) which is up from MNOK 1.6 (0.2%) in the corresponding period last year, an improvement explained by reductions in operating costs. At the same time revenue of MNOK 667.4 is down MNOK 111.3 (-14.3%), due to decline in product revenue (employee home-pc) and pronounced seasonal effects in the third quarter. However, when adjusted for currency effects and MNOK 60 loss in employee home-pc sales, revenue is down by 3.0%. Furthermore, a new organizational structure implemented this quarter, with regional responsibilities for Profit & Loss and key business areas, is expected to fuel top line growth through increased pressure on market and sales organization.
Finland
Third quarter 2007 EBITDA of MNOK 2.7 (1.1%) in Finland is improved from a loss of MNOK 7.3 (-2.5%) in corresponding period last year. The improvement is a result of major cost cuttings, implemented in fourth quarter of 2006 with a view to generate profitability going forward. Revenue was down MNOK 41.9 (-14.3%) and revenue growth continues to be the main focus in Finland with a number of pro-active strategic measures already implemented.
Acquisitions & outlook
Ementor has previously announced that local acquisitions will be an integral part of its strategy for growth in the Nordic region. A total of eight local acquisitions have been completed year-to-date, expanding the Group’s geographical presence and adding valuable new expertise.
“Ementor is extremely pleased to observe that numerous local players across the Nordic region are actively seeking to join the Group,“ says Claus Hougesen. “Ementor’s strategy is to be a disciplined buyer and we are looking forward to continue acquisitions characterised by strategic fit and value-add for the Group as a whole.”
The quarterly report and presentation is available at
www.ementor.com/reports The press conference is available through webcast at
www.ementor.com/webcast The Stock Exchange Announcement is available at
www.ementor.com/ose
For further information, please contact:
Claus Hougesen, CEO Ementor ASA, mob +45 25 43 51 62
Rune Falstad, CFO Ementor ASA, mob +47 906 14 482