Revenue of MNOK 3 415.3 for the second quarter 2007 represents a 6.6% revenue increase y-o-y, with operating result of MNOK 85.5 representing a solid 40.9% increase compared to the corresponding period last year.
Ementor delivers a strong EBITDA of MNOK 115.8, excluding share based compensation, representing a 17.4% increase y-o-y.
Services revenue was up MNOK 80 (17.3%) y-o-y due to strong demand in the IT infrastructure market. Product revenue was up MNOK 130.4 (4.8%), with a large number of long-term frame agreements signed in the last three quarters as a major contributing factor. Adjusted for MNOK 100 loss of employee home-pc sales in Sweden, brought about by changes in Swedish legislation, total revenue grew by 10% y-o-y.
“Ementor has today delivered its third consecutive quarter with solid financial performance following the integration of Ementor, Topnordic and Atea in 2006,” says Jo Lunder, CEO Ementor ASA. “We are very pleased with our second quarter 2007 results and the Group is well under way to reaching its formerly announced profitability targets.”
Financial performance by country
“Local presence, knowledge and focus are key success factors in the IT infrastructure business,” says Lunder. “Our 50 locations across the Nordic countries allow us to be close to the customer’s needs, while each country at the same time can offer Nordic resources including eSHOP, our logistics centre in Sweden with centralised purchase agreement and value added services such as recycling, configuration and financial services.”
Q2 2007 country highlights include:
Norway
Norway delivered strong performance in second quarter with an impressive EBITDA of MNOK 36.1 (4.9%), up MNOK 24.0 y-o-y. Revenue grew by 20.6 % and reflects growth in both services and products. Growth in revenue combined with cost reductions of MNOK 7 (4.0 %) explains the significant improvement in results.
Informatikk, the leading supplier of IBM’s AS 400/i-series in the Nordic market and Tre65, a leading supplier of high-end server room solutions in Norway, were acquired in second quarter and integration processes are on track.
Denmark
Denmark delivers strong performance and second quarter EBITDA ended at MNOK 38.0 (3.4% ) compared to MNOK 28.8 (2.6 %) in the corresponding period last year. Increased services revenue combined with significant cost reductions following the integration of Topnordic/Ementor/Atea gives the improvement of MNOK 9.2 (31.9%) in EBITDA.
On July 2, 2007, Topnordic reported acquisition of the Danish company Cablux A/S for MNOK 11 (Enterprise value). The estimated turnover is MNOK 44 in 2007 and the acquisition strengthens Topnordic’s capacity within fibre-optic communication solutions.
On July 11, 2007, Topnordic entered into an agreement to acquire pcs-gruppen for MNOK 13 (Enterprise value). Pcs-gruppen is the leading IT infrastructure supplier in southern Denmark, with annual revenue of MNOK 92. The acquisition will strengthen Topnordic’s presence in the southern part of Denmark.
Sweden
Sweden reports second quarter EBITDA of MNOK 40.9 (3.4%) which is down from MNOK 49.0 in the corresponding period last year. Second quarter 2006 was exceptionally good, driven by employee home-pc projects. EBITDA of MNOK 40.9 in second quarter is up from MNOK 17.9 in first quarter 2007.
Revenue of MNOK 1 191.8 in second quarter 2007 is up by MNOK 11.4 (1.0 %) y-o-y. Adjusted for MNOK 100 loss in employee home-pc sales, revenue is up 9.4% y-o-y. Total revenue is considered strong in light of employee home-pc sales loss and integration efforts combining five companies in Sweden.
Finland
The second quarter EBITDA of MNOK 0.5 in Finland is improved from MNOK 5.8 in loss last year. The improvement comes from the major cost cuttings done in fourth quarter of 2006, in order to generate profitability going forward. Operating expenses are down by MNOK 16.6 (26.9 %) compared with corresponding quarter in 2006. Revenue was down MNOK 27.4 (7.3%). Main focus in Finland is revenue growth and a number of activities have been implemented in order to increase revenue going forward.
Strategic direction going forward
According to IDC, the total Nordic IT infrastructure spending is estimated at approximately NOK 130 billion annually, implying that despite the leading position Ementor’s market share is only 10 %. The Nordic market is furthermore characterised by fragmentation and numerous small players, providing interesting acquisition opportunities.
The Group has year to date announced five acquisitions that allows for cost synergies, increased geographical presence and higher competence.
“Q2 2007 marks the completion of the Ementor, Topnordic and Atea integration process, with MNOK 200 in cost synergies realised,” says Jo Lunder. “The Group has created a strong market and financial position and we see a large and untapped potential for organic and acquisition based growth moving forward.”
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:
Jo Lunder, CEO Ementor ASA, mob +47 900 80 842
Rune Falstad, CFO Ementor ASA, mob +47 906 14 482