INTERIM REPORT

FOURTH QUARTER 2017CEO ARNE MJØS

CFO BENT HAMMER

OSLO, 16 FEBRUARY 2018

1

HIGHLIGHTS OF THE FOURTH QUARTER

• Solid organic revenue growth

• NOK 135 (117) million

• Growth of 15% y-o-y

• EBIT improved

• EBIT of NOK 13.8 (13.3) million, 10.2% (11.3%) margin

• Cash flow somewhat behind last year

• NOK 32.7 (36.8) million cash flow from operations

• Continued recruitment to secure growth capacity

• Number of employees up by net 16 in Q4 and 96 last 12 months

• Dividends

• Proposed ordinary dividend of NOK 0.25 per share

2

RevenuesNOK million

EBITNOK million

FINANCIAL REVIEW

3

KEY FIGURES

High growth in own service revenue, especially in nearshore

deliveries and Nordic countries outside of Norway

24% growth in employees, 5 pts increase in nearshore ratio to

43% in Q4

Deferred profitability from high capacity increase

4

STATEMENT OF INCOME

Double-digit growth in Service revenue across all geographies and

onshore/nearshore

Personnel expenses outgrew top line, reflecting onboarding costs

of significantly more new hires5

QUARTERLY DEVELOPMENT

Operating revenueNOK million

EBITDANOK million

EmployeesEnd of period

EBITNOK million Margin

Margin

6

REVENUE

• Revenue increased by 15% y-o-y• Service revenues from own consultants

increased by 25% to NOK 90 million

• Subscription revenue increased by 1% to

NOK 33 million

• 3rd party service revenue increased by

11% to NOK 6 million

• Other revenue decreased by 17% to NOK

7 million

Revenue percentage split (rolling 12 months)

7

Revenue split (quarterly figures)MNOK

STATEMENT OF CASH FLOW

Cash flow from operations NOK 32.7 (36.8) million in Q4

12 month rolling cash flow from operations was NOK 49 million

12 month rolling

cash flow from

operations (MNOK)

8

• The Board will recommend an ordinary dividend for 2017 of

NOK 0.25 per share (68% of net profits) and an option to pay

out an extraordinary dividend later in the year

• A total dividend of NOK 0.43 per share was paid during 2017

• Share price was NOK 7.14 on Dec. 31, up NOK 1.94 (37%)

from 2016

• Current holding of own shares is unchanged at 213 935 shares

• Total distribution to shareholders of NOK 4.17 per share during

2005-2017

DIVIDENDS AND OWN SHARES

9

STATEMENT OF FINANCIAL POSITION

• Group equity ratio of 24% (26%) per December 31

• Cash balance of MNOK 60 (71)

• Receivables high due to delay in invoicing

10

Cash Equity

Non-current

liabilities

Non-current

assets

Receivables

and WIP

Current

liabilities

Assets Equity and Liabilities

BUSINESS REVIEW

11

12

2017 HIGHLIGHTS

+ 96 EMPLOYEES NEW MARKET: ICELAND

TOP 5 IN INNOVATION

HIGH VISIBILITY: 2 MILLION

EXPOSURES IN SoMe

MULTIDISCIPLINARY

PROJECTS

HIGH CUSTOMER

SATISFACTION: 4.1

We are on a journey

CUSTOMER CENTRICITY

ONE ITERA

TOP 5 IN INNOVATION

HYBRID

SCALABILITY

#1 IN CREATING

DIGITAL

BUSINESS

GREAT EXPERIENCES FOR

THE CUSTOMER’S CUSTOMER

2012

2018

2020

2017

2016

2015

ITERA TOWARDS 2020

#1 in creating digital business

WE FOCUS ON OUR

CUSTOMERS’

CUSTOMER

WE WORK IN

MULTIDISCIPLINARY

TEAMS

WE TAKE LIFE-CYCLE

RESPONSIBILITY

WE INVOLVE

SEAMLESS

NEARSHORING

through customer

journeys and lean

startup

combining

communication &

technology skills

embracing cloud and

data protection issues

for greater scalability

and cost-efficiency

TWO SPEED AND HYBRID

Hybrid delivery Industrialised delivery, efficiency and scalability

Nordic front office Creating great experience for customer’s customer

Identify

Feedback

Lean service

design

User

experience

Continuous

innovation

Tech

Launch

Customer centricIdentifying specific challenges that are

relevant to the customer’s customers, solving

them with the customer and partners, and

realise the full potential with digitalisation

Life Cycle ManagementDevOps, hybrid cloud and security

BUSINESS MODEL

Cross-border deliveryWorks are done what

makes sense, executed by

cross border delivery management

TWO SPEED

HYBRID

THE PLATFORM ECONOMY

.

.

.

Smart home

Smart City

Smart meter

eHealth

Smart mobility Smart grid

PSD2 Fintech

Smart phone

API

$

Aggregator

Outside-in

banking

The world’s largest trade show in Las Vegas shows a massive array of new

consumer technologies and products.

Ingredient

technologies

• AI

• Robotics and drones

• VR/AR

Emerging Tech

• Smart city platforms (i.e.

Ford)

• Sports innovation (i.e.

Intel)

• The invisible doctor

In the market

• Voice becomes the

preferred UI

• Smart homes

• Self-driving vehicles

(car, airtaxi)

CES 2018 TRENDS IN THREE PARTS

DIGITAL PLATFORMS

Horisontal platforms Vertical industry platforms (500+)

Transportation Mobility Cloud

Digital Health Platform

Smart Cities, Buildings & Homes

Veracity Industry Platform

In 2018, more than 50% of large enterprises will create and/or enter into

partnerships in creating industry platforms (IDC).

System SW

Applications

Customisation

Unrealised 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 customisation

Unrealised needs

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

• Book-to-bill ratio*) of 1.1 in Q4 and 1.2 for 2017

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

20

CUSTOMER DEVELOPMENT

21

• New business• Existing clients accounted for 94.9% of

revenues in Q4 2017

• New customers won over the past year generated revenues of NOK 6.9 million in Q4 2017, representing 40% of the total growth

Revenue customers splitMNOK

Share of revenue• Increasing visibility

• Share of revenue from top 30 customers up by 4 points y-o-y to 78%

• 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 43 % in Q4

• 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

22

TAPPING GLOBAL #4 IT LABOUR POOL

• Increasing shortage of digital skills in most

industries

• Itera is tapping in the global #4 largest IT pool after

US, India and Russia

• The quality of labor pool in our nearshore region is

ranked as global #2*) after Argentina

23

IT pool: Global #4

Quality: Global #2

The Nordics as the world’s most

fast growing digital societies

*) Analysis by Magne Jørgensen, Professor at the University of Oslo

and Chief Research Scientist at Simula Research

ICELAND

Reykjavik

24

OUTLOOK

25

OUTLOOK

• Customer demand remains strong in all Nordic markets

• Profitable growth and cash flow are key focus areas

• Digitalisation 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

26

TOP 20 SHARE-HOLDERS

*Arne Mjøs Invest AS holds a future contract expiring 15 March 2018 on 4 300 000 shares currently

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

thus 24 327 688 (29.6%).28

*