Third Quarter 2016 Presentation October 27, 2016 Finnur Oddsson | - - PowerPoint PPT Presentation

Third Quarter 2016

Presentation October 27, 2016 Finnur Oddsson | Group Chief Executive

Contents

① Highlights and Update on Operations ② Financial Report ③ Outlook

Highlights and Update on Operations

Financial Highlights

Q3 2016 9M 2016

Revenue

ISK 3.429bn +13.6% YOY ISK 10.555bn +9.2% YOY

Gross Profit

ISK 860m +3.9% YOY ISK 2.67bn +8.5% YOY

Net Profit

ISK 93m ISK 204m

EBITDA

ISK 247m 7.2% Q3 ISK 686m 6.5% YTD

Positive results across the Group with strong operating prospects

Update on Group operations

• Nyherji Group operations performed on

target over the third quarter

• All Group companies showed positive

results

• Interest-bearing debt reduced

significantly

• Equity continues to strengthen
• Significant growth in software-related

activities

• The Group deploys Facebook’s Workplace

for all employees

Group Nyherji Applicon IS SE TM Software TEMPO

Update on Group operations

Group Nyherji Applicon IS SE TM Software TEMPO

• Nyherji’s revenues and earnings were in line

with expectations

• Strong sales of PC equipment and audio-

visual solutions to businesses and individuals

• Attractive opportunities associated with

potential outsourcing project

• Substantial investment in knowledge of

specialized software solutions

• Positive outlook for the fourth quarter

Update on Group operations

Group Nyherji Applicon IS SE TM Software TEMPO

Applicon ehf

• Operations improved over the same period last year

but slightly below expectations so far this year

• Sales of software licenses from SAP, Kjarni and

related implementation projects performed well

• Icelandic experts involved in the implementation of

SBAB

• Good order book and prospects

Applicon AB

• Revenues and earnings increased significantly

compared with the same period last year

• Good projects in all areas: Capital Markets, Finance &

Leasing and Core Banking

• Important contract for the sale and implementation
• f core banking systems for SBAB Bank AB
• Agreement with SBAB strengthens market positioning

Group Nyherji Applicon IS SE TM Software TEMPO

Applicon AB

• SBAB is the fifth largest bank in Sweden
• Focused on mortgages and savings solutions for individuals, with

a retail loan book of 350,000 customers

• Rated Aaa by Moody's
• Solution provided by Applicon:
• SAP lending, insurance, systems and integration by

Applicon with payment systems

• SAP HANA (in memory technology)
• Operational support and long-term maintenance

Update on Group operations

Update on Group operations

Group Nyherji Applicon IS SE TM Software TEMPO

• Revenue rose by 26% in the quarter compared with

the same period last year

• Increased focus on innovation and product

development in specific areas

• Travel Hackathon and Innovation Days
• Strong order book and a healthy outlook

Update on Group operations

Samstæðan Nýherji Applicon IS SE TM Software TEMPO

• Tempo’s total income was USD $3.2 million for

the quarter, a 43% increase from the previous year

• The largest increase in sales of cloud solutions
• Rapidly growing reseller channel of

approximately 120 independent firms delivering combined Atlassian and Tempo solutions

• Staff number swelled to almost 100 employees

across three sites, Iceland, Montreal and San Francisco

• Positive outlook

Financial Report

Key figures for 9M 2016

Revenue ISK 10.555bn EBITDA ISK 686m EBITDA% 6.5% Margin % 25.4% Wages & Related Expenses / Revenue 36.9% Operating Expense / Revenue 22.4% Current Ratio 1.39 Equity Ratio 32.5% DSO 33 DPO 42 Inventory Turnover 6.4 Cash from Operations at Close

• f Period

ISK 500m

Income Statement – 9M 2016

ISK millions 9M 2016 9M 2015

Sold products and services 10,555 9,669 Cost of goods sold and cost of sold services (7,879) (7,203) Margin 2,676 2,465 Operating costs (2,364) (2,024) Operating profits before financial income and financial expenses 312 441 Net financial expenses (98) (184) Profit before tax 214 258 Income tax (41) (57) Profit for the period 173 201 Translation difference/foreign subsidiaries 31 (8) Total profit for the period 204 193 EBITDA 686 693

163 384 244 586 693 686

100 200 300 400 500 600 700 800

EBITDA

EBITDA

3,4% 3,2% 3,1% 7,1% 7,2% 6,5%

EBITDA%

7.888 8.257 9.669 10.555 4,7% 17,1% 9,2%

0% 5% 10% 15% 20% 2.000 4.000 6.000 8.000 10.000 12.000

9M Income and Change vs. Previous Year

Income Change

Income Statement – Q3 2016

ISK millions Q3 2016 Q3 2015

Sold products and services 3,429 3,019 Cost of goods sold and cost of sold services (2,569) (2,192) Margin 860 828 Operating costs (746) (678) Operating profits before financial income and financial expenses 114 150 Net financial expenses (16) (72) Profit before tax 98 78 Income tax (22) (20) Profit for the period 76 58 Translation difference/foreign subsidiaries 17 24 Total profit for the period 93 82 EBITDA

247 240

176 120 61 189 240 247

50 100 150 200 250 300

EBITDA

EBITDA

6,3% 4,8% 2,5% 7,4% 8,0% 7,2%

EBITDA%

2.418 2.545 3.019 3.429 5,3% 18,6% 13,6%

0% 5% 10% 15% 20% 1.000 2.000 3.000 4.000

Q3 Income and Change vs. Previous Year

Income Change

Balance sheet – key figures

0,94 1,28 1,35 1,27 1,25 1,26 1,28 1,52 1,46 1,41 1,39

0,2 0,4 0,6 0,8 1 1,2 1,4 1,6

Current Ratio

13,0% 14,6% 16,0% 16,7% 16,7% 17,9% 20,1% 28,0% 29,5% 30,8% 32,5%

0% 5% 10% 15% 20% 25% 30% 35%

Equity Ratio ISK millions 30.09.2016 31.12.2015

Fixed assets

3,352 3,187

Current assets

3,238 3,719

Total Assets

6,590 6,907

Equity

2,142 1,930

Long-term obligations

2,126 2,521

Short-term debts

2,322 2,455

Total Equity and liabilities

6,590 6,907

Cash flow – key figures

ISK millions 9M 2016 9M 2015 Cash from operations 765 470 Investing activities (696) (417) Financing activities (364) (25) Increase (decrease) in cash (294) 28 Impact of exchange rate changes on cash (15) (4) Cash at beginning of year 809 79 Cash at end of year 500 103

141 88 180 318 91 274 470 966 135 506 765

Cash from operations (ISK millions)

255 162 141 160 103 500

Change in cash at the end of the quarter (ISK millions)

Nyherji shareprice movement

16,7 5 10 15 20 25

Nyherji shareprice NASDAQ NYHR.IC

10 Largest Shareholders % Vænting hf. 15.1% Lífeyrissjóður verslunarmanna 10.2% Stafir lífeyrissjóður 7.8% Kvika banki hf 6.5% Fiskveiðihlutafélagið Venus 6.0% Landsbankinn hf. 5.1% Sjóvá Almennar tryggingar 4.6% Sameinaði lífeyrissjóðurinn 4.1% Íslandsbanki hf. 3.3% Vátryggingafélag Íslands hf. 2.8%

• Listed on the main board since 1995
• Issued shares: 450 million
• Market Cap
• 30.09.2015 - ISK 5.465bn
• 30.09.2016 - ISK 7.493bn
• Change YoY: +37%
• 377 employees are shareholders

Outlook

Operating outlook

• Nyherji’s order book, both at a

Group and subsidiary level remains healthy and profitable

• Considerable demand for services

and increased interest in outsourcing

• Revenue growth and profitability

looking set to continue

Q&A

Forward Looking Statements

• Statements in this presentation that are not historical facts are forward-looking statements.

Although such statements are based on management’s current estimates and expectations, forward-looking statements are inherently uncertain.

• Nyerhji cautions the reader that there are a variety of factors that could cause business

conditions and results to differ materially from what is contained in our forward-looking

• statements. The Company does not undertake to update any forward-looking statements.
• All forward-looking statements are qualified in their entirety by this cautionary statement.