INTERIM REPORT

FIRST QUARTER 2018CEO ARNE MJØS

CFO BENT HAMMER

OSLO, 14 MAY 2018

1

HIGHLIGHTS OF THE FIRST QUARTER

• Revenue

• NOK 131 (119) million

• Growth of 11% y-o-y

• Gross Profit• NOK 110 (103) million

• Growth of 8% y-o-y

• EBITDA

• EBITDA of NOK 15.2 (16.1) million, 11.6% (13.6%) margin

• EBIT

• EBIT of NOK 10.0 (11.3) million, 7.6% (9.5%) margin

• Cash flow

• NOK -8.2 (-0.8) million cash flow from operations

• Capacity

• Number of employees up by 70 last 12 months

• Dividends

• Proposed ordinary dividend of NOK 0.25 per share

2

EBITNOK million

RevenuesNOK million

FINANCIAL REVIEW

3

KEY FIGURES

High growth in own service revenue, especially in nearshore

deliveries and outside Norway

Revenue and EBIT reduced by more than MNOK 3 from Easter

holidays

Cash conversion lowered by 3 bank holidays end of month

4

STATEMENT OF INCOME

Strong growth in nearshore deliveries and markets outside of

Norway

Cost of sales higher due to more 3rd party subcontractors

Double office rental costs in Kiev due to relocation5

QUARTERLY DEVELOPMENT

Operating revenueNOK million

EBITDANOK million

EmployeesEnd of period

EBITNOK million Margin

Margin

6

REVENUE

• Revenue increased by 11% y-o-y• Service revenues from own consultants

increased by 16% to NOK 85 million

• Subscription revenue increased by 2% to

NOK 33 million

• 3rd party service revenue increased by

33% to NOK 8 million

• Other revenue, incl. HW/SW sales,

decreased by 32% to NOK 5 million

Revenue percentage split (rolling 12 months)

7

Revenue split (quarterly figures)MNOK

STATEMENT OF CASH FLOW

Cash flow from operations NOK -8.2 (-0.8) million in Q1, negatively

impacted by 3 bank holidays end of March

12 month rolling cash flow from operations was NOK 42 million

12 month rolling

cash flow from operations

(MNOK)

8

• The Board has recommended 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

• Share price was NOK 8.18 on 31 March, up NOK 1.94 (31%)

from same time in 2017

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

• Consistent high distribution of earnings

DIVIDENDS AND OWN SHARES

9

STATEMENT OF FINANCIAL POSITION

• Group equity ratio of 25% (29%) per March 31.

• Cash balance of MNOK 44 (65).

• Receivables and WIP 18 MNOK higher (8 MNOK from IFRS

15 effects).

• Customer receivables high due to bank holidays period end.

10

Cash Equity

Non-current

liabilities

Non-current

assets

Receivables

and WIP

Current

liabilities

Assets Equity and Liabilities

IMPACT OF IFRS 15 IMPLEMENTATIONEXPECTED TO BE LOW ON REVENUE AND EARNINGS

11

Q1 2018 effects:

• Negative impact of MNOK 0.5 on sales revenue

(deferred income recognition)

• Positive EBIT impact of MNOK 0.4 due to

capitalisation of costs

• Book equity on Jan 1 reduced by MNOK 3.0

IFRS 15 implementation effects Q1 2018:

Affected areas for timing of revenue recognition:

• Customised development based where Itera retains

the IP will change from a point in time (at delivery) to

over time (over the licence contract period)

• Transition projects will be recognised when the

customer can use and benefit from the services

rendered

Change in book equity during the quarter:

BUSINESS REVIEW

12

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

LARGE TRANSFORMATION OF DIGITAL

CUSTOMER CHANNELS AT KLP

• Shortly after the closing of the first quarter, KLP announced their choice of Itera as their partner for digitalisation of KLP’s customer channels.

• Responsibility for the design and development of the future digital customer experiences to

• 900,000 members

• 403 municipalities

• 16 county municipalities

• 24 health companies

• 2500 companies

14

Sverre Thornes, Chief Executive KLP, Marianne Sevaldsen, EVP KLP and Rune Hørnes, CIO KLP

Photo: KLP

Event after the reporting period

FAST AND HYBRID

Nordic presenceSpecialists in creating digital business

Ideate

Prototype

Design

Customer

Journeys

Continuous

innovation

Disruptive

Technology

Continuous deliveryUsing digital platforms, DevOps and hybrid cloud

solutions, we provide capabilities along the whole

lifecyle for digital solutions including GDPR and

data protection issues

Cross-border deliveryWork are done where it

make sense, executed by

cross border delivery managementHYBRID

Customer centricThrough human-centered, cross-functional

teams and co-creative processes, we identify

new opportunities, digitize processes and

create great experiences that engage people

Time to

marketFAST

Hybrid capabilities High quality services, efficiency and scalability

SAMMEN MED OSS SKAPER DERE DIGITAL FORRETNING SOM ENGASJERER FOLK

VÅRT BIDBRAG

WE CREATE DIGITAL BUSINESS THAT REALLY ENGAGES PEOPLE

DIGITAL BUSINESS & EXPERIENCE

OVER 50 SPECIALISTS CREATE MAGIC TOGETHER

DIGITAL BUSINESS & EXPERIENCE

CONTENT DESIGN

AND BRANDING► We inspire interest and

create engaging content that

meets the company's brand

and their customers’

demands.

BUSINESS DESIGN► We specialize in designing

digital strategies, new

business models and

realizing business

opportunities.

SERVICE DESIGN► We create innovative services

through customer-centric

methods and insights that meet

the full spectrum of customer

demands.

Design Thinking Lean Startup Business Model Canvas

DESIGN (IxD/UX)► We design digital and future-

oriented user experiences that

functionally, emotionally and

visually touch the hearts of the

users.

PUSHING TOWARDS INNOVATIVE PROCESSES IS KEY

• Human-centered & time to market

• Experiment & learn

• Autonomy & alignment

• Value to the customer & the

customer’s customer

Build

ExplorePrototype

Critique

Idea

Test

Learn

MeasureSPRINTSERVICE

DESIGN

LEAN

STARTUP

Olena the Organiser

Project Manager

Christian the Customer’s

friend

Designer

Sarah the Strategist

Business

Ellen the Engager

Content

Birger the Bug finder

Test

Tony the Tech Magician

Developer

One team - Same goal - Across borders

CROSS-FUNCTIONAL TEAMS DRIVE

INNOVATION AND TIME TO MARKET

• Engaged by Europe’s number 1 to shape the future of parking

• The new automated parking solution is using machine learning (Automatic Number Plate Recognition) and cameras to start and stop the parking.

• Better customer experience and more efficient operations

• No more fines!

• Strong results and fast scalingof the solution

DELIVERING THE NEW EXPERIENCE

Outstanding

experiences

Open & scalable

cloud platform

Data driven

intelligence

DevOps: Continuous

innovation

Cloud platforms

Azure, Amazon, Google

150+ consultants

DevOps &

Hybrid Cloud

100+ consultants

Digital Business

& Experience

50+ consultants

Initia

tives

• Book-to-bill ratio*) of 1.3 in Q1 2018

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

22

CUSTOMER DEVELOPMENT

23

• New business• Existing clients accounted for 95.0% of

revenues in Q1 2018

• New customers won over the past year generated revenues of NOK 6.5 million in Q1 2018

Revenue customers splitMNOK

Share of revenue• Increasing visibility

• Share of revenue from top 30 customers up by 3 points y-o-y to 80%

• 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 44 % in Q1.

• 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

24

NEW OFFICE FACILITIES IN KIEV

25

• Construction and re-

allocation into new

professional office

facilities in Kiev in Q1

• About 230 working seats

in one floor, with option

for another 130 seats.

• Additional possibilities

for growth in the same

business centre.

26

OUTLOOK

27

OUTLOOK

28

• 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

TOP 20 SHARE-HOLDERS

*Arne Mjøs Invest AS holds a future contract expiring 13 June 2018 on 3 700 000 shares currently owned

by DNB Nor Bank ASA. The total controlling interest of Arne Mjøs Invest AS is thus 24 327 688 (29.6%). 30

*