Taking pole position
In 2021, we delivered one of the best rates of profitable organic growth in our industry while we continued to invest in digital capabilities to help customers accelerate their transition to the cloud.
Our strong performance reflects our talented people’s dedication and hard work in following our core strategy: Grow People, Grow Customers and Grow Company. We believe there is a direct link between this strategy, along with our innovative mindset and entrepreneurial culture, and the trust of our customers and partners and our ability to develop and attract great people.
Despite another pandemic year, we continued to sit apart in the marketplace with an even stronger foundation and an exciting future as the specialist in creating sustainable digital business. Digitalisation and sustainability have been mutually reinforcing during the pandemic, and we are seeing positive developments in the market for our services in all locations. To use a term from Formula 1, Itera has taken pole position for enabling businesses in various industries to transition digitally to a more sustainable future.
“I am confident in our ability tocontinue to meet the urgency of the challenges and opportunities that lie ahead for our customers and in our ability to deliver on the promise of technology in creating sustainable digital businesses.”
Best ever performance
As companies embrace digital transformation, our customers turn to Itera as their trusted realisation partner. This is reflected in 2021 being another year in which Itera performed better than ever before.
Here are some highlights:
- Itera was again ranked as one of the top 25 most innovative companies across all industries in Norway for the sixth consecutive year.
- For our core digital business, we delivered organic revenue growth of 19% and increased our operating margin, with an EBIT margin of 13.0% in 2021. We also showed 22% organic growth in the number of employees, with a net increase of 113 employees.
- We invested more than NOK 18 million in our Digital Factory at Scale and world-class Cloud Centre of Excellence, which put Itera in pole position with a full range of services and capabilities in digital transformation.
- We launched a next-generation AI-based offering for anti-money laundering (AML) for Nordic financial services organisations based on a strategic partnership with IBM and Red Hat.
- We moved into new offices in Copenhagen, Reykjavik, Bergen and Bratislava and opened a new office in Fredrikstad close to Oslo.
- Net cash flow from operating activities was NOK 70 million. We returned NOK 28 million in cash to shareholders as a dividend of NOK 0.35 per share, continuing to deliver on our disciplined capital allocation model.
Phasing out our own data centres started two years ago and has had a negative impact on revenue growth and profitability. At the end of 2021, only a few minor customers remain in our own data center, which will finally be discontinued at the end of the first quarter of 2022.
More importantly, we have been growing our core digital business – with opportunities in areas such as cloud, data and analytics, and AI-based industrial digitalisation with digital twins and automation. We are ready to digitise all aspects of any business with innovation, speed, scale, and quality. Our strategy defines the areas in which we will drive growth, build differentiation, and enable our business to create high value every day.
Digital Factory at Scale
Digital transformation underpinned by cloud and digital technologies continues to drive strong double-digit growth across our business. As a tech company, we are well prepared to help our customers navigate their futures.
It’s now commonly accepted that data is what fuels digital transformation, but it is artificial intelligence (AI) that unlocks the value of that data. However, the adoption of AI and data-driven decision making has been slower than anticipated. AI is not magic and requires a thoughtful and well-architected approach. For example, most AI failures are due to data preparation and organisation problems, not the AI models themselves. Success with AI models is dependent on first achieving success with how you collect and organise the data.
In response, we have created a Digital Factory at Scale for data-driven business with a full range of services and capabilities for contextualising data and unlocking insights across legacy systems. We are bringing together all our capabilities through our Digital Factory at Scale, from delivering three horizon digital strategies and cloud transformation journeys to cloud migration, cloud-native development, data, AI, application life cycle management and change.
More than technology, the move to the cloud is about adopting a new operating system for future data-driven business, opening radically new ways for companies to work, compete and drive value. Our customers value the depth and breadth of our services, our talent for creating sustainable digital business and our ability to find human solutions to complex challenges and to deliver tangible outcomes.
Increasing the speed of the energy transition
Digitalisation and sustainability are mutually reinforcing. As an example, transforming the world’s energy system from fossil-based to renewable-based energy sources is one of the key challenges in terms of creating a low-emissions society. The push for decarbonisation towards net-zero is a unique opportunity to transform the energy system by modernising the ageing energy infrastructure and investing in new technology to operate more efficiently and develop new business models and growth opportunities.
According to research by the Royal Society in the UK, existing digital technology, from smart sensors to advanced cloud services such as machine learning and artificial intelligence, is estimated to contribute to one-third of the required carbon reduction by 2030. The Nordic region is often regarded as a digital and sustainable front-runner well-positioned to show the way globally.
Through our strategic partnerships with DNV, Cognite, Microsoft and IBM and Red Hat, we are building new digital capabilities for the future energy system. For instance, using our Digital Factory at Scale and Cloud Center of Excellence we are developing data-driven utility asset management solutions to optimise the electric grid in the western part of the United States. With these new solutions, equipment failure is minimised, while the equipment life is optimised. The results are seen in improved efficiency, lower emissions and reduced costs, with maximum uptime and reliability of service reliability for end-users.
We enter 2022 with an even stronger foundation and an exciting future as the specialist in creating sustainable digital business. We are very focused on capturing the market opportunities, coupled with empowering our great people and the disciplined execution that we expect of ourselves.
I am confident in our ability to continue to meet the urgency of the challenges and opportunities that lie ahead and in our ability to deliver on the promise of technology in creating sustainable digital businesses. More than ever, we are committed to showing the world how to become more sustainable, create new pathways for industrial growth and deliver far-reaching lifestyle changes through digitalisation. As a Nordic-based company with global reach, we will seek to show the way.
From day one of the Russian invasion on 24th February 2022, our primary focus has been on the safety of Ukrainian employees and their families. We have updated our business continuity plans for personnel and operations for any new situation. But most of all, we admire our Ukrainian colleagues. In an almost unimaginable situation, their focus has been on resuming customer deliveries as soon as they have ensured that they and their families are safe.
Indeed, our distributed delivery model and our consultants’ high level of mobility enable us to work from anywhere as needed, including with home as part of the new normal hybrid model following the pandemic, with consultants continuing to be able to work at other Itera offices in the western part of Ukraine, as well as in Slovakia and the Nordics. As a result, most projects have been running more or less as normal through the first phase of the war. We want to thank both our customers and partners for the strong support and warm compassion they have shown us. It means a lot to us.
– I want to thank all our people for their incredible dedication and commitment to following our vision to “make a difference” every day. I would also like to warmly thank our customers, strategic partners, board of directors and shareholders for their continued trust and support.