Okay, welcome to the interim report for the Q1. We have the same agenda as normal. I will start with the highlights of the quarter and go through the business review. Then we have CFO Bent Hammer that will go through the financial review and some views about outlook, and then we have a Q&A session at the end. So if you have any questions, please post into the chat and we will look into these questions at the end of the presentation. Okay, highlights for the Q1. What is important to think about is actually our production is actually impacted by the number of working days. So in this quarter, Q1 2024, we had Easter in this quarter, but last year it was actually in the Q2.
So that has a big impact on the revenue side. But in general, we have a quite flat revenue for this quarter and an EBIT margin of 8.4%. If we look at the markets more or less as we talked about in the fourth quarter, the pace of spending and the overall business landscape have changed, of course. It's softer, but the fundamental importance of digital technology has not. So it's still the market and the drivers for digitalization is there, but this has some kind of temporary weaker software market that we see now today. But there are some spots that are quite have high growth.
Actually, everything about the cloud, data, and AI is levers for growth, and not least in specific sectors like the green transition or the energy transition is a sector that has quite large demand, I will say, compared to some other sectors that are really, you know, reducing their investments a lot. During this quarter, Itera also launched a new product. We have launched our Sapiens product, which is our own AI platform for generative AI that is launched and used by our employees. I will tell you more about that product later. The order intake is also flat. It's based on the book-to-bill on 1.0 in this Q1, and 1.0 for the last 12 months.
I also just want to mention that we have re-enterred Sweden, and I think also the setup in Sweden has been quite good, so they're also showing quite strong progress in terms of the pipeline development in Sweden. Overall, the performance, as I said, growth and profitability is impacted by fewer working days. It's about 3% less, fewer working days, due to Easter and also some lower utilization. A lot of the utilization also is impacted by that we had to spend more time on sales efforts that compensate, you know, the demand side, the softer demand. We are also quite focused on business optimization, so we have a program on that, and I think we are quite on track on that. Bent will talk more about the effects that we have from that program.
The cash flow is actually also in this quarter, it's minus NOK 47 million. It's also impacted by receivables falling due during Easter, but in general, if you look at the last 12 months, we have NOK 70 million in cash flow, operating cash flow, and very high EBITDA to cash conversion, about 80%. And the dividend, as we talked about in the fourth quarter, is actually will be confirmed and also approved by the annual meeting in May. And the people, the talent, is almost the same as it was in the same quarter last year, so we have reduced temporarily the capacity for supplies because we are also waiting for the demand to come back to the normal situation.
So overall, as you see the figures, it was a record high number in Q1 2023, so and that was very extremely high, I will say. It was the highest in the last year, more or less, and so the number of working days was very high last year and less this year because of the Easter time, as I talked about. We have 736 employees at the end of this quarter, and the EBIT margin was 8.4%. Okay, so that was the highlights for the quarter. If I go back and continue with the business review, I just want to mention that we have launched our annual report. I recommend you go to our website and have a look.
As you see, we have become a quite international company, and you can also have a deeper look into the sustainability report, which, of course, is a very important aspect of the business of Itera. As you know, as a company, we are specialists in sustainable digital transformation, so as we are 14 offices, as you see, we are following international companies based in the Nordics around the world, so we are delivering services to about 20 countries around the world. So today, we are selling across the border but also delivering across the border because we have a very, one Itera distributed model across the border, and that model is also now extended into Digital Factory that I will talk about later. What is important for Itera is that actually we are focused on growth.
That is the main driver for the people, for the customer, and for the company itself. So the inner circle is our classical, consultancy model, I will say, based on staff augmentation, more or less. Most of the revenue is in that direction. We are turning it more into project delivery, but what is also important is the outer circle, which is more focused on, industrial services, also a way to build managed services that increase the speed usability but not least also subscription revenue of Itera. So that's the focus. How do we really increase the outer circle that also have a benefit for the customer and also for not least for the growth and the profitability of Itera itself? As I mentioned, the priorities for 2024 is shown here. The first pillar is strengthening demand generation through customer squads.
That's, that's the most important for the time being that we move the attention, the mindset of the organization closer to the customer. So we have implemented the concept we call customer squads, where a larger part of the organization is actually, is a part of the customer team, I will say, and also working on new opportunities. So we have implemented almost 50 customer squads, during the Q1, and I see that these also trigger new opportunities that we, we will also have effects going forward. The second pillar is actually the leverage of a Digital Factory and the cloud journeys, which have made large investments. We see also more and more of the customer utilizing these capabilities. The third pillar is the growth areas that we talked about, the data, local, and AI.
Everything in these aspects is a high growth rate, and that's why we also focus on that. The fourth pillar is actually how do we also grow outside Norway, based on the capabilities and the position we have built in Norway because in Norway we have a full-fledged model. So how do we scale this model to other countries? I've already seen quite interesting impacts in the Q1 where we are selling across the border and open new opportunities in other locations, based on the capabilities that we have delivered in other places. And of course, we need to have a cost discipline. We are working a lot on the development of our practices and the development of our people and not least also quality in our delivery in terms of the operational excellence. Okay, so that is the strategy.
If you look at the AI part of the strategy, we have launched our own generative AI platform, Sapiens, which provides every employee with these tools in a safe and secure, efficient way. So that is something that I'm pleased to have developed the last two quarters. And I'm immensely proud of the team because they are really taking a new step in this direction based on what we have seen from capabilities that are already in place or that we are also enhancing these capabilities for more specific tools for the needs that we have in Itera but not least also for the customer itself. So it was also launched now for after using this internally, Itera. It was released for an external customer on the 11th of April this year.
So this is also a driver for new opportunities, new talks with customers because it's a high interest for the customer, and we can show them how we are utilizing these tools by ourselves but not at least also help the customer in their journey towards AI. What is also important in order to have the value of AI, you need to have value, have control of your data. So a lot of the customers today have, have a long depth, I will say, technical depth in the legacy IT. If you look at the workloads, 60% are located or 60% of workloads are more or less in the legacy part, and 40% has been moved, lift and shift. It's a 20% that are lift and shift to the cloud, and 20% are modernized.
So it's still a large opportunity in the cloud transformation space because only 40% there, and I said only 20% are modernized. So it's actually an 80% opportunity by you in terms of utilizing the cloud capability itself. But it's not only about digital transformation. It's also about the business transformation. So that is also a huge transformation that the customer will need to develop, and a timeframe for this is normally from three to seven years before you have really fused your business and digital into what we call a fusion technology, fully business integrated.
So that's, I think, a big driver also for AI that is coming to the business part of the customer that are looking at these tools, and not least they will also understand that they need to have control of the data to have more value of the models that are utilizing in the AI space. So this is, of course, a driver, I think. The AI will be a big driver for actually increasing the speed of the digital transformation and not least also the business transformation itself. So if I look into the energy, which is one of the largest segments, the second largest segment of Itera, there is a need, of course, to save the planet. There is a need for the green transition, as we all understand.
So I think also the AI and the digital transformation is really a big part of it. It's not only about green technology. It's also that you digitize it. So this is the new power couple that you have, the AI transformation plus the energy. They, they fit quite well together. I think by having the AI technology, you can really reduce the CO2 emission a lot. And, but this is not only one part. It's really coordinated efforts that are needed to create a green digital economy. And again, this is really about both the digital and business transformation, in terms of processes, people, and culture. And what Itera has also done is actually that we are looking at how could we actually speed up the digitalization by a factory which are really focused on doing more with less.
This is what we have in Itera invested for a long time, this Digital Factory. This is, if we look at the left side, according to McKinsey that has looking at the development velocity in the top quartile achieve that they the best players are really having 45 times faster revenue growth and 55% higher innovation than the other that the analysts analyzed. So this is actually what we believe has been the driver for Itera with our Digital Factory at scale and our Cloud Center of Excellence because now in order to utilize the AI and the you need to have control of your data. You need to have control of your foundation, digital foundation, what we call the digital core.
So that is what we are really helping our customer, and we are utilizing Itera because we have made this transformation over several years and have the scalability, what I told about in the beginning about the outer circle that really doing more with less for our customer. And if we look at the energy, which is the second largest sector of Itera, we had 80% growth in from 2022 to 2023. So that, that's quite amazing. And we have existing customers like Eviny, which are really being a long partner or customer for Itera, doing more and more or less with, more, more and more with Eviny going forward and not at least Eviny is also have quite large international ambitions. So that fits quite well with Itera's, you know, international approach.
For Entelios, which is also very interesting, Norwegian-based company, but Entelios actually has a Nordic position. It is a larger provider of energy in the Nordics to the business segment. So we are building a new customer solution for Entelios, enabling easier and better access to energy data. So that has been a very important project and is also a very important project for the customer in this space because they have a market-leading position. Vattenfall, as you know, the Swedish energy company, is also quite interesting. We are working from Sweden but we also have an initiative across Sweden, Denmark, and Finland together.
The last but not least, I think also can mention the very interesting startup company, Capture Energy, that are specializing in grid-scale battery energy storage, which, of course, is a very important part of the new energy system. So these are three or four examples of typical customers for Itera in this space. Every part of this, every customer here is actually have a quite international approach. So that fits quite well with Itera's approach. I also just want to mention that these tools, AI tools and technology will also increase the cloud ROI by 75% to 110%. That is also an analysis by McKinsey. So, of course, there will be some investment in the cloud. You need to invest more in utilizing the cloud but you also have a big impact on how to reduce the migration and modernization to the cloud.
Moving from the legacy to the cloud will be much faster because a program language is, of course, a language model itself. So it's much easier to convert or replace this old technology, old code to new code by utilizing the AI itself. And not least also we can look at you can have it 30% to 50% faster new application development by utilizing the tools that also have much more support by utilizing AI as a part of the tool itself. So in total, the ROE will be increased by 75% to 110%. So that's quite interesting for the players like Itera that we can utilize this technology and move this transformation, make the transformation from legacy to digital transformation and not least also start on the business transformation altogether.
Just to show you one example on this, it's actually an agreement we signed with an Icelandic customer, Wise, where we are helping with transforming the business but not least also looking at how they utilize or build their own cloud center of excellence because that will be a very important part of their business. So, this is quite an interesting customer where we can also showcase how Itera has done it and also make sure that they also make a fast step into this new business and digital model, I will say. So, that's quite an amazing customer coming into Itera and we are also having quite a good pipeline of other opportunities that we will see coming going forward.
Just to also mention in terms of increasing the speed of the software development process by 30% to 50%, one of the aspects of this is the testing part of it. So, we had quite interesting topics where we have been automated our testing, provision by, for a long time but now we have even more tools in the AI space to increase the speed even faster to make sure that testing is fully automated, including that the use cases, the test cases might be much easier to develop because you can utilize AI to establish these use cases or test cases much more automatically also. So it's really increasing the speed of testing, which is, of course, a very important part to create the high-quality software. So you can automate everything and you can launch new feature very fast.
So that's really a key component in terms of building solution in the cloud and utilizing cloud capability to launch features very fast. Okay. So that is also a topic I just want to mention because rebuilding Ukraine, as you know, we have a big position in Ukraine and I think, if you look at the war, I think everyone feels today that the war is actually, we don't know the future actually. So the illusion of peace in Europe is something that we can't take for granted. And what is the most important thing we can do is actually buy products and services from Ukraine. And one of the easiest services you can buy is actually IT.
and that is my message here that we need to really step up to keep the economy running behind the battlefield. And the reason for that is, of course, IT is, of course, a very mature service in Ukraine. It's one of the five strategic pillars in rebuilding Ukraine. And Ukraine has also done a lot of utilizing their own capability in order to digitize the public services by themselves. So Ukraine is actually ahead of Estonia in digitalization of public services. And also, not at least, if you look at the green energy transition, Ukraine will become one of the leading green energy and digital hub in Europe after the war. So we are talking about 360 GW of renewables in 2050.
So it's a large potential for producing green energy, that is also will be exported to Ukraine, to New Europe because we also need a lot of green renewables in order to make the transition that we need in Europe in order to reach our targets for the CO2 emissions. But, last but not least, also, the Ukraine IT sector generates the second largest export income after agriculture. So it really has a big impact on the economy behind the battlefield, from the battlefield frontline. So my recommendation is actually that everyone needs to look at how could you actually buy more IT services because Ukrainians are really fighting just for their freedom but also for our freedom together.
Just also to show you that we are also helping more and more customers that would like to do something special for Ukraine. This is a company in Norway called Moelven Byggm odule, which has very model-based components to establish new buildings for hospitals, for housing, whatever. That's a big need. So they are also looking at together with Itera as an advisor, how could they enter this small market. And also, they are looking at maybe after some pilots, how could they also establish a production line in Ukraine because there will be a huge market all during the war but not least after the war. Okay. So let's also go back to some of the figures before I finish.
This part, as I said, the book-to-bill ratio was 1.0 in the Q1 and 1.0 for the last 12 months. So we have some new customers like Vattenfall, for example. Enhanced Drilling is another one, and also Capture Energy. There are some new ones on this map but also a lot of existing long-term customers that we prolong or expand with new services. And if you look at the customer mix in the Q1, about 95% were from existing customers and the remaining 5% from new customers. So but we also have a very high visibility because 83% of the revenue for our top three customers are coming from our top 30 customers. So that has a big impact, I will say, on the strategic relationship with this customer because we are delivering core services for this customer.
They won't scale up and down these kind of core services because they need to build these core capabilities of the business. So that's, that's why it's have a big impact of the visibility. When the money is weaker, it's very good to have these kind of long-term customers, going forward. And if you look at the number of employees, it was, about, yeah, almost flat also. We are 703 employees at the end of the quarter. And as you see on the right side, on the bottom side, you will see that the rolling 12 months of FTE growth has really been taken down because of the demand situation. So that's the business review. So then I hand over to Bent to go through the financial review.
Thank you, Arne. And good morning, everybody. Like Arne said, we had a hard act to follow in terms of Q1 of last year where we had, you know, tremendous growth of 30% and high utilization, many number of working days. But still, we have managed to be more or less on par in terms of the top line. We ended with NOK 228 million in revenues, which was just a couple of million NOK below last year of the same time. In terms of the cost side, we had 7% more personnel expenses but most of that was due to having 5% more employees on average. If we look at the personnel expense per FTE and adjust it for any currency effects in the quarter, we had a growth of only 1.9%.
Of that, roughly half of that was one-time cost related to some optimization efforts we did in that respect. Also, on the OPEX side, we have an ongoing cost reduction program that I'll get back to in a minute. But it has shown a very profitable or a very good performance in terms of the activities we have implemented. So in this quarter, relative to last quarter of last year, we have an accretion to the EBIT margin of 1.4 percentage points. So that's very good. EBITDA ended up at NOK 27.7 million versus NOK 40.8 million of last year and an EBITDA margin of 12.1%. The EBIT itself was at NOK 19.2 million, which gave an EBIT margin of 8.4%. And again, this one-time hit was approximately 0.7% margin impact on that. Cash flow from operations, that's another area where we were sort of hit by the Easter holidays.
So the Easter Sunday was the last day of the month and that's where typically most of our receivables come due. So we had a lot of cash flow floating into the first week of April instead, approximately NOK 37 million more than we usually have in the week after the quarter end. So that will obviously benefit us when we report next time for Q2. We had an ending number of employees at 736, which was five more than the corresponding period of last year. And we had a bit more employees at the beginning of the year. So we had an average of 747 employees, which was 5% more than last year.
This business optimization program that I talked about was something that we initiated early in Q3 of last year when we saw that the market was slowing down a bit and we had a slowdown also in our billable utilization. So we had to do something about the cost side to try to mitigate that. So we identified a program to slim cost by the equivalent of around 1.2% to 1.6% of revenues to improve margins in that sense. So that gave some immediate effects also in Q4. Now in Q1, we have, as mentioned, 1.4% improvement into the EBIT margin as a result of this lower spending. And that yeah, there are a number of initiatives related to that, of course.
But yeah, overall, we have been tightening our belts a bit to not be so yeah, to cut down spending, to get back to the previous levels where we saw in the pandemic, where we had benefits of less travel, etc., and interaction, of course. But it was important for us to take control of the expense side and that's what we've done now. So we see that we're down at six-point something percent of revenue, which is close to where we were at in the H1 of Q1, sorry, H1 of 2021. The sequential development of revenues and earnings, we see that we have had a number of years of tremendously high growth of more than 20%. The last two years now, we've just dipped below 20% but still at 19.4% growth on average for two years.
And the EBIT margin has also been going down lately, both due to some external factors but also, I would say, internal factors. The external being the Ukraine war as a dominant thing for our part, also the impact on the economy at large. But obviously, as a company with a solid stake in Ukraine operations, we were hit particularly hard in that sense. But I think we have mitigated that in a tremendous way, both in terms of our Ukrainian colleagues and really putting the effort down into upholding the business and delivering to customers as normal. But also, we have set up new offices in central Europe to try to sort of ease the pressure of our Ukrainian operations a bit. So that leads us to also some internal things that we have done in order to build the company for the future.
So both expanding the locations we have in order to better secure supply side. Also, we have invested in this cloud and application services areas. So we are better equipped to help our customers with their projects in the future. And also, we have also implemented a new office in Sweden, which we're building up gradually now to take also that market. Yeah, there are a number of areas where we see that we will be able to recover the margins again. The foremost is, of course, to get the market back in such a way that we have utilization levels that are back to normal. That will be a huge impact, obviously. But also, if and when the Ukrainian war is over, we are very well positioned to take advantage of that, both in terms of doing local business there but also helping Nordic businesses capitalize on the rebuild.
Yeah, like I said, in the cash flow, a bit low figures in terms of cash flow generation from operations. But that's just a few days of timing issue that we will benefit from in Q2 instead then. On the investment side, there was nothing special, really. Most of the investments done there are investments into our intellectual property rights, predominantly in the subsidiary Compendia. So that's kind of a normal run rate of investments we do into those products. Now lately, it's the AI components that we're building into the software that we're investing in at the moment. In terms of financing, nothing special there either. We did have an employee share purchase program at the very end of Q3. But we have a record date for transferring the shares in the first couple of days of April. So that will be visible in the Q2 reporting.
So there will be some positive cash inflow from the sale of that. In a 12-month rolling period, we see that we have generated NOK 78 million from the operations side. That corresponds to an EBITDA conversion of around 80%. And this is very normal for Itera that we have a high conversion of our earnings into cash. And we have very little need for surplus cash. So we have a strategy of paying back to the investors as soon as possible, really. So that brings me to the next point, which is the dividend distribution where the board has announced already in the Q4 presentation that they will propose NOK 0.40 per share as an ordinary dividend in the general assembly that will be held on the 22nd of May.
And they will also ask again for an authorization to pay a supplementary dividend at the end of the year or whenever it chooses to so that we can distribute more money faster than sort of the current liquidity would allow. The share price, taking into consideration the NOK 0.70 of dividends we have distributed in the last 12 months, has been flat. And I think that's pretty even to our peers, at least in the Nordic market. Not a lot of movements lately. I think there's a wait-and-see attitude at the moment or has been so far, at least. We have almost NOK 20 million in owned shares before this sale to our employees. So that brings down our equity by some amount, which is now at 20%. He's incorrectly saying 31st of December to be March, of course.
We have also added about NOK 37 million to the full balance. That's to do with the right of use assets where we have capitalized on the seven-year office lease agreement for the new headquarters we moved into in Oslo in June of last year. Other than that, there were no very specific movements on the asset side. We have a little bit more receivables. As mentioned, that's due to a lot of cash conversion coming in the first week of April. That was it from the financial statements. In terms of outlook, we have left this slide unchanged since the Q4 reporting in mid-February. We still see that there is a lot of underlying demand for digitalization.
We believe that this will be a key tool for businesses that are now, as we read about in the financial press, implementing larger cost reduction programs to right-size their businesses. And in order to do that, you need to have digital processes replacing more analog to get some productivity gains. And we also, of course, see that the introduction of AI tools mean that you need to have your data in a manner where you can actually use it more effectively using these tools. So that means a lot of migration from old on-premises systems to more modern cloud systems. So that's also, of course, a huge opportunity for us. Yeah, so our focus will continue to be to grow but do so profitably.
We're right now balancing the desire to cut down cost in order to have shorter-term profits with having a capacity ready to take the upsurge in demand that we expect to come in the not-so-distant future, probably towards the end of the year. We would expect to see a good traction again. We expect that to continue and accelerate into 2025. We're bullish on sort of the medium to long-term perspective. In the short term, I think we will see some of the same gradually picking up. We see that in the last few weeks or so, we see some signs of stabilization and perhaps a little upturn. It will take a few months before we get the full effect, we think. Okay. I don't know if there are any questions posted online. Today, we don't have any questions. Okay. That's good.
But if you do, please reach out. You can always reach me or Arne. We'll be happy to engage in one-on-one discussions with you or do a fuller company presentation if you like to get you to know us better. Otherwise, we will be back and report the Q2 on 15 August . So I hope to see you there.
Yeah. Bye-bye.
All right. Thanks. Bye.