Good morning, everyone. Welcome to the interim report for the second quarter for Itera. We have the same agenda as previous quarter, so I will start with the highlights of the quarter and the business review section. Bent Hammer, Chief Financial Officer, will walk through the financial review and outlook, and we have also a question answer section at the end. If you have any questions during the session, just post in the chat and we will follow up at the end of this presentation. Let's start with the highlights for the second quarter. I'm very happy to say that we managed to reach a growth rate, which is all-time high for Itera in our core digital business, which is actually 94% of our total business. It's a huge growth rate of 24%, and we also managed to have an operating margin, EBIT margin of 15%.
What we see in the market, just in brief in the beginning, is actually that the digital adoption curves are really accelerating. We're seeing that for the last six, seven months across every industries and every business function driven by COVID-19. The market for our services are very positive in all locations. We have invested during the first half year about NOK 15 million into a world-class cloud center of excellence because everything is about cloud. We managed to do this investment, and we completed that project by the end of second quarter according to plan. What I think also important to mention in this presentation is also that we are also establishing new offerings in terms of anti-money laundering solution based on artificial intelligence in partnership with IBM.
If I look to the book-to-bill ratio, it was 1.0 in the second quarter, and it's 1.2 the last 12 months, more or less according to the growth rate that we're showing. Number of employees increased by 76 people the last 12 months. We also have a good, strong operational cash flow of NOK 77 million the last 12 months. We also paid an ordinary dividend of NOK 0.25 per share in the second quarter. If I just look at the high-level number, Bent will go into more details later. Again, 25% organic growth, that's all-time high, 50% EBIT margin, and also 16% growth in number of employees. You see that it's both a sequential growth, good sequential growth rate, and also the margin is quite well-established at the 15% for the core digital business.
Okay, let's go into the business review section. We'll start with some figures about what's really happening in the market. Because of the COVID-19, we have seen extreme acceleration of digitalization and sustainability. If I refer to McKinsey, they are saying that the adoption of technology, digital technology, has increased by seven years the last 12 months. That's a global number. In average maybe two times in the Nordics and maybe 10 times in the eastern part of the world. That is because everyone is talking about putting the systems into the cloud. It's not only talking about one cloud, it's talking a multi-cloud, and also not least also combining what you have on your own premises and also make sure that it's really scale out into the cloud. The cloud is not only the centralized cloud, it's going into distributed cloud.
We're also seeing new devices we call at the edge, where all kind of IoT is actually also having a more intelligent computing power. You need to really look at the full value chain. In that case, we can't use the old stuff that were in the past. We need to also use the new technology, the new computing architecture that is actually built for this future. This future has become today, actually. That is what we are seeing, the adoption curves. That we can also look at, if you look at, for example, the number of connected devices based on some analysis by Gartner and Microsoft saying that in 2023, there will be 2 billion devices that will be connected per year. That's an increase of 50% what we had in 2020.
If you look at the edge where the data, the growth of the data in the 2021 - 2025, the average growth rate will be about 33% on edge data. As you see at the curve, it's actually more or less at the same growth rate that we are seeing at the cloud data. The data at the edge and combining with data in the cloud is really accelerating. Because what we see is actually that the whole society needs to be more sustainable, and digitalization is really a key tool in order to manage to build the more sustainable and digital businesses going forward.
It's a combination of looking at the full value chain from the consumer that has been using this kind of technology into industries that haven't used this kind of technology at the same level of maturity that we are seeing in the consumer space. Now the fastest growth is actually in the industries because there's a lot of technology, but the data are locked into silos. We need to unlock the data, liberate the data, make sure that this data are really available for building new solution and new processes and turn industry into more green, sustainable future. Itera is actually having this position. We have established a Platform First strategy for three years ago, so we have put a lot of steps going forward.
Now in Norway, for example, this is to show you just from an event we established in terms of Industry 4.0, where we established and tried to set the agenda for Norway in terms of our green transition from oil and gas dependent economy into more greener. We were transforming oil and gas into more offshore wind because according to European Green Deal, 40% of the energy mix in 2040 will be on offshore wind. You know that Norway has a very strong position in the offshore. Now we will turn that industry into more offshore wind, which is a huge potential of global position for Norway in terms of the existing industry, but also not at least the need to have this kind of data in order to manage this kind of transition.
This is just to show you one example where Itera is taking a strong position. What is also important that Itera, through COVID-19, or the pandemic in general, have really take new step into manage to be able to take a full stack to transform businesses, to transform industries, working from the new business models or the new product, digital-enabled products, and make sure that we are working from the strategy and make sure that we define the new products that are user-friendly, that the consumer are integrated, and we will also manage to build the solution and manage the solution with the security that is needed to make sure that this is really happening in a safe and secure and controlled way.
That is what we have established during this global pandemic, and really taking new steps to be able to transform companies and transform industries into the future, which is termed or named as the Fourth Industrial Revolution. That's why I think it's so good to be based in the Nordics, because the Nordic region is really a digital front-runner and a sustainable front-runner. Building this solution for these first movers in the market can also have a global scalability of Itera. Today, we are delivering services to about 20 countries around the world. We are not dependent on location any longer. We can actually deliver to all over the place and have shown that we're delivering services to the east and to the west. We're delivering our services actually to any places.
That has been a part of the design of the operating model at Itera. We are building a delivery factory at scale, what we say, for data-driven businesses. When we engage a customer, we will provide innovation, we will provide speed and agility, the cost efficiency, and also the control, including the security, which is extremely important when every asset are dependent on data. You need to have high-quality data, you need to be secured, et cetera, according to the requirements. We're also working very close with partners because partners are also important part of Itera that we manage to scale and use and extend the value on every kind of technology that is available from global players like Microsoft, IBM, Red Hat, Cognite, whatever.
I think the beauty of Itera's business model has been this kind of distributed model that we established for more than 10 years ago to have one culture, one Itera, that managed to work multi-discipline across borders, across location. We have the demand side that can be from anywhere, but we also have the supply side that could be from anywhere. That is where Itera has building our position to make this scalability in terms of clients and also in terms of supply chain of it. In order to build these kind of new solutions, you need to also refactor or re-imagination your own delivery model because we need to have a delivery model that is shaped for the future.
That's why we have made this investment in second quarter and actually in the first half year, and we completed that project successfully in second quarter. In this way, in our cloud-centric region, everything is managed as a code. Everything is automated, not only the infrastructure, but also, of course, the application layer.
We are thinking about how should you maintain, how do you continuously develop, and how do you continuously maintain your application into one cycle? That is what we have established, this kind of landing zone where we have any kind of workload that we put together, the needed services that enable this workload to really have the best functionality and in the protected environment to make sure that when we start on some kind of new engagement, maybe we can have 50% functionality in place because we have the skill set about the services in the cloud platforms and all the partners, that we really manage to combine these services and then extend the value on top of it.
That has been a really important part of the design model of Itera that we have worked on very hard the last, I will say, three to five years. Finally, we are really ready to make this kind of factory scale for any customer in any place. One of the customers we have talked about, and you might have seen and heard about this very interesting startup as a part of the Aker Group. We are the largest partner to Cognite, we are the largest partner to Aize, that are really contextualizing data or unlock the data or liberate the data across the full value chain in Industry 4.0 heavy asset industries. Then we are building new solutions on top of it.
Itera is actually a part of the team, fully integrated, the largest provider of services to Aize in this case, where we are really building digital twin solution, access into digital twin, and make sure that we are redefine processes and make sure that maybe the vendor space or maybe 3,000 vendors that are a part of this value chain that really can share information and optimize the solution across, make it more greener, more efficient, make things that has been impossible in the past that is really possible when you have the data. More smart maintenance, more production optimization, et cetera, more safety, whatever. That is really interesting part, a very interesting customer. This is just to mention one. We have other customer that are also going in that direction. I think this is really what we see, this factory thinking, this kind of capability was established.
They are looking for partners that have this global scalability in their company because these startups really are setting a global ambition for the company when they start this company, establish a company. I just also want to mention one example also of solution in our banking and insurance industry, which has been our main sector. This is in terms of anti-money laundering, the financial crime space. There's a lot of stuff coming in there. It's a very complex environment to really manage all kind of failures or transaction that might be in some kind of criminal action. In terms of anti-money laundering, you need to have another approach in order to manage to identify and systematically with more intelligence to know where this kind of mistrust transaction is happening.
We really believe that artificial intelligence is the only tool that can manage to reduce the money laundering and also reduce the financial crime that you see when everything is getting more digitized all over the place. We are making a very strong partnership with IBM and Red Hat is acquired by IBM, where we have this multi-cloud, multi hybrid cloud solutions, using artificial intelligence to really address this kind of global challenge for the whole financial industries. I have quite high expectation together with IBM to take a strong position in the financial industry in Norway because IBM have acquired company for three, four, five years ago that are really having very niche application based on state-of-the-art artificial intelligence platform.
This is just to show we in another example are using technology to address a new challenge that is impossible to solve in the traditional way. I also want to mention that we also in the second quarter managed to establish win new frame agreements in the public sector. That is also important. We have mentioned three big buyer or services in Norway, NAV, Skatteetaten, and Statens vegvesen where we in a vendor alliance has actually established agreements for the next four years. It's 2+1 , +1 , where we have almost the full range of services in place. I think this is also important to make some kind of sustainable demand side because, and also working for the public sectors.
We haven't that kind of share in that space, but because we are waiting for the more distributed model, and I think there's some kind of changes also going into the public authority because they also learned to use distributed model when people were working from home. As I mentioned also, the order intake, this is showing just some logos, but we have a good book-to-bill ratio in average, 1.2 the last 12 months. In this second quarter, it was 1.1, but this has some kind of differ from quarter to quarter. I always looking at the last 12 months. I think that is more or less according to the growth rate of 24%. What I think is quite interesting to look at the customer development itself, is actually that about 14.5% are actually new customer.
That means customer that we managed to close for about 12 months ago. It's a revenue which is generated, provided from customer that is new from Itera the last 12 months. That represent, as you can see on the blue column, had some kind of reduced reduction during the COVID-19 2020. Now we see it's coming back to 15%, which I think is a very good KPI that we are also focused on new logos to have the growth capacity or the growth on the demand side in order to scale out to new customer. Also, if you're looking at the share of revenue from top to 30 customers, is 74%, down by 2% from 76% last year.
That is okay for me because that's the part of the. We try to get more customer and that also have influence who is the amount, the share from the top 30. It has been very high, 76% is extremely high, I will say. Taking a little down has been a good change because we would like to also build and establish a relationship with new clients, so we will also increase the number of business from new clients. Also, it's very interesting to look at the transformation of their own data center. As you can see, it was 90% at the fourth quarter of 2020. In the second quarter, it was 6%. We believe that by the end of this year, it will be close to zero.
That is how we have presented these figures. In 2020, we started to make a split between the core digital business and the transformation of their own data center into the cloud because that will reduce the revenue and also reduce the profitability. That's a part of strategy because we really believe that there will be a pent-up demand when we are ready to approach other customer that also are doing the same process that we are doing with our data center, move their workloads into the cloud. In terms of employees, I think that's also showing a good progress because as I said in the beginning, we increased the number of employees in the core digital business by 76 FTEs the last 12 months. We really believe, as you see, the curve is really showing that we are increasing the speed of this.
I really believe we can maybe also double that to reach a growth rate of 150 FTEs net on top each year because we have the supply model and we have the demand. We're really now trying to get even more focused on this part because the demand is in place, and we really like to scale up the recruitment from more locations in order to manage to onboard more people into quite structured way. We have established a lot of structure in the company, so it's really more easy to onboard a lot of people into Itera and don't have any kind of bottlenecks or weakness in the processes. We managed to build a company that really can increase also the supply side of Itera. That was actually what I would like to mention about the business review.
Maybe Bent will, or not maybe, but I know that Bent also have very good and strong message about the financial review. Please, Bent, take us further.
Thank you, Arne, and good morning to you all. You already spoiled the main messages. I'll try to shed some more details around this. As Arne mentioned, we are focusing the financial reporting on the core digital business, which represent now 94% of the total business, and it's the business going forward. We believe that gives you a better view on how the company is really performing. Let's dig into that. 24% top line growth, very happy with that. We saw a very strong growth even for our largest customers, which goes to show that we are building an even stronger position at those big multinational companies, and that we were able to compete with the big players in the IT consulting space. We also attracted some new logos, which have developed quite rapidly, a few of them.
We’re also able to scale fast with new clients with our distributed delivery model. Quarter two also showed better utilization of our consultants. We also had to do a more systematic approach to using third-party subcontractors to help out fill demand from our customers. The latter part also shows up in the cost of sales, which is up almost NOK 4 million or 46.8% from last year. Personnel expenses are approximately the same as our top line, and that, well, obviously the dominant reason is the number of employees increasing, but we also saw salary pressure as well as some costs related to the enhanced employee share purchase program which we launched in June. We had some more bonus accruals. Lastly, we had some COVID relief measures from government last year that we didn’t have this year.
Other operating expenses are growing not as fast as the number of employees. We are still seeing some abnormal, I would say, low spending levels on things like travel and social events, external courses, et cetera. Particularly on-site courses, that is. We believe that this will eventually grow again. Maybe not as much as back to historical levels, but nonetheless. Depreciation is down NOK 1.5 million in the quarter. That has to do with us subleasing some of the space in Kyiv because we have people working more from home at the moment, but also we see that that's probably going to be the case for the next year as well. We subleased it for that period.
This will also pick up again next few quarters as we have now or are in the process of relocating to a bigger space in Bratislava, in Slovakia, due to the growth there. We also will see the depreciation charges coming from the big investment we've done in the cloud center of excellence the last six months. We ended up with EBITDA of NOK 28.7 million, up from NOK 23.5 million last year, and an EBIT of NOK 22.3 million, which was up a full NOK 6.7 million or 43%, giving us an EBIT margin of 14.8%, which is two points above last year. Very happy about the growth in number of employees, adding 76 people in this business from last year. We see that the recruitment is still very strong.
Q3 is also traditionally a good recruitment quarter in Norway at least, where we do a lot of graduates coming out of the universities at that point in time. Looking at the sequential development, we see that we have now four consecutive quarters of growth. Q3 will fall back again because of all the vacations taken in that quarter. Nonetheless, we're on a good trajectory for the growth. We also see that we are growing profitably, so we've managed to keep an EBIT margin of 10% or more for all these quarters showing back to Q2 of 2019 here. The last couple of quarters, we've also managed to be around the 15% mark, which is very good for our line of business, I would say.
A small portion of that margin, I should say, does come from the COVID-related activities that are lower at this point in time. For example, travel costs. That will take a little bit of toll on the next few quarters as we open up the economy again, I hope. Subscription revenue from the data center operations, as we also communicated the last quarter, this took a huge hit as of January 1st when we exited the biggest customer on that and also some other smaller ones. We'll continue to see a drop in this revenue and intend to bring it down to close to zero at the end of the year as we complete this migration. In the meantime, of course, this puts a toll on our earnings. The revenue from the data center operations were down NOK 8 million or 64% to NOK 10.3 million in the quarter.
As we build down the revenue stream, there will be a lag in terms of building down the cost base or shifting also the employees over to the new business. Next phase now in H2 will be actually doing the migration projects. That will give some service revenue for that. Not full revenues as we do this in a semi-forced way with our customers, or at least the speed of it is faster than they might have dictated themselves. We had a loss in this data center operations of NOK 5.7 million in the quarter, compared to a marginal positive result of NOK 0.3 million in 2020. Nevertheless though, even considering this, we had a positive growth on the total business of 7.5%, and we actually increased the EBIT marginally, almost keeping the EBIT margin in line at 10.3% versus 10.6% of last year.
Moving to the cash flow. We had cash flow from operations of NOK 24 million. This was down close to NOK 16 million compared to last year, that's entirely due to the Norwegian government's grant, or Danish government as well, granting extensions on payment of tax and Social Security. That was postponed till Q3 last year. That has had a positive effect in Q2 in 2020. Cash flow from investment activities were high at NOK 11.7 million as we did this investment in the Cloud Center of Excellence. Last year we also had fairly high investments due to the implementation of a new ERP system. The cash flow from financing activities were high this quarter as it was in the second quarter of last year as we both acquired a lot of own shares. We did sell out some of it to employees as part of our incentive programs.
Nevertheless, approximately NOK 15 million in net spend on that, as well as paying out a dividend of NOK 0.25 per share. That gave a negative cash flow of NOK 38 million. That leaves us with NOK 15 million at the end of the period. This will then gradually build up again during the next couple of quarters, Q4 traditionally being the quarter where we generate most of the cash from operations during the year. Yeah, NOK 77 million has been generated from operations over the past 12 months. Again, that was with the postponement of last year into Q3, so that it's artificially low in that sense. Looking at the dividend payments, the annual general meeting confirmed the board's proposal to pay out a dividend of NOK 0.25 per share based on the 2020 results.
It also received an authorization to pay out a supplemental dividend later in this year if they feel that the financials are right for doing so. This is a type of authorization that they have had for the past several years. We usually have used that one. Probably alongside the Q3 earnings presentation, the board will communicate something around that. The share price ended June 30 at NOK 14 per share, which was up 21% from same period of last year, 27% if you also include the dividends paid in the meantime. We have 1.6 million own shares in treasury, which at that point was valued at NOK 22.9 million. That's up by some 10% or whatever as the share price has risen since then.
We continue to pay out dividends as fast as we can, so to speak, because we don't use a lot of cash to finance the growth. A little bit, of course, in increased working capital, not a whole lot. The balance sheet statement shows a net reduction of NOK 15 million in total. The liability side is more or less unchanged year-over-year, whereas we have then paid out more dividends and repurchased more shares to decrease the equity and also the cash position. Again, this will improve during the second half of the year. I think I'll leave it with that. Just a quick comment on the outlook for the foreseeable future. We see kind of an unchanged outlook from what we reported last quarter. Very strong demand in all our business areas, really, and all our different markets.
We have, as Arne mentioned, also secured three large framework agreements in the public sector, which are kind of just waiting to be fulfilled with the resources. We have very strong growth in our existing customers. There's a lot of demand out there to digitize businesses, and no wonder, because the benefits are so great for doing so. There's a very good return on investment on the services that we provide. Quite optimistic about the near future. I don't know if there have been any questions posted online. Nope. That's fine. Arne and myself are always available for any investors that want to have a private conversation on Itera and learn more about our company. Feel free to contact either one of us. You can contact me, actually. I'll be the secretary.
Yeah, okay.
Yeah. We'll find time for you.
Arne is spending most of his time out in the marketplace, both developing customers, but also the partner side. He's busy, but he'll find some time if I'm not capable of fully servicing you.
Okay.
All right.
Let's close up, and I'll see you soon. Looking forward to the next quarter. Also thank you to all the employees that also listen to Itera. I think it's very nice that more and more people at Itera also invest in the share. That's a good sign.
Yeah.
Okay, see you soon.
Thank you.