Okay, good evening, good morning, everyone. Welcome to the third quarter interim report. We have the same agenda that we have presented earlier. I'll start with the highlights of the quarter and the business review section, and then Chief Financial Officer Bent Hammer will go into all kinds of financial details in the financial review and also some comments about the outlook.
The highlights of the third quarter, I think, again, we are delivering very strong growth and profitability in the core digital business that represented 80% of the total business of Itera. The gross profit of the net sales had a growth of 9% in the third quarter, and the EBIT margin of the core digital business was 10.2% compared to 8.2% last year, third quarter last year.
If I look at the total business, that is, that also includes the data centers, the total revenue for the quarter was NOK 138 million compared to NOK 128 million, third quarter last year. That's represented growth of 8% year-over-year. The gross profit was NOK 121 million compared to NOK 111 million. That represents the net sales growth of 9% year-over-year, a nd the EBIT of the total business was NOK 14.5 million compared to NOK 9.9 million, third quarter last year. That represented 10.5% margin compared to 7.7% margin last year.
When it comes to COVID-19, we had some, I would call it moderate impact. It was especially in the second quarter, and that also is also opportunity for COVID-19, also driving digital innovation and cloud transformation so that we are also accelerating as a consequence of a cloud transformation of our own data centers.
If we look at the people side, we are very happy that we was ranked as one of the top 25 most innovative companies across all industries in Norway in 2020 also, so that we have been rated as one of these 25 top in Norway the last five years, and the number of employees increased by 51 FTEs last 12 months, we also have a very strong rolling cash flow from operation of NOK 107 million, and that also qualifies to an additional dividend of NOK 0.40 per share, so that was actually the highlights for the third quarter.
If I go look at the figure itself, as you see the core digital business 8% of the total business, that is everything excluding the data center, the gross net sales growth was 8.8% in the quarter, 11.4% year to date. If I look at the EBIT margin for the quarter, 10.2% compared to 12.5% year to date. For the total business, it's also showed quite a good growth of gross profit growth of 9.2% and 10.8% year to date, and the EBIT margin was 10.5% in the quarter, and 11% year to date. Year to date.
In fact, every quarter is actually improving. Let's await more details about the financial when Bent continues later in the presentation. Okay, if I look into the business review, as we all know, we have the position as a specialist in creating the sustainable digital business. We are delivering end-to-end services because we understand the user, we understand the business, and we understand all kinds of technology that are needed in order to create sustainable digital business.
We have also selected three specific sustainable goals in order that impact a lot of the customer, but also Itera, how we operate in the market. We are always focused on how to make a difference for our employees, our customer, the customer and the society as a whole. So that's the foundation of Itera. Through skilled people and multidisciplinary teams, we have always a platform-first thinking in terms of business platform of technology platform.
We work as One Itera across order or across borders. We have strong entrepreneurship culture and also local ownership of the decision closest to the customer and also put sustainability as a core focus in our company. Our digital journey has been in terms of creating sustainable digital business actually focusing first on the business-to-consumer segment, typical representative banking, insurance, public retail, some other industries.
Now we are turning the focus also into business-to-business segments where the industrial potential is much larger, I will say, than we have seen so far. So we have customer in the power utilities and oil and gas that are actually moving a fast transition, I will say, into green economy, not least driven by the COVID-19 and the incentives from the government, and also not least in Europe and the global itself.
We also focus on the digitalization of the manufacturing stream or process industry, maritime and fishery. So everything is about actually going towards the Fourth Industrial Revolution. The business-to-consumer segment has been digitized. We are connected. We are using services every day, but in the business-to-business, it's just started because all the physical things need to be digitized through software.
The software in the business-to-consumer segment has been there and is quite well matured. The data is easy to connect. If you have to book a meeting in the calendar, you might also know that it takes 50 minutes to go to that place because they also are connecting to the map or Google Maps, whatever, in order to look at the traffic jams, whatever. In the business-to- consumer, we are quite connected.
In the business-to-business, we are not that connected, but there's a large potential for digitization in the business-to-business, what we call the industrial digitization. If you look at the potential in this area, it's actually that everything becomes also a software in the business-to-business because all the physical things need to have software that make it more intelligent.
According to McKinsey, if you're linking the physical and the digital, we can actually generate $4 trillion in increased value a year by 2025. If you look at the increased value that has produced in the business-to-consumer, it's more or less at the same level. According to McKinsey, the potential for digitization is at least in the business-to-business because they also need to use the software in a more intelligent way than we have seen in the past.
And that's also quite interesting if you look at some of the local players, but also based in Norway but have a global position like Aker, are saying that the value of the IT or the software part of it will be at least at the same level that they have actually built, through a long period in terms of the oil and offshore industry. So they really believe that the large value uptake will be in terms of using the software within the industry and also transform the industry into a more green economy where software is actually one of the tools that they need to have in place in order to succeed in that transition.
And if you look at the market cap of the top most valuable companies, you see that most of these listed top 5-10 companies are actually coming from the data economy because they manage to generate the revenue based on the data as a part of the business model. Itera is also doing a lot in the business-to-business.
We are looking at using the platform, and one of the platforms out there is Cognite Data Fusion. It's called a [inaudible] platform that has a very unique technology in order to get access to all the data in different silos in the industry, and put it into some kind of operational digital twin, which makes it easy to look at the total value and start to transform the industry into a new business model.
So there we have cases in oil and gas that are actually turning into a green economy, but we're also working not least with the power, utility, manufacturing, shipping, a nd the typical use cases are related to predicting and smart maintenance, yield optimization, production optimization, digital worker, and sustainability, a nd I'm very happy that the collaboration with Cognite and Itera is quite strong.
So this is just to show you one of the teams that are working for Cognite, a nd I think we have just started on a very interesting journey together with Cognite because they also have a global position. I would like to take a global position. They have a technology that is at the forefront of the development in the market, a nd that's why I think it's very interesting to work with this kind of company in order to address the new logos and new accounts in this business-to-business segments.
I'm really happy also to onboard Bjørnar Engebretsen in order to drive the industrial digitalization because Bjørnar, he's appointed as head of hybrid cloud services at Itera, which will be very focused on the public cloud technology. He's actually coming from a position as director of cloud at Microsoft Norway, where he had very overall local responsibilities to support Microsoft in establishing its global data center in Oslo and Stavanger.
He has quite deep competencies in this global data center, but also, not least, a long proven track record from different positions, not least from Evry, which has been one of the larger players in the Nordic in terms of the complexity of a large customer setting. Combining his competence from the past in terms of transforming the data center locally into a more global-based data center from the global giants is very important because we need to use this kind of technology in order to have the scalability for this massive volume of data that we see in these new industries.
So what we are doing is also, Bjørnar is heading up a Cloud Center of Excellence at Itera that will have the scaling engine for massive data to enable industrial digitalization in the business-to-business segments, but also, of course, take care of the business-to-consumer segment using public cloud services managed as a code. So that kind of all, again, it's about using the software. So we have in terms of Itera, the software mindset is a part of the core practices of Itera, and so we need to use this also in terms of the Cloud Center of Excellence because everything will be managed as a code.
So that is not only the infrastructure, infrastructure provision and software, but also the operation and service delivery need to be really automated as much as possible and using the intelligence in the software in order to look at how this operation can really scale and also take care of the security that you might see as a part of the society that's been really connected with some kind of more cybersecurity risks.
But again, we need to have the security as a part of delivery, a nd what we do is we design the security into the system from the beginning, not wait for the operation part. So that's also a new way to operate. The security is a part of the core team when we establish the relationship with the customer.
If we look at the cloud adoption is really accelerating, not least driven by the COVID-19. According to analysis by Gartner in late 2019, the analysis is actually saying that 88% of all organizations have a cloud first strategy. 11% have no and 1% only say don't know. So of course cloud is mainstream in the market and not least in the Nordic. So that also has consequences for Itera. Now the transformation of our own data center has been a part of Itera for a long time, but two years ago we had the strategy to start the transformation into the cloud. So that is actually because of, or not least this kind of survey is saying that we need to move into the cloud as fast as possible.
So in terms of our data center transition, as you say, as you see, the 20% is actually represented of the, is from the data operation of total business, an d during the next six months, it will be reduced to 7% share, a nd by end 2021, it's not, it won't be any substantial at all, a nd during the next three to six months, one of our larger clients in the infra that we have only delivering infrastructure services will leave Itera because they will be managed by their global operation.
It's a quite large international company where they have, by using the cloud, they can operate this in a more global perspective. So that has an impact on the revenue for Itera going from NOK 7.2 million in run rate today to about NOK 3 million in run rate by January next year. But most of the revenue in this space is the cost of sales because we have invested in the data center and all this kind of stuff.
We don't need to do that in the cloud. So the net value will not have the same impact. In addition to that, we will also generate new clients using the cloud. So that will also compensate the reduction in the revenue, which is low margin today, to more high margin from the new managed services based on our Cloud Center of Excellence. I'm also happy to look at the international traction for Itera. As I said, we have one of the most, top 25 innovative companies in Norway, but we are also happy to look at the delivery model that is really working very well across borders as One Itera.
According to Global Sourcing Association, we have a top one in the world, and we are also happy to, as we announced in the second quarter, that Itera also have a strong position within project management, so we are the top one player in project management across every industry in Europe, so that is also important to be an international company that managed to grow with Nordic-based clients into their international presence in other parts of the world, so today we are delivering services to about 20 countries around the world.
As a part of the social responsibility, not least during the COVID-19, Itera is also a part of the society in terms of looking how could we really contribute to the digital competence building, not only for the businesses, but for the society and the individuals.
So in this case, there were some kind of Arendalsuka, which is a quite large community where all the businesses are meeting once a year during two, three days in Arendal, but it couldn't happen this year, so it was actually digitized.
It's a digital version, so we organized a panel debate by the Minister of Labor and Social Affairs that attended, the Director General, Ole Erik Almlid from NHO, and also the head of Microsoft, Kimberly Lein-Mathisen, and myself attending this in some kind of debate that was very interesting in order to contribute to how the society could actually develop the competences in digital competence that we need to in order to be a part of the society, and we are also happy to look at how we are also onboarding graduates.
In this case, we had both students, summer students or master students that, 30, I think they were, yeah, 31 master students this summer that attended five projects. That was very successful, and we also onboarded eight graduates across our range of services in the third quarter. So we also take responsibility to make sure that the people from the education system also can attend or enter Itera in order to be part of a business, despite the uncertainty that COVID-19 has been for a lot of businesses out there.
If I look at the order intake, it's actually the book-to-bill ratio in the third quarter. It was a 1.0 for the core digital business, so there's a lot of the existing accounts, but we also see some new accounts that are coming in, and the new accounts have been important KPI for Itera.
About 8.9% of the revenue in the third quarter was from new accounts and that these accounts that we didn't have any relationship for 12 months ago. We have started the relationship for about 12 months ago. The revenue from these new accounts represent 8.9% of the total revenue in this quarter. Also if you look at the share of revenue from the top 30 customers, we have a very high share of customers that has been had a 5 to 10 of maybe 15 years. We have developed every year. I think that has also been very important during the COVID-19 that you have long relationship that you continue despite all these kind of uncertainty during COVID-19.
As I said in the beginning, we are about. We increased the number of employees by 51 the last 12 months. We are now 556 employees at the end of the quarter. The nearshore ratio is, was actually, 46% compared to 48%. In this, the last 12 months, we have onboarded more people onshore than nearshore. But that's also part of the strategy. We had a long-term direction of 50% and we will continue also working with the recruiting from all the locations. In this, the last 12 months, we have also strengthened the local presence to our customers also. That was everything from the business review. Let's go more into the financial part, Bent?
Thank you, Arne. Good morning to everybody. As Arne mentioned, we had a growth of 8% in this quarter. On gross profit level, it was 9%. Our personnel expenses grew by only 5% during this period, which gives a personnel expense per FTE 3% lower than the corresponding period of last year. There are several reasons for that. One obvious is that there are less social activities going on during this corona pandemic.
Also that the software utilization we've had has also had an impact on our bonus achievements, bonus targets. So we've had less accruals for that, a nd lastly, we have a positive pyramid shift. We've taken on board a good contingency of graduates in September. So that gives a positive impact on the average personnel expense. In terms of other operating expenses, there are also some positive corona impacts, I would say, in terms of less or hardly any travel expenses.
So those expenses grew by 7%, or then slightly less than the overall growth. That gave an EBITDA of 24.6 million NOK, up 29% from last year. Then the EBITDA margin was 17.8%. Depreciation was a bit higher, at 10.1 million NOK, which then gives an EBIT of 14.5 million NOK or an EBIT margin of 10.5%. This corresponds to 7.7% of last year. It was a very good performance in these trying times, I would say, Q3 is seasonally the lowest quarter we have, being a consulting business predominantly, and that also is normally reflected in our cash flow.
We had a pretty good cash flow of Q3 of last year from operations of 15 million NOK, but we exceeded that this year with 16.4 million generated from the operations. Giving an ending cash balance of NOK 57.7 million, which is up about NOK 12 million from last year. The equity ratio is approximately the same as last year at 23.8%. Arne mentioned the growth in the number of employees. We ended at 556 FTEs at the end of September, which is up 10% from last year. Year to date, we have similar or slightly higher growth rate of 9% on top line and 11% on the gross profit level. EBIT of NOK 49.6 million versus NOK 37.6 million of last year.
Splitting this into the two major business segments, the digital business had a growth of 8.2% in the quarter and data center operations 6.1%. The latter though grew by more in terms of gross profit, as much as 11.6% actually. They obviously have recurring revenues throughout the summer vacation periods, and that gives them strong profits in the third quarter, 12.3% EBIT margin this year versus 4.9% last year. I would say driven by more consulting businesses surrounding the data center transformation that Arne mentioned.
We have accelerated the transformation into cloud, and there are a lot of services surrounding this transformation that we are delivering at the moment. At the end of the year, we will do the restructuring to accommodate lower revenue going forward from these low margin infrastructure subscription services, so we think that we will see a one-off charge in the range of 3-5 million NOK at the end of the quarter, and then, as Arne mentioned, the revenues will drop as of January.
The impact on gross profit is obviously less due to all the related cost of goods sold to that business. Looking at sequentially, we see that the red bars, representing the third quarters, are the lowest we have during the years, and obviously that's tied into the vacation periods of the consultancy business. But we also see that there has been a positive shift in the curve on the EBIT margin from year to year. So and we actually achieved a flat EBIT margin compared to Q2 this year, which is very positive, and obviously slightly impacted by the corona situation. But in a sense that goes both ways in terms of top line growth versus the savings we see on the cost side.
On a 12-month rolling basis, we are more or less reaching NOK 600 million in top line last 12 months and growth in the EBIT of 25% to NOK 68 million, and an EBIT margin last 12 months of 11.4% versus 9.8% of the 12 months before that. It's the revenue from our own services, the consulting services that grow the most by 9% to NOK 91 million, whereas the subscription services grow by or grew by 6% to NOK 39 million.
The revenue from third-party services and other types of revenues are quite small at NOK 5 million and NOK 3 million. So the percentage changes there are not significant, though positive this quarter. The P&L results are pretty positive this quarter, but I'm even more happy with the cash flow. We have generated, as mentioned, NOK 16.4 million from operations this quarter, which corresponds to NOK 15 million of last year, which was then a very strong seasonally adjusted achievement.
Looking at the graph on the right-hand side, we can see that from the last 12 months, we have actually generated NOK 107 million from the operations, which is, I would say, extremely good compared to the underlying profits. Obviously, there comes a time when you're not able to squeeze more out of the balance sheet. I presume we will have to improve the underlying results before we can see levels like that going forward. In terms of investing activities, we have spent NOK 4.5 million in Q3 versus NOK 2.3 million of last year. The increase there is related to a new ERP system that we are implementing as we speak.
We will actually go live on November 1st. So, exciting times for a CFO, obviously. So I can only cross my fingers for everything going smoothly. It looks fine at the moment, but always, always very, very exciting. So we're looking forward to getting a new ERP system in place. From financing activities, we sold shares worth of NOK 3.6 million to our own employees.
Those were targeted placements to key employees, which got the shares for a discount in return for a three-year reservation on sales and also the discount being linked to their continued employment. So we have an option to buy back the shares, excluding the discount, if they leave the company within these three years. Lease liabilities, approximately the same as last year at NOK 2 million in outflow.
That gave an ending balance of NOK 57.7 million in cash. On the back of that strong cash flow, the board resolved last night to pay an additional dividend, based on the 2019 results, of NOK 0.40 per share. The share will go ex-dividend tomorrow, and the dividend will be paid on November 4th. That's the second dividend we pay out this year. We paid the NOK 0.20 in, I guess it was, one of the first days of June, as an ordinary dividend. Looking at the share price development, it has had a good run during the quarter as well. We ended NOK 13.95 per share, which gave us a value of our own treasury shares of NOK 17.7 million .
And we, yeah, we continue to show the high distribution of earnings, which is also why we have adopted a policy of paying dividends twice a year in order to pay out available cash at an earlier point in time than just once a year. The financial position is unchanged in terms of the total balance. It's at NOK 240 million , including the right of use assets that came from this IFRS 16 leasing adoption, which represents about NOK 38 million of that. Equity ratio, as mentioned, approximately 24%, unchanged from last year.
So we, yeah, basically the changes in the balance sheet is an increase in cash of NOK 12 million at the expense of other outstanding assets. So, I'm, yeah, I'm very satisfied with the balance sheet at the moment. I could mention as well that we have had absolutely zero impact on our receivables from the corona situation. No defaults on payments and no change in the pattern of paying the invoices, so that's comforting as well. That was it, what I was going to present from the third quarter.
Just quickly on outlook, as you may know, we don't guide specifically on the outlooks, but a few words, we still see the underlying demand for our services as being very strong. Obviously there is some uncertainty surrounding the corona impact, well, Norway as well as the rest of Europe is into its second big wave of infected people.
Although there were, or there has been some softening of spending and maybe some longer sales cycles during these times. We haven't really seen any permanent drops in demand, or anything. I think we have a quite favorable distribution of customers in the industry segments that have not been very much affected by the corona situation, as of yet at least.
We are doing this transformation on the data center, which will have an impact now in Q4 in terms of our one-off, but also the drop off starting 2021 in the subscription revenues, while we probably will have more consulting services in the cloud transformation going forward. So a shift from less recurring revenues to more consultancy.
At least I would think, through 2021, some of those services will probably be converted to more as-a-service type of models at a later stage in time when there's more matureness in the customer relationship, on those services. I should also mention that the Cognite Corporation that we are working very closely on at the moment takes some toll in terms of resources that we invest in this relationship. So, in the short term, that will also have an impact on our earnings. But it will make us stronger in terms of achieving future growth in 2021 and beyond. So that was it. If you have any questions, you may post them on the on-site Q&A section.
You may also be in contact with Arne or myself to set up one-to-one meetings if you want to hear more about Itera and our investment case. So, thank you for listening and I hope to see you back when we present the fourth quarter in February. Thanks a lot and have a nice day.