Okay, thank you. Welcome to the interim report for the fourth quarter 2018. My name is Arne Mjøs, and I'm the Chief Executive Officer, and we will have the same agenda as the previous quarters. So I'll take the first part with the highlights, and then our CFO, Bent Hammer, will go into details for the financial section. Then I'll come back and present more about the business review, and we end up with the outlook. So we're a little delayed today, but I think we'll keep up to speed to tell you a quite good story, I think, for the fourth quarter. We have quite strong growth. We have split it between what we call the core digital business, which is the business of Itera without the data centers that are transforming into the cloud.
So if I look into the core digital business, we have a revenue growth of 9%, full year 18%, and the EBIT margin was actually 15% for the fourth quarter, for the full year 11.7%. The total business, we had a revenue of NOK 141 million compared to NOK 135 million. That's our organic growth of 5% year over year. And the EBIT was quite strong in this quarter, NOK 16.5 million compared to NOK 13.9 million last year. That represents an EBIT margin of 12% compared to 10.3% last year. As I said, we are migrating or transforming our data center into the cloud, and that's quite good development according to the plans. We established a new managed cloud services unit, which is up and running, and we have also established a partnership agreement with Arrow on all kinds of cloud provisioning and the billing part of it.
We have also started to take a stronger position in Bergen. So Bergen will be a focus area in terms of geography. We are representing Stavanger, and we also believe it's a quite good market in Bergen, and that will be the hybrid setup. So we have some people working onshore from in Bergen, but most of the capacity will be from our nearshore centers. And the board has proposed the ordinary dividend of NOK 0.25 per share. That is the highlights for the fourth quarter, so let's go into the details, Bent.
Thank you, Arne, and welcome. Yes, as Arne mentioned, we had quite good growth of 9% for the digital core business, 18% for the full year. On the other hand, we had some negative growth in the data center operations, which brought the total growth down to 5%. Our EBITDA is very strong compared to last year, up 17% to NOK 22.3 million , and the EBIT is NOK 16.9 million , actually, up 22% from 2017. And we have a full year EBIT of NOK 42.8 million versus NOK 39.3 million of 2017. I will come back a bit to the margin development in a minute to give you some more details around that. The cash flow from operations were a full NOK 42 million in the quarter.
We knew that it was going to be good as there were some spillover effects from the receivables from Q3 that fell due on the last weekend of September, and were only collected in the first week of October. However, even on the full year, we have a very strong cash conversion of NOK 57 million almost in cash from operations, which is more than the EBITDA less paid taxes would suggest. So very pleased with that. Our equity ratio is 24.5%, slightly down from 2017, and that's attributable to the impact of the accounting change related to IFRS 15 revenue from contracts with customers, which had a negative impact of NOK 3 million on the opening equity. Looking at the number of employees, we're pretty much flat or slightly down on the end-of-period number of employees. There's a bit of a change in the mix.
We have downsized a bit on the overheads and also a bit related to the data center operations, and also converted some of the roles from onshore to nearshore. So yeah, slight change in mix, but overall pretty flat. Yep. Moving on. As I mentioned in the Q3 presentation, we have split out the core digital business and the data center transformation for you in the presentation to show you that there are two distinct elements to our business now that develop quite differently. The core digital business is experiencing high demand, and we have been able to capitalize on that and produce a growth of 18% of last year. Profitability is good and growing, as I will show you on the next slide as well. Whereas the data center transformation has been hit by somewhat negative growth and also a strong dip in the margins.
We're meeting that by transforming this into the new cloud business that Arne mentioned and surely we'll speak more about later. We will, at the end of the day, probably migrate totally out of our traditional on-premise data centers as the technology advances and we are able to migrate the customers. We can see from this picture that the full growth from NOK 475 million in turnover in 2017 to NOK 531 million in 2018 is entirely and more so made up of the growth in the core digital business. Also looking at the EBIT development, we see that we had a negative contribution year over year from the data center operations of NOK 9 million, whereas the core digital business added NOK 12.4 million in EBIT. All in all, a positive EBIT development, though the margin is slightly down due to these different developments.
Sequentially, we can see that our operating revenue is going up and down quarter by quarter, and that's despite the underlying growth of 5%. This is very much affected by the number of working days in the period and also, obviously, the big vacation period in Norway in Q3. So we can see how that's impacted. I think at the moment we have approximately a NOK 1.4 million impact per working day. So Easter effects, etc., will shift this picture from year to year. As I said, the number of employees has been pretty flat throughout the year, and that's on the back of a huge growth in H2 of 2017. So we kind of consolidated our position there and changed the mix somewhat, as mentioned.
Somewhat weaker, relatively speaking, in that sense, whereas Q4 has been pretty strong, and we ended the year with an EBIT margin of 12% in Q4, which is quite pleasing. Splitting the revenue into its different components, we see that the revenues from own consultants are actually down by 2% to NOK 88 million, and that's largely attributable to where the data center operations have been hit through less change works and new projects in that area. Because we can see that the subscription revenue, both from that part of it, but also the digital tool part in Compendia, has had an increase of 6% year over year to NOK 35 million. Third-party services doubled in Q4 to NOK 12 million, and that's largely related to a project in Denmark, whereas other revenue, including hardware, software sales, and re-invoicable costs, etc., were up by 6% to NOK 7 million.
Cash flow conversion, very strong, as mentioned, with the rolling 12 months of NOK 57 million versus NOK 50 million of last year and NOK 48 million the year before that. We had lower investment spending in Q4, and that was related to the data center operations where we cut back. Full year, though, slightly higher, but that's related to investment in facilities in Kyiv. Whereas from financing activities, nothing out of the ordinary, meaning that we didn't have the additional dividend payments of 2017 in this quarter. So that leaves us with a bank deposit of some NOK 55 million , slightly down from 2017, but that's attributable to us having a lot more treasury shares, now valued at NOK 10.4 million versus about NOK 1.5 million at the same period of 2017.
If you look at the return for the shareholders, we've delivered 21% return, including the dividend payment of NOK 0.25 per share. We started the year with NOK 7.14 per share and ended at NOK 8.40. The board has, as Arne mentioned, proposed an ordinary dividend of NOK 0.25 per share, and that's about 65% of the earnings per share, and we also will ask the general meeting for an authority to decide on an additional dividend payment later. During 2018, 120 employees bought a total of 1.2 million shares. They had a lock-in period ranging from six months to three years, so we're very pleased to have so many employees being on board with the shareholding and thus have the same incentives as the owners. I think that's a very strong setup. In the financial position, I should mention that we have netted 7.
The last year's figures have been restated as we didn't do this netting in last year's figures originally. Brings about an equity ratio of 25%, just slightly below last year, as mentioned. Yeah, I think I've gone through the other things. Lastly, about the IFRS 15 implementation, it had an impact on our opening balance, as mentioned, of NOK 3 million . During Q4, it positively impacted the turnover of NOK 1.1 million , but no impact on EBIT. And full year, though, net EBIT impact of positive NOK 1.3 million . Just lastly, the IFRS 16 leasing standard will add NOK 54 million to our gross balance sheet. That's made up of predominantly our office leases. So that was implemented now January 1st. That's it for me. I will hand back to Arne to go through the business section with you. Thanks.
Thank you, Bent. Yes, let's jump into the business review section. As I mentioned last time, I always talk about the amount of data that we see in the market where every industry is actually digitizing at full speed, so this is some kind of numbers that I think show what's really happening there. Today, we see that there's more than 1 million new devices that are getting online per hour by 2020, so that's actually quite fast, and if you look at some of the other figures, the smart home will produce about 50 GB with data per day, but also the vehicle, the electric vehicle, will produce 5 TB of data per day, so if I compare to our data center, the capacity of the data center, that represents about 50 vehicles that are coming to Itera every day.
That is more or less the same size of the data center that we have in our data center, so that's actually quite enormous data that we see will come into the market because of all the new IoT devices that we see in every industry, and the main focus for Itera in 2019 is actually to always think and work with platforms, so we have what we call a platform-first strategy in order to take our position, which is actually being number one in creating digital business, and the strategic position as the number one in creating digital business has been a long-term plan. We actually started in 2014 with a customer-centric model, and then we, in 2015, had a focus on one Itera instead of having a lot of different companies. We said that we should structure the consolidated company into one brand.
We focus not only on the customer, but the customer's customer. That was the focus in 2016. In 2017, we achieved an award among the top five most innovative companies across any industry in Norway. The last three years, we have been among 25 of the most innovative companies in Norway. We are quite an innovative-driven company. In 2018, the culture in the Nordics is actually spread out or integrated in all our offices, both in the Nordic region, but also our national centers in Ukraine and in Slovakia. As I said, the focus in 2019 is actually the platform. What we mean by platform is actually two types. It's business platforms, as you see some of these guys here, the global guys, but also some local guys like the Finn and Itera.
But also these platforms are enabled by the technology platform, typically represented by Microsoft Azure and Amazon. And if you take this, everyone is talking about the future of smart city. Yes, every industry is actually digitizing. And one of the major new technologies I will see that is a part of the platform is the Digital Twins. Digital Twins is something that the engineering, R&D companies, the airplane industry, whatever, these kinds of industries have been working for a long time. But now we see that some kind of every IoT will be represented by a digital twin in a platform. So it's very easy to use machine learning and these kinds of algorithms to really make these IoTs work together instead of having more structured ways, some kind of programming in the traditional way. If then else, you don't work with that kind of programming pattern or mechanism.
You need to really go into the artificial intelligence space. And so we see that, yes, we are targeting smart cities from the different industries. It takes some time before the cities will be really smart. But we see already, if you look at some of the sectors we are working on, like the smart energy and smart utility, smart buildings, these are really targeting the future of the smart city. And what is important when you have these kinds of new technology stuff, you also need to look at the new user interfaces, a new generation of new experience. Of course, the business case, the process will radically be changed. We call it new use cases. Voice will be the preferred user interface because you can't discuss or you can't use all the apps for everything.
You need to be more intelligent in the user interface because of all this data. And there will also be new kinds of visualization tools like augmented reality or virtual reality that will also be available with not these big, big glasses, but more integrated into ordinary glasses. So these kinds of technology we see is coming. And if you look at how we build the solution, as I mentioned, it will be more based on artificial intelligence and with some kind of elastic access to computing power that we haven't seen in the past. It's very easy to spin off hundreds of thousands of service at a second. So in the past, it was you need to go to the data center, ask for these kinds of resources, and then buy them.
But in the data center, in the global public data center, you can really just request these kinds of services on demand. And I think that if you want to be some kind of digital business, you need to be in the platform. It's impossible to realize these kinds of solutions in the ordinary data center. That's why we made this transformation of the data center, as Bent mentioned, that we are really sunsetting our own data center and building new units that really focus on the cloud platforms. And this is some in the energy space that we're working on. We have an architecture to really digitize every part of the value chain in the utility space. We have also customers that are taking some part of it. But we are based on a global platform, like in this case, Azure.
We have the capabilities that are available in the market to start digitizing because all these products in the value chains will be digitized by a digital twin by themselves. And what is important for different places is actually to access these kinds of new information to build the new position in this new value chain, where we, as a consumer of energy, will also be a producer of energy because of the solar panel, whatever we have, or the battery we have in the Tesla or the electric car. So these, what we call components as assets, will be part of the new Smart Energy ecosystem. And if you have started on the Smart Energy, you can also go into the Smart Buildings because one of the business cases for energy is in the buildings. So you integrate because in the buildings, you have solar.
The building will also be a producer of energy. That's why energy will be going into smart buildings. Also in the smart buildings, there will be a lot of sensors that can really optimize or produce something quite different experience that we have in the past. Every lock will be digitized. Every kind of lighting, etc., the parking will be integrated, etc. That's some kind of platform that are based on some of the global leaders that we have established kinds of capabilities or competencies to really be able to develop, start developing these kinds of solutions for our clients in the Nordics. Also, there is a case we call I think that was quite interesting in we won this case in the fourth quarter.
But in Norway, there is some kind of quite good program at the top management from different private sector and the different public units that really look at how should we digitize or improve the collaboration, the digital collaboration between the private sector and the public sector. So in this case, we had a project for the financial sector by BITS, which is the financial infrastructure organization that looked at what is the common thing for the finance players that need to be in place. So BITS engaged Itera to build some kind of gateway. So it's very easy for all the banks to integrate with different public units both ways, actually. So we established this on Azure with all the components in the Azure that we could reuse. And we managed to build this solution by two and a half months.
Compared to if you had to do this in the past, I think it will be much more costly and didn't have all kinds of future functionality already in place. We managed to do this as a first phase that will be in production in February, but for all kinds of needs, we have all the capability, the building blocks in the platform, so it's very easy to integrate the next public unit or whatever, so that's some of the reasons for having a platform. You have a lot of capabilities. It's much easier to develop the new solution, and it's much more effective to also take the future needs that come in. We had a good order intake in the fourth quarter, 1.5 . The order intake will vary by quarter by quarter. Some of them are prolongations of existing clients.
But we also have some new players like IKEA, which is a new customer for Itera. It was driven by some kind of inbound because of a positioning platform. So we have some international players, large players that are really targeting Itera because of the platform-first strategy. It's very attractive in terms of the digitizing processes or the transformation processes that they are running. If I look at the customer development, it's been very strong. We have 95% of existing clients still continue with Itera the year after. So we have very high loyalty from the customer. We have customers that most of the customers have at least in Itera for 10 years. And that means we deliver quite high quality. We have a high visibility in the revenue stream. And also, if you look at the top customer, it represents about 79% of their revenue.
I think that's a good sign that we really have delivering quality and the customers still every year are planning new projects with Itera. That's very important in terms of the relationship and the visibility of revenue going forward. The focus forward is also to look at new customers. We have some bigger players that have started to work with Itera. It's not very high visibility in the revenue stream. I think that will come going forward because the attractiveness of the model and also the shortage of resources in the market is quite large. That will also have an impact on the nearshore ratio, which is the percentage of all staff located nearshore. In the fourth quarter, it's 45%. We set the target many years ago that we should pass 50%.
I guess it's quite reasonable to expect that it might be in place this year or next year, and then maybe this year. I don't know. But we have a very large scalability in the Azure part. So I don't see any kind of limitation. If the demand is in the market and we have the customer, we can really scale quite fast with the Azure setup because we are accessing the fourth largest pool of resources globally. And all the management processes, etc., are in place to really scale. So these guys that are running the Azure part of Itera are quite experienced managers. They have started some other companies in the past. So they have experience with 5,000-6,000 people how we are operating in this kind of space. So I don't see any kind of scalability in terms of the Azure part of Itera.
So we have good access to resources in this market. And also, of course, we are doing a lot with competence development, social engagement, etc., among the employees. So these are just to show you some of the headlines in this quarter. We have a podcast. We are introducing a lot of new employees. We also have done some kind of summit with Google, which is also an important provider for Itera. So that is just to show you some snapshot of that. To summarize, first, we will, of course, continue our solid proof to build the growth in our core digital business. We will still be investing in the managed cloud services unit, which is already running with clients. But we will continue to bring more clients in. And there will always be some kind of new stuff that we need to have in place.
For the existing data center, we will lift and shift them, so I think this new managed cloud services is also very attractive for the existing customers, so they see that we will migrate them, transform them into the managed cloud services in some kind of good and appropriate way for both parties, and the last, but also important, is actually we are also looking at the overhead. That is some of the reasons that we have seen the profitability improvement because we have fewer business units. We have reduced one management layer, so it's actually a more integrated company that also will have an impact on the profitability of the group, so that was actually what we could say about the fourth quarter, and going forward, it's more or less the same what was said before. The market is quite huge, as you all know.
Every company, every industry is digitizing at full speed. We will focus on profitability growth and cash flow. Yes, there are some investments in the managed cloud services and the transformation. And that's why we will continue to show you the core digital business as one part and totally in order to make it easier for you to look at how is the business developing. And of course, as we have said for many times, that we will continue to focus on larger projects and customers. That will also have an impact on the visibility, efficiency, and scalability of the group. So that was all we had for this quarter. Looking forward to see you back. If you have any kind of questions, please contact Bent Hammer or myself. We will always be available to support you with any kind of questions you have. Thank you.