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Edited Transcript of EVRY earnings conference call or presentation 31-Oct-19 7:00am GMT

Q3 2019 Evry ASA Earnings Call

Oslo Nov 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Evry ASA earnings conference call or presentation Thursday, October 31, 2019 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Nina Mortensen

EVRY ASA - Interim CFO & Senior VP of Group Accounting & Controlling

* Per Kristian Hove

EVRY ASA - Group CEO

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Conference Call Participants

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* Christoffer Wang Bjørnsen

DNB Markets, Research Division - Analyst

* Michael Briest

UBS Investment Bank, Research Division - MD of Global Technology Research Group & Head of the European Technology Research

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Presentation

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Per Kristian Hove, EVRY ASA - Group CEO [1]

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Very good. Good morning, everyone, and a warm welcome to EVRY's 2019 Q3 presentation. And I'm really glad to stand before you today for 2 reasons. First of all, we have very strong numbers today. Secondly, it's, hopefully, an historical event, because we will, in Q4, hopefully, announce or report a combined company between Tieto and EVRY.

So with that, the clicker, let me start off. And today, I will, of course, talk about business highlights. I will update you on the merger process with Tieto, and we will walk through the numbers as well.

Today, I have Nina Mortensen with me, acting CFO for EVRY, and first quarter as a CFO. And so she's really looking forward to present the numbers.

So first of all, I'll get back to the Tieto merger, but everything is on track. And as you probably have seen, we have now announced the new management team, which we did a couple of weeks ago, and I'll get back to that a little bit later in the presentation. And we're also very pleased to see that we are continuing our journey towards a Nordic consulting and technology powerhouse. First of all, we have very good results in Consulting, 5.5% growth in Q3. We also see very strong growth in Application Services which is predominantly software, 9.2% growth in Q3. And last, but not least, Financial Services, application part, the software part of Financial Services, 11% growth. So very strong top line quarter.

The other good news now is that as we have planned, with activities in H1, we now see a ramp-up in Sweden as well. We're still not on the bar, but development is definitely positive in Q3. And last, but not least, we also see the Nordic data-driven services organizations start performing across Nordic with wins and better performance. 13.7% EBITDA margin for the quarter as a stand-alone and 11.5% year-to-date margin.

So just to recap the numbers. Q3, 13.7% EBITDA margin, very strong growth top line, specifically on Application Services and Consulting; and a year-to-date growth of 0.9% as a combined company, all revenue. If we take out Fulfillment, which is our low-margin service line, we have a year-to-date growth of 3.2%. Also very strong cash conversion in Q3, plus 90% compared to 82% Q3 2018.

So a little bit deep dive into different important areas. First of all, the TietoEVRY merger. On track. We announced it 18th of June this year. It was approved in September by both EGMs, and we are now awaiting approval from the competition authorities in Norway, Sweden, Finland and Ukraine. We still expect the merger to close in Q4, but we are prepared for a Q1 closing as well.

Some of you may have seen the new management team, and we are very proud of the mix of geographies, the mix of executive leaders from both companies in this new management team, which, I think, is very, very important for the success of the TietoEVRY going forward. It will be led by Kimmo and Tomi. Kimmo, the CEO; and Tomi has the position of CFO. And as you can see, we have business leaders from EVRY leading -- heading up the Norway with Christian. Karin will continue as Managing Partner for the continued company -- the combined company in Sweden. HR will be headed up by Trond, which has been an important part of the EVRY culture journey. And also very pleased to announce that -- or confirm that Johan will just continue to head up infrastructure, Cloud & Infra. And Wiljar Nesse will continue to head up Financial Services. So a very strong team from EVRY continuing the journey, and the whole integration office will be headed up by Malin. And for those of you who know the executive management team from Tieto, I'm sure that you will recognize many of the names there as very strong industry leaders.

So let's dig into some of the business areas. If I start off with Consulting. Strong growth in Q3, 5.5%. We are now touching 2,200 consultants in Norway, Sweden alone. So all the global delivery consultants is on top of that. And when you -- if you read the numbers, you will see that utilization has gone slightly down. Please bear in mind that we have onboarded 200 consultants after the summer in Norway and Sweden, and there is a lead time to get those new colleagues into work. But that's a very important part of the strategic direction we take now to strengthen our consulting practice, both in Norway and Sweden. And I'll also get back to employment -- the employee engagement later in the presentation. But I'm really glad to see that we have continuously also in the last employee survey, increased employee engagement across Nordics.

A couple of very important customer wins also in Consulting. The first one is we're not allowed to announce the name, but it's a very important win for us in the Nordics, large enterprise customers that have engaged us both in long-term application management, but also chosen EVRY as their partner for advanced analytics. For us, a proof that the new go-to-market model in Consulting with more specific sharp skills is paying off.

We also have a service [resister], which is on-premise to cloud project. And as we have mentioned earlier, the innovation journey goes on with Energi Lab and -- in the utility sector.

Secondly Sweden, and Nina will go back to the numbers in Sweden. But we also see a very good momentum in Sweden. 5.4% EBITDA margin, slightly down from Q3 2018. But now we see positive development from Q1, Q2 to Q3, and we're really encouraged that we see all the actions we took in H1 actually start paying off. We also see that the restructuring of consulting in Sweden has meant that we have a sharper, clearer consulting offering in Sweden, also combined with Nordic competence go into the Swedish market.

And last, but not least, I would like to touch upon the 2 upper customer logos. SilverRail has chosen to renew infrastructure engagement with EVRY for another 6 years. Also proves that our infrastructure offering to the market is really working. And Stadium, a retailer in -- with more than 170 retail stores, has also chosen to increase the scope on the infrastructure with EVRY.

Last, but not least, Financial Services. Very good growth in Q3, 11% top line growth, 14.5% EBITDA margin. And we see still very strong demand across all services in -- solutions and services in Financial Services. And I would like to touch upon one of the interesting solution we have brought to the market, Handelsbanken Norway has now implemented financial dashboard from EVRY, which means that all enterprise customers logging into the bank will have a totally new customized dashboard, which they can actually customize themselves. Quite new in the bank and finance market and very interesting to see that potential going forward.

We also see a very good momentum in Cards, 2 large contracts signed in Q3. We are not allowed to disclose the names, but basically, full value chain on payment and cards for the first one and delivering cards to one of the largest banks in Sweden is also signed in Q2.

And then just to give you some insight into what the journey ahead of us in Financial Services are. Some of you may have used chatbots, and very often, that's quite frustrating because it's question and answers. We are now prototyped and are about to test it on customers, a chatbot with actually execution capabilities, meaning that it's integrated with back-end systems, and you can perform actual tasks in the chatbot window. So this is next-generation dialogue, which we call conversational banking. And as you can see here, we're actually testing the core systems and doing actual transactions in the background. For those of you interested in this, there's a white paper when you walk out of this presentation, and you can just grab it as you go.

Last, but not least, we had an ambition, which we also articulated in the market that we would hire 800 new colleagues in the Nordics. The internal ambition was 1,000. We are now north of 900, so we'll exceed also the internal ambition, which is very important for us. And one of the reasons we're able to attract talents is also the branding and the perception in the market. What we see now is that we are ranked very well at different indexes. So the She Indexes came out a couple of weeks ago. We were a top IT company. We also ranked now #1 by Young Professionals in Sweden. And as we have announced earlier, very, very high ranking in the Universum Q2 report, which will also come out with the new numbers a couple of weeks ahead.

And as I touched upon in my introduction, whenever a company goes through large changes, like a merger is, 24,000 people is going to join the new company, you could expect that employee engagement is flat or decreasing. We see all-time high in our recent employee survey on all parameters. So that goes for pride, commitment, leadership, executional capabilities, and total indexes is increased 1 percentage points from a very, very high level. For those of you who know Net Promoter Score of almost 70, which is down there, you will recognize that, that's very high across all industries.

So with that, Nina, please.

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Nina Mortensen, EVRY ASA - Interim CFO & Senior VP of Group Accounting & Controlling [2]

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Thank you, Per. I will start by going through the financial highlights, and then I will also go more into the details behind the performance this quarter. As also Per mentioned, I think, we're very pleased to see that we're back in growth this quarter. We have an overall growth of 2.5% in the quarter, and if you also take out Fulfillment Services, we have a growth of 2.9%.

And we're especially also pleased to see that we are continuing the good growth within both Consultancy Services and Application Services. As you can see on the far right on the slide, we see that Consulting Services had a growth of 5.5% in Q3 and Application Services with a growth of 9.2%. And also see that the change in the revenue mix is also supporting us to maintain a good EBITDA margin of 13.7% in this quarter. We also had a quite strong cash conversion. Ended up 90.5% as of September. That's up from 82.8% in the third quarter last year.

And the backlog is at NOK 16.7 billion, which is slightly down compared to last quarter. But as also communicated before, that's also quite natural when you see the change in revenue mix, as not all consultancy contracts are in the backlog figures. And we're also starting to see improvements in Sweden, as Per also mentioned, and that I will also come back to later in the presentation.

So looking more into also the growth. As I said, we had a growth of 2.5% this quarter. Take out Fulfillment Services, which is low margin and not that much of a focus area for us anymore, we see a growth of 2.9%. Year-to-date, we have a growth almost at 1%. Excluding the Fulfillment Services, we are at 3.2%. Looking a little more into the details behind the growth this quarter. I think we're also especially pleased to see we have a very good growth, both within Financial Services, but also in the Norway segment. It's 6.4% in both of the segments. We're also especially pleased to see that Norway has a very good growth, both within the Consultancy and the Application Services, in line with our strategy.

Financial Services is also seeing a very good demand across all service areas and solutions, and both the banking area and the Card Service areas had good growth this quarter.

As I mentioned, we see that the revenue mix is in line with our strategy. As we can see also on the slide here, we are moving from 31% and 32%, respectively, when it comes to Consulting Services and Application Services, to 32% and 33% of the total revenues in Q3. And also to repeat, Consulting Services with over 5% growth this quarter, and Application Services above 9%.

We see the same trend also year-to-date and even higher shares of the total revenues within Consulting and Application Services. And year-to-date, we also have growth of 5% in Consulting and almost 8% in Application Services.

Moving on also to look more closely on the EBITDA for the quarter. We had a good and solid EBITDA margin of 13.7% this quarter. That's in line with what we had also for the third quarter last year. We see especially a good EBITDA margin and development within the Norway segment, which reported 11.9% EBITDA margin this quarter compared to 10.3% in the same quarter last year. And also Financial Services with 14.5% this quarter is also very good solid performance. So overall, a very solid performance in both Norway and in the Financial Services segment.

So now also let's move on to looking more closely also on the Sweden segment. We are really starting to see improvements within Sweden. And the activities and initiatives and the change in strategic directions is really starting to pay off. Sweden delivered EBITDA margin of 5.4% this quarter. That's somewhat lower than the same quarter last year, but we see a significant improvement from both Q1 and Q2 this year. So we're very pleased to see that, and we're also expecting that improvement in performance to continue also in the next quarters.

Other income expenses related to IBM was NOK 241 million year-to-date. We had merger cost of NOK 47 million year-to-date and also exit cost of NOK 11 million. That's in total NOK 299 million year-to-date in the P&L effect of other income and expenses. The cash flow effect was NOK 229 million in total year-to-date.

As also communicated in the Q2 presentation, we will also have significant merger cost of NOK 150 million to NOK 200 million, where we also expect most of it to come in Q4 when we will also close the merger most likely.

Then also looking a little bit more on the cash side. Also as mentioned, strong cash conversion of 90.5%, up from 82.8% in the third quarter last year. These are all LTM figures. And we see that -- the increase in the cash conversions, it's due to both strong cash collection, we have reduced working capital outflow and also improved margins. And we also see that the free cash flow is also increasing, both compared to the third quarter last year, but also compared to the previous quarters this year. So we're quite pleased with the development in our cash performance.

Looking at the net leverage. We ended at ratio of 3.34x at the end of September. We have long-term interest-bearing debt of NOK 6.8 billion, whereas NOK 1.4 billion is related to IFRS 16 and the lease -- long-term lease obligations. We do expect a positive also cash flow in the Q4 that will also reduce this ratio somewhat when they come also to the end of 2019.

So with that, I would just like to sum up this Q3 presentation before I hand it over to Per, again, and that we are -- to see that, we are very pleased with the continuing growth within Consultancy and Application Services in line with our strategy, also supporting a solid margin of 13.7% this quarter. We also see the improvements in Sweden and initiatives that implemented really starting to give effect that we're really pleased with. And also looking forward, a solid backlog of NOK 16.7 billion also really supports for future growth.

So with that, Per?

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Per Kristian Hove, EVRY ASA - Group CEO [3]

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Very good. Thank you, Nina. And then I'll wrap up with an updated guiding for 2019.

On the revenue, we had the guiding of 2% to 4%. We have chosen now to narrow it a little bit down to give you more information. So first of all, we predict that the combined revenue of Consulting, Applications and the Infrastructure will grow around 4%, and Fulfillment will decrease year-over-year with about minus 20%. So all together, we then expect that the total revenue growth will be around 1.5% to 2%.

Secondly, we have a guiding of 12% to 13% in the EBITDA margin. We have now chosen to narrow it down to 12.1% to 12.4%. As we approach the end of the year, we have more insight into the end results.

On other income and expenses, we stick to the NOK 250 million, and we still predict that we'll land around NOK 250 million on the other income and expenses related to predominantly IBM. On top of that, we also will have a merger and acquisition cost of NOK 150 million to NOK 200 million, which also is in line with what Tieto reported.

CapEx will be slightly higher than the guiding, started off in 2019. So we will now guide on 4% CapEx, and that is due to the large project in Finland with Handelsbanken, where we both put up a currency layer on euro and also prepared a whole core and payment solution for 8 national markets.

Last, but not least, we have taken out the dividend as that will be -- if the closing goes as planned, will be up to the new company and the new Board to decide.

So with that, I'd like to open up for questions. Christoffer?

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Questions and Answers

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [1]

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Christoffer here, from DNB Markets. So yes, as the first, I would just want to say I'm really happy to see the performance in the Consulting business and the Applications business as well as Platform Services. That's really nice to see. But going into Q4, you gave a comment that you expect the revenues, within Sweden, to stabilize. Could you just elaborate then a bit on the mix, what you see this far this quarter in Q4? Do you expect also -- that means, it's stabilizing in Q4 compared to what? And what you're seeing in EVRY Norway and EVRY Financial Services thus far for this year -- quarter, sorry, quarter?

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Per Kristian Hove, EVRY ASA - Group CEO [2]

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Yes. So let me start off with Sweden. First of all, bear in mind that we have had a focus in Sweden on profit, not top line growth, because we basically need to change the service mix quality in Sweden. That strategy will continue in Q4, meaning that we'll still focus on consulting. We've onboarded a fairly large portion of the new consultants in Sweden as well. And we have, as you may recall from the Q2 presentation, introduced the 7 practices in Sweden as well to make sure we are more streamlined. So Consulting, we're expecting to continue growth in Consulting in Sweden.

Same goes for applications. We're strong in some of the segments in Sweden, including public sector. And then we have still continued activities to make sure that we just continue to deliver strong Infrastructure Services in the market, but also have higher quality in Fulfillment in Sweden. So that's the priorities in Sweden.

When it comes to Norway and Financial Services, Norway is underlying very strong performance. We see really good results from the strategy that we focus on Consulting Services, high-margin services and applications. So we continue that journey in Q4 as well. And Financial Services, strong pipeline, strong EBITDA margin and, of course, historically, quite strong Q4.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [3]

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Sure. But you can't give kind of a flavor on what kind of growth you will be expecting for top line in Sweden in Q4? It was quite decent last year. Does that mean that it is challenging for you this year to show your year-over-year improvement? Or...

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Per Kristian Hove, EVRY ASA - Group CEO [4]

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So we will definitely not prioritize top line in Sweden before we know that we have a healthy service mix and a healthy delivery. So still continued focus on cost improvement, revenue mix improvement and if top line grows in Sweden, that's fine, but profit is prioritized.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [5]

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And then moving onto the digital platform area. So I was quite pleased to see that you announced that in the new management setup for Tieto, I've read that you anticipate that the head of your infrastructure business is now being announced as the new head of the combined business. Should we kind of interpret that the combined company will follow, first of all, EVRY's strategy? And then secondly, should we interpret that the total kind of capital intensity of the combined business will come down, as we shouldn't expect the investment level to continue increasing, for example, at Tieto?

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Per Kristian Hove, EVRY ASA - Group CEO [6]

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So first of all, I think the combined company has a very good value proposition, as we have different delivery models. So as all of us know, EVRY has chosen a partner strategy predominantly, and Tieto has built up their very strong private cloud offering combined with own deliveries. It's important for us to strengthen that strategy going forward, meaning that we can address both the global market, customers that would like scalable solutions, and also customers with specific requirements regarding on-premise or security customers. So that's the going-in position. We will work in the coming quarters to build a new strategy, but I think you can imagine that it will be a combination of those strategies going forward. And we can also foresee a strengthening on the partner development of that offering. But it'll -- we will take some time to build a new strategy.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [7]

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Then just 2 quick ones before I pass on the microphone. So the first one is that if you could just give a brief update on the process with IBM on the arbitration notice that you received there some time back. And then the second one, I was a bit disappointed to see the level of costs related to the IBM agreement and that you're expecting quite -- not a significant downtick in the second half in total. So if you just explain what those costs are now related to and why you still have this significant level of IBM restructuring costs?

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Per Kristian Hove, EVRY ASA - Group CEO [8]

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Of course. Yes, of course. So as you may recall, IBM sent us a notice of arbitration 30 hours after the announcement of the merger. They haven't followed up with that since then. So we have chosen to actually file our arbitration as well. That's described in the Q2 report, and -- sorry, in the Q3 report. For us, it's -- of course, it's a huge engagement with a huge partner, and it's the nature of the business is that we have some discussion points, specifically on the commercial side. So normal process going forward. No big news in Q3 either, but we will follow that track.

When it comes to other income and expenses, we have guided on NOK 250 million. We are still guiding on NOK 250 million. But as you may imagine, one of the challenges we have announced earlier on as well is that even though the basic operations is going very steady, very solid, we have an opportunity to do changes more flexible with our customers. Meaning that, specifically on the small, medium enterprise, we have a challenge with the whole delivery process with our partner. Meaning that we will have some mitigating actions to take also from EVRY to make sure our customers get the best services. But still we don't expect any substantial deviations from the NOK 250 million. You had only 2 questions?

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [9]

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Obviously, yes. But you didn't answer my question. So you spent NOK 81 million in the quarter on the IBM agreement. So if you could just give any color on what does that go to during the quarter? What are you still working on more specifically for us to understand?

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Per Kristian Hove, EVRY ASA - Group CEO [10]

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Nina?

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Nina Mortensen, EVRY ASA - Interim CFO & Senior VP of Group Accounting & Controlling [11]

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Yes. They're both related to the transformation process that is still slightly ongoing. And also, as Per said, with mitigating actions also -- is also increasing some of the cost in Q3 that we expect in the Q4 that will be on the lower level. And NOK 250 million, we still stand behind that guiding, and we do not expect to be significantly over that.

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Per Kristian Hove, EVRY ASA - Group CEO [12]

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If it's no more questions from Fornebu, maybe we should pass on to -- operator, we're ready to take questions.

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Operator [13]

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(Operator Instructions)

We will now take our first question from Michael Briest from UBS.

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Michael Briest, UBS Investment Bank, Research Division - MD of Global Technology Research Group & Head of the European Technology Research [14]

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If we can start on the IBM topic again, because I think this is very fresh. It looks like on the 23rd of October, so a week ago, you submitted notice of arbitration probably related to payment. So I'm wondering is that something that's causing the DSOs to go up in the quarter. And also saying that the general failure by them to deliver their services in line with the master services agreement, this sounds quite important for a core part of your business? And clearly, something that could hang over into the post-merger world. So can you sort of say what they're not doing or why they're not returning cash to you?

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Per Kristian Hove, EVRY ASA - Group CEO [15]

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Very good, Michael. I didn't quite catch your first question. What did you...

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Michael Briest, UBS Investment Bank, Research Division - MD of Global Technology Research Group & Head of the European Technology Research [16]

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It's just the detail around the IBM situation. It seems quite serious if you're chasing them for money and saying they're not fulfilling their service as under the terms of the contract. I don't think -- this is a very important part of your business. Can you not say a bit more about that?

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Per Kristian Hove, EVRY ASA - Group CEO [17]

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Definitely. So first of all, it's a very huge engagement with IBM. So in the nature of that business, it's -- we have ongoing discussions with more partners than IBM, of course. This is a very important one, because it affects our delivery to our customers. It's predominantly 2 things we are discussing with IBM. First of all, we have a challenge with flexibility and agility, meaning that customers will not get delivery on changes as fast as we would like them to get. Secondly, we do have an integrated value chain in EVRY combined with IBM. And we also see opportunities as we interpret the contract to make that more streamlined. So those 2 things are predominantly the things we discuss with IBM.

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Michael Briest, UBS Investment Bank, Research Division - MD of Global Technology Research Group & Head of the European Technology Research [18]

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Okay. And can you say something about the impact on DSOs, perhaps, Per? It looks like DSOs have gone up, and there is comment around IBM around reimbursement. So is that a cause of the weaker working capital cash flow?

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Per Kristian Hove, EVRY ASA - Group CEO [19]

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Basically, we don't comment in that detailed level, but the overall answer is that we have a normal situation with IBM as well on payments. So it wouldn't be a large impact on DSO, specifically.

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Michael Briest, UBS Investment Bank, Research Division - MD of Global Technology Research Group & Head of the European Technology Research [20]

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Okay. And then just 2 quick ones for me. Firstly, on Financial Services, some of your peers have commented on weaker demand in Europe, in particular. What are you seeing around maybe the consulting space as much as the software side on Financial Services? And secondly, what is the sort of causes that would mean the deal closes in 2020 rather than 2019? What are you still waiting for, either from regulators or shareholders, to get the deal closed with Tieto?

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Per Kristian Hove, EVRY ASA - Group CEO [21]

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Yes. So on Financial Services, I think we see a huge potential as we have a solution covering core banking payment and cards, which we see are able to scale in the Nordics and in Europe. So we expect very strong growth on Applications and Financial Services going forward.

On Consulting, we see that the streamlining of consulting in EVRY as such means that we're able to address requirements in financial sector as well in a better way. So we see more opportunities as a combined company across Consulting and Software and Financial Services as well. So, so far, we haven't seen any weakness in the market and the market demand. And we also really feel that the offerings we're bringing to the market is relevant for the financial sector as well.

When it comes to closing in Q4 or Q1, of course, as always, when you have a large number of people waiting for something, we would like to speed up. So we would like to close everything in Q4 due to 24,000 colleagues waiting for this to happen. We do need the acceptance from the competition authorities in all 4 countries. And as we announced also in the press last week, we have one mitigating action we need to execute on in Norway, which is a divestment of a small business on archiving, about EUR 14 million -- EUR 14 million to EUR 15 million in revenue of a total of [EUR 3 billion], but we need to execute on that. We still articulate the same time line as we have done now since 18th of June, expecting Q4, but preparing for Q1. And we don't see any large impact if, for some reason, we need to wait to Q1. But of course, we would like to close this as soon as possible.

Was that answering your question, Michael?

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Michael Briest, UBS Investment Bank, Research Division - MD of Global Technology Research Group & Head of the European Technology Research [22]

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Yes.

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Operator [23]

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(Operator Instructions)

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Per Kristian Hove, EVRY ASA - Group CEO [24]

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Okay. If it's -- any more question on the line, operator? Otherwise, we will like to go back to the audience at Fornebu.

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Operator [25]

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Sure. It appears there are no further questions at this time.

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Per Kristian Hove, EVRY ASA - Group CEO [26]

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Okay. So we have one more question in Fornebu.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [27]

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Christoffer from DNB Markets here, again. So just following up on that comment on the divestment you're doing in Norway. You said EUR 15 million to EUR 20 million. Were you then talking about...

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Per Kristian Hove, EVRY ASA - Group CEO [28]

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Not. EUR 14 million to EUR 15 million.

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Nina Mortensen, EVRY ASA - Interim CFO & Senior VP of Group Accounting & Controlling [29]

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Euros.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [30]

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EUR 14 million to EUR 15 million -- euros? Okay, sure. So could you comment on how we should expect that to affect your bottom line? You commented also in the press that, that has very satisfying profitability. So if you could quantify that so we can understand how that fits into the business?

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Per Kristian Hove, EVRY ASA - Group CEO [31]

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Okay. So first of all, the scope is about EUR 14 million to EUR 15 million revenue-wise. It's about 100 colleagues working in that specific area. It's a very healthy software business. We didn't actually announce the very healthy margin. That was the press, they're doing that. But, of course, software in its nature is a very healthy business. And this is a very important market for us and specifically in public sector. But as we have -- as I said earlier as well, the size of this part of EVRY, and even if you take it into account of the combined company, it's insignificant. So it's of EUR 3 billion in total revenue of the combined company. It's a very, very small portion. So yes.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [32]

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Sure. And my second question is on a bit different topic. On the Cards side, you mentioned that you've signed now a -- one of the largest Swedish banks. Can you just elaborate, is that a new customer? And how significant is it? How does that kind of move the needle on your market share? I understand your market share on the Cards side in the Nordic region is quite significant.

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Per Kristian Hove, EVRY ASA - Group CEO [33]

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So in Cards business, it's about 60 million TCV. I'm actually not sure if it's a net new customer. I don't know.

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [34]

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And your current market share in the Cards business, is there something you can share?

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Per Kristian Hove, EVRY ASA - Group CEO [35]

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Market share in Cards business in Sweden?

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Christoffer Wang Bjørnsen, DNB Markets, Research Division - Analyst [36]

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In the Nordic region.

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Per Kristian Hove, EVRY ASA - Group CEO [37]

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In the Nordic, I don't know. We haven't announced that.

Okay. If it's no further questions, I would like to thank, everyone, at Fornebu, for joining, I would like everyone on the stream as well and call. Thank you for joining us, and I wish you a wonderful day.