15.717 m.kr.
[2017: 15.064 m.kr.]
15.717 m.kr.
[2017: 15.064 m.kr.]
1.128 m.kr. / 7,2%
[2017: 928 m.kr. / 6,2%]
5.420 m.kr.
[2017: 433 m.kr.]
4.173 m.kr. / 26,6%
[2017: 3.783 / 25,1%]
1,95
[2017: 1,3]
66,1%
[2017: 41,6%]
Growth and development - increased value for shareholders
Origo Market Value
2013
ISK 1.460 MILLION
Origo Market Value
2018
ISK 11.740 MILLION
| Equity | ISK 8,194 million |
| Revenue from own software | ISK 675 million |
| Number of shareholders | 577 |
| 2018 equity ratio | 66,10% |
Finnur Oddsson,
CEO
It is fair to say that 2018 was a milestone year in the history of Origo and its predecessors and marks a certain turning point in a journey that began in late 2013. At the time, the company was beset by a number of challenges, with operations thinly spread across different countries and brands, and a weak financial position. To address this a new strategy was developed, with the goal of improving operations, strengthening the balance sheet, and the making the company more competitive in the IT market going forward.
Ívar Kristjánsson,
Chairman
The new strategy was multifaceted, touching on areas such as the solution offering and marketing strategy, the organisational structure, human resources and the financial position. This work has been guided by the idea that our role is to support customers in their efforts to do better, and to take advantage of digital solutions and IT technology to improve the efficiency, competitiveness and service experience of our customers. In other words, we measure our performance by the success of our customers.
Our focus in recent years has been on implementing this strategy, and we are very pleased to report that now, in early 2019, our efforts are really bearing fruit and Origo is in a stronger position than ever before. This is true whether one looks at the company's finances, brand, marketing strategy, human resources or the solution offering. The prospects looking forward are therefore promising, with the company continuing its focus on creating value for shareholders and other stakeholders founded on stable operations and increased value of assets.
The year 2018 began with the formal merger of Nýherji, Applicon and TM Software under a new brand, Origo. Preparations for the merger had been going on for a while; for instance, in recent years, we have been focused on promoting closer cooperation between different group companies on the development of solutions and servicing customers.
One of the goals of the merger was to better integrate the group's different operations and allow us to offer more complex and comprehensive solutions, which is something our customers are increasingly demanding. The goal was also to simplify the operations and improve efficiency, for instance by reducing duplication of work and allowing customers to receive all their IT services from the same entity. Finally, we wished to strengthen our marketing strategy by making it more focused and efficient. Although changes such as these are made for the long term, we are already seeing benefits from the consolidation and the new brand.
The promotion of the new name and our brand reinvention has gone better than we could have hoped. Of course this work is just beginning, but under the new name Origo has already achieved a strong position as a leading IT service company and is now first in customers' minds among companies in the IT sector (according to a Gallup surveys). We are reaching a wider age group than before, especially the younger demographics, reflecting the diverse group who are customers of Origo now and will be in the coming years.
We have been gradually improving the efficiency of our operations and are pleased to see how well customers have been responding to our broad range of solutions, which is now being offered by one company instead of three. After a slow start in the first quarter, our results have gradually gotten better, and the final two quarters were the best in the company's history in terms of operating results. Our operating earnings for the full year were strong, ISK 1.1 billion, and have never been higher as a percentage of sales.
In November, the sale of Tempo was completed with Diversis Capital acquiring a 55% stake and taking on the responsibility of leading the company towards further growth and value creation. The sale of Tempo really is a testament to the terrific work done by the staff of Tempo and Origo in recent years. It also demonstrates in a very real way the value represented by Icelandic ingenuity, with the sale of Tempo being the third largest deal in the history of the Icelandic software sector. In our estimation it was very important for Origo shareholders to maintain a significant stake in Tempo going forward, as its potential for growth is substantial and we believe it is certainly not overvalued.
The impact of the sale on Tempo on Origo's earnings was about ISK 5 billion. Thus, Origo's total earnings last year came in around ISK 5.4 billion, a record for the company. As a result of our robust 2018 operating results and the sale of Tempo, Origo is now in a very strong position, with more than ISK 8 billion in equity, an equity ratio of 66% and ISK 3.2 billion in cash.
Origo's market value has increased manifold in space of a few years, for the benefit of shareholders. The company's current strong position suggests that we will be able to continue our present course of creating value for shareholders and customers, on the basis of three pillars: First, we expect our operations to remain steady and deliver positive results. Second, Origo's investment in the development of solutions will strengthen our operations and further increase the long-term value of our assets. Third, it is reasonable to expect that our significant stake in Tempo will continue to increase in value in cooperation between Origo and Diversis Capital.
Hence, we are optimistic about the prospects going forward. The future lies in IT technology and in that arena, Origo is in a key position.
The future is Origo.
Finnur Oddsson, CEO
Ívar Kristjánsson, Chairman
Finnur Oddsson is the CEO of Origo. He became the Deputy CEO of Nýherji in November 2012 and CEO in August 2013.
Finnur served as the Managing Director of the Iceland Chamber of Commerce from 2007 to 2012. Previously, he was an assistant professor at the University of Reykjavik for several years, where he oversaw the development of the University’s MBA program and Management Academy. Before that, he did consultation work for Aubrey Daniels International in the US. He was a member of the University of Reykjavik Board of Trustees from 2009 to 2017, serving as chairman until 2014. Finnur is a member of the board of the Iceland Chamber of Commerce and sits on the boards of Orf Genetics and Distica.
He holds a B.A in psychology from the University of Iceland, an M.A. and a Ph.D. in the same subject from the Virginia University in the US, and an AMP in business administration from IESE in Spain.
Dröfn Gudmundsdóttir is the Chief Human Resources Officer.
Dröfn, who joined Nýherji in February 2013, has a long track record in the field of human resources. She worked as a human resources consultant for the Straumur Investment Bank from 2007 to 2009, a training manager at Arion Bank from 2009 to 2011, and from 2012 to 2013 worked as a human resources manager at the Financial Supervisory Authority (FME).
Dröfn graduated with a B.A. in psychology from the University of Iceland and went on to pursue post-graduate studies in psychology focusing on work and organizational psychology at the University of Giessen in Germany.
Emil Einarsson is the Managing Director of Digital Sales.
Mr. Einarsson worked as a Systems Analyst from 1985 to 1992, helping to design and implement new service solutions for Icelandic banks. He was a Sales Advisor for IBM Iceland for larger IBM host computers.
When Nýherji was founded in 1992, he became Sales Advisor and Team Leader, until 1995 when he became Chief Sales Manager for all IBM computers. In 2005, Mr. Einarsson became Head of Sales and in 2011-2014, he worked as the Managing Director of Nýherji‘s Product Division. He was Director of Business Development and Service Management at Nýherji from 2014-2017.
Gunnar Petersen was appointed CFO in January 2013.
Gunnar was CFO for Iceland Express 2011- 2012 and CFO for Landic Property hf. 2006-2010. Before Gunnar worked as a Client Executive for HSH Nordbank AG in Copenhagen and earlier worked as a specalist for Icebank Ltd and VBS Investment Bank.
Gunnar holds a B.S.c in Finance and Economics from the University of Iceland, M.s.c in finance from Reykjavík University, is a Legalized security trader and holds a ACi Dealing Certificate.
Hákon Sigurhansson is the Managing Director of Software Solutions. Mr. Sigurhansson has worked for the company since 2008, first as a CEO of EMR Healthcare Solutions and then as the head of the Healthcare Solutions business unit in TM Software.
Before joining TM Software Hákon worked as consultant, as the Director of Sales, Product Management and Development at Trackwell Software and as a Head of IT at Ministry of Justice.
Hákon has an MBA from the ESCP Business School in Paris and an MSc degree in Electronic Engineering from University of Aalborg, Denmark.
Ingimar G. Bjarnason is the Managing Director of Business Solutions. Before Ingimar was the Managing Director of Applicon Ltd., a Nýherji & subsidiary which provides business software solutions.
Mr. Bjarnason worked at Nýherji's Software Department from 1998 and later at Applicon serving as the Managing Director for Applicon Solutions Ltd. in the UK from 2006.
Mr. Bjarnason holds a B.Sc. in industrial and mechanical engineering and an MBA from IESE in Spain.
Örn Þór Alfreðsson is the Managing Director of Service Solutions.
Örn holds a business degree from the University of Reykjavik and has extensive experience in the area of IT management and operations. He was previously a long-time manager at EJS and later Advania, where he was responsible for sales and coordinating the company's marketing strategy.
Most recently, Örn served as the managing director of the glass manufacturer Samverk. Örn is also a member of the board of the management company Virðing.
Tomas Wikström has been the Managing Director of Applicon Sweden since 2012, after joining the company in 2000. He has served in various positions at the company in recent years, including as CFO. He also has experience as a programmer and has worked in project management in the financial services industry.
Tomas holds an MSc degree in physical engineering from Uppsala University.
Origo's results in 2018 were the best in the history of the company and its predecessors. Net earnings were up significantly, coming in at ISK 5,420 million versus ISK 433 million in 2017. EBITDA was ISK 1,128 million (7.2%) for the full year 2018, versus ISK 928 million (6.2%) in 2017. Our EBITDA trended upwards as the year progressed, totalling ISK 423 million (9.5%) in the fourth quarter, a new record for the company.
It is fair to say 2018 was a milestone year in the history of Origo and its predecessors. Origo was created at the beginning of year with the merger of three companies, and the rebranding and consolidation has already yielded benefits for our customers as well as improved efficiency and better results for Origo. The year was certainly an eventful one for Origo.
In addition to strong sales of IT equipment to enterprise customers, we have strengthened our solution offering, particularly in the areas of software and business solutions, both by developing our own solutions and through acquisitions of other operations. The company's revenue composition has changed with an increased emphasis on subscription services, consultancy and sales of various software and business solutions, including both internally developed and third-party solutions. These changes have helped deliver a broader solution offering and improved earnings.
Our brand reinvention has been highly successful, with Origo already having established itself as a leading IT service company among enterprises and consumers. We notice a great deal of interest in the company in several areas and it is clear that our thorough preparations, carried out in collaboration with consultants and our staff, have delivered a strong brand and high awareness of the nature of our operations. As an example of this, Origo is the first brand in customers' minds when it comes to choosing an IT company, according to a Gallup survey conducted in late 2018.
The company has a very strong position in most age groups, including in the 18-24 and 35-44 demographics. Furthermore, 91% of Icelanders recognise the Origo brand according to a recent Gallup survey, an impressive result in less than 12 months. In top-of-mind awareness, Origo comes out on top among 18-49 year olds. We owe this accomplishment partly to the tone of the Origo brand, which is light and spunky while also signifying humility and helpfulness. This positive feedback lets us feel that we are doing something right, and it clearly has significant value for the company going forward.
Our sale of a 55% stake in Tempo in late November 2018 was an important step for both Origo and the operations of Tempo. Origo is in a very healthy financial position after the sale and well positioned to support both internal and external growth as well as meeting as any challenges that might lie ahead. The sale of Tempo is a testament to the terrific work done by the staff of Tempo and Origo in recent years. It also reaffirms the value represented by Icelandic ingenuity, which recently has been receiving increased attention and support from the government, which is to be celebrated.
With the combined support of Diversis and Origo, we expect Tempo to enter into a new phase of development and revenue growth and would not be surprised to see the value of the company rising substantially in the near future. In view of this, we have stressed the importance of Origo maintaining a significant stake in the company, for the benefit of Origo shareholders.
There was good demand for Applicon consultants in the fourth quarter and full year, with more consultants added to meet the increased demand. Applicon's largest projects relate to the implementation and maintenance of core banking solutions for SBAB Bank and Landshypotek Bank, and Applicon is the only company in Sweden which counts two of the country's ten largest banks among its clientele for such services. The collaboration with the two aforementioned companies has been successful, and they have chosen Applicon to work on important additional projects related to their core operations.
The earnings for the year were somewhat lower than the previous year and slightly below expectations. Among the reasons for this are charges related to product development and higher operating costs. Revenue in 2019 is expected to be similar as in 2018. It is expected that demand for consultancy services will continue to be strong and that results in the current year will improve as newly added consultants gain experience.
Origo employs a talented group of experts who help customers improve their operations, performance and security. Our goal in human resources is to be a highly sought after place to work in order to attract the best talent available. To achieve that goal, we have established an ambitious human resources strategy founded on our three core values: Combined Strength, Service Vision and Professional Audacity.
At the beginning of the year, the number of full-time equivalent positions at Origo was 429, down from 443 at year-end. Applicon Sweden had 52 employees at year-end. Hence, the combined number of full-time equivalent positions at Origo and Applicon Sweden was 495.
The gender ratio among Origo employees was 24% female and 76% male, which is similar to the preceding year.
At the end of last year, Origo received the Icelandic equal pay certification. The implementation of our equal pay system was carried out in accordance with the Equal Pay Standard, ÍST 85:2012. Our equal pay system is designed to ensure that all decisions related to compensation are taken in the same manner for men and women and that the criteria underpinning compensation decisions do not promote gender discrimination. The implementation of the equal pay system is part of Origo's equal rights policy.
The Board of Directors of Origo hf. is committed to maintaining good corporate governance and adhering to the “Guidelines on Corporate Governance” issued by the Iceland Chamber of Commerce, Nasdaq OMX Iceland and the Confederation of Icelandic Employers. The Board of Directors has adopted detailed rules of procedure defining its powers and the division of tasks between it and the CEO. Origo is an "Exemplar of Good Corporate Governance" according to the Centre of Corporate Governance at the Institute for Business Research, University of Iceland, which based its assessment on a detailed survey conducted by Capacent in the fall of 2014.
In March 2017, the Nasdaq exchanges in the Nordic countries issued guidelines designed to assist companies with social responsibility disclosure. The guidelines are divided into three parts: Environmental, Social and Governance. Origo hf. now publishes its ESG metrics for the first time.
| E - Environmental | Notes | ||
|---|---|---|---|
| E1 | GhG Emissions | 124 tCO2e | Of which 83.5 tCO2e for Scope 1, 24.3 tCO2e for Scope 2 and 16.3e tCO2 for Scope 3 |
| E2 |
Carbon Intensity Carbon Intensity per megawatt-hour consumed Carbon Intensity per full-time equivalent (FTEe) employee |
Carbon Intensity per megawatt-hour consumed 0.04 tCO2e/MWh Carbon Intensity per full-time equivalent (FTEe) employee 0.22 tCO2e/FTEe |
|
| E3 | Energy Usage | 2,843,168 kWh | Of which 1,545,584 kWh from hot water, 969,440 kWh from electricity and 328,144 kWh from fossil fuel |
| E4 |
Energy Intensity Energy Intensity per square meter Energy Intensity per full-time equivalent (FTEe) employee |
Energy Intensity per square meter 435 kWh/m2 Energy Intensity per full-time equivalent (FTEe) employee 5,014 kWh/FTEe |
|
| E5 | Primary Energy Source | - | |
| E6 | Renewable Energy | 88,5% | Renewable energy as share of Origo's total energy usage 88.5% |
| E7 | Water Usage | 61,803 m3 | Of which cold water 35,155 m3 and hot water 26,648 m3 |
| E8 | Waste Disposal | 89,355 kg | Share of sorted waste was 68.1% and share of recycled waste was 68.0% |
| E9 | Environmental Policy | Yes | Origo's Environmental Policy |
| E10 | Environmental Impacts | No | The company has not caused any negative environmental impacts |
| S - Social | Notes | ||
|---|---|---|---|
| S1 | CEO Pay Ratio | 17.5% | The ratio of CEO total compensation to median basic compensation of other Origo employees is 17.5% |
| S2 | Gender Pay Ratio | 99.6% | The ratio of median female compensation to medial male compensation at Origo now stands at 99.6% |
| S3 | Employee Turnover | 13% | The percentage of employees who left Origo in 2018 |
| S4 | Gender Diversity | 24%/76% | The ratio of female-to-male employees at Origo is 24% female and 76% male |
| S5 | Temporary Worker Ratio | 3.6% | The percentage of employees who are part-time workers or paid by the hour |
| S6 | Non-Discrimination Policy | Yes | Origo's Non-Discrimination Policy |
| S7 | Injury Rate | 0 | No employee was injured during working hours or while travelling to or from work in 2018 |
| S8 | Global Health & Safety | Yes | Origo's Human Resources Policy |
| S9 | Child & Forced Labour Policy | - | Origo has not adopted a specific policy on this issue |
| S10 | Human Rights Policy | - | Origo has not adopted a specific policy on this issue |
| S11 | Human Rights Violations | 0 | No human rights violations have been reported |
| S12 | Board Diversity | 40% | The Origo Board of Directors is composed of three men and two women |
| G - Governance | Notes | ||
|---|---|---|---|
| G1 | Board Separation of Powers | Yes | The CEO does not serve on the Board of Directors or chair any sub-committees |
| G2 | Board Transparent Practices | - | Origo's Board of Directors and Corporate Governance |
| G3 | Incentivized Pay | No | Directors are not awarded based on ESG performance |
| G4 | Support for Collective Organizations of Workers | Yes | |
| G5 | Sustainable Procurement Policy | - | Origo has not adopted a specific policy on this issue |
| G6 | Ethics | Yes | Origo's Code of Ethics |
| G7 | Anti-Corruption / Anti-Bribery | - | Origo has not adopted a specific policy on this issue |
| G8 | Tax Transparency | - | Origo has not adopted a specific policy on this issue |
| G9 | Sustainability Report | - | Origo has not adopted a specific policy on this issue |
| G10 | Other Reports on Sustainability | Yes | Festa Greenhouse Effects Agreement |
| G11 | External Validation & Assurance | - |
Our core values are combined strength, professional daring and visionary service.
These concepts reflect the working practices that are vital to a cutting edge service company that is keen to promote cooperation, professionalism, daring and initiative.
We work together across units, utilizing expertise in different areas of the company to develop smart solutions for customers.
We build on a solid foundation of professionalism and expertise while also emphasising the need for innovation and flexible decision-making which may involve changing and improving working methods for the benefit of Origo and our customers.
We provide excellent service that is adapted to the needs of each customer. We exceed expectations by always striving to develop new and more efficient service solutions, thus ensuring long-term business relationships.
The Board of Directors of Origo is composed of six members and follows the Guidelines on Corporate Governance issued by the Iceland Chamber of Commerce, the Iceland Stock Exchange and the Confederation of Icelandic Employers.
Top left to right: Loftur Bjarni Gíslason, Finnur Oddsson (CEO) Hjalti Þórarinsson and Hildur Dungal.
Bottom left to right: Emilía Þórðardóttir, Ívar Kristjánsson and Guðmundur Jóhann Jónsson.
Ívar Kristjánsson became a member of the Board of Directors of Nýherji in March 2016. He is the CEO of ATMO Select ehf, the chairman of the board of directors of Angling iQ and chairman of the board of directors of 1939 Games ehf.
Ívar completed his Business Studies at the University of Iceland and took an MBA at the University of Reykjavik. He is one of the founding members of CCP hf. and was the CEO of CCP when EVE-Online was launched in 2003, but has spent most of his time at CCP as its Chief Financial Officer.
Emilía Thórdardóttir became a member of the Board of Directors of Nýherji in March 2016. She is project manager - Mgr. Project II RA Filings Actavis. She has sat on the board of directors of Hergill hf. since 2012. Education: Graduate in Business Administration from the University of Iceland, Business Studies course (B.S.) in management and marketing.
Hildur Dungal joined the Board of Directors of Nyherji in February 2011. Hildur is attorney at law and town-councilor. Previously held the position of President of Directorate of Immigration in Iceland.
Loftur Gíslason joined the main board of Nyherji in March 2014. He is currently Shipping Manager at HB Grandi, one of Iceland’s largest exporters. Loftur Bjarni holds a B.Sc. degree in fisheries from the University of Akureyri in 2007.
Gudmundur Jonsson was appointed Vice-Chairman of the Board in March 2014, having served on Board as Director between 2005-2013, and prior to that as alternate Director since 1999. Gudmundur is director of insurance company Varðar and graduated in business administration from Seattle University in 1985. He also holds an MBA from the University of Edinburgh and has also served on the boards of several other companies.
Hjalti Thórarinsson joined the Nýherji Board of Directors as a deputy board member in March 2017. He studied Electrical and Computer Engineering at the University of Iceland between 1995-1998 and holds an MBA degree from MIT. In 1998 Hjalti co-founded Dímon Software. He was made Director of Sales at Microsoft in 2013, leading a team of account managers responsible for the Think relationship on the Lenovo account team. Currently, Hjalti serves as Director of Business Development in Microsoft's AI division.
Corporate Governance
The Board of Directors of Origo adheres to the most recent version of the Guidelines on Corporate Governance issued by the Iceland Chamber of Commerce, the Iceland Stock Exchange and the Confederation of Icelandic Employers in June 2015.
The purpose of the Guidelines is to:
Committees and Compliance Officer
Articles of Association and Rules of Procedure
| Shareholders | Nr. of shares | % |
|---|---|---|
| Vogun hf. | 50.308.800 | 10,8% |
| Lífeyrissjóður verslunarmanna | 46.119.303 | 9,9% |
| Birta lífeyrissjóður | 45.961.188 | 9,9% |
| Kvika banki hf. | 39.250.296 | 8,4% |
| The Wellington Trust Company Na | 30.891.476 | 6,6% |
| Sjóvá-Almennar tryggingar hf. | 20.829.837 | 4,5% |
| Arion banki hf. | 18.980.196 | 4,1% |
| Lífsverk lífeyrissjóður | 16.057.679 | 3,5% |
| Landsbankinn hf. | 12.257.801 | 2,6% |
| IS Hlutabréfasjóðurinn | 12.000.937 | 2,6% |
| Júpíter - Innlend hlutabréf | 11.461.632 | 2,5% |
| HEF kapital ehf | 10.800.000 | 2,3% |
| The Wellington Trust Company Na | 9.495.639 | 2,0% |
| Eldkór ehf. | 9.344.708 | 2,0% |
| Landsbréf - Úrvalsbréf | 8.635.402 | 1,9% |
| Fagfjárfestasjóðurinn IHF | 8.611.797 | 1,9% |
| Stapi lífeyrissjóður | 7.508.780 | 1,6% |
| Íslandsbanki hf. | 5.241.767 | 1,1% |
| Hólmur ehf. | 5.066.480 | 1,1% |
| GBV 17 ehf. | 4.867.159 | 1% |