Annual Report

Key figures for 2014 operations

ISK 11,572m
ISK 827m
Salary and related expenses/revenue
Operating expenses/
Equity ratio
Current ratio
30 days
23 days
Inventory turnover
Cash flows from operations
ISK 318m
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Avarp benediktBenedikt Jóhannesson
Avarp finnurFinnur Oddsson

On the right track

Nýherji Group performed well in 2014. Profits before depreciation and financial items amounted to ISK 827m, or approximately 7.2% of turnover. Profits after taxes amounted to ISK 259m, or the equivalent of a 31% return on equity. Nýherji’s operation over the past few years has been characterised by significant fluctuations, making it hard to make comparisons between years. Nevertheless, it is clear that the past operating year has been one of the best in the company’s 20-year history.

One of the main tasks of the year was following up on the strategic planning that was embarked on in the autumn of 2013, with the goal of improving the company’s operation and strengthening its equity position. Particular attention was paid to simplifying the Group’s operation, boosting its supply of services and solutions and cementing Nýherji’s position as a leading IT company using both internal work and marketing. Work according to the new policies was successful last year and led to both excellent operating improvements and greater stability.

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New market focus points

Policy formulation for the Nýherji Group focuses on the company’s service role and the importance of constant solutions development for the corporate market. To support both aspects, new and fresh market targets were formulated for the Group and were initiated in the autumn. These focus in particular on Nýherji’s role of supporting the success of the principal companies and public bodies in Iceland through the more efficient use of IT in all fields of operation. “Using newism as its guiding light, Nýherji creates techoptions and nowlutions for clients.”

Simplification, streamlining and less risk

Nýherji’s operation was simplified through organisational changes and the sale of operating units that did not fit in with the Group’s operations or which were unprofitable. The sale of Nýherji’s subsidiaries in Denmark, Applicon A/S and Applicon Solutions A/S, was completed in March. Dansupport A/S had already been sold in December 2013. The operation of Tækjaleiga Nýherja was sold in June.

A new organisational structure for Nýherji’s parent company came into effect in October 2014, involving increased focus on the collaboration of technicians and sales personnel as regards the development of solutions and their marketing and sale. In addition, the organisation supports sales and services of new solutions in various areas. Examples include solutions for smart equipment and solutions in electronic transactions and security issues. The new organisation streamlines the company’s operations and brings it closer to customers and collaborators; response times are reduced and sales are more targeted.

The number of employees was reduced by over 100, and turnover decreased by around ISK 2bn. The Group, however, is now much stronger.

In recent years, the Company has worked systematically to strengthen internal operations and reduce operational risks. Particularly pleasing is that Nýherji was recently recognised by the Corporate Governance Research Centre at the University of Iceland, following a detailed audit by Capacent. In addition, considerable attention has been paid to controlling security issues, with continued certification of the information security management systems. In addition, an agreement was reached with Roka ehf. in the autumn as regards the dissolution of the company and the cancellation of legal proceedings against Nýherji hf., reducing the risk of operational setbacks.

Advancing subsidiaries

All of Nýherji’s subsidiaries – Applicon in Iceland, Applicon in Sweden and TM Software – returned positive operating results in 2014, some of them even performing significantly better than in recent years. An especially important turnaround was achieved in Sweden, where operational losses had been endemic in recent years. In addition, investments in product developments in SAP banking solutions are expected to return further operating improvements in the future. The Applicon companies in Sweden and Iceland collaborate successfully and extensively on banking solutions development and services. In addition, Applicon in Iceland has been very successful in the development of solutions in other fields, such as with the Icelandic human resources and payroll system Kjarni, which is sold as a cloud-based solution and has been extremely well received.


Company founded to manage TEMPO solutions

Although Nýherji’s extensive operations overseas were discontinued last year, there continues to be substantial demand for solutions that have been developed within the Nýherji Group. This is reflected in the dynamic operations of TM Software, where overseas income increased by more than 80% during the past year and are at present almost half of the company’s turnover. This significant growth is for the most part attributable to the success of the TEMPO project management and timesheet solutions which have proven themselves internationally in recent years. Work on TEMPO solutions began in 2007, and the sales and scope have increased each year. The company purchased the financial management solution FOLIO from the Canadian company Kitologic Inc. near the end of the year. The purchase is an important aspect in expanding solution options under the TEMPO brand, which now offers comprehensive corporate solutions on par with the best in the world.

Over 6,000 companies in more than 100 countries now use the TEMPO solution. Turnover in 2014 was close to USD 6m, as compared with just over USD 3m in 2013. Projections for TEMPO assume a similar growth over the next few years. To support such growth and value creation, the decision was made to separate TEMPO from the operation of TM Software. A new company, TEMPO Software ehf., has been established to take over the development and sales of TEMPO solutions, while specialised solutions in the field of health and tourist services will continue to be developed under TM Software. After the changes, there will be two strong companies in the field of software development, with clearly defined goals, products and market areas.

Creating a company around TEMPO will increase the visibility of the brand and simplify marketing efforts. In addition, the move will add opportunities for collaboration with external entities to support continued swift growth, through e.g. networking and financing of product development and marketing efforts.

The changed organisation of TM Software sharpens the operation and increases the company’s scope for the development of products for its current speciality sectors such as health services, flight and tourism services, electronic transactions and service websites.

Motivated staff create value

The good results of 2014 are a pleasant confirmation that the new focal points in the operation of Nýherji are of such a nature as to increase faith in the company and create value for its owners, customers and the community as a whole. Although huge steps have been taken over the past year, there is yet a great deal of work to do in order to achieve the goals of the Board as regards value creation. The main tasks of the Board and management of Nýherji in the coming year involve strengthening the company’s equity position even further. This will first and foremost be achieved through continued efforts for greater efficiency in operations, better services to customers and improved results. Account will also be taken of the organisation and structure of the Group and the possibility of collaboration and investment options.

The success that has been achieved in the operation of Nýherji is based on its wealth of exceptional staff, consisting at present of 450 employees in Iceland and in Sweden. We would, on behalf of the company, like to thank our staff for their excellent efforts which have resulted in one of the best operating results in the history of the company. Through such work, Nýherji will become an even better workplace and at the same time, a better investment option. The company is on the right track, and its future is bright.

Benedikt Jóhannesson, Chairman of the Board

Finnur Oddsson, CEO

Organization chart

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Finnur Oddsson

Finnur Oddsson was appointed CEO of Nýherji in 2013. He previously served as the Managing Director of the Iceland Chamber of Commerce for five years.

Mr. Oddsson holds a B.A. in psychology from the University of Iceland, an M.A. and a Ph.D. in psychology from West Virginia University, and an AMP in business administration from IESE in Spain.

Mr. Oddsson was an assistant professor at Reykjavik University for several years, where he directed the development of the University’s MBA program and the School of Executive Education. Previously he worked as a Business Advisor for Aubrey Daniels International.


Dröfn Guðmundsdóttir

Dröfn Gudmundsdóttir is Nýherji's Chief Human Resources Officer. Ms. Gudmundsdóttir, who joined the company in 2013, has extensive experience in human resource management.

In 2003-2007, she worked as Education Administrator for the Reykjavík public preschool system and as Human Resource Manager for the Reykjavík Department of Education. From 2007 to 2009, she worked as a Human Resource Consultant for Straumur Investment Bank, as a Training Manager for Arion Bank in 2009-2011 and in 2012-2013 as a Human Resource Manager at the Icelandic Financial Supervisory Authority.

Ms. Gudmundsdóttir holds a B.A. in psychology from the University of Iceland and pursued post-graduate studies in psychology at the University of Giessen in Germany with focus on work and organizational psychology.


Emil G. Einarsson

Emil Einarsson is the Managing Director of Business Development and Service Management at Nýherji, providing equipment and technical services to corporate customers.

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.


Gunnar Zoëga

Gunnar Zoëga is the Managing Director of Nýherji’s Managed Services/IT Services/Frontline Services.

Mr. Zoëga joined TM Software in 2003 and has since held various positions at Skyggnir and later Nýherji, most recently as the head of Support and Managing Director of the Technical Department.

He holds a B.Sc. in Business and Computer Science from the University of South Carolina and a B.Sc. in Systems Analysis from Reykjavik University.


Gunnar Már Petersen

Gunnar Már Petersen was appointed CFO of Nýherji in January 2013. Gunnar holds a B.Sc. in Finance the University of Iceland and an M.Sc. in Economics from Reykjavík University. He is a licensed stock broker and holds an ACI Dealing Certificate.

Mr. Petersen was the CFO of Icelandic Express in 2011-2012 and the CFO of Landic Property Ltd. in 2006-2010. Prior to that, he worked as a Client Executive for HSH Nordbank AG in Copenhagen and a specalist for Icebank Ltd. and VBS Investment Bank.


Ingimar G. Bjarnason

Ingimar G. Bjarnason is 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.


Ágúst Einarsson

Ágúst Einarsson is the Managing Director of TM Software Ltd., a Nýherji subsidiary which specialises in software development and services for the healthcare sector. He has worked for TM since 2003 and served as Managing Director since 2007. He was previously the Managing Director of TrackWell Software, Skyggnir, SAP and Nýherji‘s IBM Department.

Mr. Einarsson holds a B. Sc. in mechanical engineering and an M.Sc. in industrial engieering from Aalborg University.


Þorvaldur Þorláksson

Thorvaldur Thorláksson is the Managing Director of the Wholesale Distribution Division at Nýherji. He was previously Head of Solutions and Services, he has a broad range of experience in the Icelandic corporate world and led the development and operation of the O2 Innovation Center for the Icelandic Chamber of Commerce.

In 2007-2009, Mr. Thorláksson served as the Director of SMI Iceland, international real estate management firm. In 2003-2007, he was the Director of Bónusvídeó Ltd. media distribution business. In 2000-2003, he was the Marketing Director and Deputy Manager of Smáralind, Iceland‘s largest shopping precinct.

Mr. Thorláksson holds a B.Sc. in Management Studies from the University of Bifröst.


Tomas Wikström

Tomas Wikström is the Managing Director of Applicon Sweden since 2012. He has worked for Applicon since 2000, holding various positions.

Mr. Wikström holds an M.Sc. in engineering physics from Uppsala University.



Nýherji hf. is an IT service provider. The aim of Nýherji’s personnel is to provide outstanding services, expert knowledge and to assist its customers in achieving ever-better success in their operations.

Nýherji’s results were very good in 2014 and much better than in the preceding year. Income amounted to ISK 8,350m, rising by 2.4% between years. Product sales were successful, particularly in the latter part of the year, and demand for technical and expert services rose in accordance with projections.

More demand for hosting services and computer management systems

EDemand for hosting and managed services for the IT systems of companies and public bodies has grown rapidly in recent years and is in accordance with the company’s advancement focus points as regards information technology.

Many of Iceland’s largest companies and public bodies rely on Nýherji for the design, maintenance and management of their IT systems. Nýherji’s client list in this field is extremely broad and diverse, consisting of almost 10% of the country’s workforce.


Approximately 30% more Lenovo computers

Remarkable success was achieved in the sale of Lenovo computer equipment during the year. Approximately 12,000 Lenovo computers were sold, a sales increase of more than 30% between years. In addition, there has been a significant increase in the sale of Lenovo tablets.

Security procedures that support exceptional service levels

Nýherji employs ITIL (Information Technology Infrastructure Library) service procedures to ensure exceptional service levels in information technology. Security in systems operations has been confirmed by the British Standards Institution in the UK (BSI-UK) with certification of the information security management systems of Nýherji according to the ISO 27001 international standard. The certification covers all of Nýherji’s operations, including the data centres in Reykjavík, Kópavogur, Akureyri and Egilsstaðir.


Applicon is a Nordic consulting and servicing company in the field of business software, with an emphasis on solutions from SAP, Calypso and Advent as well as its own software.

There are two Applicon companies, Applicon in Iceland and Applicon in Sweden. The operation of Applicon in Denmark was sold out of the Nýherji Group in March 2014.

Great importance is placed on the collaboration between the two Applicon companies as regards joint development and use of solutions in the Nordic market as well as co-operation with other companies within the Nýherji Group.

Applicon in Iceland

Applicon ehf. specialises in consulting services and the development of business applications and business analytic tools. The company offers SAP solutions and also specialises in integrated business solutions and application services with Vigor software.


Revenues rose by 7.8% between years and were ISK 990m in 2014. The results of the company were excellent and exceeded targets.

Applicon in Sweden

Applicon in Sweden specialises in consulting and services to financial undertakings in Sweden and elsewhere in the Nordic region. The company’s revenue in 2014 amounted to ISK 965m. Although the company’s results were below expectations, its operation has reached an equilibrium, which is a positive turnaround from 2013.

TM Software

TM Software specialises in the production of software and provides services and consulting on specialised software solutions for its clients.

The company focuses on three main areas: the development of its own software in the field of healthcare services, development of software for project management and time tracking (TEMPO) and providing consultancy and developing specialised software solutions for domestic and foreign clients.

TM Software performed well both during Q4 and during the year as a whole. The company’s revenues increased by 31% from the same time last year and amounted to ISK 1,663m. Foreign revenues from the TEMPO project management and time tracking solution rose by 84% between yeas and were 45% of the company’s total income.

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The Board of Directors of Nýherji regularly addresses corporate governance issues and each year holds a special meeting dedicated to the discussion of the work of the Board and corporate governance. The Board feels that it is important that corporate governance is under continuous review in response to changes in laws and regulations and developments in the areas of management and corporate governance.


The Board of Nýherji hf. strives to maintain good corporate governance and adhere to the “Guidelines on Corporate Governance”, issued by the Confederation of Icelandic Employers in March 2012.

The Board has established detailed Rules of Procedure defining its scope of authority and the divisions of tasks between it and the CEO. These rules include provisions on the conduct of meetings, rules on the eligibility of Board members to participate the process of business and non-disclosure requirements. They also include provisions on the disclosure of information by the CEO to the Board and the powers of the members of the Board, the majority of whom can bind the company with their signatures.

The current rules of procedure were approved at a meeting of the Board held on 28 October 2011 and are available on the company’s website, The Board has appointed an Audit Committee, the terms of reference of which are available on the company’s website. The Board regularly meets with the company’s auditors in conjunction with the release of quarterly financial statements. The Board does not feel that it is necessary to appoint a selection committee.

In 2014, 19 meetings of the Board and 7 meetings of the Audit Committee were held. All meetings of the Audit Committee are attended by auditors. All meetings of the Board and Audit Committee were attended by a majority of the members.

Board of Directors of Nýherji hf.

According to Nýherji’s Articles of Association, the Board of Directors is the supreme authority in the affairs of the company between shareholders’ meetings. The Board determines the policy of the Nýherji Group and follows up on the main tasks undertaken within the Group. An operating budget and investment plan are submitted to the Board for approval and regularly monitored by the Board throughout the year. The Board sets a strategy and organisational structure and ensures that the activities of the company are in compliance with the Articles of Association. The Board shall ensure adequate supervision of the disposal of the company’s funds and that the company’s accounts are in good order.

Back row from left: Loftur Bjarni Gíslason, Ágúst Sindri Karlsson, Benedikt Jóhannesson and Guðmundur Jóh. Jónsson.
Front row from left: Hildur Dungal, Finnur Oddsson, Nýherji CEO, and Marta Kristín Lárusdóttir.

The Board of Directors of Nýherji is composed of five members and one alternate member, elected at the Annual General Meeting for a term of one year. According to the Articles of Association, prospective candidates to the Board of Directors shall submit a written notice of their candidacy to the Board of Directors no later than five days before the start of the Annual General Meeting. Only those who have submitted a notice pursuant to the above are eligible as candidates. The Chairman of the Board convenes meetings of the Board and presides at Board meetings. Meetings shall be held at the discretion of the Chairman. Furthermore, the Chairman is obliged to call a meeting of the Board if requested by one member of the Board or the CEO. Meetings of the Board of Directors are valid only if attended by at least three members of the Board.

Role of the CEO

The Board of Directors of Nýherji hf. appoints the CEO and decides the terms of his or her employment. The CEO is in charge of the company’s day-to-day operation in accordance with the Articles of Association and the policy and decisions of the Board. The CEO has the task of developing and implementing a future strategy for the company as well as organising and overseeing its daily operations. It is also the responsibility of the CEO to ensure that the company’s operations are at all times compliant with statutory law and regulations as current at any time and that the same is true of the operations of its subsidiaries.

Shareholders’ meetings

The supreme authority in the affairs of the company is in the hands of duly convened shareholders’ meetings. The Annual General Meeting must be held before the end of June each year. Shareholders’ meetings shall be held at the discretion of the Board of Directors or at the request of the elected auditor or shareholders controlling a minimum of one-twentieth of the shares of the company. A request to call a shareholders’ meeting shall be made in writing and must specify the business of the meeting, in which case a meeting shall be convened within the deadline prescribed by law. Shareholders’ meetings shall be called by an advertisement in a daily newspaper or by other comparable means. The Annual General Meeting shall be called with at least three weeks’ and at most four weeks’ notice in accordance with the Companies Act, as amended on 19 December 2009.

The notice of the meeting shall specify the agenda and the documents and motions to be presented at the meeting. Each share carries one vote at shareholders’ meetings. The Annual General Meeting is generally held in February each year.

Amendments to the Articles of Association

The company’s Articles of Association may only be amended by a lawfully constituted shareholders’ meeting, provided that the notice of the meeting clearly indicates that such amendments are proposed and outlines the main substance of the amendments. A decision is valid only if it has the support of at least two-thirds of the cast votes and the support of shareholders controlling at least two-thirds of the share capital represented at the meeting. The Articles of Association of Nýherji hf. were last amended at the Annual General Meeting held on 18 February 2011.


The company’s auditors are elected at the Annual General Meeting for a term of one year. At the 2014 Annual General Meeting, KPMG ehf. was elected as company auditor for that year; KPMG ehf. also serves as the auditor of all of the company’s subsidiaries in Iceland. KPMG, moreover, is the auditor of Nýherji’s subsidiary in Sweden.

Model company in good corporate governance

Nýherji is a model company in good corporate governance according to the opinion of the Corporate Governance Research Centre at the University of Iceland, following Capacent’s detailed audit in the autumn of 2014.

31 DECEMBER 2014

329 shareholders

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