Netcompany - Interim report for the 12 months ended 31 December 2019 and Annual Report 2019

Netcompany grew revenue by 23.4% and realised an adjusted EBITA margin of 26.8% in Q4 2019

Company announcement
no 2/2020
06 February 2020

Summary
In Q4 2019, Netcompany realised reported revenue of DKK 671.0m, of which DKK 654.7m was organic, corresponding to 23.5% (constant 23.4%) growth in reported currencies and an organic revenue growth of 20.5%.

Adjusted EBITA margin, when not including the non-organic impact from the Netherlands reached 27.9% which was 3.8 percentage point higher than Q4 2018.

The average number of full-time employees grew by 25% from 1,979 in Q4 2018 to 2,468 in Q4 2019. Part of the increase was related to the acquisition of Netcompany Netherlands, which affected the average FTEs in Q4 2019 by 85.

Free cash flow remained strong and increased by 412.3% from DKK 22.8m in Q4 2018 to DKK 116.8m in Q4 2019.

For the full year 2019 Netcompany realised revenue growth of 19.5% (17.7% organic) and grew revenue to DKK 2,453.9m in line with most recent expectations. Adjusted EBITA margin was 25.2% including the negative impact from the acquisition of QDelft in the Netherlands. Adjusted for this, margins was 25.9% - also in line with most recent expectations.

For the full year 2019 Netcompany realised revenue growth of 19.5% (17.7% organic) and grew revenue to DKK 2,453.9m in line with most recent expectations. Adjusted EBITA margin was 25.2% including the negative impact from the acquisition of QDelft in the Netherlands. Adjusted for this, margins was 25.9% - also in line with most recent expectations.

Revenue visibility increased by 15.7% to DKK 1,827.8m for 2020 compared to DKK 1,579.4m for 2019.

For 2020, Netcompany expects organic revenue growth of around 18-20% in constant currencies and non-organic revenue growth of around 1% in constant currencies. Organic and reported Adjusted EBITA in constant currencies is expected to be around 26%.

“During Q4, we have continued to deliver high quality in our projects and had important wins in the Danish market. Further, we experienced that delayed projects from the fall were initiated in the recent quarter as expected. During the quarter, we grew revenue by more than 23% and realised close to 27% in adjusted EBITA margin. In addition, cash flow was strong as we start to see the impact from moving work in progress to receivables and subsequent payments – also as expected. We have continued to recruit top talent and I am pleased to welcome 210 new employees to Netcompany. Looking into 2020, I am confident that we stand on a strong foundation to continue to grow our business and gradually move closer to our ambition of becoming a Northern European leader.”

André Rogaczewski, Netcompany CEO and Co-founder
 
Performance highlights for Q4 2019

• Revenue increased by 23.5% (23,4% constant), hereof 20.5% from organic growth to DKK 671.0m in reported currencies.
• Gross profit margin was 42.3% against 39.4% in Q4 2018.
• Free cash flow improved by 412.3% to DKK 116.8m.
• Cash conversion rate of 80.3%.

 
Financial overview
For full details on financial performance, see enclosed Company announcement Q4 2019 and the Annual report for 2019.
 
Conference call details
In connection with the publication of the results for Q4 2019, Netcompany will host a conference call on 6 February 2020 at 11.00 am CEST. The conference call will be held in English and can be followed live via the company’s website; www.netcompany.com

Dial-in details for investors and analysts:

DK: +45 32728042

UK: +44 (0) 8445718892

Standard International: +44 (0) 2071 928000

Confirmation code: 4976856

Webcast Player URL: https://edge.media-server.com/mmc/p/iibxxi3i

 
Additional information

André Rogaczewski, CEO +45 70 13 14 40

Thomas Johansen, CFO +45 51 19 32 24

Attachments