Netcompany - Interim report for the 12 months ended 31 December 2023 and Annual Report 2023

Double digit growth and strong cash flow delivered in a challenging year

Company Announcement
No. 1/2024
25 January 2024

Summary

In Q4 2023, Netcompany grew revenue by 4.2% (constant 4.9%) to DKK 1,582.6m.

Adjusted EBITDA was DKK 244.1m in Q4 2023 compared to DKK 348.9m in Q4 2022. Adjusted EBITDA margin was 15.4% in Q4 2023 (constant 15.6%) compared to 23% in Q4 2022.

Average number of full-time employees increased by 412 FTEs from 7,353 in Q4 2022 to 7,765 in Q4 2023.

Free cash flow was strong and increased by 18.3% and was DKK 382.6m in Q4 2023 compared to DKK 323.4m in Q4 2022.

Cash conversion ratio (tax normalised) was 386.9% in Q4 2023.

Debt leverage was unchanged at 1.4x in Q4 2023.

For the full year, Netcompany grew revenue by 9.6% (constant 10.7%) to DKK 6,078.4m, in line with original guidance.

Adjusted EBITDA was DKK 901.2m in 2023 compared to DKK 1,106.2m in 2022. Adjusted EBITDA margin was 14.8% for 2023 (constant 14.9%) compared to 20% in 2022.

Free cash flow in 2023 was DKK 552.1m compared to DKK 602.7m in 2022.

Cash conversion ratio increased to 135.1% in 2023 from 85.2% in 2022.

For 2024, Netcompany expects revenue growth in constant currencies of between 7% and 10%.

Adjusted EBITDA margin measured in constant currencies is expected to be between 15% and 18%.

"Based on strong performance in the international part of the Group of more than 20% growth, we ended the year satisfactorily, and in line with our guidance, at 10.7% revenue growth for the Group, and at 14.9% adjusted EBITDA margin.

Towards the end of the year, we have seen a shift in customer sentiment in the Danish private segment and we have begun to convert pipeline cases accordingly. Furthermore, we begin the year with improved revenue visibility. Macroeconomic outlook still looks uncertain though, and the high level of geo-political unrest experienced in 2023 prevails. Therefore, we expect to grow revenue between 7% and 10% and deliver adjusted EBITDA margin between 15% and 18% in 2024.

We remain committed to our midterm financial targets, and based on strong free cash flow generated in Q4 2023, we initiate the first tranche of our DKK 2bn share buyback programme. The first tranche of our share buyback programme amounts DKK 150m and will be executed between 25 January and 1 May 2024.
I am proud of the results delivered in a challenging year by our more than 7,700 dedicated and talented employees. In combination with our enhanced Go-To-Market strategy focussing more on products and platforms and reusability, I am confident that we are on track to become a European market leader.”

André Rogaczewski
Netcompany CEO and Co-founder

Performance highlights Q4

• Revenue increased by 4.2% to DKK 1,582.6m in reported currencies and by 4.9% in constant currencies.
• Adjusted EBITDA margin was 15.4% compared to 23% in Q4 2022.
• Average employees increased by 412 FTEs to 7,765 FTEs.
• Free cash flow was DKK 382.6m.
• Cash conversion ratio (tax normalised) was 386.9%.
• Debt leverage to 12 months tolling adjusted EBITDA was 1.4x.

Financial overview

For full details on financial performance, see enclosed Company announcement Q4 2023 and Annual Report 2023 (incl. iXBRL)

Conference details

In connection with the publication of the results for Q4 2023, Netcompany will host a conference call on 25 January 2024 at 11.00 CET.

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 7876 8490

UK: +44 203 769 6819

US: +1 646 787 0157

PIN: 598046

Webcast Player URL: https://netcompany-as.eventcdn.net/events/annual-report-for-the-financial-year-2023

Additional information

André Rogaczewski, CEO
+45 70 13 14 40

Thomas Johansen, CFO
+45 51 19 32 24

Frederikke Linde, Head of Investor Relations
+45 60 62 60 87

Attachments

• Netcompany Company Announcement Q4 2023
• NetcompanyGroup-2023-12-31-en
• Netcompany Annual Report 2023