Netcompany - Interim report for the six months ended 30 June 2022
Netcompany realised revenue growth of 58% in Q2 and maintains expectations for the full year on Group level
Company Announcement
No. 24/2022
11 August 2022
Summary
In Q2 2022, Netcompany grew revenue to DKK 1,305.8m – equal to 58% growth compared to Q2 2021, of which 50.7 percentage points was non-organic and related to Netcompany-Intrasoft. Organic revenue growth was 7.3%.
In constant currencies, revenue grew 57.6% compared to Q2 2021, of which 6.9 percentage points were organic and 50.7 percentage points were non-organic.
Adjusted EBITDA was DKK 188.8m compared to DKK 186.6m in Q2 2021. Adjusted EBITDA margin was 14.5% in Q2 2022 compared to 22.6% in Q2 2021.
- Temporary higher level of sickness in Netcompany Denmark and Norway impacted margin negatively by 2.5 percentage points.
- Non-recurring adjustments to three projects in Norway impacted margin negatively by 1.5 percentage points.
- Improved employee benefits impacted margins negatively by around 2 percentage points.
- Netcompany-Intrasoft impacted margin negatively by 0.9 percentage point.
The average number of full time employees grew from 3,238 in Q2 2021 to 6,719 in Q2 2022. The acquisition of Netcompany-Intrasoft accounted for 2,965 employees of the growth while Netcompany Core accounted for 516 employees of the growth.
Free cash flow was DKK 7.3m compared to negative DKK 10.2m in Q2 2021.
Revenue visibility for 2022 increased by 62.4% to DKK 4,976.7m compared to DKK 3,064.5m at the same time last year. The acquisition of Netcompany-Intrasoft accounted for DKK 1,555.7m of the increase.
Netcompany maintains expectations to revenue growth and margins for 2022 on Group level.
“In Q2 2022, we grew revenue by 58% compared to Q2 2021 to DKK 1,305.8m, despite a temporary higher level of sickness in Denmark and Norway and non-recurring adjustments to three projects in Norway.
We continued to see a strong performance in our UK operation that grew more than 30% in the quarter and at the same time Netcompany-Intrasoft performed above expectations and grew close to 15% in the quarter.
Irrespective of the rapid changes occurring in the macroeconomic environment, in which we operate, we continue to see our pipeline increase across our business, hence we have continued to add new employees to the Netcompany family.
At the end of Q2 2022, the Group accounts for more than 6,700 employees including Netcompany-Intrasoft, and during the second quarter of 2022, we welcomed more than 400 new employees in Netcompany Core and more than 250 in Netcompany-Intrasoft.
Despite challenging market conditions, we remain confident that Netcompany is well situated to maintain strong growth and financial performance based on the society and business critical nature of our business, the unique delivery model and best in class employees.”
Performance highlights for Q2
- Revenue increased by 58% to DKK 1,305.8m in reported currencies and by 57.6% in constant currencies.
- Organic revenue grew by 7.3%.
- Gross profit margin was 27.9% against 35.5% in Q2 2021.
- Adjusted EBITDA increased by 1.2% and yielded a margin of 14.5%.
- Adjusted EBITDA margin was 15.4% for the organic businesses.
- Free cash flow was DKK 7.3m in Q2 2022.
- Netcompany Core generated a tax normalised free cash flow of DKK 10.5m compared to DKK -49.2m in Q2 2021.
- Netcompany Core cash conversion rate normalised for tax payment was 12.5% compared to -41.2% in Q2 2021.
- Debt leverage to 12 months rolling adjusted EBITA was 2.4x.
Financial overview
For full details on financial performance, see enclosed Company announcement Q2 2022.
Conference call details
In connection with the publication of the results for Q2 2022, Netcompany will host a conference call on 11 August 2022 at 11.00 CEST.
The conference call will be held in English and can be followed live via the company’s website;
Dial-in details for investors and analysts:
DK:
UK: 4
US:
Webcast Player URL:
Additional information
André Rogaczewski, CEO
Thomas Johansen, CFO
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