Netcompany Group (NETC) Q4 2024 earnings summary

Executive summary

• Revenue grew 7.6% year-over-year to DKK 6,540.6m, with strong performance in Denmark, Intrasoft, Norway, and the Netherlands, despite macro and geopolitical uncertainty.

• Adjusted EBITDA margin improved to 17.7% for the year, up 2.2pp, reflecting operational improvements and margin recovery.

• Free cash flow increased 48.7% to DKK 821.1m for the year, supported by higher operating profit and working capital improvements.

• Workforce expanded to 8,249 FTEs, with attrition rising to 18.1% from 15.3% last year.

• Major contract wins in Germany, Denmark, Netherlands, Greece, and EU institutions, including digital transformation projects and public sector platforms.

Financial highlights

• Q4 2024 revenue rose 6% to DKK 1,678.2m; gross profit up 6.7% to DKK 488.5m; net profit up 78.6% to DKK 117.1m compared to Q4 2023.

• Gross profit margin for the year increased 1.3pp to 29.6%, led by Denmark and the Netherlands.

• Adjusted EBITDA margin for 2024 was 17.7%, up 2.2pp; Netherlands margin surged to 21.9%.

• Cash conversion ratio improved to 147.1% for the year.

• Free cash flow for 2024 was DKK 821.1m, up 48.7% year-over-year.

Outlook and guidance

• 2025 revenue growth expected between 5% and 10%, with adjusted EBITDA margin guidance of 16–19%.

• DKK 8.5bn revenue target deferred to 2027 due to UK public spending delays and divestment of non-strategic markets.

• Adjusted EBITDA margin target of at least 20% and DKK 2bn cash return to shareholders by end of 2026 reiterated.

• No new share buyback program to be initiated at this time.

• Revenue visibility for 2025 is DKK 4,895.6m (69.6% of guidance midpoint), considered normal.