Netcompany Group As Adr

Good day and welcome to this presentation of NET Company's results for Q4 and full year 2025. My name is André Rogaczewski and I'm the CEO and co-founder of NET Company and I'm joined today by our CFO, Thomas Johansen. And before we get going, there are some important disclosures that I need you to read through. So could we have slide number two, please? I will pause for 30 seconds here and let you all have a read through of these important disclosures. And with that, can we go to slide number three, please? The topic of today's presentation is our performance for Q4, full year 25 and financial guidance for 26. I start by walking you through the business highlights for Q4 and 25 in general. And once I'm done, Thomas will go through the financial performance, including our guidance for 2026 before we can open the call for questions. And can we have the next slide, please? Over the past year, we've navigated a landscape defined by geopolitical uncertainty. In times like these, the call for a resilient, secure and digitally sovereign Europe has never been more urgent. At NEC Company, we are not just observing these changes, we are actively building the solutions that Europe needs to thrive. For both governments and private enterprises, the path forward is clear. We must move beyond legacy systems, streamline administration and responsibly embrace the power of AI. Why? Because technology that truly works and delivers tangible benefits is the single most important force that can bring Europe to a competitive edge. It's what will strengthen our position in the global race, a race where we, as a continent, stand for true democratic values. We have clearly differentiated our offerings from our peers, which is also why we continue to grow. By using platforms and products and AI will become a force in the industry and someone other vendors to strive to become. At the crucial and complex space where we operate developing regulated IT solutions that truly matter, we have a clear and ambitious goal to become a European tech giant. That is the future we are building. We will get there by accelerating growth and profitability by transitioning from a pure IT service model to a hybrid model, driving expansion through a portfolio of scalable products and platforms and related expertise. The future does not belong to traditional IT consultancy companies building solutions from scratch, but rather to European platform companies using components and products and AI to deliver in a fast, reliable and responsible way. And in 2023, we launched a product and platform strategy embracing this development, and we are strongly positioned to take market share from the more traditional players. Our talented employees embrace this development and we continue to look at how we can become better in everything we do. To us, this is not a threat, but an opportunity. And in 2025, we realized an ENPS of 32 compared to 22 in 2024, highlighting that the trajectory we are on is supported by employees too. With the combination of our products, platforms, AI and talented employees, I believe that NET Company is the most modern and future-pointing company in our sector. That is why when I look to 2026 and see the uncertain global geopolitics that the world finds itself in, I am comforted by knowing that NET Company will raise the challenge and enable that we digitize Europe responsibly, making it stronger, more competitive and resilient. To get there, first we need to show velocity. Europe's legacy needs to be replaced and new systems designed to embrace and embed AI must be put in place. Our dedication and skills combined with our platforms and products will get us there. Secondly, we need to show determination by consistently delivering on time, at budget and within the required quality. This is how we'll continue to stay competitive. By acting intelligently, by reusing as much as possible, adhering to our methodology, we will show the way. We are uniquely combining our own platforms and products with our abilities as a system integrator. This gives us the edge. This is how we will prevail. This is how we're different. We are confident in our direction and immensely proud to be at the forefront, building the digital foundation for strong, independent and prosperous Europe. And we will continue the momentum we've built to push even further in 26. Europe needs us more than ever. Can we have the next slide, please? In 2025 was also the year we cemented our position in the financial services industry with the merger of SDC into Net Company Banking Services. The integration has moved swiftly and since the beginning of this year, all employees of Net Company Banking Services have been integrated at our headquarter office in Copenhagen, fostering closer collaboration with colleagues from across the group. We have launched the first new modules for our net company banking services customers, and we will continue with ongoing new releases. During the second half of 2025, we've seen a significant improvement in margins, and we expect more to come as synergies will be realized. The integration is progressing faster than initially anticipated, and the synergy targets announced in connection with the capital market today remain unchanged. And can I have the next slide, please? That our purpose and ambition for a prosperous and digital sovereign Europe have had merits with clients in both the private and public segments in our markets is supported by continued contracts wins throughout the quarter. In the UK public sector, we have been selected by HMRC to implement and operate the next phase of the Trader Support Service, TSS. The solution will be built on our market-proven ERMIS customs product and our Amplio platform. Net Company Banking Services was selected by Oboes Bank in Norway for the delivery and maintenance of their new core banking system. The agreement is a testimony to a Net Company Banking Services approach to open architecture, flexible integration and a high degree of automation. In the Danish private sector, we've expanded our agreement with Forsa, bringing Festina alongside to deliver the pension solution for the future with Open Advisor. The implementation of Open Advisor platform from Festina will be a part of the complete pension solution delivered to Forsa and its customers. And can we have slide number seven, please? In the Danish public sector, NetCompany has been selected as a vendor under a framework agreement with the Danish Agency for IT and Learning. The framework covers development and maintenance of a portfolio of critical education and grant administration systems. And in the private sector in Greece, we have secured a three-year extension with COSMOTE payments. The extension includes development, maintenance and operational support across the full COSMOTE payment ecosystem. Furthermore, in the private sector in Greece, we have been awarded a contract by the National Bank of Greece covering several key strategic areas, including the development of the bank's AI framework. And with that, I will now pass on the word to Thomas, who will go through the numbers. Please, Thomas, go ahead.

Thank you for that, Andre. Like already mentioned, I am the CFO in NET Company and I will go through our financial performance for Q4 and for the full year 2025. So if we move past the breaking slide number eight and straight into slide number nine, please. We ended 2025 with a strong quarter and grew organic revenue in constant currencies by 10% compared to Q4 2024. Currencies impacted revenue growth negatively by 0.5 percentage points in the quarter, resulting in reported organic revenue growth of 9.5%. Organic growth was driven by 20.7% growth in revenue from the private sector and 5.2% growth in revenue from the public sector. Revenue growth was driven by a mix of new wins related to our products and platforms and revenue generated from existing customers with contributions from all segments. Group revenue grew 35.5% in the quarter, of which 25.4% were non-organic related to the inclusion of Net Company Banking Services. Continuing the strong performance in Q3, net company Denmark revenue increased 10.2% compared to Q4 2024, mainly driven by 27.9% growth in the private sector with contribution from multiple verticals, most notably in the financial services industry, with both new and existing customer engagements. Net Company's CEU grew revenue 6.9% compared to the same period last year. The growth was driven by both the public sector, including the EU, and the private sector, which grew 4.9% and 12.7% respectively. Net Company UK also continued its strong growth from the previous quarters and grew revenue 28.1% compared to Q4-24. The growth was driven by both the public and private sector, with increased engagements within tax and customs and defence and resilience. In net company banking services, revenue decreased 3.9% compared to performer revenue in STC in Q4 2024. STC results in Q4 last year were positively impacted by one-off revenues from customer quote-unquote out conversions and exit fees. In NET Company Norway, revenue increased by 7.4% compared to the same quarter last year, and in NET Company Netherlands, revenue was in line with the same quarter last year. Can we move to the next slide, please? During a year when most of our peers have seen little to no growth, NET Company grew organic revenue by 7.9% in constant currencies compared to 2024, fully in line with our guidance given at the beginning of the year. Organic growth was driven by both the public sector, including EU, that grew 7.4% in 2025, and the private sector that grew revenue 8.4%. Growth in both segments was supported by our go-to-market strategy, focusing on dedicated industry verticals combined with our embedded AI product and platform solutions. Group revenue grew 20.8% in 2025, of which 13 percentage points were non-organic related to net company banking services. Can we move to the next slide, please? In Q4 2025, organic adjusted EBITDA before allocated headquarter cost increased 21.3% to 346.4 million Danish, yielding an organic adjusted EBITDA margin of 18.8%, an increase of 1.7 percentage point compared to the same quarter last year . Group-adjusted EBITDA before allocated headquarter cost increased 41.2% to 403 million in Q4, yielding an adjusted EBITDA margin for the group of 17.7% compared to 17% in Q4 2024, even with the inclusion of net company banking services, which actually impacted margin negatively by one percentage point. In NET Company Denmark, adjusted EBITDA margin increased 4.7% to 26.2% in Q4. The significant development was a result of improved utilization and our continued focus on scaling revenue without a one-to-one relation in FTE growth, underpinned by a 2.5% increase in client-facing FTEs compared to double-digit revenue growth in the quarter. In net company CEU, adjusted EBITDA margin was 13.3% Q4 2025 compared to 15.5% in the same quarter last year. The decrease in margin was a result of lower license revenue income recognized in this quarter compared to the same quarter last year. In NET Company UK, adjusted EBITDA margin increased by 4.4% to 14% in Q4. An improvement reflected by better project execution as well as continuing focus on converting freelancers into own employees and especially public deliveries. In NET Company Norway, adjusted EBITDA margin was breakeven in Q4 and in NET Company Netherlands, margin decreased to 18.8% based on timing events. In net company banking services, the adjusted EBITDA margin was 13.3% in the quarter compared to performer adjusted EBITDA margin of 6.4% in STC in the same quarter last year. On a sequential basis, margin in net company banking services more than doubled compared to Q3 as the integration is progressing faster than anticipated and we're starting to see the impact from synergies materializing. The performance in Q4 2025 fully supports and validates our expectations to synergies, and with the recent win of Obers in Norway, we are confident that NET Company Banking Services will be able to take market shares going forward. Can we have the next slide, please? For the full year 2025, organic adjusted EBITDA margin before allocated headquarter cost was 17.8% compared to 17.6% last year, despite increased time spent on product and business development during the first half of the year, as well as time spent on preparation for the SDC integration. Group adjusted EBITDA margin before allocated cost from headquarter was 16.9% compared to 17.6% in the same period last year. The lower margin was fully attributed to the inclusion of net company banking services into the group. Can we have the next slide, please? In Q4 2025, we employed an average of 9,752 FTEs equal to an increase of 1,500 FTEs or 18.2% compared to Q4 2024. Of this, 7.8% were organic and 10.4% were non-organic as a result of including net company banking services into the total number. Attrition rate for the last 12 months was 18.1% for the organic part of the group, which was in line with Q4 2024. Net Company Banking Services is right now in the initial phase of a significant structural reorganization. Standalone attrition rate for Net Company Banking Services was 27.5% for the last six months. And can we go to the next slide, please? Along with previous years, a continued focus within our group is that of working capital management. And while our cash conversion ratio was lower at 98% compared to 147% in 2024, we are still satisfied with our result. First of all, we are comparing against an extraordinarily high cash conversion ratio in 2024. Secondly, two of the most important metrics indicating whether we are on the right track in our focus on working capital management both improved in 2025. The relative share of net work in progress and accounts receivables combined relative to revenue decreased compared to last year, as did days of sales outstanding. We ended the year with 287 million of cash at hand, up slightly from last year. Our leverage was 1.6 times, naturally impacted by the acquisition of STC, but still at a level giving us strong balance sheet momentum into 2026. During the year, we have executed share buybacks of 500 million, bringing our accumulated share buyback to 1.3 billion in the period 2024-25. We cancelled 2.5 million shares in March 2025, and we plan to cancel another 1.5 million shares in connection with the upcoming AGM, reducing our outstanding capital by more than 8% over the last years. To complete our three-year committed share buyback program of 2 billion, we have today initiated another share buyback program of 750 million, of which 700 million are to be executed in the calendar year 2026. Can we have the next slide, please? Revenue visibility for the group excluding net company banking services for 2026 amounts to 5.3 billion, an improvement of 8.1% compared to 2025. Revenue visibility for net company banking services for 2026 amounts to 1.4 billion and solely relates to the private sector. Can we go to the next slide? Taking the current macro and geopolitical uncertainty into perspective and observing pipeline and revenue disability at the beginning of the year, we expect our group revenue to grow between 15 and 20 percent measured in constant currencies in 2026, including net company banking services. Excluding net company banking services, we expect revenue to grow between 5 and 10 percent. From a margin perspective, we expect to deliver adjusted EBITDA margin between 15% and 18%, also on constant currencies and also including net company banking services. Excluding net company banking services, we expect adjusted EBITDA margin between 16% and 19%. Based on our market position, our superior product and platform offerings, we remain committed to our long-term targets and we expect to keep winning market shares in existing and new markets in the years to come. And with that, we've concluded the presentation of Q4 and the annual report. And if we move to the Q&A slide and open the call for questions. Thank you.

Thank you. We'll now start the Q&A session. If you wish to ask a question, please press five star on your telephone keypad. To redraw your question, you may do so by pressing five star again. There'll be a brief pause while questions are being registered. The first question will be from the line of Daniel Gerber from Hannes Bank. Please go ahead, John. I will now be unmuted.