Q1 2025 Netcompany Group A/S Earnings Call Transcript
Key Points
- Netcompany Group AS (NTCYF) reported a 9.1% revenue growth in Q1 2025, driven by increased activity across all business segments except the UK.
- The company secured several new contracts in the public sector in Denmark and Greece, as well as a multi-year framework agreement with the European Border and Coast Guard Agency.
- Netcompany Group AS (NTCYF) increased its gross profit margin to 29.6%, a 1.9% point improvement compared to the same quarter last year.
- The company generated a free cash flow of DKK67.9 million in Q1 2025, a significant improvement from negative DKK4.9 million in the same quarter last year.
- Revenue visibility at the end of Q1 2025 increased by 3.8% to DKK5.6 billion, indicating strong future growth potential.
- The attrition rate increased by 1.7% points to 18% over the last 12 months, indicating potential challenges in retaining talent.
- The UK segment experienced a decline in private sector revenue due to the discontinuation of historical low-margin contracts, leaving overall revenue in line with the previous year.
- The gross margin in Denmark decreased due to continued time spent on business development, tender writing, and product development.
- The company's debt ratio was 1.2 times, reflecting a pause in the share buyback program due to the SDC transaction.
- The adjusted EBITDA margin in Denmark decreased to 22.3% from 23.4% in Q1 last year, impacted by lower gross profit.
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(audio in progress) And expect to close a transaction mid 2025.
And in connection with the closing of the transaction, we expect to begin the integration of SDC into net company banking services, and we will also reinitiate our share buyback program. We look forward to being able to share more information with you subsequent to closing of the transaction.
And can I have the next slide please?
So during the first quarter, we've won several new contracts of which I am mentioning a few here. In the Danish public sector, we were selected as the vendor for the development and maintenance of the student debt system. The new system will be implemented by leveraging our AMLO platform.
Also in the Danish public sector, we were selected by the Agency for digital government for the modernization of the NE account system, the central account registry facilitating public payments. The modernization includes moving the solution from
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