In Q3 2020, Netcompany grew revenue in constant currencies to DKK 699.1m – 18.1% compared to the same period last year. In reported currencies revenue grew 17.3%.

Adjusted EBITA grew 19.1% to DKK 195.5m compared to DKK 164.1m in Q3 2019, corresponding to an adjusted EBITA margin of 28.1%.

Average number of full-time employees grew 482 from 2,345 in Q3 2019 to 2,827 in Q3 2020, corresponding to a growth of 20.5% - all organic.

Free cash flow remained strong and improved by 18.5% from DKK 126.5m in Q3 2019 to DKK 149.9m in Q3 2020. As a consequence of the strong cash flow Netcompany reduced bank debt by DKK 200m in Q3 2020.

Based on current expectations for full year performance, Netcompany expects to redistribute around DKK 100m to the shareholders for the full year 2020 by a combination of dividends and share buy backs, to be initiated in 2021.

At the start of October 2020, revenue visibility for the full year of 2020 was DKK 2,719.9m compared to DKK 2,387.4m at the same time in 2019.

The second wave of COVID-19 has a significant negative impact particularly in the UK, as cautioned in connection with the Q2 2020 report. Thus, Netcompany expects revenue growth to be around 2 percentage points lower than previously expected, and adjusted EBITA margin to be around 1 percentage point lower than previously expected.

For 2021, Netcompany expects revenue growth of between 15% to 20%, still with a high degree of uncertainty related to the continued impact from COVID-19, and adjusted EBITA margins around 25%.

“I am proud to see the significant positive development that Q3 brought to two of our markets outside of Denmark – Norway and The Netherlands. In Norway, we won a significant development contract with the National Medicines Agency and in The Netherlands our business more than doubled compared to the same period last year.

We grew more than 18% and realised 28% in margin. However, we also witnessed the underlying economic conditions in the UK deteriorate significantly following the impact COVID-19 has had and continues to have.

The negative development in the UK leads us to reduce our expectations to revenue growth by around 2 percentage points and adjusted EBITA margin by around 1 percentage point.

Despite this adjustment, I am humbled by how we have performed during unprecedented times and at the same time it makes me really delighted to have welcomed close to 400 new employees to the Netcompany family during Q3.”
André Rogaczewski, CEO and Co-founder

Performance highlights for Q3 2020

• Revenue increased by 17.3% (18.1% constant) to DKK 694.7m in reported currencies.
• Gross profit margin was 42.2% in Q3 2020 against 43.2% in Q3 2019.
• Adjusted EBITA increased 19.1% and yielded a margin of 28.1%
• Free cash flow remained strong and improved by 18.5% to DKK 149.9m.
• Cash conversion rate was 101.4% and normalised for tax payment conversion rate was 77.8%.
• Debt leverage to 12 months rolling adjusted EBITA was 0.8.
• Strong free cashflow was used to reduce bank debt with DKK 200m and total cash and cash equivalents increased from DKK 176.6m in Q3 2019 to DKK 236.7m in Q3 2020.

 
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