Good day and thank you for standing by. Welcome to the Columbus Financial Report Q3 2022 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Søren Krogh Knudsen. Please go ahead.
Thank you, operator. Thank you and thank you all for joining today's call. As the operator said, my name is Søren Krogh Knudsen and I am the CEO and President of Columbus. I'm accompanied here today by our new CFO, Brian Iversen, who joined us on October first. Before we continue, I'll just hand over to Brian who can give a short introduction.
Yes. Thank you, Søren. First, I want to say that I'm very pleased to have joined Columbus and to be part of my first interim presentation. Briefly about myself, I come with a broad finance background, within group finance, most recent as CFO in A. Espersen and before that, served as vice president and head of group finance at companies like GN Store Nord and FLSmidth. Having completed my first month, I can say that I've already met a lot of committed and professional colleagues, still mostly via Teams though and you can clearly feel that it is a company in change, rapid development towards a strong quality consultant house. Lastly, I would also like to say thank you to the openness and forthcoming colleagues I met the first months.
Super. Thank you, Brian. I look forward to running these calls with you and I suggest today we start by going through the agenda on slide four. The topic of today's presentation is regarding our performance of the third quarter of 2022 and we will start by looking at the business and financial highlights of Q3, which I'll take you through and that will be followed by a financial review and lastly, our updated 2022 guidance. As always, you're welcome to ask questions directly via the phone or write your questions in the chat and we will then pick them up after the presentation. Okay, let's begin. We'll go to slide 5 and begin the presentation. Columbus delivered positive business progress in all areas of the business in Q3.
Despite uncertainty in the, I would say, both the macroeconomic and geopolitical business climate, we delivered an organic growth of 9%, which were broadly in line with our expectations. Q3 is the sixth consecutive quarter where Columbus has delivered organic growth and the average growth has been 9% in the past six quarters. Other highlights in Q3. We continued our focus on strengthening customer centricity, which is essential to our strategy as advisors. As part of this focus, we have implemented a customer development program targeted towards our largest and most strategic customers in our main markets.
This program implies a designated customer team collaborating on a strategic level with the customers' C-level suite and it should ensure that we have a proactive and holistic approach to value creation for both the customer and for us and we see very good results from the program. Another important initiative in Q3 was the merger of our project and business lines into two global business lines. We call it Dynamics and M3. These two business lines constitute about 73% of group revenue in Q3 here, as well as year to date.
The merger does support the emergence of what we call sort of an evergreen cloud environment and what it means is that the ERP implementation cycles are really starting to be reduced from years to months and releases have gone from a sort of very big bang or silver bullet single go-lives to multiple and sequential go-lives. With the merger of our combined project and care, we simplify and improve the customer interaction to sort of cater for this continuous work stream. It reduces some complexity in our own organization and some overhead and it strengthens our ability to set the best customer teams. We have incorporated this new organizational setup in the financial figures that you will see later in this presentation.
In our Q2 reporting, we also described the new pricing initiatives to improve our EBITDA margin or general gross profitability. We now start to see that these initiatives are materializing in better profitability in the projects. The hourly rates has and is expected to continue to improve during the coming period and this obviously is an essential component in reaching our long-term profitability targets. As a side remark to that one, just so you know, the nature of the business is that all of the big customers that we are focused on now, we have with most of them individually negotiated contracts. A price increase program is not just raising a list price but a very elaborate process where you work through all of the customers in each country and negotiate new rates and terms for the work we do.
Okay, moving on. During the past months, we've also been working on both defining and launching our sustainability strategy for the coming years. In Q3, we launched our new strategy and initiated the implementation period. The strategy basically implies four programs, where the largest program is customer-oriented. Basically it's a service from our side towards our market. It's named Enabling Sustainable Impact and is focused on building digital solutions and advisory services to accelerate our customers' sustainability performance. With most of our customers in the retail, the food and the manufacturing industries, we have seen an increasing need for solutions to automate the very extensive ESG reporting they have to do towards authorities.
They also need to improve the traceability of their products and they need to be able to leverage all the data they already generate today to enhance automated sustainability insights because it's very time-consuming for them to do their own analysis today. That's where we can help. We are now in the process of developing a broad portfolio of advisory services and solutions within sustainability and we expect to launch the first solutions in the beginning of 2023. Moving on to recruitment. We continue our recruiting and retaining activities as planned. In Q3, we welcomed 46 new talents for our Accelerator program, which is basically the name we have for our career program for young graduates. It's a big investment for us and one we also did last year.
It's some heavy lifting for us to get these people integrated but very beneficial in the long run. The number of FTEs is currently at 1,587. That is an increase of 58 compared to June 2022, where we had our last count. If I should say something briefly about the financial highlights and I know Brian, you will go into more details. We did indeed grow organically by 9% to DKK 334 million in Q3, as just mentioned, with significantly higher growth in our strategic and future-proofed service area and a decline in the product area. We see good growth in all the business lines and in all market units and with particularly good growth in our new strategic business lines that are Customer Experience and Engagement, the Data and Analytics business line and also Digital Commerce.
We also see actually that our Dynamics and so our big business lines, Dynamics and M3, have delivered 7% and 24%, respectively, so also good growth. All up, as I said, the service revenue grew by 18% and the product sales declined by 30% due to the cloud conversion, which is this decline, as we've talked about before, is expected. However, year-to-date product sales have only declined by 9%, so there are some fluctuations between the quarters. EBITDA for the period amounted to DKK 60 million, which is an increase of DKK 50 million compared to Q3 2021. You may also remember that the Q3 2021 result was affected by some even more significant investments in new hires and internal systems, which also caused a little bit of a depressed EBITDA result back then.
It was essentially the first big investment I made in renewing the organization back in 2021. Efficiency for Q3 was 61% and that's compared to 64% in Q2 of this year. It's basically we're comparing here on a timeline rather than comparing against the same quarter last year, because we need to track that development quarter by quarter. Q3 does contain the summer vacation, so the efficiency is always tends to be a little bit lower in Q3 than Q2. Broadly the development is in line with our expectations but we do expect to continue improving our efficiency in the coming years. I could say that for the year as a whole, we had expected a slightly better pickup of our efficiency. It is improving.
We had expectations of a slightly faster improvement and we'll get back to that. Our EBITDA margin ended at 4.8% and we are not satisfied with this and this remains a focus point for us going forward. Overall, the result for the period is broadly in line with our expectations. I'll now hand over the presentation to Brian, who will present the income statement.
Thank you, Søren. I will now briefly cover our income statement. As you already mentioned, we grew organically by 9% and our service revenue increased by 18%. Staff costs increased by 6% to DKK 234 million. The increase is related to salary adjustment and increase in average number of FTEs by 113 in Q3 2022 compared to Q3 last year. Additionally, we have seen a decrease of 19% in other external costs compared to Q3 last year. In Q3 2021, other external costs was impacted by extraordinary high advisory costs. As stated earlier, EBITDA for Q3 amounts DKK 60 million, corresponding to an increase of DKK 15 million compared with Q3 last year. Columbus realized a profit before tax of DKK -2 million, an increase of DKK 12 million compared to Q3 2021.
The increase is mainly driven by the improved EBITDA. Next slide, please. We are now on the business line slide. In Q3, service revenue increased by 18% to DKK 294 million. In this chart, you can see the service revenue split on our global business lines. Dynamics increased by 7% to DKK 145 million, which now covering both the Dynamics 365 Cloud ERP and our Care business. M3 delivered a growth of 24% to DKK 70 million, covering both M3 Cloud, ERP and our Care business. Digital Commerce grew by 29% to DKK 40 million, which is primarily coming from Sweden. Data and Analytics grew by 50% to DKK 13 million. The revenue increase is driven primarily by our Danish and Swedish team.
Customer Experience & Engagement grew by 147%, DKK 10 million. The revenue increase is coming from Sweden, U.K. and Norway. Year to date, service revenue grew by 18% to DKK 394 million, as mentioned earlier. We are satisfied with the organic revenue growth in our business lines and we expect a further growth in the coming quarters. Next slide, please. Now briefly on our recurring revenue. Recurring revenue decreased by 4% to DKK 69 million in Q3. The decline is due to a decline in subscriptions of 52%. The development is expected due to the conversion to cloud. However, cloud grew by 52% and is now constituting a larger part of recurring revenue than subscriptions. ColumbusCare contracts were at the same level as last year, which is not considered satisfactory.
The recurring revenue now constitute 21% of total revenue of Q3 this year, a decrease of three percentage points from Q3 last year. Next slide, please. Efficiency is measured as customer work delivered divided by available customer hours. In a consultancy business as ours, it's a key performance indicator. In Q3, efficiency was 61% for the group. This is a decline compared to Q2 this year. This is partly expected in a quarter with summer vacation. However, it is not considered satisfactory as received. We expect efficiency to increase further in Q4 and onwards. I will now let Søren present our market units. Next slide.
Super. Thank you, Brian. I'll now go through the sort of geographic lens of the same thing, the market units. All our market units did deliver growth in Q3, ranging from 4% to 23%. As you can see, the Swedish market, which is our largest market, did deliver 23% increase in service revenue in Q3. The growth is more or less driven across all of the business lines. Denmark is slowly. We're getting that back on track. We've been working hard on getting a stronger pipeline in Denmark. Denmark now delivers a growth of 4% and that growth is mainly driven by our Dynamics business line returning to growth. Norway continued the strong momentum that they've had for a while and they also grew by 23% in Q3.
They are now delivering a 13% growth rate year to date and that growth also comes from all the business line. Also, very positively, the U.K. market unit did deliver 21% growth in Q3, which is mainly driven by our Dynamics business but also very much by our customer experience and engagement business. I think that's very impressive compared to all of the different external dynamics at play in the U.K. The U.S. market unit grew by 7%. However, that is actually mainly driven by a currency advantage we have currently. We do not consider that we have solid organic growth yet in the U.S. market. Overall, the development in our market units is considered satisfactory on a top line and particularly on a service revenue level.
Next slide, please. I will now cover the outlook and the updated guidance that we have issued for 2022. Start by saying that we now have in the past six quarters we have continued to deliver pretty solid organic growth despite especially recently some increased uncertainty and perhaps slightly less favorable business environment. We've made our investments in the new business areas and in higher value consulting skills and they have proven to deliver growth. We've also at the same time been streamlining our operations and processes and we continue to do so and we can see that it does deliver the positive effects. However, we also have to recognize that these initiatives have required significant effort from us and in the short term.
We are seeing improvements but we are seeing slightly slower efficiency improvements and also cost optimization improvement than expected, when we made the budget for the year. Good progress, not as fast as we thought. Our top line is broadly developing satisfactorily, although with, as I said, with slightly lower overall growth than expected due to a longer sales process. Therefore, we specify the revenue guidance to around DKK 1,525 million, which constitutes a growth of 8%. As a consequence of this and of the efficiency improvements, which are a little bit slower than expected in the second half of 2022 and the generally higher uncertainty in the market, we adjust our EBITDA guidance for 2022 to be just around DKK 100 million for the full year.
Columbus' ambition during the current strategy period is maintained and it is to gradually increase our profitable growth to a minimum of 10% annually by 2023. I will now hand over the conference call to the operator for questions.
Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. There are no questions at this time, so I'll hand the call back to yourselves.
Thank you. I have a question here on the chat, which I think we can start with from Doug and he's asking just for the pause. I'm just reading it aloud in case somebody's only on the phone. The question from Doug is, "Can you comment on the weak EBITDA result in Sweden and what should we expect forward in Sweden?" Yes I can, Doug. I think one of the main contributors to a weak quarter from an EBITDA perspective is a very big intake of our graduate program.
Sweden is kind of the stronghold for our graduate program and I believe the correct number was 48 graduates in our Swedish business, so that we take on board because we take them as they exit the universities and they need to be trained and undergo certain sort of internal programs before we can launch them to the market. Brian, I don't know if you want to contribute with further.
No, I think it goes in line with what we're saying. We continue the optimization and of course, any country will be lifted during that process.
Sweden, I could maybe add also, Doug, Sweden has produced the same improvements in gross project margin as expected. I don't expect Sweden to be permanently at a lower level than what we are used to seeing them at. Okay. Just waiting to see if any more will pop up. Okay. If there are no further questions this time, yeah, I would just like to point towards the possibility to reach out to Brian or to myself with any further questions or anything you want us to elaborate on. Otherwise, we do look forward to talking to you again and presenting the full year report when we get to that. Yeah. Good. Thank you.
Thank you.
I hand back to the operator.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.