Welcome to Netcompany's Capital Market Update, both to you here physically in the room in Copenhagen, and also to the participants watching online. My name is Thomas Johansen. I am the CFO of Netcompany, and I will be your host for the next couple of hours. You should have received the presentation this morning or have access to it online, and thus we have not made any handout or any printout for the group here. The agenda for the next couple of hours is as outlined here. Our CEO and co-founder, André Rogaczewski, will give an update on our strategy status, and he'll give a status on the current integration projects ongoing in Netcompany Core. André will also give a description of the Danish market in a little more detail, as well as the market potential in general in Europe that we will be tapping into towards 2030.
Once Andre is done, Alex Manos, the CEO of Netcompany-Intrasoft, will give a more detailed description of the part of the business that he's heading and the dynamics herein. Alex will also give a description of the different platforms that Intrasoft had developed before being acquired by Netcompany in October last year. Finally, I will touch on some KPIs and the seasonality of these, especially seen in the light of the impact that COVID-19 has had, both in 2020 and 2021. I will also briefly discuss working capital management, and I will give an analysis of churn rates in a longer time perspective. There is no planned breaks as the agenda is only 2 hours. Any questions to the presentation will be done after each presentation. Questions to André will be taken after André's presentation, question to Alex after his presentation, and the same for my presentation.
We will be bringing a microphone to be used on the tables for questions so that the participants online can also hear the questions. There is a chat function for those online that can be used for questions. We will do our utmost to answer all questions depending on time. We might have to skip some, and we hope that you understand this. The presentation in full will be available for replay during tomorrow or Thursday. Once we're done with the presentations here in Copenhagen, we will host a meet and greet session, which unfortunately will be difficult for you guys participating online to be part in. With that, I will give the floor to our CEO, André Rogaczewski. André, the floor is yours.
Thank you. Thank you, Thomas. Good to be here on this cold spring day in Copenhagen. I think that's what we call it. I'll go through the strategy and market update. I've been looking forward to do that. It's quite an exciting time we're living in after a COVID pandemic, now the war in Ukraine. But I'm happy to say that from a strategy and market update point of view, digitalization and the market that we are operating in is still very much alive and growing. I'll start with Netcompany in a glance. As you can see, the company is quite big, bigger than ever. I started the company 21 years ago, and it's been growing organically for quite a long time until 5 years ago, where we started acquiring different companies.
Recently, as you guys know, we acquired Intrasoft, now named Netcompany-Intrasoft, which is a considerable part of the business as well. The acquisition gave us entrance to several new markets and certainly also some really new exciting platforms that we are standing on top of, together with the things that we've already developed through the years in Netcompany Core, as we call it. From a revenue point of view and a numbers point of view when it comes to employees and a growth point of view, it's quite a considerable company in Europe, working on several vertical solutions in several markets. I think that's probably where I have to start. Netcompany is considered being a pure play IT company. We are not delivering legacy solutions. We only work with, some people would say even dull or a little bit boring, very complex IT solutions.
Solutions where we don't really sell hours, but sell projects or larger engagements, where we deliver from A to Z and where things have to work. A lot of that is today, in today's market, actually very technology agnostic. It's very important that you deliver on time, on budget, and within the required quality. That's been the focus of the company actually, since we started it. We want to do all the difficult things, the things that exist behind the scenes, whether it's tax or it's within transportation or whether it's within some of the financial sectors, you'll find Netcompany do some of the really, really difficult things. That's the Netcompany Core. We've been working with that for 20-plus years. We've delivered several solutions both to government and to private businesses, and many of these solutions we've been reusing both components and platforms.
The recent four years, we've been talking a lot about platforms. Wherever you go to a government or private company, their wish is to introduce one technical platform from where on they can launch a lot of digital solutions. The way we have addressed that is that we've created frameworks where we can combine these platforms, put them into play. Even put the platforms into the customer's environment, and from there on, stay with the customer in a very long journey where we launch again and again for years to come. Now, with Netcompany Core being built first organically and then adding smaller offices, turning them into become Netcompany, we found that platforms is a very, very good way to both sell and deliver. With Netcompany Expand, we've decided to buy ourselves into new markets with platforms and continue to deliver the way we've been doing for many years.
I'm happy to say that with Netcompany-Intrasoft, we have added a great set of new platforms to our portfolio. That's the way we see it. We will continue to grow the way we've been growing historically, but we will also look into how we can add more platforms and build our solutions on top of them. That will happen through organic growth and acquisition of well-run companies that have platforms that we can utilize in order to create even more exciting solutions and stay with customers for a long time. We've called it Netcompany Core and Netcompany Expand, and currently Netcompany Expand is Netcompany-Intrasoft that Alex will tell about just in a moment. The idea is that every time we win a new project together, we will use Netcompany methodology to deliver high-class, really high-quality solutions to the market.
Looking into the strategy of Netcompany, this is not a new slide. This is actually a slide that we've been showing for many, many years. The only new thing here on the slide, really basically from over the years is that we've changed the focus not only to buy companies or acquire companies with people where we have to change culture, people and everything. Now, we're also looking into companies that have platforms, and we will use platforms more and more, our own platforms, but also platforms acquired into the company. Gaining the market share on this slide, as you can see, we will still focus on the very same thing. Complex projects grow faster than the market, and we will grow in all the countries we are present in. Exporting the business model into existing geographies, that is happening.
I will give you a status on how things are going in each country, but also expand into other European countries. There's actually no reason why we shouldn't be able to deliver a platform-based solution in any of our countries using our methodology. The platform thing is gonna be, and you can already see it in the way we sell and also the way we deliver so much reuse, which is also the way we can scale the company even better, growing and making a substantial fundament for future growth, not only in the few years to come, but also on a longer timescale. Many of these solutions, if not all of them, are solutions that will live with customers for a minimum of five to ten years.
When you come in and you deliver these solution based on these platforms, you will stay with the customers for a long time. Of course, underlying all this strategy is the usual things that is always very important when you deliver solutions like these. You have to continue to attract the right people, make sure that they are there, they understand the methodology, they also know something about the platforms, and you have to make sure that you continue to identify the new types of solutions that are there. Right now, the IT business is changing a lot. The platform idea and being technology agnostic is shaping all of Europe at the moment. It is not standard software that we're talking about because the standardization of software and using standard packages is something today that is considered being non-differentiating.
That part of your portfolio of IT systems you of course need to have and it has to work, but it will not differentiate you. What I'm talking about here is all the platforms on top of that, the platforms holding the power of you differentiating your business, the things that you will change continuously to a lower OPEX than you normally do with older systems, and where you can burst with some CapEx investments into what you wanna accomplish from a business point of view. This is where digitization has been heading for a while, and we see it all over Europe, both in the government sector and in the private sector, and we are present in both. It is true, Netcompany was previously known for being a Northern European leader. We said that. I mean, I loved saying that. Now we are a European leader.
Why? Well, I have to say that maybe it's because a simple answer is we've shown that the way to sell and deliver these systems by using platforms is actually doesn't matter where it is. Many countries want the same solutions, and we see a lot of investments going on, and these things really crawl over borders. We've seen it throughout COVID as well when it comes to employees and the way we build systems together. There's no big difference in delivering one of these systems in Denmark or Norway or delivering it to, for instance, Benelux region. Right now we are very much present in Benelux and talking to all three governments about different solutions. The dialogue going on there is no way different from the dialogue that we have in Scandinavia.
There's no big reason for not addressing customers having this need wherever they are, and solutions can also be delivered more and more across borders. I think this evolution is happening faster than anyone even saw. I mean, we knew it was coming, but it's certainly coming fast right now, especially after COVID-19. Now, I think Europe will go through a decade of digitization. Every country right now is very ambitious. Even a country like Germany has articulated publicly now that they will actually invest more than any European country into digitization. We know that by digitizing government and private businesses, that's the only sustainable way to create a Europe that will stand firm and strong in the winds of global powers also digitizing.
Now, platforms and in Netcompany's case, it's gonna be the GovTech Framework, which is a set of 200+ references and components used for governments and the composable enterprise architecture framework, which is another set of solutions for private businesses. These are two pillars that we're introducing to customers every time we are out there. Now, some customers will use it 30%, some of them will use it 80%. That's where we start every time. We bring customers together, and we stand on these platforms, and we can see now that just in Europe alone, the level of investment into government and digitization is higher than ever. The next 2-3 years will see that explode in many countries. It requires the entry ticket to this, of course, and we know this is flawless execution of what we've been doing until now.
This is not a radical change in what we do. It's just a supplement or addition to what we do. We still have to deliver complex systems when we win them. We still have to deliver them the very same way. We still have to make sure that we are very profitable and that we deliver on time, on budget, within the right quality levels. Without that, I think the company will definitely have difficulties in gaining power. We need to make sure that every year we are one of the best in delivering quality, and we certainly are. Especially with the platform thinking, which has been in place but now is much more formalized, it's even easier to deliver and repeat what we are so good at.
We have to release and use the existing synergies in the company, and we have to make sure that in every country we go into, we are reusing what we know about that particular domain and how we run projects. I think realizing the top synergies of Netcompany-Intrasoft and in Netcompany is not gonna be that difficult. We're already showing that. Both companies are growing, and the platforms that we're addressing are being considered very interesting by all our customers. We will also, as a new thing, we've mentioned it for a few years, look at greenfield possible expansion into other geographic areas based on our platforms. That could be within tax, customs, the airport platform, as you guys know about, telco or banking.
I see no reason why we shouldn't enter, for instance, Sweden, if we get a large engagement with the government there or one of the larger private businesses. That will be the entry point for an organic growth into, for instance, Sweden. That creates a much more free, if you so will, much more customer-driven approach than the one we've had before, where we only looked at specific countries or geographies, and we went for particular companies where we were limited by the people in those companies. We spent, as most of existing investors know, 4 or 5 or 6 years in changing culture in a company in order for them to become Netcompany.
Now, we can actually go to a specific customer in a particular geography, even within the same country, and then create a strategic partnership with that customer, build solutions there, hire more people, help from other countries, and build up a new department of Netcompany across geographies. I think that's a very intelligent and customer-driven way of growing. It is not different in the terms of delivery. It is a little bit different in terms of how to approach customers, because before acquiring a small company in a particular geography, you had to make sure that that company would be able to attract customers in that particular geography. Buying a company having 200 or 300 or 400 people is not necessarily an interest ticket to a new market. It will take time, as we know.
It's much better to come in with a platform, sell that one to the customer, and then create the necessary delivery mechanisms around that. That's what we're seeing, not only in particular countries, but even in Denmark. New acquisitions will be platform-driven and not employee-driven. Okay. The methodology part and the Netcompany Core has not really changed that much over the last 20 years. The methodology itself and the way we execute has to be pure in a sense. Every time we sell something new or we go into a new country by acquiring a platform-based company, it is important that when we start delivering, that we deliver the same way, because that is the way that yields the margins that we are used to. If we start delivering differently, it will definitely look much more like an average IT company, and we don't wanna be an average IT company.
We have to do things right and not do them fast. I think looking into the recent developments, both in the four core markets that we'll go through in just a minute, but also looking into the great things that we're doing together with Netcompany-Intrasoft that Alex will talk about soon. We'll see that every time we engage into something new, we use the Netcompany methodology, and we use that in order to create the entire solution. Solutions that will go into maintenance after one or two years of build and implementation, and then run in maintenance for a long time and still bursting new developments over many years to come. With a lot of patience, a lot of sense of detail, delivering the right quality, you can stay with customers for a long time no matter where they are. I think underlying market conditions are quite favorable right now.
There's so many things right now pointing into this direction. We are definitely feeling and seeing many meetings and encounters being taken, not even on our own initiative. There's definitely a movement going on across Europe about digitizing and doing the same thing as other countries are doing. No doubt that Danish position as number one in digitization in Europe has been beneficial for us, and no doubt that the political agenda of investing so much into digitization across Europe is very beneficial for us. Because if the investment potential is there, people want to digitize, they all ask, "What are we going to do with our old legacy systems? What are we going to do with all the new stuff? Who can show us examples? Are there any platforms out there? Who can we choose to come in and do this?"
That's some really interesting talks and dialogues on a high strategic level, both on a country level, but also on an enterprise level with companies that span several European geographical areas. Looking through the company's history and where we are right now, the four acquisitions that we did the old way, where we bought people companies and that we changed them to become Netcompany, they are at the very end of that transition. We're seeing, w ell, yeah, you can always say, you know, it took some time, but we're seeing that these countries are actually behaving more and more as Netcompany offices the way we've seen in Denmark. So their margins are going up because they're actually working the same way as we are. Even though it took some time, they are definitely on the path to become very similar to what we do in Denmark.
The new joint projects that we do with Netcompany-Intrasoft, we will run the same way. We will not go into Netcompany-Intrasoft and try and change that entire operation because I think that would be, first of all, harder to do, and secondly, probably also take too much time. Instead, Alex and I will go out, and we will try to conquer new markets together. That's much more intelligent. It's the right thing to do because the markets is right there right now, and this is where the solutions will be acquired in the near future. This slide, I don't know, I would probably not make this slide. I think this is, I don't know, some clever guy who's started looking at the IT market in Europe. I think the short message is that there's a lot of addressable IT spend out there.
So we are by no means exaggerating the market at the moment. There's a lot of plays. I mean, the observant viewer will probably say, "André, could you just address maybe Denmark and maybe Greece?" Because if you look at the other countries, as you guys know, we are not the biggest IT vendors in any of these countries. In Denmark, we have 12% of the addressable market, and we are seeing a pickup, a real pickup, both in public and private IT expenditure. We don't see any reason why we shouldn't have ample room to grow, at least for a couple of years more and maybe even more. Right now in Denmark, investments are going up, both in public and in private. The same when it comes to Greece. We have a substantial market share in Greece.
With that, with all this investment coming in from Europe, being a big IT vendor in Greece is actually an advantage, because then you are one of the candidates to take that investment going in. Looking into Denmark, very strong position. We've had an average annual growth of more than 18% over the last three years. The good news is that Denmark is definitely not in any way trying to stop investments into IT. Quite the contrary. If you look into the pipeline of public expenditure in IT, it's actually going up much more than we've seen last year. There's a lot of new projects on their way in that goes within all the traditional administrative areas, where new systems are about to emerge and replacing old systems. But certainly also goes within the private sector. A lot of Danish enterprise companies are not only flirting, but definitely changing.
They're flirting with the idea. No, they're changing their entire core systems. Many of them are actually taking out their ERP systems or shrinking their ERP systems or getting rid of their legacy application suite. This is where we become extremely relevant as a vendor. In Denmark, growth is as it used to be, and we are busy. We will continue on focusing on doing exactly what we've been doing in Denmark for a long time. Now, being a vendor that is delivering so many business-critical and society-critical solutions, we will always be someone that you look to. Well, now it's we are very known as a company. If you look at the recent 10 large deliveries, we've made all the deliveries come in on time, on budget, at the right quality. That is quite an accomplishment.
In the Danish public sector, it is highly valued that these systems actually work and operate every day. We also see that in the portfolio of systems that we have, there's a lot of new work coming in because there's a lot of legislation happening, and there's also a lot of new self-service and workflow solutions coming in. I think, and we feel, and we see a continued strong demand from customers, and we have a lot of deadlines that we have to live up to, and we are very busy. Recently, we came out with a new pension solution to the elderly in Denmark. As you guys also know, we are working on the new solution for elections in Denmark. We also have a very strategic partnership with TAXUD delivering the systems from Netcompany-Intrasoft, where we've been working together with Netcompany-Intrasoft for several years.
One issue that we always encounter, especially in these times, is, you know, the talk about churn. Churn in Denmark is around 17%-19%, which is normal. It is not new or problematic. We've been between 15%-20% over the last 20 years. We don't want to be a lot over 20%, but we don't want to be a lot under 15%. During COVID, we were down at 14%, especially during the first year, which was, I think, a little bit too little. That was the time that was the way the market was portrayed at the time because a lot of people were nervous about their job situation. We see a strong demand for a GovTech Framework. We see a strong demand for solutions coming in, also from other countries. Strong demand for flexible platforms. We see our market share not being a problem at the moment.
This is a list of major public wins. When you look at the list, you realize that's quite comprehensive. I've mentioned the social pension system, which is implemented. As you can see, in 2019, we implemented 3 major systems. In 2020, we are working very much with EU customers and tax department. In 2021, we've started on the election platform, and we've won several larger deals here. We are writing tenders, I think in a way now that is even more tenders in parallel now than we've done in previous years. Very busy environment in Denmark when it comes to public business. Okay, Norway. Let's turn to Norway. The Norwegian practice is the first one we acquired. It's a very well-functioning practice now. We've been through some changes up in Norway over the last four or five years.
We've had an average growth of 16% 2019 to 2021, despite, as you know, we had a year in 2020 where we did some changes in Norway. We've won larger public deals, and we've increased our activity in private segment. Right now, Norwegians are very busy. We've been through some of the wins. The pipeline is strong. The wins are both in private and in public. You know Oslo Municipality as a strategic customer. We won a big deal there. We are working with Møller Mobility Group on digitizing the car fleet and the import of cars into Norway. We have positioned ourselves into the Norwegian public space as a vendor, a newcomer, a contender, that can actually deliver high-level quality solutions with the same source of competency coming from Denmark, which is very popular in Norway. We've added senior resources in the Norwegian partner group.
Despite Norway being a tough labor market, we've opened a new office in Trondheim. We have great employees coming in, both in Oslo and in Trondheim. With the academy that we have in Denmark and now also locally represented in Norway, there's great interest from local young people to join a company that has this type of purpose-driven mentality. We did it the hard way, so we're using the Netcompany methodology on all our Norwegian projects. In Norway, we've been delivering on the Netcompany methodology from the very beginning. We've been teaching that from the very beginning over the last five years. There's no projects anymore in the Norwegian practice that are run the original way. We will see a Norwegian business right now performing more and more like the Danish one. In the U.K., it's a very interesting market. It's the largest IT market.
I think people tend to forget that. Every time I come back from the U.K., and I'm quite often in the U.K., people always ask me, you know, "What are you doing in the U.K.? All this Brexit and what are you doing there?" Digitalization is really happening in the U.K. There's huge ambition, both in public and private. We see great growth over there. We've had a breakthrough both in the public and private sector, especially in the public sector, where we have some really good contracts and great cooperation with both NHS and HMRC. HMRC, of course, also using some of the Netcompany-Intrasoft platforms, but definitely also coming in and helping HMRC on various dimensions. We also have other customers in the public and private space which are really interesting, going from railways to even airports. It's really interesting what we're doing there.
I think we're mentioned in The Times just recently about this project for the energy DCC, which is collecting. They're actually collecting different types of data from all the self-metering devices in the U.K., both public and private customers and enterprise customers, is a great example of how we deliver more and more complex solutions in the U.K. market. Looking into that market, we see a lot of growth, a lot of tender activity. We have been able to attract a lot of great people there. We've gotten rid of all the contractors, almost. We have a lot of permanent employees there. We've hired a set of new partners who have joined the company, delivering both business development, but also continuous relationship building up with the customers that we have there. Significant improvements in 2021.
We have utilization there which is close to our group target, so we are very, very busy, and we also see better pricing mechanisms in the U.K. I'm very happy to say that we definitely see a fundament there to grow the business even further, and there's no roof on top of the market, and we are in some really, really interesting customers where I see a lot of potential. The Netherlands, well, the Netherlands was the new kid on the block, so to speak, a very small office that we acquired two years ago. As you guys know, we had a turnaround case in the Netherlands last year. We changed the organization. We didn't wanna wait another four or five years like we did in Norway. We decided to do the right thing from the beginning.
We added a new management team, and we also went straight to start selling the things that we're selling in Denmark, in Norway, and in the U.K., instead of waiting too long doing the wrong things. That has paid off. We've seen new contracts being won. I know it's on a poor background considering the numbers from last year. Even in the Netherlands, you'll see numbers will go up, both in terms of course, growth, but also in terms of profitability. It is a large and highly interesting market. Remember that the company we acquired was focused primarily and only on public government business. They are very close to Den Haag. We have dialogues with government there. The Dutch are very much into looking into what the Danish administration is doing on a lot of different areas, specifically also within tax and customs.
I think there's another synergy that should be mentioned here as well, and that is, of course, that with Netcompany-Intrasoft, we have a big office in Brussels. We're doing a lot of things in the EU institutions, and together with the office we also have in Luxembourg, we now have a great representation in Benelux working with government, both EU government, but also now, as a new thing, we will address governments not only in the Netherlands but also in Belgium and even in Luxembourg. We have the power to do that, and we have the palette of solutions to do that, and we have the references to do that. That's gonna be highly interesting as well. I see the Netherlands as a very, very good example of us doing things a bit faster, and in a way to just go in and start delivering on the platforms.
The new deals we will do in the Netherlands, we will not start selling two, three, or five people going into some customer and, you know, get to know the customer and forget about it. We're gonna sell platforms and solutions, we're gonna use references, we're gonna go in together with Netcompany-Intrasoft, when it comes to tax and customs, and we're gonna sell whole solutions, and we're gonna deliver them from the Netherlands but also from the other countries where we're present. We're gonna work together, closely together with Delft University, where we are present, and other universities in order to hire a lot of young, new people, attract them in exactly the same way as we've been so good at, both in the U.K. and Norway.
I think that's the right way to go, and we're already seeing some really, really positive signs of both wins and deliveries, the same way. We have a slide about Sweden. I mentioned it in my introduction that we might do some greenfield. This has opened up even more because of this platform approach. Because sincerely, there's no reason why. We already have Swedish customers in southern Sweden. We have Swedish customers even in Stockholm, where we do some work for them, but based on our resources in Denmark. We have 130-140+ Swedish resources working in the Danish operation right now. We also have Swedish-speaking people working for us. There's no, absolutely no reason why we shouldn't go into Sweden if we win one of those major contracts for either government or one of the private businesses there.
Having a contract in Sweden will enable us to not only use our Swedish employees in Denmark but also hire new Swedish people in the Swedish market. Again, that's a very good example of growing based on the platforms. In this particular case, if we have a big contract in Stockholm, say, that needs 40 or 50 or 60 people to start with, we probably put in 5 or 10 people from other countries where we have experienced people, and then we will add the rest in the local environment, and then we gradually build it up organically from there. Based on the platform that will differentiate our win and not the people. I think that's my walkthrough of the, both of Netcompany's strategy but also the existing markets where we're in right now.
Should we take questions now? I think it's better to take questions for this part now, and then we will ask Alex to come up and do the Netcompany-Intrasoft talk. Please go ahead. Yes.
Claus Almer from Nordea is on. Two questions, Andre. First of all, moving to this platform thinking, what will that do to the organization? Do you need to make some changes to how you drive the company? That'll be the first question. Second question, if you're going organic in Sweden this year, which platform are you going to sell?
Yeah, two good questions. The first question, the answer, the short answer is no. The platforms, you have to think of them, they are technology agnostic. We're already using them. It's something we're doing everywhere. Now, you can always argue how much of a common platform we are using on a particular project. What we do every time we start a new project, we always look into, you know, how much can be reused from a similar customer. The way it's been happening over the last two, three years is that even when we sell the project, we start with the first dialogue with the customer. We start showing what we have from similar projects, and we use that. It's the same technology. It's the same methodology.
It's just a greater reuse percentage and also a more formalized, explicit way of talking about the solutions, having references and concrete technical components. In the case of the GovTech Framework, we have 2000+ components now that we combine every time. Now, some of them are in clusters, so you could say this user handling mechanism is already in a cluster. We're using it 50 other places. We will reuse it again. Some of them are also in clusters when it comes into domain-specific things. If you're selling a solution where it's grant management, what is grant management? Well, you're granting something to someone. There's a set of criteria, there's a rule engine. You know, you need to make sure that you didn't grant too much in terms of what budget you have.
All these things are very common for a solution, so we call it grant management. In some cases, it's 50% reuse, 60% reuse. Some cases only 30%, but we always start with the platform, and when we address the customer, we know that they want grant management, and we have grant management. That was a long answer. The short answer is no. Your second question?
Which platform will drive your.
In Sweden? Yeah. That's a good one. There's a race going on at the moment, so it's gonna be difficult for me to answer. I think you'd see platforms within the government space. It's either gonna be something like grant management or workflow for specific government bodies. I think that's probably one of the first places we go to, but I can go into more detail about that.
No, no. Thanks.
Wei from SEB. Thank you for taking my question, André. I have a couple question here. Firstly, just regarding the international operation. Now you're using like 80-100 people from Denmark to support only 2-3 operations. Considering you will have a lot more after the acquisition, how would you handle it when you know more operations need support from you? How would you multitask in time?
Yeah. I think you got a very valid point there, you know, because every time we do something that is new or difficult in a new geography, you need help from not only Denmark, but actually we have some really, really good people in Poland and even in Norway now. It's not a question of whether they're Danish, this is the thing. It's a question of how long have they been in that company, and how many times have they been on a Netcompany project. It's not even just Denmark, it's just experienced people helping less experienced people delivering. I think from.
We have to be careful here, because from a relative standpoint, I don't want that part to go up, because you, as I said before, the entrance ticket to do all these things is also to have an operation in the existing countries that is actually growing and is very profitable. We will deliberately not, you know, dilute the quality in order to just gain market share. It's always a balance. Yes, it's around 100 people now. When Netcompany grows, will it become a larger number? Probably a larger number, but not too much. It can't grow much more than the company is growing because we need to make sure that we are very profitable, that we deliver quality, and we build up new references all the time, both in Denmark, Norway, U.K., and also in some of the Netcompany-Intrasoft things that we're doing at the moment.
I think it would be wrong to just throw too many people at this. Sell the right thing in the right tempo. I think the Netcompany-Intrasoft acquisition was a great move. It was a bold move. It's the right move. Now we're getting into a new market, both geographically, but also from a platform point of view. We also have to show that we are delivering, still delivering quality, creating the margins that we've been used to in the markets that we've been in, and that we can actually, you know, get some synergies out of this. I don't think the right move right now would be to just take the best people we have and throw them out in all these markets and then do your best. No way. Be very, very careful of what you sell when and deliver high quality and yield those margins.
Then, I mean, the Intrasoft acquisition, looking at cash flow and the way the company works is paid off after one and a half year. That's the entrance ticket to do what we do. If you continue doing what we do, you can also do more acquisitions. You have to deserve it. Does it make sense?
Yeah. Very helpful. Thank you. Secondly, regarding the international projects which you mentioned you will do the project together with Intrasoft and Netcompany, how would you split the work between the resources from the two very different organizations with different cultures?
Yeah.
What profitability level should we assume for those kind of projects?
Yeah. You know, I can't tell you the last one in detail, but the way it's gonna work is that, first of all, what we will go for together, and we're already doing that. We're doing that in Denmark right now. We're delivering very high complex solutions within customs to the Danish Tax and Customs Office. Now, we are delivering in teams where the Netcompany Core is about 50% of people, and the Netcompany-Intrasoft is about the same, depending. The people coming from Netcompany-Intrasoft, they are very skilled people. I mean, Ax will tell you about that. They know everything about customs, the Union Customs Code, 'cause they have a software platform that's actually one of the best in the world regarding customs. We know a lot about what the Danish tax wants and how to run a complex projects with 50 or 100 interfaces.
Together we deliver that. The good thing is, in terms of Netcompany-Intrasoft, we've actually been doing it for several years, so it's not like a new experiment. We of course try to mimic that also if we win something in Benelux or we win something in Sweden. We will of course mimic that way of working together. When it comes to margins, I can just say they will go up, but I can't tell you exactly how much. It needs to take the time it takes, but they will go in the right direction.
Cool. One more question, then I jump back to the queue. Just a follow-up question on GovTech platform. Should we assume any cost benefit to you? Because you have mentioned you can save a lot of. You reuse a lot of resource and components in those kind of projects.
Yeah. I think you got two opposite forces there. I mean, that's the way I look at it personally. In some projects, you will see a lot of benefits. I mean, you will see better margins. You also have to remember, like, that involving new people going into new geographies, that will also dilute the quality in the beginning until people know exactly what they're doing. I think you need the platforms in order to make sure that your chances of succeeding are higher. The more you reuse, say 30, 40, 50%, especially the technical environments. I mean, if you've got the technical environment set in stone and you're like, "This is how it works. Don't think too much about it. It's already there." Fine. That risk is out of the project, then you can concentrate on the other stuff, and eventually, that will give you much better margins.
I think we have great margins. I think we have really, really good margins, right? I'm not gonna promise even better margins. I'm just saying the new countries will gradually move towards the margins we have here. Maybe someday in the far, far future, that could even go better. Right now, no. I think you have two opposite forces. You've got the platforms yielding better chances of delivering, but you also have new people. Those two kind of even out, so you can deliver fast, but still within the right quality and within the margins that you guys expect.
Thanks.
Hi, George at Morgan Stanley. Can I just ask how you view your internal competency around M&As having changed over the last few years? You know, pre-Norway, obviously, there probably wasn't much of one. Where are you now? And also, how's the structure? Do you have an internal team looking at this constantly or using external consultants? Thank you.
Yes, good questions. I mean, it has certainly changed, because I think the philosophy has changed some parts because, when we started on this, we sincerely believed that it was just a question of changing culture by putting in cultural agents into an organization, and over time, it will, it would happen. Now, looking into the numbers in Norway and the U.K., I mean, Norway, the company we bought was acquired, like 135-150 people. Now, looking at who's left there after four or five years, I don't know, 20. But the company now is what? 400 people. So looking at that equation, you go, it was a great idea and it worked. It took some time, but it's not the most effective way of doing it.
I think, you know, looking at how well we actually hired new people, we should focus much more on hiring people in the local geographies and adding in, coming in with platforms instead. It has changed, the philosophy has changed, but hey, you are allowed to become wiser over time. I think the new way of both going in acquiring platform companies, but also going in greenfield, like we talked about with Sweden, is the right thing to do it. Secondly, organization around this is, we have a combination. We have our own people as well, but we're also hiring external help, and now we are definitely. We have a very, very professional M&A. It is with M&A, as with everything.
I mean, you can have 100 names or a list of 100 companies, but it's only maybe the two or three or four really relevant ones that you want to engage with, and it takes time to also create the relationships. I think it's good to have a long list, but also focus on the ones that you think could be a potential. I mean, Alex and I, we've known each other for what? 3 years, 4 years before it happened. It can take some time. Yeah.
Yeah. Maybe one follow-up just on the U.K., given we've talked about it. You know, do you feel you can go even faster in the U.K.? I mean, you could be there in 5 years and still be at less than 1% market share. You know, I'm just thinking.
It is a big market, but the way I look at it, we are hiring a lot of great, very talented people in the U.K., especially also north of London. We're looking into enlarging that part of our business. There's so much talent, but also a lot of work in the U.K. I think looking at organic growth in the U.K., if you just grow the existing operation by +20, maybe even more, 30%, it will become a considerable player in a very few years to come. Add on bolt-on acquisitions, I know what you're asking about. You know, you always have to be awake and opportunistic. If that happens, it will be platform-based. It will be a solution that we need in the market.
Understood. Thank you.
Yeah. Poul Jessen, Danske. Come a little back to the question about the co-wins. If you win it together and you deliver on the Netcompany methodology, where will it then be reported or delivered? Is it Intrasoft or is it Netcompany or a new co-setup or-
Well.
How's deliveries going to be?
It is a very, very good question. Because if it's delivered, let's say it's in the Netherlands. Well, if it's in the Netherlands and we win a big deal in the Netherlands using Netcompany-Intrasoft software and Netcompany-Intrasoft people, and we deliver it in the Netherlands, it will be reported in the Netherlands right now. If it's in Netcompany-Intrasoft. Yes, if it's in Netcompany, yes. That it will be reported there to start with. Yes. Gradually, it will be, you know, over time, this whole thing with the Core and Expand. I mean, gradually, over time, it will become more and more the same company. In the beginning, it will be reported all there. Thank you, Thomas.
You talk about entering Germany in 2023, I guess through an acquisition. Are we talking about Intrasoft size or is it the U.K., Norwegian size that you want to enter a country?
You mean in terms of people? Yeah. Well, the most interesting part of entering a new country or geography is gonna be the importance of the platform and how many customers it has, really. So, could that mean that the size of the company could be the same as Intrasoft? Yes. Could it mean a much less? Yes. The most important part is actually the platform an entrance point to new customers, and not necessarily whether it's 500 or 700 or 300 or 800 people.
Going back to a discussion on the Q4 numbers, how do you define becoming a European leader? Is it revenue, project sizes, CapEx or what's needed to be a leader in Europe?
Well, first of all, leader within what, right? I think right now there's no doubt that we are becoming a leader within GovTech. Specific parts of government administration, we are definitely becoming a leader, one of the ones you want to meet with and talk to, especially when it comes to administration. When it comes to healthcare administration, all the traditional benefit areas, we're definitely a leader. Hopefully, we'll also be a leader within airports, a leader within transportation and all the systems that we do within those areas as well. That's how I see us become leaders. Of course, then when the company grows to a certain size also of employees and geographical span, you would also say it has considerable size, right?
When are you a leader in Europe in size? Good question. 15,000, 20,000 people with 6, 7, 8, 9, 10 countries, I think you're getting there. Europe needs large companies with the stomach and appetite for delivering high quality systems in Europe. I think from a geopolitical standpoint as well, I mean, I just love the fact that we can position ourselves there. We don't wanna buy from the Americans anymore. We certainly don't wanna buy from the Russians or the Chinese. I mean, we need companies like that in Europe. I think there's great space for a company like ours.
All right. I will take one question here from the online audience, André, and that'll be the last question before we move over to Alex. The question is from Mads Quistgaard o from Carnegie. It goes, The discussion about Sweden has been ongoing for a long time. Have you lost any large tenders in the public sector? And if not, are you doing tender writing activities at the moment?
The first answer is yes, we have lost a few tenders. The second answer is yes, we are writing tenders. Certainly are. We always are, also in Sweden. Okay. Good. Alex, please come up to the couch here and continue to talk about Netcompany-Intrasoft.
All right.
It's good to have you here, even though with the hand and everything.
It's good. Good. Thank you.
You need this. You need this one.
All right. Hi, everyone. Pleasure to meet all of you. It's the first time I talk about Netcompany-Intrasoft in this audience. I hope I'll be able to cover enough ground, but after I'm done, I'll be more than happy to answer any questions that I can answer. Just to get started, we've been around for over 25 years now. The company was originally founded in Greece, but very soon it moved to Luxembourg. One of the first activities of the company was to work for the European institutions, develop IT systems for the European institutions, and the company pretty much grew with IT provision in the EU institutions. We shifted our headquarters to Luxembourg at some point, and today the company is headquartered in Luxembourg, and it has a number of subsidiaries or offices throughout Europe and a presence also in the Middle East and Africa.
We have managed to be a key player with the European institutions consistently for the last 20 years. We have been ranked within the top three, I would say, which is not a small feat. Not only did we manage to do that, we managed to capitalize on that in taking knowledge from the European institution and using it in order to win business for national governments or develop systems, platforms, or products that I will talk about later on. We've had a steady revenue growth and EBITDA growth over the last seven years. It has not been of the size that Netcompany has managed to achieve, but nonetheless, we have managed to grow year after year in all practical KPIs. Today, we have about 3,000 full-time equivalents.
Although a very big part of the business is within Belux because of the European institutions, the majority of our staff is in Greece, where we have about 1,850 people, I think. We have about 500, a bit more in Belgium, about 300 or more in Luxembourg, and the rest are in the other companies and offices that we have. As I said before, year after year, we have managed to grow, and we have managed to grow completely organically. We had no outside investment, and we had no capital increase. It was again in my team's eyes we managed to do better and better every year fully based on our own strengths. Where we did really well the last two years was in building our order backlog where we actually managed to close 2021 with something like EUR 900 million in contracted business. Okay?
That of course creates a long runway for us and a significant amount of security for business that we have to do and deliver in the future. I think it's an excellent part of the story with Netcompany because now we have contracts where we can grow together or we can bring in GovTech Framework components the way of working and try to do even better than what we've been doing so far. The European institutions market, which is something that Netcompany has probably never spoken about, is actually quite significant in size, and it's about EUR 1 billion of spending in IT per year. I think it's actually a bit more. Next time I can have much more accurate statistics, but I know it's at least EUR 1 billion. And it's the market that basically serves all the DGs of the European Commission and the European Parliament, okay?
As you can understand, there's a huge presence in Belgium and Luxembourg, but also agencies throughout Europe that need to be serviced, that need to use IT in order to run their business, but also approach the citizens, the public, and interwork with the local governments. It's not easy to get into this market, okay? It's not easy to get into this market in a way where you actually build value. You can get in if you wanna just offer some IT professionals. In order to be able to get in and actually develop these large, complex IT solutions that allow all the countries of Europe to work together and implement common policy, that is something that is quite hard, okay? The other part of the business that we do, which is also quite hard, is offering managed services to all these extremely demanding customers, okay?
I'll talk about this a bit later. One other interesting part of this business is that it works with large framework contracts that last for between four and eight years. First, you need to compete to get in, and once you get in, you either have a full contract like this for yourself to implement for the next 4-8 years, or you actually have to compete again and again with the others that manage to get in the shortlist, the three companies usually that get on the shortlist, in order to get specific contracts and implement. Most certainly in the last 25 years that we've seen, being in a framework contract most probably will mean you will have a sufficient part of the business. There's over 70 institutions and bodies around Europe that need to be served. A few words about Greece as a market.
We have a very strong position. As the company was growing in the European institutions, there was also a similar effort to become a significant player within the Greek IT market. The company actually managed to be consistently the biggest IT provider for the Greek government over the past 30 years, almost. We had a very strong market position. We do over 20% of the business. There again, we're not interested in doing just any kind of business within IT. We like to focus in large, complex systems where once we get in and once we build, we continue working with the public authority for a very long number of years, implementing all the new policies, implementing the new laws, upgrading with new technologies, and so on and so forth.
We are today partners and the main providers of software and services for tax, for customs, for social security, for justice, for health. Pretty important, you know, functions of the country. We have been in there for a long time, and we have used all that expertise combined with what the expertise we get from the European institutions in order to be able to develop the platforms and the products that I will talk about later on. That was also value building on top of value.
Now, what makes the Greek market interesting, because it's been pretty small, okay, and it has not been moving a lot, honestly, in the last 4 or 5 years, is the fact that the company moved really fast with the recent government that came to power 2.5 years ago in order to put a concrete bible for IT transformation in front of the RRF, the Recovery and Resilience Fund. We were actually, I think, the second that submitted it, and it was approved. About EUR 2.8 billion will be spent, must be spent or lost within the next 3 years in order to transform the entire public sector digitally. Okay? We are in the middle of a process where most tenders have already been written. Some of them have been issued. Some of them have been won. We won the first one.
I'll say a couple of words later on about it. This is basically gonna be a huge wave that's gonna sweep all over the public administration. This government is pretty steady. They're gonna finish more likely than not their full four years. As far as I can tell, being that these systems need to be implemented because of the European Commission pushing this on Greece, I think it will happen. The probability of delays or stoppage have been higher in the past than they are today. We see a very clear reality that these systems will be implemented, and we as a company are very well-positioned to benefit from that. Now, Belgium is a much bigger market. Okay?
We have never really tried to work with the Belgian government. We have been fully focused on the EU institutions, for as long as we've been there, but we have always had the ambition of trying to differentiate and trying to address the Belgian, both the public sector and the enterprise sector. Naturally, when we were acquired by Netcompany and with the possibility of using the GovTech Framework and all the components, and the fact that Denmark is the number 1 ranked country on the DESI index, that opens a world of possibility for us in Belgium and then eventually in Luxembourg. We have already started having numerous discussions together jointly. André came and he spoke, and the amount of enthusiasm we see is very big.
We feel we are really on the way to open that door as well, and that's a very significant addressable market, as you can see, growing from DKK 11 billion to about DKK 13 billion in the coming years. Now, let me talk a little bit about the business lines. More probably than not, you have not heard about specific projects that we do. What I did was I picked a couple of projects, large projects that we do to talk about and recent wins in order to give you more of a texture of what it is that the company does. We have three main lines of business: EU institutions, the public sector, and the private sector. As you can see, we do more than half of our revenue within the EU institutions business. Okay.
Within the EU institutions, we mostly do two types of business. Software development, okay? Huge bespoke complex systems for the European institutions, and managed services. One of our biggest customers, traditional customers there is DG TAXUD, which is the DG that's responsible for the design and implementation of tax and customs policy in the European Union. We have just successfully completed a few months ago, the transition of the new Trans-European systems, both for export and for transit, what they call phase 5, in order to support the paperless movement of goods in the EU. We have about 100 business and IT experts working on these systems, working with each one of the member states and TAXUD in order to design, implement, test, and operate these systems.
Now, what's even better for us or what has been even better for us is that towards the end of last year, we actually renewed this contract. It is called SOFTDEV now. Before it was CUSTDEV and FITSdev. Now it's called SOFTDEV, and it's a 8-year contract for EUR 145 million in order to take, you know, TAXUD and all the member states to the next, you know, the next phase of customs union and the implementation of the tax policies. So that's one big area that I think describes the kind of things that we do there. Speaking about managed services, we have been working and supporting both on the infrastructure, but more importantly on the application side, DIGIT and through DIGIT, a very large number of DGs that get their services from DIGIT.
DIGIT is the IT delivery group of the commission, okay? It's the part of the commission that supports all the other DGs. There they are buying all the services for the support of the applications, operation support, upgrade, update, and so on and so forth. They buy it from external companies. We have been the contractor for that for the last 15 years, and we have actually won again the contract last year, which is again another one of these that runs for another 7 years, and it's a few hundred million EUR. Now what's more interesting is that they've asked us to try to shift the service from on-site to near site and then off-site and pretty much move to service mode where we just offer them a service.
They don't know how many people we use or how we do it. We just offer them a service, and they pay based on an SLA. That's a huge transition that's gonna take a number of years to happen, and we are doing it together with DIGIT for the European Commission. I'll mention a couple more very quickly. One is the European Parliament, the majority of which is in Luxembourg, but there's also quite a presence in Brussels. As you can understand, they need an enormous amount of software in order to run their meetings, in order to discuss and vote and implement their policies, in order to support pretty much everything that they do. We have been within that contract again for the last 16 years.
We just recently won again EUR 90 million contract in order to support them in all these services. I will skip eu-LISA. For example, it's to ensure that all member states can share criminal records in order to facilitate border control and increase the security for Europe. This is a system that we have undertaken to now develop its software. It's an application, and it's gonna be running for the next two years. Obviously, as you can understand, with all the issues that we have with people moving around with immigration, so on and so forth, having a common system where the countries can quickly check the criminal records of people that move from one country to the other is essential for the security of Europe. I'll stop there.
I'll just mention, since André said it, we actually had our first win with Netcompany in the Netherlands for the European Patent Office, where we bid together, and this business is a percentage local and a larger percentage nearshore. We have bid together, and we have won. It's about DKK 20 million, and we're gonna be implementing together. The answer to the question was we will put the right experts from both teams. We will try to use the methodology of Netcompany and you know, hopefully, be able to stay in with EPO because there's other contracts coming up that are a few 100 million for application development. Through that, we hope that we're gonna open that door for the future. If I can move to the private sector and give you a couple of examples. We were very happy.
I was very happy and my team on Monday, and so was the customer, because we managed to go live with Skynet. For whoever remembers The Terminator, Skynet was Vodafone Greece, which is the second biggest operator in Greece. It was a full transformation of their service fulfillment and billing platform. It was a huge project. We had about 70 people, and we had two partners that had more people, and the customer had about 50 people working on it for the last two years, okay? Extremely complex, full uplift, changing everything and anything in order for them to be able to move faster, to provide better service to their customers, okay? We managed to go live on Monday. I called the CEO right before I got on the plane.
I said, "Are we okay?" He said, "We are still on hero, but we can get on zero in 5 minutes, so make sure everybody stays on until we're safe." Until today, everything works well, and it was a success. These are the types of systems that we do within telco. We have very good know-how in the telco sector. We are probably the biggest vendor of Deutsche Telekom in Greece. It's called OTE. Since we do such a good job for them in telecom, they also gave us the chance to build with them their e-money platform, okay?
They decided to go into building an e-wallet and being able to do acquisition of customers and give the possibility to all their customers to have an e-wallet with their mobile and fixed and TV provider in order to pay their bills, but also shop, get credits, be parts of clubs, and so on and so forth. They came to us. We designed the solution together. We actually used some components from our banking business and topped it off with bespoke development and some third-party systems. We went live a little while ago. What I'm hoping for is that this solution is actually gonna be used by the Deutsche Telekom group in all the countries they're present, and this company in Greece will be their operator, okay?
That's another example of how, you know, we combine platforms that we have in enterprise with bespoke development in order to meet the customer needs. I've noted here Cepal, which is a non-performing loan servicing company. In Greece, there was a big problem with non-performing loans. We had these companies were really in high demand and they did very good business. They are actually handling a portfolio of EUR 28 billion. We helped them to be the first to start servicing it. We used, again, the component from our banking solution and build all the software around it in order to be able to give them the best possible tool to manage their loans. They're live, they're doing very well, they're still number one. One last one, MedNext.
For example, we built for Munich Re HealthTech, which is a Munich Re company. It's the technology arm of Munich Re. We've been contracted to build their new health insurance platform, which they're gonna call MedNext. We're involved with them in the full cycle. You know, we had to understand their business very well. We designed the new system together, and now we are developing it, and it should be delivered sometime early next year. That's for enterprise, a taste of the projects that we do. As you can see, we do similar things to what Netcompany does, and from those things, we have very strong references. We also have very nice components that we hope to combine with what Netcompany has been building in order to address new markets and new customers.
The public sector here we're even more aligned, I would say, with Netcompany. Some of the systems we've recently delivered is the pension in one day system. During the crisis 2015, somebody had a crazy idea to bring all the pension funds together, call them one name, EFKA, and not really worry about how all these things would work together. Okay? Now, we were the vendor for most of these pension funds. We went through hell for a number of years, and the number of pensions not being awarded just kept growing and growing and growing. Thankfully, they thought of, you know, one of the pieces of the puzzle to solve this would be a fully automated system that would greatly reduce the amount of time that's needed for somebody to apply and get a pension. We started this system about two years ago.
It just went live in January, and it's cut for specific areas of pensions, not everything, but it's cut the time anything from months to years to a few days or weeks. That brought an enormous amount of value to the citizens. The integrated hospital information system, where we've upgraded the systems for 13 biggest hospitals in Greece. The first project that I mentioned before that we won for the RRF, which is the single digital map, which is bringing together information about real estate, buildings, all types of assets in one integrated platform so that anybody, a construction company, somebody that wants to buy a house, anybody can just access this one platform and get all the information they need in order to make a decision about whether to invest or not in a specific property. That we are beginning now.
It has a very aggressive delivery plan for a year and a half. We need to deliver it. As you can understand, it's extremely valuable for the tourism industry, which is big in Greece, to buy hotels, to build hotels, to find apartments for BnB and so on and so forth. Plus, also for regular citizens like ourselves. For Denmark, I think, André also mentioned, we've been working together for four or five years, first with collections in tax, then in customs, and we are now taking on even more responsibility to deliver the full export and transit by the deadline, which is September 2023, I think. That shows that the companies don't really have to learn how to work together. We're already working together and very effectively. I hope I didn't tire you, but I just wanted you to understand what we built. The platforms I've already touched upon.
What this. We decided five years ago, in whichever area we had very strong expertise and very strong references, and it made sense to have something like a standard product to invest and develop product. That was a no-brainer for customs. We had already done a number of bespoke implementations. We had already built a system with IBM, and then we decided that it needs to be out, open source. It needs to reflect everything that UCC is commanding, and everybody in Europe may want to buy it. Okay? We invested to develop ERMIS, and we went live with release one in Denmark last summer, and we are now working for export, transit, and so on and so forth. At the same time, we're discussing with HMRC, who's already a customer for the customs platform, in order to transition to ERMIS.
We're discussing in Sweden. No, Sweden, we signed for NCTS in Norway. This is now becoming in Austria, in Luxembourg. This is a common platform that now Netcompany and Netcompany-Intrasoft will try to offer to all of Europe and capitalize on the investment already made and the huge reference from Denmark. Similarly, we've had enormous experience in tax with a number of systems and working also with some major vendors. It made sense three years ago that we should invest in building such a system. We are now pushing to get the first proof of concept with some customers in this region together with Netcompany. The X4B is our banking product. It's based on BIAN, which is. I don't know who knows BIAN. It's a revolutionary banking technology framework that also standardizes the interfaces for the system to be used easily by many financial institutions.
Our compliance is actually a risk management platform, which combines both with tax and customs and Social Security. We have sold it to about 35 customers worldwide, and it's also here, also with the ARPA project in Denmark. Then finally, PERSEUS is our product with Social Security. It's a very big and very complex system that we've developed for quite a while. We already have three customers we're delivering on. This is the only area where we will be discussing with the colleagues from Netcompany on what to do because they have also done a number of Social Security. This I'm gonna skip over because I think most of the information I've already covered for the market in Greece. Now we have started a number of actions, obviously, as we become part of Netcompany and as we align the strategy.
We had some property in Bulgaria we already divested. I'm gonna talk about these business later on. We're consolidating staff in countries where we have common presence. A lot of work in the financial and finance domain, bringing very big benefits to Intrasoft. We are beginning a plan to divest from non-core operations based on the new strategy. We think those are gonna come into effect around Q3, Q4 of this year. As André mentioned, of course, we're always looking to optimize, and much more importantly, we're always looking to how we can bring the best resources on and keep them. It's a very, very competitive market in every country we operate in, but we're working together in order to be able to achieve that. Here's a few things that we've already managed to do jointly.
We decided from the very beginning, we're gonna focus first on business and then on anything else. We had our first win with EPO in the Netherlands. We have a joint team from both companies that meets every week, and it includes sales, pre-sales, and delivery people, and we are jointly looking at all the new deals that we have in Europe. Already, I can tell you within the last few weeks, you can see how the momentum is building and you can see how the customers, when they look at the combination of the two companies, how they look at us a lot more favorably for the future. We have started, as I mentioned, our joint effort to enter the Belgian public sector, which is quite significantly sized. In telco, where Netcompany-Intrasoft has some very good assets and extremely good know-how.
We have already brought the teams together, and we are now trying to develop business in the telcos in this area, Scandinavia and U.K. Of course, we did the expected thing. We are looking how to enrich the GovTech Framework with the platforms that Intrasoft brings to the table, and similarly for the composable enterprise framework. That's work that's done in the background, but it will be presented to all our customers. We started in Greece because Greece received so much money that they don't exactly know how what to do with all of it. And projects cost a bit less in Greece than they do in Northern Europe. Anyway, there's budget, okay, and there's needs.
What we're trying to do now is position a lot of the systems that Netcompany has delivered in Denmark as ideas from scratch in order to get funding and then be tendered and implemented in Greece. We see very good potential in that in a number of areas. What I call the Holy Grail is with our banking portfolio, where we're working to try to see how we will be able to have the first win of our banking platform in the region, because we're quite confident that once we get the first win and the first reference, we can grow this enormously, and for sure the financial market is of great interest to all of us. Of course, there are some things happening on the corporate side as well.
Very quickly, as I said, we have started looking at the entire structure of the corporations. We are looking to see where it makes sense to do things commonly and at what pace, always keeping the focus on keeping the business running. We've started the IT stream, we've started the HR stream, we've started the finance stream, and all of those are happening and things are changing, but we are doing them at a pace that will not in any way affect the business of one or the other company. One of the most important things, of course, is talent development in the kind of business we're in, resources.
We are trying to share the best practices from both companies and bring all the wealth of educational material that the Netcompany has with the academies and everything into our operations, and try in that way to attract and maintain the best people. We rebranded very quickly in January. We didn't go all the way, but we went from Intrasoft to Netcompany-Intrasoft, and we are gonna stick with that for a little while, allow the market to absorb it, okay? Eventually, I think we will move to all of us being just Netcompany. We've done a big promotion, and we have a number of activities planned throughout the year in all our locations in order to familiarize customers and the general public with Netcompany, because it's not that well-known in our markets, and the fact that we are transitioning into Netcompany.
That's, I think, all I had to say. I hope I didn't tire you. I'm ready for questions.
It's Wei from SEB. Thank you for taking my question. One question regarding your business model. I realize you have used very different sort of resource. You have used a lot of subcontractors, very different to Netcompany. I mean, what do you see about pros and the cons, and has your view towards the business model changed since you have been closely working together with Netcompany?
That's a good question. I would not call it a different business model. There is a part of our business that has a lot of contractors, okay? That's mostly within the European institutions. There, in Belgium and Luxembourg, the vast majority of people that work at the customer premises want to contract as contractors. They are reluctant to contract with you as employees, okay? In that sense, it's not a model we believe in. It's something that we just follow in order to be able to do the business there. In all other parts of our business, we mostly use employees, and the contractors that we have, I would call, they're augmenting the teams. Some people will only come and work for you or work for a customer as contractors. They don't wanna come as employees.
We have a strong preference in employees, but there are certain talents or there are certain needs that cannot always be filled with employees. In that sense, we have also the option of working with contractors.
Is it fair to assume when you expand in those countries, you will also sort of going more and more subcontracting instead of hiring your FTE, or do you see this as like structural challenge?
Which countries?
The country you just mentioned, you know, the people are they reluctant to be hired as a per, like Brussels and those countries, you know, where the European Commission is located.
In Brussels, for the EU institutions, getting hired as a contractor is a very, very standard thing that they all do with all vendors, okay? It also has a number of tax benefits, okay? For them and for the companies. In that sense, this is the mode that we will be forced to continue working in for as long as that's, you know, the way things work. It is not our preference, okay? Whenever we can have an employee placed, we prefer it to a contractor, but it's not something that we can just make the decision and change.
Thanks.
You're welcome.
Claus Almer from Nordea. The first question goes to, you know, your performance so far has been quite good. What do you think Netcompany will bring to your business?
I think I described quite a lot of things that Netcompany brings to our business. It will bring us the reach, which we didn't have before, okay? Number one. We've always wanted to be able to address the Northern European market more effectively, but we could not. It's not an easy. It needs a lot of investment, and you need to find the right people and so on and so forth. The fact that Netcompany actually operates in this market and already has a very strong presence in the U.K. is a very big plus for the asset base that we have for our platforms, for our references, for our know-how. Number two, we really see a group that is working in a very, very smart way and is managing very, very good margins. We always prided ourselves on always delivering, and that's why.
That's what the company was based in order to be able to grow and be trusted by more and more customers. We see now a company that can both deliver every time, but also have better margins. Anything that we can learn from that, where applicable, we will definitely try to take advantage of. Number three is the GovTech Framework and the composable enterprise. Being able to find and take these ready components into the markets that we have loyal customers and good know-how, I think will help the common business to grow further. That's four. I probably have a few more, but
Just a second question regarding profitability. Is there difference in the profitability within EU and Greece projects? Second part of that question is, if you look at Netcompany at least, there's, you know, very few failed projects. Do you have the same track record that's not, you know, a quarter here and there where you see a big extra cost due to failed IT projects?
Again, thankfully, we have not had failed IT projects. We have had delayed IT projects, where the margins, because of the delay, are not what we would want them to be. If I try to compare between the markets, we have three markets, right? EU, public, and enterprise. I think most of the delay you will find in the public sector. Okay? In the EU institutions, it's a very, very well-structured market. Very, very knowledgeable customers, and they do their part. We more often than not do our part, and things are done on time, and there's no issues, no delays.
Similarly, for enterprise, you will see that since this means how competitive they are, how profitable they are, they have a strong interest to make things happen, and we don't face significant issues there as well. In the public sector with public servants, it has been the case that we see more delays and so on and so forth, and that's an area, I think, as well, where the way that Netcompany handles some of the public sector projects may help us, you know, work with our customers in a way that this will be improved.
Okay. Come back to the first part of the question. Is there difference if you execute as you thought you would, will it be the same margin across these three segments?
No, because the prices are different.
Okay.
Enterprise has a higher profitability than public, and public has a bit higher profitability than EU institutions. That's the blend. Okay. There are projects that have higher, projects that have lower, even within each one of the market segments. In general, we're seeing better margins in enterprise than we see in public, than we see in the EU institutions.
Okay, thanks.
Yeah. Okay.
I still see a lot of questions, but we have to move on, otherwise time will run. We'll come back and take some of the questions later on. Thanks a lot, Alex.
Thank you.
Yeah. Sorry for being the boring guy that is spoiling a good debate. Just a few remarks before I move into the financial part. When Otto was asked about the reporting of joint projects between Netcompany-Intrasoft and Netcompany Core, the important thing here is that whatever is delivered by Netcompany-Intrasoft resources will be reported as revenue in Netcompany-Intrasoft. What is delivered with resources from Netcompany Core will be reported as revenue from Netcompany Core. The reason to do that is also to not dilute the potential growth aspects of Netcompany Core by taking new business won by Netcompany-Intrasoft and put that into Netcompany U.K., Netcompany Netherlands, or Netcompany Denmark, and thereby giving those countries a, quote-unquote, "free ride" on the acquisition of Netcompany-Intrasoft.
The ambitions we have to grow Netcompany Core is still intact over and above what will be gained from the joint projects. It's an important distinction to make. When Alex was asked about the detailed profitability on contracts, there are certain contracts within the European Union segment that are high profit, and that is, for instance, the contract that we do together between Netcompany Denmark and Netcompany-Intrasoft. There is a little bit of ups and downs there. It's not so easily cut. With that, I'll move into the financial part here. I'll try to be swift and quick. You can have my speaking notes afterwards if I don't get to talk to all of it.
From an overall point, it's important for us to stress that we run Netcompany on a long-term view, and therefore we are also not too worried about swings from one quarter to another. However, we do recognize that such swings can create uncertainty in the equity market, even though the underlying equity story has not changed. When we look back over the last couple of years, both 2020 and 2021 has to some extent been abnormal or even extraordinary for Netcompany. In 2020, the world got to know the COVID-19 pandemic and all the knock-on effects that it had to businesses worldwide and also to Netcompany. Specifically to Netcompany, COVID-19 led to very low churn rates in 2020, as nobody was really in the mood for changing jobs.
In addition, we took a decision as a company that we would not be managing people out of Netcompany like we would normally do based on performance, and we would do everything we could to give security to our employees, even if it had a short-term negative impact on margins. Our business in Norway and the U.K. were harder hit than Denmark in 2020. In fact, there was no real negative impact on business activity in Denmark despite COVID-19 during 2020. The reason for the different impact to U.K., Norway, and Denmark was that both the U.K. and Norway. In 2020, still had a number of smaller projects of non-strategic character that were stopped pretty fast during Q2 2020 in the middle of the shutdown.
Unlike in Denmark, where we at that point in time, and still, are engaged in society and business-critical infrastructure projects that continue despite the impacts of COVID-19. From a group perspective, in 2020, we had literally no travel cost. There were no expenses for external training. There were no expenses for external education, no staff event costs, and so forth, which of course led to higher margins for the group in 2020, despite the negative impact that I just mentioned in Norway and the U.K. 2021 also turned out to be somewhat of a special year, not only because of the acquisition of Intrasoft that Alex in great detail has just walked you through in October, but also for reasons still related to the aftermath of COVID-19.
In the spring 2021, most of the world was still in lockdown, which meant that there was almost no vacation taken at Netcompany in Q1 2021, as there were no place to go. That meant that in Q1 2021, we ended up yielding what is equivalent to around 4 working days more of quote-unquote production at unchanged cost, simply because people are working instead of taking vacation, which naturally spiked both revenue growth and margins in Q1 2021. Now, we knew and communicated all along 2021 that some of that growth had to be handed back in the second half of 2021, which also happened to be the case.
Where we saw revenue growth in Netcompany Core of 23% in Q1 2021, we saw revenue growth of 12% in Q4 2021, yielding an annual growth of 17%, which happened to be in the middle of our originally guided expectations for revenue growth of 15%-20%. Had it not been for the late introduction of COVID-19-related restrictions in December related to the Omicron variant, organic revenue growth in Q4 would have been three percentage point higher, and the full-year revenue growth would have been 18%. Now, in addition, and unlike 2020, we also started to see movement in the labor market again, and from spring and on, people started changing jobs, either voluntarily or involuntarily, as we were now also actively moving people based on performance or lack of.
That naturally impacted our churn rates, and that then ended in churn rates of around 19% for the group in 2021. In itself, not alarmingly high, as I'll show later, but of course, compared to 15% in 2020, a fairly large increase. That increased churn rate and a 12% revenue growth in Q4 were unfortunately taken as a sign that we had lost growth momentum, that we would not be able to hire enough people to continue growth. Nothing could be further from the truth. In that aspect, it was somehow overlooked that we actually grew client-facing FTEs by 20% in 2021, which is a much more important KPI to look into the potential growth for 2022. I'll give a more detailed analysis of churn rates a little bit later, where it'll make you clear that a churn ratio of 17%-20% is the norm for Netcompany, not the 15%.
When we presented our financial guidance for 2022, we guided for an EBITDA margin of above 23% for Netcompany Core after the dilutive impact of three percentage points from the margin by introducing updated benefits, mainly in Denmark and a little bit in the U.K. The introduction of improved benefits brings us up to market standard, and it was actually a matter of executing a long overdue outstanding matter than anything else. However, since the benefits are basically reducing the amount of hours available for our employees to perform client-facing work, they lead to lower utilization and not an increase in the salary pool. Therefore, we also expect to be able to recover majority of that 3% loss in margins in the coming years.
Now, Netcompany salary model has been in place for decades, and as such, it is not news to us that top performers get a high annual salary increase. In fact, historically, top performers in Netcompany get a annual salary increase of between 14% and 15%. When we look at the entire pool of employees, the annual salary adjustment leads to an increase overnight from New Year's Eve to the first of January of between 6-8 percentage point in the salary pool. Because we grow 15%-20% annually, and because we have a employee churn rate of 17%-20%, and because we hire 8 out of 10 new recruits straight out of university, the average cost per client-facing employee on a yearly basis is not increasing more than 2-3 percentage point, which naturally makes the current discussion on salary pressure and salary inflation much more manageable.
If we take a look at the growth rate on a quarterly basis for Netcompany Core, as shown here, most of you will find these numbers to be familiar. For the skilled and trained eye, you will find that the slide now correctly say 2021 for all of 2021 and not only for Q1 as the previous version showed. My apologies. I want to highlight, though, that the growth rates seen in 2021 of 23% in Q1, 22% in Q2, 15% in Q3, and 12% in Q4 was heavily impacted by the lack of vacation taken in the beginning of the year. That vacation was taken instead in Q3 and Q4 and clearly negatively impacting growth rates in Q3 and Q4 in 2021.
For 2022, it's fair to assume that growth rates on a quarterly basis would have an opposite trend line, i.e. starting lower and ending on a higher note, as 2022 looks to be a more, quote-unquote, normal year. I also want to reiterate that the high margin in Q1 2021 was driven by a combination of no vacation taken, and hence more top line on unchanged labor cost, and at the same time, limited travel and limited employee activities. Q1 2022 is going to look like a much more normal quarter. What is new in our disclosures on the quarterly accounts will be the revenue growth and EBITDA margins for Netcompany-Intrasoft, which is shown in a longer time aspect here. There is seasonality in the revenue in Netcompany-Intrasoft, and it means that Q4 historically has been the best performing revenue quarter in Netcompany-Intrasoft.
If we look at Q4 2021, the margin of 7.1% is lower than the margin that we reported for the two months that we owned Intrasoft in 2021 of 10%. The reason for that is that Intrasoft took some provisions of certain accounts in the month of October prior to the execution of the transaction. Overall, though, it is hard to make any real trends on the financial performance on a quarterly basis for Intrasoft. There has been various one-off events impacting certain quarters negatively, as Alex also alluded to. Going forward, it is our expectation that these swings in margins will be less. However, they will not be entirely eliminated throughout this year. We are comfortable though with our overall guidance of a margin of above 9% for the year.
When looking at Netcompany and knowing the type of projects we conduct, work in progress and accounts receivables should always be seen in conjunction. For our fixed-fee projects, we use percentage of completion accounting, and that means that we will income recognize work done in relation to how progressed the project is. However, the invoicing of the work typically differs and falls in certain buckets called payment milestones. In the period from the time we perform the work and until we invoice, the work balances are booked as work in progress. You can almost say that work in progress is, quote-unquote, "unbilled accounts receivable". Hence, when certain payment milestones are met towards the end of the year, as was the case in 2021, the impact is that work in progress are moved to accounts receivable, but with no profit and loss impact.
This also means that day sales outstanding will increase simply because we now have more accounts receivable on the same revenue. Now, that is not a worsening of the quality in the accounts receivable. In fact, it's a positive to cash flow in Q1 2022 in this case instead. We've shown here the development in Netcompany Core accounts receivable, and you'll see that they are fairly stable apart from June and November, December. In June, the summer month, we always see a spike in accounts receivable simply because many Danes are on vacation on thirtieth of June. In November and December, the spike was caused by invoicing of work in progress, which in turn will improve cash flow in Q1. Looking at the receivables for Netcompany Core to revenue, the trend is also stable as shown.
Again, the increase in DSO in 2021 was caused by invoicing of work in progress. The part of receivables that are overdue in Netcompany Core is 51%. That percentage has been stable over the years, and generally losses on accounts receivables are low. A high percentage of overdue receivables is not the same as issues with collection. When we look at the same metrics in Netcompany-Intrasoft, the underlying dynamics for the receivables are similar to those of Netcompany Core. In Netcompany-Intrasoft, 51% of invoices are overdue, similar to Netcompany Core. However, there is a higher proportion of more than 90 days overdue receivables in Netcompany-Intrasoft, mainly related to projects in the public segment, and again, as Alex alluded to, where projects have been postponed under COVID-19 and payment will not happen until these projects are concluded.
Again, no underlying issues on collectability. Now, during 2021, we've made a number of cash payments that we were not going to be making in 2022. I highlight them here, and they sum up to DKK 325 million. In addition, the increased invoicing from work in progress to receivables means that Q1 cash flow will be positively impacted by the collection and payment hereof. Not all of the 237 million that the change from work in progress to receivables are due in Q1. However, a substantial part is, and that will have a positive impact to cash flow in Q1. Overall, we are in a strong position to continue to deleverage during 2022 and 2023. Our current long-term debt is around DKK 2.3 billion, with a leverage of around 2.7x twelve-month rolling EBITDA going into 2022.
Now based on cash flow from operations, the fact that we do not have the same one-off cash out items as we had last year, and the positive contribution on cash flow from Netcompany-Intrasoft, we do expect to be at 1.2x-1.5x leverage at the end of 2022. All other things equal, which means before any potential acquisition in 2023, our leverage is expected to be around 0.5x by the end of 2023. Which means, like Andre said, that we would actually have paid for the acquisition of Intrasoft in cash in around 2 years' time. Now, coming back to a topic that has attracted a lot of attention lately, we've shown 12-month rolling churn rates per entity here since 2017. Bear with me, I know the slide is busy, but it's important details.
From the data series here, it is apparent that 2020 was indeed the odd year out, and not 2021. It becomes even more clear when we look at the same picture, but showing churn on a rolling 3-month base. Where you can see clearly that it is 2020 that is abnormally low compared to both 2017, 2018, 2019, and 2021. We're constantly monitoring churn rates, and we monitor also our success in attracting new talent to Netcompany. While there's clearly more activity in the labor market in general, we have so far been able to attract the amount of resources we need to support our growth, and we expect to be able to do so going forward.
With that, I'll see if we have time for one or two question on the financials before we end today. If any question or you guys wanna have Alex back up here, I guess.
Thanks. It's George from Morgan Stanley. Just on M&A acquisitions, you know, clearly it's becoming more important in terms of the next 5-7 years for you. How do you think internally about the valuations you're willing to pay for those acquisitions? How you make sure they generate shareholder value? What returns metrics would you look at? Then maybe one for Alex actually as well. You know, could you just talk about how the business has moved since it was owned by Intracom? What were the kind of priorities Intracom had for Intrasoft? Was there a constraint at all on how you ran your business?
All right. I'll take the first part, George. In terms of valuation, historically, we've looked at it fairly pragmatic and have had a, you know, internal guiding point that somewhere between 10-12 up to 14-15 times EBITA would what we would think to be a fair price. Now, that of course depends on the eye of the beholder. But that has been what we have looked at historically. Now, as André was also alluding to, as we are moving into more platform-based companies, multiples might be slightly different, but it's not gonna be significantly different from that level. That is where we think we can manage the risk and also make sure that we can return value to our shareholders in a short period of time. You wanna give it a shot, Alex?
I'll give it a shot. Although it's not a very fair question. I think it's completely different because, before we were part of a holdings company that also had investments in construction, in defense electronics, in lottery, gaming and so on and so forth. Obviously, the focus and the priorities of the group that we belong to were placed and divided among the different businesses. Being part of Netcompany, we are part of a company that does exactly what we've been doing, that understands our business fully, that can see all the synergies, the complementarities, the weaknesses and the strengths that we have. In that way it's pretty evident to all of us that we can grow a lot more than we would ever have been able to grow with our previous shareholder. No offense, they were great, but I think this is much better for the company moving forward.
Thanks, Alex. I think we'll have to cut it here in light of everybody's agenda. We'll be available for questions in the room if there are any more. With that, I want to conclude our update for today. Thank you very much for your participation. Thank you for all your questions, both here physically in Copenhagen, but also online, and for the ones that we got time to answer to. Have a great afternoon. Thank you.