Welcome to Gofore's full year and second half 2020 results presentation. Presenting today is me, Mikael Nylund, the Group CEO of Gofore, and Teppo Talvinko, my colleague and our Group CFO. I will start by looking at the year 2020 on a general level, then Teppo will take you through the numbers, and then we'll round off by having a quick glimpse at Gofore's strategy, which we updated in December last year. Afterwards, we'll have a chance for you to present some questions and have a short discussion. So, what Gofore is about?
We, the Goforeans, are experts in digital technology, in digital business and design, and we help our customers in going through their digital transformation, so we are in the consultancy business. Being a growing and profitable, successful company is a big part of our identity, and if we look at other things that we see ourselves as always being, they are presented on this slide. Today, we are here mostly to talk about the growth and profitability parts, and we are happy to present a result from 2020 that really supports our aim to be growing and profitable. But there's other things that we want to be also, for example, constantly renewing, and last year, 2020, was something that really, really was challenging in this way.
We needed to innovate during the year quite a lot, going overnight into almost full remote mode in the spring. Also closer to the end of the year, working in full remote mode, so really a year of innovation in that sense. We always want to be impactful and responsible, and last year was a year where we worked further to reduce our own footprint on the environment. But above all, we worked with our customers to produce a Gofore Good Growth model, something that we use in our customer projects to measure and improve on the sustainability side of our work with customers. We want to be international. Last year, with COVID coming in spring, that was...
The first hit that we took from COVID was to our international business, and our international customers were the first ones affected. That was something that of course was a big hit for us in spring, but also international customers have come back from this hit quite quickly after summer, and we are now back on track on the international business and helping our international customers going digital. What we also did during the year 2020 was to focus our efforts to establish our operations outside of Finland to Germany, the German market, and we've taken some steps to go along that path.
Maybe above all, the difficulty in last year was in the right-hand side bullet on this slide, offering exceptional customer and employee experience. Going full remote, of course, was a big challenge for us, and trying to give our employees that experience that heavily relies on good community and working close to our customers and the team, that was something that was really difficult for us. And I think our people have coped really well in seeing how difficult that has been.
But what we did also during the year, improving on our exceptional customer experience especially, was two good company acquisitions that really improve on the offering that we have and further takes us on this path of exceptional customer experience. Looking at the recent highlights, first of all, of course, a strong year financially. Teppo will, as said, guide you through the numbers in more detail, but what I want to just highlight here is that, the second half of the year was especially strong for us, and going into the fourth quarter, even stronger.
Starting this year, 2021, financially, we are in a good position, and we have, despite the difficulties during 2020, we have managed to improve on the financial side of the business. Our active M&A track and strategy has continued with the acquisition of Qentinel Finland in September, and on this year side, CCEA in March 2021. We're going to look into these acquisitions a little bit more later in the presentation, but to put it shortly, Qentinel Finland is a company of about around 100 quality assurance experts and is one of the leading names in this area in Finland, and we are very happy to add Qentinel Finland to our portfolio of services that we can provide our customers.
And that's something that we think will set us apart from the closest competition in the future. CCEA, on the other hand, around 50 experts, leading experts in people-driven change, really strengthen the human side of digital transformation. That's a big thing for us at Gofore, and which we also think is a big challenge for our customers, so very happy to add CCEA to our service portfolio in March, this week, actually. By the end of last year, in December, we released an updated strategy and long-term financial targets. We're gonna look at those a little bit also today.
This strategy continues what we've done before, and we set what we think are ambitious financial targets for the next five years for us. And in combination with that, our new group executive team has been in place since January 1st, and we had a capital markets day in January, actually, where some of our executive management team presented themselves also to investors. So if you want, you can have a look at that video from our investor site. We also announced that we are looking to transfer to the Nasdaq Helsinki Main Market, and that project is progressing well, and we are still scheduled to do that during the first quarter of this year. So over to Teppo and the numbers side.
Okay. Thank you, Mikael. Okay, let's take a look at the financial highlights in the second half, and growing and profitable, we continued on that path in the second half. Key drivers, as stated in our updated strategy, were organic growth. We were keeping up a really good speed there. Qentinel acquisition in September, we continued our selected well-fit M&A story, and of course, our lean operations, we were coping pretty well with the pandemic. That can be seen in our EBITDA figure. Of course, Gofore crew continued growing. As you can see, the number of employees, Qentinel as a main factor, but also we were successful in recruiting and boosting organic growth.
A Board proposal of dividends, that's EUR 0.24 per share, and it's a decent increase from last year, representing 49% of EPS. Well, pandemic that has been a headline for a year now, and it may be there for some time. It's causing some uncertainty in the market. That's quite clear. But as seen in the previous slide, it has not affected to our operations or our business too much. As always in life, there are both sides of the coin, slightly positive effects on OpEx, for example, less traveling, et cetera, and some negative side effects hitting our billing rate, especially at the beginning of the pandemics. The uncertainty, that's going to continue for a while.
Let's look at the net sales development next. So, strong growth, that can be seen on the right. If you take a look at the sales CAGR, it's over 30% from 2017 up to 2020. So what are the key drivers? Finland, of course, our main market, and public sector, but also international market and private sector, have been in a good speed. Taking a look at the 2020, you can see that, organic growth in net sales has been over 15%, and that's really delightful. As you well know, so we publish our net sales on a monthly basis, and taking a closer look at there, so you can see that we have been able to exceed net sales year-on-year basis.
Even before Qentinel acquisition in September, the growth has been mainly organic. Acquisition of Qentinel Finland gave us a clear jump in sales in sector, as you can see in the graphs. However, the organic growth during the second half has been double-digit +15%, well in line with our strategy and long-term targets. January, on the left, you can see a steady growth and in line with the monthly pattern that we have in our business. We are growing and profitable. So let's take a look at the profitability development during 2020. Adjusted EBITDA, which is our key profitability KPI, well, what are the factors driving our profitability? Of course, it's the growth supporting good profitability development. We have the billing rate.
We have our lean operational model. There is a scalability in our OpEx. So all these are affecting to our good profitability development. If we take some of the findings from year 2020, we can see that the pandemic had some effect on our figures. Billing rate, the most important profitability driver that we have, it had some negative hit due to pandemics, especially in the beginning. We have the Main List, an IFRS transition, causing a negative one-off effect to 2020 figures. On the other side of the coin, personal cost and some OpEx items like traveling, they were having a slight positive effect in the figures.
We feel that operationally, it will be different after the pandemics, and there might be some lasting changes in the cost structure in the future. Quarterly development. As Mikael mentioned earlier, so we had really strong Q4, outpacing last year Q4. Net sales growth, +40% year-on-year basis. EBITDA margin improving significantly in last quarter on year-on-year basis. Let's take a closer look at the net sales distribution. So, on the left, by location, Finland, that is our solid home market, and growth has been fast. It represents 90% of the net sales distribution. Abroad, we have a good potential. For example, X-Road technology, that's where we are a key development partner. That's a promising basis, also in public sector outside Finland.
By sector, okay, strong position in public sector has brought us solid growth. We are very delightful being a part of the public sector digital transformation. Having said that, we have also been able to grow fast in a private sector. On the right-hand side, you can see subcontracting. The share of subcontracting has increased up to 19% of the net sales, an important ecosystem for us. Speeding up the growth, broadening our skill spaces, and bringing us flexibility to bring up more value added to our customers. Okay, a few words about our balance sheet. So we had a really solid financial position at the year-end, and okay, that solid base gives us steady grounds for this year.
Net debt, equity ratio, net gearing, firm bas is to keep on going. You can see some events on the right, and those will bring cash and gearing position on a lower level. Still expect it to be on a healthy level. Our board financial guidance for this year, 2021, net sales will increase, adjusted EBITDA will increase. And let's keep in mind that we have there two acquisitions on the bottom: Qentinel from September last year, and now CCEA from March this year. Summing up this all, growing, profitable, decent dividends. That's how we have set the long-term targets. Growth, having both M&A angle and organic growth as the drivers, roughly half and half, aiming at 20% growth rate.
Profitability, EBITDA, + 15%, and of course, decent dividends, at least 40% of the annual profits. This year's proposal represents 49% of EPS. So Mikael, what are the avenues to reach the targets?
Yeah, we have identified three avenues of growth, as Teppo here references, to achieve these long-term growth and profitability targets that we feel are quite ambitious, but in line with the ambition level that Gofore has shown before. So very good targets for us in that sense. Looking at the avenues to reach those growth targets, there are three, as said. First of all, there's of course, and in the short term, the most important one, our growth ambition in Finland in our home market.
As Teppo explained, we have a really strong position in the Finnish public sector with a strong digitalization trend in the public sector going on, and as we see it, continuing into the future. So a good opportunity for us to continue the growth and have the positive impact we have had on Finnish society up until now, and even strengthen on that. So that's of course in the short run, especially our main target and main avenue of growth.
We are also working on the private sector, and there, our ambition is to form strategic partnership with selected customers, big Finnish companies, big international Finnish companies, preferably, and help them in their digital transformation. And that's why we build our offering the way we do to meet our customers' challenges in digital transformation from end to end. The second avenue of our growth is from international growth, and that's something that we have only taken the first steps on up until now.
Teppo showed the net sales distribution, and international sales is around 10% now for Gofore, and we see that both public and private sectors internationally are in need of the services that Gofore can provide, the same as the Finnish public sector, the same as the Finnish big companies. So that's what we try to achieve with our internationalization strategy, help those other societies in Europe or even in developing countries, to reach those digitalization targets that we have, like, set in the Finnish market. And the same goes for the private sector companies. During last year, we also focused our efforts for our operations outside of Finland to the German market.
This means that we, we, moved our operations from, from the U.K. or, or, those operations were phased down, and we have now put all of our focus of development into operations in, in Germany, and, and that has taken, taken some steps forward during, during last year. The third, third avenue of, of discipline, M&A, you'll see our, uh, track record of, of doing successful acquisitions in, in the last years on, on this slide, and, and this is something that we want to keep up.
This is something that we also have developed the capabilities and learned a lot about during the last years, and we think that we can continue this track record of very successful acquisitions, starting from 2017, when Gofore acquired Leadin, acquiring state-of-the-art design capabilities and also was the start of Gofore's international business. In 2018, there was Solinor. We strengthened our position in the Helsinki area in software development services. In 2019, there was first Silver Planet, and that's an acquisition that's made us, we think, the number one digital transformation partner for the Finnish public sector in advisory services.
We are advising the Finnish public sector on a very broad basis, on all sectors of life nowadays, and that's something that we're really proud of. Then there was, in 2019 also, our first acquisition outside of Finland, Mango D esign, design agency that strengthened our position in Germany. And now in 2020, first Qentinel Finland, the leading name in digital quality assurance in Finland, and we're really happy to add Qentinel Finland to our service portfolio, because that's what we really feel that our customers are in need of.
They have learned via the help from us and similar companies to develop software in an agile way, and that means that they have developed capabilities to come out fast and quick with new digital solutions. But what they need in addition to that, and integrated to that, is also the quality assurance. When more and more of our customers' business is running on software and digital solutions, seeing to it that that software is up and running 24/7 and of good quality will become a priority also. And that's something that we feel we can come in and help them with very strongly with the help of the Qentinel Finland acquisition.
Then there's the last acquisition, which was on this year's side with CCEA, the leading experts in people-driven change in Finland, and we're really happy to have the CCEA people on board starting from this week's Monday. I'm gonna go a little bit deeper into what CCEA is and open up on that acquisition a little. So CCEA is the leading expert in people-driven change in Finland, with around 50 experts in Espoo and also a small project office in Singapore. Services from CCEA include change execution, which is the main service offering of them, change portfolio leadership, and change capability development....
And from a recent acquisition by CCEA done in 2020 from Celkee Limited, they also have their own change measurement system or software to measure that change. And that's why the CCEA change management offering is superior to all of the other offerings that can be found in the Finnish market and also very strong internationally. CCEA's customer base is something that really nicely complements what we're trying to do in Gofore, focusing on top 50 Finnish companies. And here are mentioned, for example, Outokumpu, Neste, and KONE, very international companies, all of them, and that also will support Gofore's ambition to become more international.
CCEA rationale and the synergies between Gofore and CCEA services can be summed up in human-centric digital transformation. Gofore is a strong player in digital technology, using that technology to enable a digital transformation with our customers. CCEA is the leading player in the people-driven change area. And combining these two things, which we think is necessary for all of our customers, will make Gofore and CCEA together the leading human-centric digital transformation offering consultancy in Finland. So that's something that we are really excited about and really excited to have these discussions with our customers. What both Qentinel Finland and CCEA acquisitions strategically provide us is to broaden our offering to help us partner long-term with our key customers.
And we want to do that by offering them an end-to-end offering in digital transformation. And starting from the left-hand side, provide them with the advisory services that they need to really unlock the digital potential of their business, to understand what kind of changes in the operating environment they will face with digital, to understand what kind of strategies they have to choose, to implement those strategies.
In the middle, the very DNA and the, where Gofore comes from is the building of those digital services that will be needed for our customers to go digital with their business, doing that in a modern way, doing that with agile development, being very customer-centric, using service design methods to ensure customer centricity, and using the latest technology to base these solutions on, like, cloud and data AI, AI side of technologies. And on the right-hand side, what we added with Qentinel Finland acquisition, the digital quality assurance part of it all, which we will strive to deliver to our customers in a very integrated way with the agile software development services.
So CCEA will add to the advisory side of our business, and Qentinel Finland added to the right-hand side, to the, to the digital quality assurance side. Okay, to round it up, the year 2020 continued our good track record of profitable growth, and that's something that we are, of course, very, very proud of. And, and I think that that's, that's a good step in our journey to become one of the most significant digital transformation consultancies in Europe. And by that, we'll have a chance to, to have some, take some questions. So, Nina, maybe you can hear us and, and can take some questions if there, there are any at this point.
I can hear you perfectly. I hope you can hear me, too. Thank you, Mikael, and good afternoon also on my behalf. Those of you who don't know me, my name is Nina Pavón, I'm the IR Lead at Gofore. But let's dive in, let's dive into the questions. Firstly, about growth, Jerker Salokivi, Evli, wants to know, "What are the expectations for organic growth in 2021? You managed to achieve solid organic growth despite the negative impact of the pandemic in 2020. Could continued double-digit organic growth figures in 2021 be achievable?
Thank you for the question, Jerker. Looking at the market now, at the beginning of March, I think it's achievable. And the market outlook is very good at the moment, as we see it. Both public sector side is progressing well, and we also have seen after summer, an accelerating demand for services from the private sector. So looking at the markets right now, I think it looks good, and we think that achieving the same kind of organic growth figures as last year could be achievable. Of course, we are also looking at our long-term targets, where we say that 20% growth, of which about half will come from organic growth.
So, we think that is also a good ambition level, and that's what we are right now, especially targeting. So, thank you for the question, Jerker.
... Yeah, continue with the growth theme. We have a question from Panu Laitinmäki, Danske Bank. Referring to the guidance, how much do you expect 2021 sales to grow? Would you expect to reach your long-term target of growing 20% annually in 2021? And do you expect to reach the target 15% EBITDA margin in 2021?
Both on the growth side and on the profitability side, we are, for 2021, one expecting and, and, targeting to, to reach those, those levels that we have stated in the long-term, long-term targets. Yes, and what, what you could see in, in, in Teppo presenting the monthly figures, the year start was, was quite good, quite strong. But we had January's, net sales there, and, and, and we think that that supports this, this, this target very, very nicely. We will be releasing, of course, in the future also, the, the monthly net sales figures, so, so, investors can, can keep up with, with, the pace that, that we are, are, are growing.
Panu, Panu Laitinmäki has also sent us a question about COVID and its impacts on earnings, last year. How much was the cost saving, and how much will come back in 2021?
Costs, would you like to comment on it, Teppo?
Yeah, on a cost side, so as I mentioned in my presentation, so, there were both positive effects and negative effects. Summing up all those, I would say that there was a slightly positive effect to our 2020 figures. So, yes, it has some slight positive effect. However, it also hit our billing rate, and we expect that... And we also have seen that that has—we have recovered on that. And I think that's an even bigger issue for us in the future.
Okay, continuing with the set of questions from Panu Laitinmäki about the Q4 and the billing rate, how do you expect it to develop this year?
Q4 billing rate was, let's say, on a good level. It was not on an all-time high level, and we still feel that there is, especially when we come out of the remote work situation, which is really burdensome on people, we expect there to be a further upside on the billing rate side, and that's what we're targeting during the year.
Okay. So far, that's all the questions we have.
Okay. Thank you, Nina. Thank you, everybody, and thank you, Jerker and Panu, for the good questions, and we wish you a very good day.
Yeah. Thank you, having you.