Good morning and welcome to Gofore's third biannual Capital Markets Day. Great to have you all here. My name is Emmi Berlin, and I head up Investor Relations at Gofore. And me and the team are really happy to see so many of you here with us in Helsinki. Some have come from far away, like Italy and the U.S. Warm welcome to you. And all of you online, a warm welcome to you as well. We're happy to have you with us today, either watching this now or the recording afterwards. Today is about helping you understand the contents of our new strategy. And of course, in a true Goforean style, it doesn't lack ambition. So moving on, let's get to our agenda.
First off, it's Mikael Nylund, our CEO, discussing our track record and an introduction to the strategy, paving the way to the upcoming speakers, the new geographical area heads, Elja Kirjavainen, for Finland, and Dr. Marc Fuchs, for DACH. Then you'll have a chance for your first Q&A with all three. After that, we'll take a break for 15 and return to our most important things, the Goforeans' people and culture with Sanna Hildén. Then, of course, last but not least, Teppo Talvinko, with our financial performance. Finally, a wrap-up from Mikael again and a final Q&A. Regarding the Q&As, we'll take questions in turn from the room and from the online audience to keep it equal. If you feel like you have a question that wasn't answered, people on site can obviously stay and chat with us afterwards.
And people online, we have your email address and your questions. So we'll get back to you as soon as we can after the event. All right, that's all from me. We can get to it. There's just one more thing. As the speakers come on stage, let's give them a big hand. Makes it more fun. Please welcome Mikael Nylund.
Thank you, Emmi, and good morning, everyone. So nice to see all of you here. A lot of familiar faces, but some new ones as well. And good morning, or whatever time of the day it is that you watch the stream or the recording that we have prepared for you. I'm hoping this recording also will be a big asset for people who are getting to know Gofore in the coming couple of years. As Emmi said, my name is Mikael Nylund, and I have been the CEO of Gofore Group now for five years. A long career with Gofore, almost 15 years. But in the role of CEO, I've been here at the Capital Markets Day and presenting these same things two times before this, so a third time now.
This is because for quite a long time, we at Gofore have worked with strategy in a way that we have a two-year strategy cycle. We want to be agile, we want to be iterative in our approach to strategy, want to be adaptive also to the changing circumstances. Oftentimes, it's about Gofore changing in two years that much. But of course, also it's about the environment that we work in that changes, like we have seen for the past two years now with the market environment changing quite radically from the situation we had in 2022. When we work with strategy at Gofore, I think there's one thing that every Goforean thinks of and has as a starting point, and that is the fact that Gofore is a growth company. For us, that of course means that when we decide upon our strategy, it is a growth strategy.
It has always been, and so also this time. Since the two years we were here last time, things have changed. We have taken long steps forward. We have taken long steps forward in terms of just numbers. There are 200 more Goforeans than there were two years ago. We have achieved around EUR 30 million in new sales after that. So big things, but we can also be honest in saying that during the last two years, we didn't achieve all of the financial targets that we set for ourselves two years back, and that is because the operating environment changed quite radically during that time. One thing that is important, however, and that's one thing that we want to make clear to all of you here today, is that not all of the achievements that we do during two years are visible as financial numbers and financial performance.
It's also about how Gofore has strengthened in many ways that it provides a great basis to build on the future growth. That's something that we want to look at a little bit today also. Most of you, if not all, know that Gofore is not the only company that has struggled a little bit with growth the last 18-24 months. That has been mostly evident, of course, last year in 2024, when our long streak of profitable growth was also impacted by the market environment. We had the weaker market cycle starting with 2023, as you can also see from many of the graphs on the growth side here, with the top-performing Nordic peers as the lighter blue and the gray one being the Finnish peers. Everyone's been basically impacted in 2024.
The thing maybe to note here is on the right-hand side graph where we talk about profitability, and I hope that Gofore's ability to provide stable profitability also in a weaker market environment with weaker growth or even negative growth is something that stands out here. Whether we compare to the Finnish peers, again, the gray line, or even the best-performing Nordic peers, the light blue one. Something that we are, of course, extremely proud of at Gofore. This short introduction brings me to the key messages we want to deliver to you today, and those three key messages are here. We want to make sure that you remember and appreciate the strength of the foundation that we have built over the years.
The focus strategy that we have and the focus strategy that has provided a good track record of results, also in a different market environment with the profitability. We want you to understand what we are thinking about in terms of our updated financial targets. These were released in December already, so many of you have probably already looked at them. And we had a chance to discuss with some of you already around the financial targets. But that's, of course, the most important thing today. And finally, growth targets and financial targets are nothing without the strategy, and especially the ability to execute that strategy. And that is the third point that we want to deliver to you today.
I hope that the team members that will be up here on stage also will convince you that we have the team that is exceptionally well prepared to execute on the strategy that we have. We are not talking about a transformational strategy today. We are talking about an update to the current strengths that we have. So I think the ability to execute is really super important here. Next, I want to a little bit walk you through the achievements that we've had during the last two years before we then dive into the forward-looking perspectives on things. I'm going to start that with showing how we create shareholder value. It's not only our share price that has outperformed the competition and the Helsinki General Index. It's also the dividends that Gofore has paid over the years.
We have been able to, in addition to the share price, pay a constantly rising dividend, which I hope makes our shareholders happy and want to be part of the Gofore story. The other thing we do is we create value for our customers. I think it's especially important now in this market situation where the growth is harder to come by, that we have really achieved higher customer satisfaction numbers, higher amounts of big customers than we have in previous years. I think that's a really good achievement, and that tells about the retention of our customers also in more difficult budgetary environments. We are there with our customers to do important work, important work that our customers really need, and they are happy with the work that we do for them.
So this is an extremely powerful message, I think, and something that both Marc and Elja will also talk about in their presentation a little bit. We have also, during the past two years, been able to improve on the offering that we have. In many ways, but I want to especially lift the example of the acquisition we did in 2023 of a company called Creanex, which added to our Intelligent Industry offering new technology in the form of simulators. And also how we, also involving that new technology, have invested in quite a sizable R&D project together with our customer Ponsse, and partly funded by Business Finland, so publicly funded partly also. Maybe at the heart of it all, when we look at the achievements for the past two years, is how we create value for our people, our employees, the whole network of people working with Gofore.
Also in this area, we have strengthened compared to the competition. Attractiveness, retention, employee experience are all at high levels and have improved during the difficult times. I think quite an achievement that also. And that is thanks to the continued development work, even when we have been seeing the more tougher times and have also needed to focus on financial results in a different way than what we used to do in the better market times. And what is the best evidence, I think, of the value for Goforeans that we create is that in 2024, Gofore was the most attractive employer when we look at IT consultancy, IT service providers in Finland, according to a survey of Universum, which we think at least is the best survey in this area. I think that's quite remarkable. We have also, in many ways, created value for society around us.
This is something that we feel strongly about, corporate responsibility being a good corporate citizen. Maybe I especially want to highlight the social targets and something that Sanna will be talking about today in the people and culture part more, about how we are actually big pioneers of the future working life in Finland and how we take part in that public discussion, how we shape that future working life. That is something that has resulted in, of course, especially advancements into the future working life, but also for Gofore has lifted us as a good employer, as an exemplary employer. That, of course, helps us in our other targets to be competitive in the talent market. We have been for a long time talking about pioneering an ethical digital world, about the ethical digital world.
This is an area where I think many of our competitors have followed suit also with talking about the ethics of digitalization or the responsible digitalization or whatever word they use. I think that's good. I hope that we have been seen as some kind of role model also in this area. Now, with the big advancements in artificial intelligence, discussions about social media, its role in society, its role in preserving Western values or the Western democracies, this is an area which I think is also more and more important in the future and something that we want to be part of that discussion also and do our part. Climate targets, that's something that all businesses in the industry feel ambitious about, and that's of course important.
What we can more do is actually why our customers, why the handprint that we have industrial customers that have, of course, bigger challenges in their climate targets where we can help them. And that's what we've done over the past two years also. And last but not least, in the bottom right corner, the foundation, Gofore Impact Foundation that we founded two years ago or a little less than two years ago, a foundation that has already helped quite a lot of nonprofit organizations to advance their digitalization targets, to advance Digital Society for everyone and everyone being able to be part of the digitalization development and advancing inclusive digitalization. You can find some stories about the projects that we have been part of also on our website, very interesting stories, I think. Looking at all of these achievements, financial results have followed.
Looking at the long-term placement of Gofore compared to a lot of great companies from all over the world, I think we can still be extremely happy and proud about how we place in this scatter diagram about longer-term growth and profitability. Above all, this is a good reminder that that's where we want to be. That's what this strategy also, looking forward and looking into the future, is about, how we can remain one of the leading digital transformation consultancies in the world. Now that we've looked a little bit in the rearview mirror, let's change perspective and start looking forward and talk a little bit about the market landscape. We have discussed shortly the bottlenecks, the constraints that we have. There are macroeconomic reasons, there are geopolitical reasons for the last 24 months to be different from what we were used to before that.
Different in the sense that the investments have been a little harder to come by. The ability from our customer side to invest in digital technology, digital projects has been limited. But what hasn't changed is that digital technology keeps advancing. That's not something that we can or should think of in terms of that would be that much dependent on the economic cycle. And what that means in turn is that the gap between what organizations on an average, how well they are able to use digital technology today compared to what is possible, what technology makes possible, that gap is widening when the investments are slower. And that's really something important to keep in mind when discussing and trying to understand the longer-term market fundamentals. They are there, the strong fundamentals of the market because the technological advancements will continue.
A few trends that we have especially identified where we think that Gofore is extremely well placed is the technological advancements in themselves. We have a strong technological know-how. But in addition to that, I think something that all organizations are now thinking about is the adoption part. Doing an organizational digital transformation is not just about understanding and mastering the technology. It's about transforming the organization. It's about transforming how people do work. It's about processes. And that all is a very human-centric perspective on transformation. And that's where Gofore has a lot of strengths. And that's why I think we are also in the future very well placed to take advantage of the market growth.
The third point is that what we now see, of course, because of various reasons, not least geopolitical concerns and war-like environment, is that security, continuity, resilience in different situations is something that all of the organizations put in their spotlight and want to invest into. And this is also an area where Gofore has a lot of strengths. And this is not only about cybersecurity consultancy, which is one of our spearheads and which is one of our business areas that has grown for the past year also very strongly. It's about comprehensive thinking about security, about making sure that our customers trust that Gofore is a secure, reliable supplier for their digital transformation. And that's where we are well placed. So in terms of the big picture and long term, we are very optimistic about the market.
And this is, of course, the leading thinking when we set our new financial targets for the long term. That's something that gave us the courage to be optimistic, to be ambitious. We have to take into account the bottlenecks. And we understand now that 2025 will not be completely different from 2024. We are seeing that the market is turning into better, but it's going to be gradual. It's going to not happen overnight. There are different customers with different situations. There's public sector, there's export industries, there's other companies, all in quite different situations, speaking of economical terms. And that's something that also Elja and Marc will take you a little bit deeper into. But overall, we think that the environment is something that helps us grow.
That's what we have based our financial targets on, in addition to the track record that I showed in the beginning about being profitable also when the growth is maybe not that strong. Updated long-term financial targets look like this. As said, these were released in December, and many of you have already seen them. But what we want to do is have net sales of EUR 500 million by 2030. An ambitious target, but also taking into account the little slower market situation now compared to two years ago when we last time set our updated financial targets. Of that growth, we expect over half to be half or more to be organic growth.
That Gofore will continue to outperform the market in terms of organic growth, which of course also means that M&A will be a part of the growth story, as it has been since 2017 when we made our first acquisition. Our past performance also gives us the confidence to think that we can do this while maintaining a capability to deliver good profitability. We set also the profitability target on a high level. We don't change that. It's what it's always been. We want to have a profitability of 15% in adjusted EBITDA and continue as part of our capital allocation thinking to also make sure that our shareholders are remembered annually by dividends, which is especially important for us because there's a lot of Goforeans that are shareholders in the company, and that's an important stakeholder for us.
That's also part of how Gofore wants to be a good employer. Important part also of the financial targets. Great. That leads us to the updated growth strategy. I'm just going to give you a sneak peek of it. Marc and Elja will take you through the more practical and the real sides of the strategy. I just want to highlight that Gofore has always been very focused in our strategy. I think that's an important part of why we have been successful also. We want to keep that focus. We also want to take into account that the market environment has changed with different customer groups in different ways. What we want to do is a little bit rethink about the focus on different customer groups.
Public sector, maybe we are not expecting for the upcoming couple of years to grow that strongly. We need to find other growth streams, other new growth areas that we also want to invest in, and that's again something that Elja and Marc will be talking about more. We will keep our geographical focus as it has been. Our home market in Finland is a growth market for us, and it's very different from the more recent market expansion into the German-speaking area of Europe, the DACH area, which is the other focus area for us. On the right-hand side, you see the ideas we have around our unique value that we can provide our customers, and this is something that we have discussed quite a lot when doing the strategy work.
We want to be sure that Gofore provides the best value for the chosen customers, for the focus areas that we have, and for us, it comes down to these things, the people that we have, the investments into the people that we have, and where we have evidence that Goforeans are an extremely important part of the puzzle that makes up the value that we deliver to our customers. Our focus on the customers that matter to us, the strategic customers, and building those relationships and developing an offering that we can really consider is exceptional, is unique compared to all of the competition and provides the value for the customers.
As said, M&A and company acquisitions will continue to be a part of our strategy as they have since 2017 and provide kind of a booster for all of these areas of the strategy where they can help implement the points in the strategy. To pay way for the implementation of this strategy, we have also made a reorganization of the company during the end of last year. We have started this year with a new structure of the company. We have taken the company from being more like a capability-oriented organization into a direction of a customer-oriented organization, something that we strongly feel that really fits this market environment where the bottleneck for business growth is with the customers, with the sales, with the go-to-market activities. That's what we have wanted to strengthen. I'm very confident about the new organizational model that we have.
We have also wanted to clarify the business unit structure, and what we have now in place is clear business units for Gofore DACH, and Gofore Finland, and that's why Marc and Elja are here today to present themselves to you, all of you, and to also make sure that you understand what we are trying to do in Gofore DACH, and Gofore Finland. Strategy execution and implementation is always about the people, and that is about the team that we have. We at Gofore have a really strong team, and my closest team is the group leadership team, and many of us will be presenting today. Elja, Marc, Sanna, and Teppo will be up here on stage to present today, but also here present without coming up to the stage are both Auli in the back row here and Ville over there.
So if you have any questions during the break, you can also talk to Auli and Ville about their responsibility areas. I'm really sure that this is the team that will take Gofore back to the growth track and make sure that also in the future, Gofore is seen as the growth company that we want to be. With that, it's Elja's turn. Welcome up on stage, Elja.
Thank you, Mikael. And good morning from my side as well. I'm Elja Kirjavainen, and I'm responsible for our Finnish business starting from the beginning of this year. And prior to that, past five years, I have been responsible for our consulting business. We have identified five growth streams for Finland: digital government, well-being, retail services, security, and machines at production. Let's deep dive into each of these and especially focusing on new growth areas.
In digital government, our home field, we are the market leader, but still we expect moderate growth. Our current position is based on our long-lasting client partnerships. We also know very well Finnish public sector ecosystem. Also, we know the EU level. We know the players in the field. Finnish public sector, we all know, is in the challenging situation and finances are weak. There is a lot of pressure for cost savings, but still, digitalization is and will be the key lever to provide future efficient public services and also maintain the Finnish welfare state. AI and automation, really interesting area. I think last year was a bit of piloting, trying to identify where we can really achieve the benefits, but now it seems that it's starting to go into the mode that the benefits will be realized and more larger projects are starting in that area.
This Digital First Act, for example, supports this kind of development. At EU level, there is happening a lot of things. For example, initiatives like Digital Wallet, Real-time Economy. They are really important. We expect also these to be realized for us as growth areas in the coming years. Then also we see the development in the market that, let's say, as a service type of ICT partnerships will start to happen more. That's, of course, a very interesting area for us as well. Then we are strong in this kind of large scale of digital investment projects. These will continue to happen. We play a major role in those as well. There are some examples of our clients as well, long-lasting client relationships, Traficom, City of Espoo, Finnish Tax Administration.
So, as said, our home field, but still we expect also moderate growth in the future despite the fact that the economic situation and the situation of the public sector is a bit challenging. Digital government is our strong part. And well-being is the kind of natural expansion area for us based on that. We expect strong growth here. Market drivers are very similar to digital government. Big change happening. A lot of pressure, cost-cutting structures will be modernized, etc. But here as well, digitalization is really the key to provide efficient, high-quality well-being services in the future as well. We have a good market position. Consulting, especially, is our strong area here. We are serving many well-being service counties like Western Uusimaa, South Savo. And this is a good basis to our expansion. So the big growth will come by expanding to digital services and solutions.
For example, this Kela One application program is a good example of this kind of project which we are currently implementing. We also see interesting new potential business areas here. For example, combining services which include healthcare technology, different service elements, and consulting to reshape service structures creates a really interesting area. Let's take, for example, senior citizens who want to stay home longer. If we can create this kind of solution which helps to make this real, it's really valuable for both senior citizens and also well-being service providers. We also see a need for new kinds of delivery and business models in this area as a service-based approach, value-based approach as a kind of commercial model, and then platforms and, for example, low-code related to delivery. This is valid also to digital government and the other sectors as well. Interesting development.
Let's see what we can do there as well. We move to retail and services. This is a kind of new playground for us. We have some good clients, existing clients. We have mentioned Elisa and S-Group here. It's a good basis to expand and to build on. Here, our game plan is very straightforward. We grow in current customers by cross-selling and upselling. This is our strong point because our offering is comprehensive and we can use our offering to make this happen. We target new potential accounts in this area. The focus is the top 100 Finnish companies. We have a really interesting Arrowhead offering here. This is our ERP business integrator model. It includes enterprise architecture, project management, change management, and quality assurance. We ramped it up last year very fast.
We have been able to win many new projects in a short time scale. We see this is really the area where we can do much more. We can triple easily in short time scale. There is now a lot of effort to make that happen. We can also develop new offerings and concepts, the kind of shared areas for this sector. Retail and services, it's also a good area in the way that we expect that the development in this market landscape will be stable, kind of steady growth. There are a lot of companies in good shape. They continue to invest in digital projects and services. For example, this data intensity, it's something which helps our growth sources in this area.
And we have recognized that among our clients and companies in this area, there is a kind of need for our kind of, let's say, new agile, fresh player in the markets. And of course, we are very happy about that. And we try to kind of realize that potential what we see here. So good sector, strong growth expected, and straightforward, relatively simple game plan. Then we have really excited new growth stream and its security. We are the new player in the area. And it's, as said, a new area for us as well. Probably also, at least I would say that one of the most important decisions in our strategy entering into this new area. And why we have done this decision? I think the first reason is kind of obvious.
The changed global security environment has led to heavily increasing investments in the security and defense area. So it's the kind of no-brainer, follow the money approach, which is always good. But then the second reason is our unique fit to make this approach. We can build on our existing governmental security customers. We know how the governmental ecosystem works. We know the buying behavior, the kind of public procurement and tendering processes, etc. Then we can use our existing offering to grow with. For example, cybersecurity, industry software development, simulation and simulators, large-scale digital projects, and also dual-use solutions are our existing assets what we can use to make this expansion real. And then our strong consulting capabilities, we can combine that to different partners who are already strong in that sector in the areas like technology, products, and services.
And also then the kind of new expansion area is the defense sector. We have some private defense sector companies already as existing accounts. And then leveraging that and our existing assets offers a good growth track here as well. So new area, very exciting as well, kind of unique opportunities for our consultants. And we expect fast growth. Then last but not least is machines and production. And here we expect strong growth. And the key is that we really make the breakthrough with our digital product lifecycle concept. The other areas which we see potential are digital services. There is a lot of this servitization happening in the industry, a lot of demands from end customers, etc. Also software-defined manufacturing solutions to transform the industrial production is a hot topic. And then also we have strong consulting capabilities and especially the areas of IT, OT, ET convergence.
Different transformations in this area are something where we see a lot of potential. Our current market position, it's relatively strong. We are especially strong in machines and devices. We have a good existing client base like Metso and Ponsse, Mikael mentioned as well in the beginning. This kind of, let's say, world-class top clients, it's a good base to build on. Also the market landscape, there is a trend supporting our growth. There is increasing intelligence in machines, electrification, sustainability requirements, etc., etc. All that supports the digitalization and helps us to grow in this sector as well. As said, the key here is our breakthrough with this product lifecycle concept. Let's look at a case example related to that. A machine manufacturer aims to transform its R&D and product lifecycle management. They are looking for faster go-to-market.
They are also under pressure to offer new lifecycle services to their clients. Our solution, surprise, surprise, it's based on a digitalized product lifecycle concept, and it includes our core expertise: management consulting, project management, design, agile change management, software development, quality assurance, and cybersecurity listed here, and then we will bring value-creating elements to this solution. We have a transformation framework. It's our consulting framework to implement and plan this kind of big transformation, then we will bring our digital twin platform, so we will create a virtual copy of the physical product and use that during the whole lifecycle of the product, then Mikael mentioned our Creanex acquisition, so we have also here our Creanex simulators by Gofore, so we use this simulation platform to improve the efficiency in concept creation, development, testing, training, and product support.
So, quite a comprehensive way to use these simulators and simulation platform. And then finally here in this solution, we have our Celkee Insight tool, which is also we have done the acquisition of CCEA, I think four years back. And we use that Celkee Insight tool to measure the progress of the change, especially from the human side of it. Again, something really unique. And we believe this kind of solution is the kind of future way to offer and create unique value to our customers. Really exciting as well. So what we just demonstrated is that we bring our own and our partners' products, concepts, and technologies to complement the capabilities of our own experts and consultants. And this example, this was from the Intelligent Industry side.
But of course, we can create and we want to create similar kind of unique solutions in the other areas as well. And we kind of feel that it's the kind of rethinking consulting and, as said, something unique. And of course, the key is that we can accelerate our clients' digital transformation. We can create more and faster value to our clients. This can be also combined to new value-based models. I already referred a bit in the well-being part. For example, kind of sharing the achieved results as a commercial model is something interesting. We don't see that this replaces the kind of traditional time and material type of work, but this will be something which will increase. And of course, it's also really interesting to our clients how we can take more responsibility and by doing that also create larger clients and do more strategic cooperation.
To summarize, our position in Finland is strong, but as you saw, there is still a lot to gain as well, so overall, we believe in strong growth in Finland as well. I think it's the good mix of growth sources. It's based on our strong existing position and then bringing new areas as well, and of course, I as a part of our group management team and responsible for Finnish business, I'm really committed and eager to make it happen, and next, we will move to our DACH business, and I would like to welcome my colleague and friend Marc to tell you more about that. Thank you.
Also warm welcome from my side. Herzlich willkommen. Guten Tag. I've learned that we have also some guests here from Italy joining us, so I also want to bring some German touch.
Yeah, basically we have learned that Gofore is a growing company and also a big part of this growth is to be expected to come from the DACH area. And therefore I joined the company one year ago to facilitate this growth. From my past, I come from bigger consultancy companies, worked a longer time at Capgemini, NTT DATA , and others, and helped them growing in different sectors. I've spent some work in financial services, then in the last years, most of the last years in manufacturing and automotive. And I always help companies growing. And one has to note that growing is, of course, everybody thinks about the figures and revenue and all this. Of course, this means getting new clients, getting new offering, but it also means developing capabilities and getting people, getting capacities.
And this could be in Germany, in Austria. It could also be in other locations like nearshoring and so on. And all this was part of my past history, and therefore I'm here. So first check, I have to find the right button. Yes, I've managed it. I want you to start similar to the Finnish part of earlier with a look about our major streams. And I would say these growth streams or verticals, industries, they are not a big surprise. And why Gofore has chosen them also in DACH. First of all, I want to ask you to say Gofore has a real great development in the past. And that means that we really have a lot also of knowledge, of capabilities, even of assets in certain sectors and industries.
I think it's really wise to say, let's use this, let's use this experience in order to build up business in DACH. But of course, in DACH, we have also some kind of specifics. I've mentioned here the topic automotive. This is an interesting topic. I will look a little bit deeper into this further on, but it is an important part of the German economy. Therefore we also decided to have a specific look on this, specific offering and also go-to-market approach. Therefore, this is a sector you will not find, of course, in the Finnish offering. But before I will take a more closer look at the different growth streams, I want to give you a little bit of an overview. Where are we now in DACH? I think we have not reported in the past so much about this.
I think it's interesting to see where we are now because it makes a huge difference, of course, if you start from scratch or if you have your foundation somewhere to go. This slide is intended to give you an overview about our DACH business in terms of industries where we are working on. These are the verticals shown. Then the different kinds of services we provide. This is a little bit of a very simplified view on the Gofore portfolio or service offering. And I showed there some example or highlight customers. The first observation I want to state is we really have a quite significant client base already in DACH. Typically, we aim at customers with more than EUR 1 billion revenue. There are here some customers which are considerably bigger, BMW, EUR 150 billion. But we have also some smaller customers.
But in general, we have a big customer strategy and we have a significant client base. The second observation is we provide the complete Gofore portfolio in some sense to our clients. So we are in early phases, service business design from implementation then to quality assurance, cybersecurity. And the third observation is there are a lot of white spaces also in this. But this is good, of course, because that means we can go somewhere and we can grow. So let's just look at a customer, even at a customer like BMW, where we provide a lot of services currently. We are not in the service and business design. Or other customers, we just can expand the service portfolio. And of course, you also see that in certain areas like data analytics and then AI, we just still could make much more than we can do now.
So that's, of course, something to do with the history of our companies, what has been acquired in the past and what we are able to do. But we, of course, we develop, and these are the areas we want to develop. So this is a little bit more like an overall view on the business. A further thing I really wanted to highlight is what kind of projects we are doing. Because I think we'll show it to you later on. In contrast to the general economy, IT typically is growing. And also you will see it in the German market, IT is growing. But the point is, of course, what kind of IT services you provide. Because IT is also a cost factor, of course, is a considerable cost factor. And so it's important that you do the right things with the customer.
IT projects are then relevant when you help the clients to develop new business, for example, or help them to optimize the execution of current business. Then it's very relevant. But you have to look that you're not doing commodity kind of stuff. Then also our clients are making things like putting things to India, switching custom solutions to standard software and such topics. And we should not be part of this then. So just to give you some examples of what we are doing to underline the statement is, for example, this first one is an example we do for Lindner. Lindner, this is an Austrian company in the field of agriculture. And we really help them with everything regarding their control units within their machines. And this is, so to say, the heart of their business. And we provide really a complete end-to-end offering for them.
We do UX, UI services. We make the software within the machines, but also we help them outside the machines. Because also in this area, for example, connectivity is important, even a lot of AI also in these machines. Then Deutsche Bahn. I think everybody who was in Germany knows Deutsche Bahn is not famous for being in time. But you can be sure that you are well informed, at least. And basically, we have played a major role in this. We developed a real-time system which collects information about the different trains and gives an overview of what is the current situation. And this can be seen in different kinds of channels in the webpage, in the mobile apps, on a railway station and such things. And the last topic I want to mention is an automotive example. You see it, it's BMW.
Maybe you have seen in Vegas the last presentation of their new infotainment. I think it's quite interesting, and so this plays a major role for them, and we help them to develop such things, and this is really an AI case, computer vision case, to speed up the development because we can make an automated test evaluation, basically, of test results. In earlier times, humans have to look, is everything okay? Now this is then fully automated and we use also the computer vision cases, so this is also some kind of a highlight topic. Good. Now I think I come to the last slides, which goes a little bit backwards, and then we move on to the future, and this is a little bit of an overview about major things that happened in the years 2023, 2024 in the DACH market.
I would say I can differentiate two things. Of course, I think we have made quite a good job dealing with the two most important things of an IT consultancy, looking at our people and looking at our clients. The third thing is we really try to lay some kind of foundation for future growth. First, maybe starting with people. Specifically in the next years, we will really see that it will be differentiating to have the right people on board because we will just do not have enough. And so we really try to be the best company for the people. We have really great rankings and relevant platforms for this. We have nearly no attrition in DACH currently. So this is one major point. The next is we really tried to win two kinds of deals, big deals for the future.
But we also tried to win new customers, which can give opportunities in the future. First one, BMW Test Center as an example, it's an EUR 18 million deal. It's a five-year deal. Nevertheless, for us, it's a great deal. Starts now. Next Friday is kickoff for this. Then this will start. We start the services for this. And we won new logos, new customers also in the last year. Lindner as an example, we won a topic regarding tire production at Continental. We won things at Pöttinger. Pöttinger is also an Austrian company in the agricultural space. So really new customers. And this was great. And the third thing is foundation work. We had made some kind of acquisitions in DACH. And we really put everything there together. We really want to make one company in DACH.
So the people are integrated, the processes are integrated, the brand in Austria has been changed. And you will see in the beginning in Q2 of next year that we will have only the Gofore brand then in Germany. Good. So this about the past. Now we have seen, I think, that we have a good foundation. We have a good situation. And we want to grow. But now the question, of course, can we grow? What about the economy? And of course, you know that in Germany and also in Austria in 2023, 2024, basically we had no growth or even a decline, a small decline in the economy. And also for 2025, analysts say it will be a minor growth, maybe very small growth.
But this is, of course, only one side of the medal because we really have to look at what we are doing and what we are doing as IT. And here you can see the numbers. Here's this from Bitkom, which shows the developments of IT services in the past. So for us, we're on this IT service development. And there we can really see it has been growing also in the past, also in the last two years, and it's expected to grow also in the future. And of course, this is not a big surprise, of course, because companies really need IT. Another observation I want to share is a little bit what are typical sectors IT consultancy companies serve in Germany or in DACH. This is from Lünendonk. Lünendonk is an analyst company also in Germany.
And you can see still a big focus on the industrial sector, a little bit shrinking maybe, but still the most important sector for IT services, for IT consulting companies. Of course, then public, very important, still growing, financial services. These are basically the most important sectors. And you have seen basically that we cover these. And we still also see in the future they are really the main budgets or main topics for us to be done. So now I want to have a closer look on the different sectors. And the first thing is automotive. And I have to say automotive is always a difficult story because everybody, if you read newspapers, and every second day, I think one can read something like, oh, BMW had problems with brake systems. In China, huge price dumping, competition, protectionism, U.S., and all of this. And of course, this is true.
I think it's true that we will not see a huge number of sold vehicles, for example, also in the future. We have in this year, most of the German OEMs had nearly no growth. In some areas, growth, in others not. In China, no growth, but typically a growth in the U.S. sense. But we will not see that much movement. But what is also true is that there's a lot of transformation time, really disruption in this industry. We see a move towards electric vehicles. We see a move towards software-defined vehicles. So the differentiating factor in a car will be software in the future, besides design. But there are also a lot of topics besides the product itself. Typically, the manufacturers try to flexibilize their production. BMW has been very successful because they are very flexible in their production system.
And this is also a topic a lot of companies want to do. And also the topic of supply chain management is very important for them. The Ukraine war really showed also some weaknesses of these companies and a lot of other topics like this topic in Suez Canal, a lot of things. So this is a major point. And the third one is disruption in the sales and service network. Typically, a retailer earns money with service. And this is gone or will be gone maybe in the future. And so the OEMs really want to find new ways. So direct sales will be a more important topic, new concepts for service. And why I'm telling this? Because all of this really needs IT. There's a really tremendous amount for IT. And this is IT within the car. So embedded software development is very important in this.
But also a huge amount of IT in the plants, in the information systems of the OEMs for rebuilding their sales service systems and all of this. And so we really think it's a good idea to engage there. And I already said we have proven it last year with a huge deal. And I can say also our personal look on this and our sales pipeline really. So we are very confident that this will be a major part of our growth. So next thing is this machines and production parts. Machines and production, I have to say, this is for me. I'm also at heart a sales guy. This is really easy because we have from Finland. We have really everything we need. We have a really complete end-to-end offering in this field. We have innovative stuff with the simulator technology.
We have references. We are totally credible in this field. Everybody thinks we can do it and we can do it, and so basically in the last year, we got leads basically everywhere in the agricultural construction space where we wanted. We have one new topic and this is really great, and we will just continue this in some sense, but there are also further chances because, of course, machines are also needed in other areas like process industry, for example, and there's also a huge need for making machines smarter, getting more data out of them, connecting them, and these are also topics we want to tackle, and therefore we have also very important partnerships, so the Bosch Rexroth is an important partner for us. We can find Bosch Rexroth controllers in many kinds of these machines, and also Siemens. You will see Siemens in the production line.
This is totally established, and this is also now a partner we will do more in current year, and so this is also a topic of strong growth, and this is really, I think, the topic which will be even the easiest for us to gain. The third one is digital government. Digital government, this is really an interesting story because paper-wise, we should already have made their big successes in the last two years. Because there are basically two things come there together. Basically, of course, Germany has to do a lot of things in digitalization. One has to look a little bit different into this topic. Germany has a federal system, and I would say some states are quite advanced already in this. One has to say Bavaria, for example, is quite advanced.
But in general, I would say looking at digital services in the public sector, there's a lot of things to be done in Germany. We're still not there. And there are also a lot of very big public topics, for example, like register consolidation. This is a typical problem also in the German-speaking area. A lot of different registers. The topic of digital identity will be very important in the next years. Of course, there's this nice German word, Onlinezugangsgesetz. Of course, digital services has to be provided to the citizens. This is a major topic. And so there's a lot of things to be done. And we are also really good at it. In Finland, we have done so many things. And we are very capable of this. And so one could just expect we should be a really big player in the market already.
I have to say there's a lot of interest for us. We currently face one major point is we're just too small. We're much too small. Typically, the size of deals in the public sector, this is by magnitudes higher than that what we can deliver. In some sense, we really decided to change a little bit of strategy. Of course, we still try to get certain contracts on our own. We have already contracts like byte. It's an agency in Bavaria for digitalization and also for federal ministries. Our strategy currently is more like getting in touch with bigger players in this market from alliances and go together to this. I think this will be the approach for next year. We will see more growth there. The fourth is retail and services. Good.
Germany, I think I will never see that Germany will be a service country dominated by services. We think it will be industry, will play a major role. But nevertheless, it is a very fast-growing segment in Germany. And as we defined it, honestly, of course, it's very much. This is basically it's financial services. It's here travel transport, it's telco, it's banking. So this is a lot of stuff, of course. And I have to say that we are already in this kind of business and a lot of different examples. So we do a lot of business in the food and beverages sector, for example. We have, of course, travel customer. We have a retail customer. We have also now first customers in financial services. But I would say it's still not a really focused topic for us. We consider more this is more like an IT topic.
Currently, we provide IT services for a lot of companies. And this is good. But we are not currently that strong business-wise that we have the business domain expertise. So we really say, let's do this opportunistic. We see this as a moderate growth area. But maybe this can change. But this is more the view for next year currently on this. So then summarize. When looking at the different industries, when being completely honest from the positioning is we are a challenger everywhere. DACH is 150 guys or a little more than 150 guys. We are a challenger everywhere. But in the first three industries, I would say content-wise, we are very strong. We really have something to say. We have a good story. We have credibility. We have customers. And this is the position. And so we will and want to grow in these first three areas.
As explained, retail services, let's see a more opportunistic way of growing there. Good. Basically, I'm also nearly done with this presentation. I only want to highlight one thing. One has to be aware, of course, Gofore in the Finnish market, everybody knows Gofore. This is in some sense, you do not have to explain a customer what is Gofore. The situation in Germany is, of course, a little bit more complicated. We really found the need to be seen as unique and what is really special in the company. Therefore, the point of innovation and showing really something very interesting or new to the customers, we have really identified that this is very important for us. Therefore, we established in the last year Gofore Labs based on something we already had in an acquired company.
Gofore Labs is an internal unit which really tries to build innovative things. It could be concepts, it could be solutions, it could be assets together with research institutes and universities. For example, we work quite closely with IVI. This is Fraunhofer Institute for Transportation and Infrastructure Systems IVI. For example, these Car2X cases come in this area because we see this is a growth field. Sometimes we do also some kind of co-innovation with clients. For example, test framework, infotainment systems, something like this. We did also further things such as highlight some topics. We really use this. These are spearhead offerings. We use them for lead generation, for growing. These are accelerators if we come to projects. This is also very important for us because in order to really be seen as an interesting and relevant partner in the market. Good.
So this basically was DACH in 30 minutes. Of course, I could do more. But I think we have now the chance for the Q &A.
Thank you so much, Marc and Mikael and Elja. Please welcome on stage. So first Q&A. There is very little competition to you from the online audience, but there's one question. So maybe I'll take that and then let you guys loose. This is from Frans-Mikael Rastas in Inderes. He's asking you to provide an approximate number or percentage of consultants working within each of the growth streams in Finland.
Okay. I just want to first say that we don't, in the organizational structure, we don't dedicate consultants to these growth streams or business areas. But I can give the approximate percentages. So digital government about 45%, well-being and retail a bit less than 15% both. I mean 15% each or a bit less than 15% each. Then security around 5% each. And then the products and manufacturing 25%. So that's the approximate. And all together we have, let's say, about 1,100 consultants working for the Finnish clients.
Thank you. Anything to add from Mikael?
Not to the percentages. That's of course correct. But important to note that we don't, an individual consultant is not working just for one business area. They can move and many of the capabilities that the consultants have, like Elja said, like let's say software development or project management, they are transferable between the business areas. But then we have some consultants that are more like industry-focused. And of course, those then provide the kind of the spearhead of the understanding of the customer industries in each of the business areas.
Thanks, guys. Then the audience, please go ahead. Who's first? I saw Joni first. Sorry, Jaakko. Joni Grönqvist from Inderes.
Okay, thank you. I would first like one question and then I'll leave to the other ones so we all have time. But I want to touch the topic of M&A. It's always been, or you've been really good in M&A in not only buying and integrating, but also being innovative in what kind of companies you buy and strengthening your strategic position. Now looking at your new growth areas and your quite wide offering already, if we think about IT companies traditional. So two questions regarding this and the new growth areas. Are you more or which capabilities could you want in both the markets, DACH and Finland? Or is it now that you're moving more towards buying customers instead of capability? So what are you looking for in the different markets?
Maybe I start and you guys can add then afterwards. But we're going to look at the second part of the presentations. We're going to look a little bit more on M&A. But first of all, thanks for noting the track record. We are also very happy with the track record. And of course, Gofore as a buyer of companies, we have a different situation here in the home market in Finland where I think we are known. And I think we get offered all of the companies that are relevant for us and on the market. In the DACH region, the situation is different. We are in the process of building that awareness towards Gofore as a buyer, building that pipeline. As you pretty much noted there, our thinking has been that M&A is a tool to facilitate or strengthen the strategic choices that we've done.
That could include buying certain capabilities. The capabilities that we want to find should be something that integrates into the offering that we have so that we can, for the chosen customer groups, provide something new. I'm not sure that we even 100% know what those areas or capabilities can be in the future. This is the basic idea. Maybe in a second, Elja and Marc can add what kind of things they think of in terms of Finland and DACH. The other side, of course, is the customer side. There we have been switching the focus of M&A activities towards the DACH region because that's where we need the volume. We need the customers added to the portfolio.
So that's what we, especially in the DACH region, of course, are looking at and which strategically can be very valuable for us, finding good customer relationships that we can then build on in terms of offering synergy idea. But do you have any ideas, Elja, about what you think of in terms of capabilities in Finland?
Yeah, I think I would choose two. The first one is quite obvious. It's this security area because it's new for us. And there we see the kind of potential to strengthen our position and offering both from the client and offering perspective by acquisition or acquisitions. And then the second is this Intelligent Industry as a whole. I think that's something where we can do actually the same. We can strengthen the offering and also from the client perspective. Those two.
But I would say in DACH, it's quite easy from my point of view because we are really quite small. And we lack, of course, a lot of different things. We have a lot of different things, but of course, there are some white spots. So when looking, so I would say both is interesting. But when looking from a service or capability perspective, maybe you have remembered my metrics I've shown, then you can quite see maybe we have not so much needs in the area of information systems, cloud, and all this stuff. This is fine. But we have white spots, for example, in the topic business consulting. We have white spots a little bit in the data AI on the verification space. So this could be good acquisitions.
But in general, of course, as Mikael said, every acquisition which widens a little bit the customer base is also a good acquisition. So I would say in DACH, we are a little bit more quite open, I have to say. There could be a lot of different options we want to go. And as Mikael said, we are actively building pipeline and having talks. And let's see what we will do. But I think there's no real wrong.
One quick follow-up actually on another topic to Elja on security, a new growth area for you. And it's a lot of discussion about this. And there was on some other slides, you mentioned certificates. And in the security business, many customers need different certificates. So what's the current situation for you? What kind of certificates do you have or do you need, you think, to be able to grow? And how long does it take for you to ramp up this kind of capability or certificate portfolio?
Yeah, it's a good question and definitely relevant. And I see it in the way that you can, when you do the kind of generic things for those clients, you can do it quite, let's say, same way than we do for the other clients as well. But then when you enter more into the, let's say, real security projects, then you need this kind of things. And for example, one example is related to our offices. So they need to be certain security levels achieved. And that's what we are doing at the moment. And then there is also, for example, related to different areas.
If you want to work for NATO, then you need to be compliant with the architecture and you need certain certificates. But we have taken the approach that we kind of go step by step. So for example, now this office thing, when we are just moving into this Siltasaari premises, we have taken that into account and we have certain security levels achieved already now. And then when we get more work to be done in that area, we will go more further with different kind of certificates as well.
In terms of information security, I think a good basis to build on is also the ISO 27001 certificate, which covers kind of all of the basic. And that's where we've been for a number of years now. And there's always something to develop.
And that's something that we also identify as an area, not only for security-aware customers, but all customers will become more and more security-aware. So we want to take that further, of course.
That's true.
Yeah, thanks for taking my question. I wanted to ask you, did some changes to your organization from capabilities-based to customer-focused? So can you provide a bit more color on that and maybe make some practical examples that we get a better understanding?
Sure. So this is quite a lot about also the business areas or the growth streams that both Elja and Marc, and in this case, it's relevant for Elja's part because this organizational redesign is mostly concerning our Finnish organization.
So we come from a background of capability orientation, which for us meant that we were organized around roughly the advisory consultancy arm, the software development arm, including the cloud technology platforms and user-centric design parts, and the quality assurance arm. And what we want to do now is have primarily organize around the customer groups that we have, getting an even stronger integration between these different capabilities and service areas that we have. Because that's what we see that the direction for us with the customers to create more value is so that we can provide them with a comprehensive package. We've already done that earlier, but we see that this is the natural next step into getting closer to the customer and their needs and building the strategic relationships with the customer.
And then in terms of M&A, I wanted to ask, you can either choose to buy new capabilities or to buy, let's say, a customer base. So of all the transactions that you have done, was there any in the customer base acquisition type? And I wanted to ask if yes, which type of M&A has worked better, buying the capabilities or buying the customer base?
Well, let's say it's seldom completely one or the other. You get parts of both. Elja has joined us via an acquisition company called Silver Planet that significantly strengthened the advisory consultancy arm, which is really important for Gofore as of now. But we already had that from before. It strengthened that. So that brought us a lot of customer base and strengthened the existing capability that we have.
Mikael Nurminen, who is now part of Elja's Finnish organization as head of the service areas, came from a company called Qentinel Finland, which now is the core of what Gofore's quality assurance capabilities are. So that added almost a completely new part to our offering, while at the same time also opening new customer references, but strongly a capability base. So we've done both, but seldom are they completely one or the other.
I have a question from the online audience. There's quite a few, so let's keep this equal. Does Gofore plan to build some kind of an ecosystem of continuous services to scale up productivity in continuous services? Not sure if this concerns Elja or Marc or both.
Do you have, Elja, something to? I think if I start with something and you can add to that. Continuous services, how we've seen the market is that traditionally it's seen as something of a cash cow part of the business. So basically from where we come from, the core of where we come from, the software development part, traditionally it was broken up into different life cycle phases where you implemented the software and then you had the maintenance phase. And the continuous services was mostly about the maintenance phase, which then those that maybe look at the industry from the outside saw quite a lot as the kind of a cash cow phase of building this new customer-specific software.
What we've experienced and what kind of shift we have gone through with the customers, and that's pretty much where Gofore comes from, is the agile paradigm where we much more engage in a continuous development of the software solutions, be they then customer-facing digital solutions, be they some kind of data platforms, continuously developing them and trying to achieve value delivered and taken into use as soon as possible. So that kind of has broken up the traditional paradigm of the life cycle phases of software development, and has also meant that for our big customers, we engage in a certain kind of continuous service with all of the big customers. We are in this continuous development mode.
And that means that we work with the customer continuously, not just with a project idea that this project is going to end on that and that date in two years' time. Having said that, I think there are different ways of looking at it when we look at different capabilities. For example, you mentioned City of Espoo as an example where we engage with the customer on a little bit of different continuous service model. If you want to talk about that, and City of Espoo is not the only customer where that is.
Yeah, I think Mikael is referring to what I said, this kind of as a service type of ICT partnerships. So they are one example of continuous service as well. I think also, for example, our change management approach is an example of continuous services.
But then this, what Mikael mentioned, this traditional, it's one of our service areas and we want to expand it, but we are not making the kind of special effort to expand to that area. It's the kind of part of our offering and we need to have it, but it's not the special growth area, let's put it that way.
All right, thank you. Daniel Lepistö, Danske Bank.
Thank you. Thank you for taking my question. Maybe first quickly, I would like to discuss the growth ambitions between geographies. I think Marc called the DACH area growth expectation as a big part of the total in the future. So is it fair to assume faster growth for this DACH area due to the much larger market? And would you elaborate any ambitions on the maybe potential share of total sales in the end of strategy period?
Maybe I take this and Marc, you can add on it, but you very well already put it in your presentation and your assumption, Daniel, is also correct. We don't want to give any 2030 numbers or shares of net sales from different geographies, but it's safe to assume that we expect faster growth from outside of the home market in Finland on that time scale, that long-term time scale. Now, looking at last year's numbers, a little less than 15% of the business is from outside of Finland. So we are expecting that number to significantly change over the coming five, six years.
Yes, I definitely agree, and of course, we want to grow faster than Finland, but one has to be also aware that with organic growth, there are limitations, of course. Let's just look at the account size of the company. And typically, we have a target of, I think, 15% organic growth, I think, typically. And this will not be sufficient, of course. And I think this has to be combined, winning big deals in the market, but also M&A, of course, will play a major role. And this together should lead them to higher growth rates in Finland.
Thank you. Then a sort of a practical question regarding your employee collaboration and service delivery between DACH and Finland. As many competencies and capabilities, they are much stronger in Finland. So are your consultants doing cross-border work or how are you transferring the knowledge between countries and even IP between these areas?
Yes. So we have experts from Finland which work in DACH. This is one approach. So we really have direct access to these consultants. This is one thing.
Then from the offering perspective, of course, you can see the machines and production offering as well as the public offering. This is really strongly influenced from Finland. This is already also there. And we even use, if possible, colleagues from Finland in our projects. This is typically in the public space, not so easy, but in the machines and production space, one can really say that when we initiate new things for new clients, then always Finnish colleagues are actively involved in this and to transfer the knowledge then.
And just to add, the principle is that when we have the project, we kind of try to find the best possible skills from covering the whole organization. So it doesn't limit [to whether] it's in Finland or is it in Germany and where are the consultants. And then, of course, as always, there is a lot of variables which have an impact, but that's the principle.
Yes, thanks. And the final question is on continuation on that, the pricing level of the consultant work between Germany and Finland, hourly pay and salaries, are there major differences?
How should we put this not to be disrespectful towards everyone, but let's say that the last few years of development or longer time, Finnish price level has become more and more attractive on a European level. So salary development has been different, I think, in the geographies that we work in. And this is, of course, not necessarily what we in Finland would like it to be, but it also provides opportunities to use the strong Finnish expertise, the strong Finnish engineering thinking and culture to really digitalize Europe, which is a positive.
So probably in the coming years, that advantage will be there and maybe even a little bit strengthened, which is, of course, one of the reasons that we want to work in the way that Marc explained already. And our learning is that in order for us to do that, we need to have enough feet on the ground in the target market, and that needs to be bigger than it is now. But this price advantage from the Finnish market and know-how advantage also, Finnish know-how is of high quality and very respected in Europe. So combining both of these makes up the sweet spot that we want to achieve.
Thank you. Now, one more question before we break. Jaakko Tyrväinen, SEB.
Yes, thank you. Perhaps I continue on the same topic a bit and would like to ask on the German markets and the public side of it. You mentioned that you have to work through alliances or partnerships with the bigger ones. Just to get the big picture, how much larger scale you would need to have in order to be more relevant in the German public tenders?
When really trying to offer this standalone, I would say we should be in some kind of level like the Finnish organization. Of course, it depends a little bit, to be honest. Germany has a federal system and there are certain topics which are really at federal level and state level. Even cities have their topics to be done, and also the size of typical topics varies in some sense, of course, but I would say when really playing in the bigger field, we should really look maybe at the Finnish organization, and in other topics, of course, we are strong enough maybe to offer alone.
And there are, of course, also topics where even the Finnish organization is not enough. And it's also in Germany also not quite typical to offer for really big topics. There are really a large number of companies really involved. For example, Bundesagentur für Arbeit, what is this? Employment services. Employment services is one of the biggest, I would say, IT spends you will find in Germany. And there are really very big consortium-like approaches. And so I would say this is in general a good idea to have these alliances, even if it would be bigger. I would say we should be bigger, but we should also have in any way this kind of alliances.
Maybe this is a little bit of a difference, not only in scale. And the scale is, of course, the big difference between DACH and Finland. But also that maybe in Finland, our customers in the public sector have more strongly developed their own capabilities of integrating different suppliers into their projects. Whereas in DACH, maybe the consortium model is more prevalent, at least for now. So that's our experience. Typical model that you build such ecosystems, but we are currently just too small to lead such an ecosystem of partners, so to say. This is also an observation.
Thank you so much for the good questions. You'll have a chance to do more later. Now we'll take a 15-minute breather. Welcome back. Welcome back from your break. Now it's time to talk about the most important thing for Gofore: people and culture. Please welcome the lovely Sanna Hildén.
And good afternoon also from my side, and also to the stream there. I hope you have had a good day so far.
Someone has said that the who is even more important than the what. That someone is Ray Dalio, and I'm not sure if you fully agree with him, but that is surely something that we have put quite a lot of thought to during our strategy process at different levels. So we know that we are not the only company presenting a growth strategy. And now the question is: who will succeed? My name is Sanna Hildén, and I'm responsible for people and culture at Gofore. I've been at Gofore for now nearly six years, and my professional background consists of business and leadership positions in a few industries. But then part of me is always a researcher, and my dissertation and postdoc studies have dealt with organizational renewal and performance. But now to the maybe more interesting Goforians. Who are they? What are Goforians like?
We can proudly say that we are the pioneers of working life, as Mikael said in the beginning, and we have a lot of evidence to support that claim. You probably know that we were the first to fully publish our collective labor agreement a few years back, first in our industry, including its innovative salary model. Every year we bring new, interesting things to add to the flexibility for the experts that are working with us. In addition, we have been talking about neurodiversity. It was a fresh perspective to the important diversity discussion since we know that every fifth of us has a little bit different way of thinking, and that's certainly something that is important to also take care of when we are deciding digital services.
But it's also important for Goforians that we can provide the needed support and leadership and everything to fit the little bit different kinds of ways of working. If we look at diversity, inclusion, and equality, and our sort of metrics there, we are at pretty good shape. We can always, and we want to be better, but we have the situation where every third is a woman working at Gofore. That's a lot more than is the current situation at the industry. Also, if we look at our salary equality, that's pretty nice to have it actually with the same level of both genders. Our latest initiative was to start talking about mental well-being at working life. Certainly a meta challenge that will be here and challenging every organization's productivity and also just the well-being and how people, what kind of challenges they are ready and willing to take.
This is important that we talk about it, and we said that we are going to report our mental health statistics as part of our regular reporting, which raised a lot of eyebrows. Also, the biggest journal in Finland, Helsingin Sanomat, put it in their editorial. But that's the kind of media attention that we get based on, for example, all of these initiatives, which are only a part that we are doing. We are the pioneers. What else do we know about Goforians? These are pretty traditional KPIs of people and culture stuff, and you are used to having these kinds of numbers from Gofore. We have excellent levels in our expert experience. Our eNPS is a nice level. Also attrition, which has maybe lately been easier, but we have a strong track also from the years when the market was more heated.
But the most important thing in this slide is not only that the Goforians are really engaged, but they have shown resilience during these past couple of years. If you combine these numbers with the situation that we have had in the market, you know it has been tough for everyone and our profitability levels, you can understand that these results are a reflection of a strong culture, resilient Goforians that have been able to understand how the situation can be different from only two years back. It's not only about culture, though. There is organizational capability that we have been developing so that we have a proper insight to understand what people truly value, and when we are optimizing our people investments, we can do it as smart as we can. So all of this is a sign of what Goforians now have.
We are resilient, engaged, and also the pioneers. What does this then bring to us as a company? Mikael already said it. We are the most attractive IT consultancy now based on Universum survey. But once again, it's not only this. It's the fact that our customers, when we have made our studies along our strategy process, they tell that what makes us different is actually the Goforian attitude, the mindset, the mentality, and how we work together. And then if we look at investors, they say that Gofore, once again, third best reputation of listed companies in Helsinki. Our attractiveness is a combination of excellent people-related experiences, also of the future Goforians, the potential Goforians, the customers, and those who invest in us. And this is the combination that we have understood works really well for Goforians.
Everyone wants to be part of a successful team, and surely that's what we are. Now, how this people and culture area can support our growth strategy? It's quite simple. We have now shown you that we have an asset here. We just make it stronger. In practice, it's not all easy. These three choices that we are presenting here to keep this on a high level in a way, the first one stays true to our values that are over 20 years old. We want to be the great place to work at. The means could be a little bit different looking at these times than they were like two years ago, but still the main thing is that we want to keep Goforians engaged, inspired, and also equipped.
Marc and Elja explained about our offering and how we are going to use our assets, how we are going to rethink the consulting. AI is certainly going to be there. Equipped will mean new things for us. In addition, what's happened during these past two years that have been a little bit tougher, we didn't settle for any quick fixes, keeping up our profitability, for example. We used the harder times in getting better, and what we realized when talking with Goforians last year is that our culture kind of grew up, which is a nice thing to have, that we have the very familiar strong things that we have had in our human-centric culture always, but we learned something new, and we wanted to really take it with us also for the future.
That's why we rewrote our Culture Book, which is actually available for you if you'd like to take it with you since it's not yet online, so you'll be the first to check it out. But that includes elements of, let's say, even new kind of ambition, realizing that we have this growth mindset and resilience that we can use, also taking our culture and our success to the next level. The third topic is not also a small one, the organizational change that we did. And as a part of our strategy process, doing these three things at the same time, creating the new sharp strategy, rewriting our culture, redesigning organization, and in January, we are sort of ready to rock and roll because the organizational change has been made to the extent that we've had the negotiations and the team is in place.
Certainly, this is a journey like any change, rooting the culture and making the organization work the best it can. But we have shown that we have learned something along these past couple of years, so we will use that strength for our success, whether it comes in form of faster growth than we might expect, or if we still are relying also on these capabilities, keeping up the good profitability. This is actually my part of this strategy, and I'm happy to soon invite our dear CFO, Teppo Talvinko, on stage.
I'd just like to remind you that as you are listening to what Teppo will tell you about our financial performance, you will see that as you understand this business and the logics, you understand that the culture, the operational capability that we have developed, it's there looking at our past numbers, and that gives also the basis to assume future success with this new strategy. Thank you on my behalf, and welcome Teppo.
Okay, good to have you, good to be here. My name is Teppo Talvinko, CFO of Gofore. So what are the main drivers in our capital allocation strategy? Profitability is obviously number one, but organic growth is also very important. We have been one of the best in organic growth and in terms of CAGR. We have also outpaced many of our Nordic peers also in organic growth.
We have been showing a stable profitability for the years, and that has been also the case last year when the demand stumbled. We reported 12.6% Adjusted EBITDA in September. We continue allocating our money back to organic growth. We are strengthening our offering, and we are continuing acquisitions. From the investor point of view, we see that healthy dividends are an essential part of the total return. We have been asked many times about our success and our profitability. It's about top line, and it's our flexible cost structure. We have a really good grip on our customers with broad offering, and that is really an advantage to us compared to many of our competitors. The recurring revenue and returning customers are also protecting us from economic cycles.
If we take a look at the cost side, then personnel expenses count more than 60% of the net sales, and this is mostly reflected in our employment model. And what is impressive here is flexibility. When the demand is higher, we are able to reflect that to our salaries, but at the same time, we are aware of keeping expenses relevant to revenue. Materials and services are also a flexible cost item, and it's nicely supplementing our own capabilities. Lean and cost-efficient operations enable us to grow profitability. When we are scaling up our operations, fixed cost will not be increased proportionally. An example of that is our investment in our offices during the last couple of years. You remember that we launched an internal cost efficiency program back in Q3 2023, and the result was about EUR 1.5 million savings as of September 2024.
These savings were achieved by reducing non-customer-related costs. We, of course, are continuing to monitor our OpEx levels also in the future. Strong cash flow will, of course, enable us to invest in growth and also major acquisitions, and the positive cash conversion is a result of operational excellence and a strong market position. Cash conversion has been about one throughout the 2020s, and this, together with our strong balance sheet, makes it possible to invest and also to seize opportunities. With excellent liquidity and solvency that provides us favorable circumstances for debt financing for the bigger acquisitions. So, to conclude this, we are ready for the growth, and we are ready for acquisitions in the future. Thank you.
I'm not sure who should be on stage, but it is actually me. Yes, so we are going in now for the wrap-up and then a final Q&A session.
But I'll start with trying to wrap up what we have discussed today and also adding a couple of more viewpoints to that. We have been talking about Gofore's growth strategy, and we have actually gone through all of these numbered elements on this slide. Gofore is a focused company. We have always been a focused company, but now we are adapting to, reacting to, and taking into account a new kind of market situation that we've seen developing under the past 18 months or so. We will continue to be focused on Digital Society and Intelligent Industry customers, but as Marc and Elja both explained, we will also put more effort into finding the growth pockets inside those bigger strategic industries that we from the past already know quite well. Like examples, Elja mentioned the security area.
Elja mentioned the well-being area, which we have been building over the past years, but it's a big opportunity also for the future, and Marc mentioned automotive, something that we have a good base in, an industry where there is a lot of transformation going on, where the German auto manufacturers are in for a big challenge, which can at least partly be solved also by improving their capabilities in utilizing digital technology in their products and all of their operations, but it's still about focus, so this is what we want to do. Digital Society is about us people, how the world around us, how our everyday lives change, and how we want to be part of that, building that new Digital Society so that it is good for all of us because there's so much opportunity to produce well-being by using digital technology.
And on the other hand, Intelligent Industry is about the machines, something that we, both in Finland and in Germany, have economies quite a lot revolving around investment goods and export industries. Machines that no longer us Finns and Germans maybe can differentiate by building better physical products because that physical product is more and more becoming a commodity and needs to be augmented by the digital technology. They become software-defined, as Marc put it in his presentation. So, areas where a lot of things will happen in the future also and areas where we want to be focused, where we want to be strong. Continuing on the focus theme, geographical focus will continue to be on the home market in Finland and on the German-speaking part of Europe in the DACH area, both where we are already established and where it's about broadening that local presence.
The market situations in both countries are quite similar, actually, if you look at it from a global perspective, and not all of that is, of course, positive. But for Finland, we do believe that this year will be a change for the better in the economy. That will be different in different industries. Export industries, of course, are more dependent on the global economy, but we will see a gradual improvement in the economy. In the German economy, the situation might not be as positive this year, but on the other hand, the digitalization gap, which we discussed, is much wider in Germany. There's a need for bigger investments. There's a need for transformation, be it in public services, be it in energy industries, or be it in automotive.
The other side of the growth strategy was about the unique value that Gofore provides, and it is still a fact that for Gofore, the value to our customers, the biggest thing is the people, the mindset, the expertise of the consultants that we have. And here we can never be ready, never think that, okay, now we are the most attractive employer in Finland, now we can stop this development and investments into our people. That is not the case. It's a race, and the competition is fierce. We need to develop constantly. But when we do that and when we achieve the kind of results that we have achieved also in the past couple of years, we get kind of double type of results and advantages. We get the competitiveness in the talent market.
We are going to see, and it won't take too long, is my estimate that we are going to see again a very competitive talent market where only the best employers get the best experts and at a favorable price, hopefully. And there you need to, you want to be where Gofore is the most attractive one, and that is a competitive advantage. But in addition, you get that thing which provides the value for our customers. You get motivated people that have a high level of expertise, that have the right mindset of helping our customers succeed and doing that as a team together, not only as individual superstars. And that is what we are continuing to work on. The second part in our unique value is the strategic customer relationships. Again, not an area where we can be satisfied with what we have achieved.
I think the most concrete thing here is that we have started the year with the new organization that we already discussed. As mentioned, coming from a capability-based which served us very well in a situation where bottlenecks were many times on the talent market side, whereas now we are in a situation and a market situation where the bottleneck is on the customer side. You want to put more focus on the go-to-market activities, on the sales activities, and building the customer relationships. This model that we have now adopted is more suitable for that. It also, as we already discussed earlier, helps us in continuing the integration of the comprehensive service portfolio that Gofore has so that our customers can benefit from the service portfolio in a comprehensive and end-to-end way so that it translates into exceptional value for the customers.
Elja talked about the comprehensive portfolio, but maybe just once more to wrap it up, Gofore offering is, I think, almost unique in the size that we are. It resembles, I think, the service portfolio of many global consultancies, technology consultancies. You might think of, for example, Accenture, which, of course, on a size scale is extremely different from Gofore. But that's what our offering pretty much is. We have the advisory consultancy with people who are capable of advising our customers in their digital strategies, in their change portfolio leadership, and so forth. We have the implementation part where we build software solutions for our customers that are built in an agile way so that they produce maximum value in as fast a time as possible and are user-centric. The design services around that build on world-class technology platforms like the hyperscaler platforms that most often are used.
We have the quality assurance part. This whole comprehensive offering is quite unique to the market, and we want to continue the integration of that so that our customers can get the best out of it. Elja also gave a good example of, and that was in the context of Intelligent Industry and more intelligent machines with the digital product lifecycle and virtualizing the product development process. That was good in the sense that I think more and more of our customer solutions are based not only on the expertise of our consultants, but on other parts of the solution that are relevant to our customers. Maybe we are seeing a little bit of a shift in the market from fully tailor-made solutions to more of an approach where you put together platforms, components, and concepts from different origins, and that provides the solution for the customers.
That's where we want to be stronger. Third area here is that we also want to look at engagement models, and Gofore, as those of you who follow us, we've been very strongly a time and material-based company which has served us extremely well for a long time. We are not steering away from that, but I think as we develop, we become bigger, we become more relevant for our customers in bigger engagement. We need to have the flexibility to also explore other options on top of the time and material. This is something that will also be looked at and started some sort of level of change during the next couple of years. The exceptional offering part was what I just explained, actually, with both the comprehensive offering and investing in the platform. I'm going to jump over to the next one.
And part of the exceptional offering is the AI part. And you all know that AI is going to change a lot of things. What we now see in the market when we talk to our customers is the fact that everybody basically sees the possibilities from AI to somehow change their business, somehow take their business to the next level. But what actually happens right now is that customers are in the process of improving individual productivity by using productivity tools, two very different things, I think, that come from the same source, from the AI revolution.
I think all organizations are in a situation now that they need to choose, and they need to choose whether they are ready to go into what on this slide is called the pioneering mode, ready to invest big into AI technology and start building some kind of advantage comparing to their competition that will set them apart in the future. If they don't do that, they need to build on their own capabilities, build on their understanding of AI technology, build on the process how they will in the future adopt AI technologies, and this is actually which most of the organizations have chosen right now, and that is, I think, for a number of reasons, but not least the economic situation that the investments are a little bit slow now, so there might not be the possibility to invest big into AI.
But what we can do here and what we have focused quite a lot on is the advisory side. We are the partners for the customers to understand what AI is, what AI will mean for their business, for their industry, and what will be the future bigger investment objects that they will have on their roadmap. And then in the third phase, we will be also ready to help our customers in the bigger investments when they start actually building the AI solutions and taking those into use. But we are very much in a phase where there's a lot of promise from the technology. There's a lot of interest in the technologies and not yet so much in terms of big investments. The other specific area, and this was also touched on today earlier already, is security.
There have been unfortunate events involving IT suppliers, thankfully not Gofore in the Finnish market, in the Nordic market, and probably in all markets. And I'm pretty sure there will be more in the future. This is, of course, not only about the geopolitical situation where also geopolitical entities use the digital sphere to attack their enemies. It's also a natural development when more and more stuff moves to the digital space. So something that we think that all of our customers will be paying more and more attention to. And when they don't, we need to be there to remind them that they should. We have the cybersecurity spearhead that, as I mentioned in the beginning, is an area of expertise that has grown very strongly for natural reasons, for exactly these reasons that we discussed here in the past few years.
But I think even more important is that the security awareness and the understanding of security in all phases of digital development, not least when building the actual, implementing the actual digital services, the understanding needs to be better. We have based our thinking on the information security certificate of ISO 27001, which kind of provides a good foundation for all good practices and how we work also with the customers. But then there are industry-specific situations where you need other kinds of evidence and even in some cases other kinds of processes, but at least other kinds of evidence and certificates to show the customers that you are doing a good job. Like in automotive, you need the local TISAX certification, and in the defense industry, you need their own certificates.
So we have a way to go on this road already, but I think we are well placed, and I think taking into account the recent events, we can be happy with the situation we are in right now. The last element in the growth strategy, and it's not new, is the mergers and acquisitions. And what we are looking to do also in the future is not that different from what we've done up until now, and that was touched upon in the questions in the beginning. We want to focus on Finland and the DACH region. We want to support our growth in those regions with mergers and acquisitions. And we get offered targets also from other geographies. We look at them on a case-by-case basis, but our focus is quite clearly on Finland and the DACH region.
And as we discussed already, in DACH, we have a way to go still to build the awareness of Gofore as a buyer, to build the networks and understanding of the market, what is up there for sale. We want to find elements that fit our strategy, that support our strategy, be they customer groups, new customer relationships, or be they capabilities that add to the capability mix of what Gofore has. And those are kind of equally important, and usually you get some amount of both, as we already discussed in the questions. I think a certain aspect of this is important also, and that's the philosophy part on this slide and how Gofore is already well known as a good buyer, as a good integrator, as a company that doesn't represent something negative or something disruptive for the target company.
That is oftentimes important when we talk to the sellers, especially, of course, if the sellers are or the company is in a phase where the sellers are the founders and they who have built up their own identity and life around a certain company. So this kind of image and brand of how Gofore does things, I think it's extremely important, equally important in Finland and also in the DACH region. These were the elements of the growth strategy, and just before we go to further questions, reminding you of our key messages today, we have a strong foundation, we have a strong track record of doing things, and those are the strengths that we build on when we think about the future.
Our updated financial targets reflect on a very strong ambition, and that ambition is based on the thinking that the market is there, the market will support that, the market foundation is still very solid. And I think our growth strategy is good, and what is even better is the ability of our team to execute on a growth strategy like that. So those were the key messages, and now we have a chance to go in for the last Q&A part.
Thank you, Sanna, Teppo and Mikael. Did great. I'm now in the Q&A going to favor the online audience a little bit because there's quite a lot of good questions queuing here, and then leave it to you guys. There's interest towards this shift from time and material-based towards something more conceptual. Is this going to be a big business, and is there already demand for off-the-shelf products?
In the IT industry, there's always been demand for both tailor-made and off-the-shelf products. And maybe traditionally, companies have chosen a strategy of adopting one or the other. Now we are, of course, well into a new kind of era where especially the hyperscaler cloud platforms have brought in a kind of new way of thinking of it, seeing the infrastructure as a service and building your tailor-made solutions on top of that. How we see the future is not that tailor-made will be replaced by off-the-shelf products across the board. That's not at all the case. When digitalization goes forward and business becomes even more and more digitalized, businesses need the tailor-made part. They will choose where they want the tailor-made part, and they will invest into that because that will be their way of differentiating in the market.
But that will be more and more based on platforms that are ready-made. And we want to take this into account in the future. That doesn't mean that Gofore becomes a software product company or a reseller of software products, but it does mean that the solution that we provide to our customers must more and more take into account this development and this change in the market.
Anything to add from Elja on the rethink?
I think related to this time and material versus other models, I think time and material, it will not disappear. It will be the kind of mainstream still if we look at the, let's say, midterm future. But there will be also these new types of models more and more, and we want to be ready for that as well.
Thanks, Elja. One for Sanna. Do you have a continuous program and budget to re-educate each and every person working in Gofore annually or even more often? Or is competence development something happening on individual free time?
We have several ways for Goforians to develop, and surely that's very different from if we look at seniors, juniors. They have different kinds of expectations, what they need to have. But for each Goforian, we do a professional development plan, and that's then being followed and agreed what is needed. But basically, there is a lot of freedom inside our service area teams to sort of figure out what kind of skills we need, how we need to develop, and whether it's through the professional development, recruiting, all those means, and then combining that to the dreams and aspirations of individual experts. So many different kinds of ways, Gofore Academy and so forth.
Thank you, Sanna. Now, any questions from the room? Jaakko Tyrväinen, SEB.
Thank you. A bit of a broader question on the topic of AI, and some of your peers seem to put all in terms of AI, and you are not providing us necessarily exactly a similar message here, although you are acknowledging the potential out there. How should we read this and how ready you are with your current AI-driven capabilities in order to respond to the bigger AI solution growth that you, Mikael, mentioned there that lies ahead, and are you also able to attract sufficiently the AI talent that is out there?
Like I tried to shortly in the presentation say, for us, AI doesn't represent a different business from what we do already. And from our point of view, it doesn't represent a completely different challenge for our customers either. It's part of the digital transformation journey that the customers are already at some phase of it, already on their way. And when it comes to more complicated solutions or objectives like renewing your business, providing some kind of process and organizational level transformation in the business, there will not be products or general industry agnostic AI solutions that will solve them for all organizations. So it will be about different needs in different industries, different needs for different kinds of customers. And that fits our approach to the customers, I think, very well. And that's how we approach it. You talk about how ready we are for the bigger investments.
I'm not sure if this has been completely understood either, that what does that mean capability-wise? Does that mean that you need to have the AI guy or five of them or 50 of them if it's a good investment? Probably not. It means that you need to understand the AI on a business level for the customer. So you need to have the advisory consultants that help the customer understand the situation, what the customer wants to change. You need to have the people that are there to develop the AI solutions, which, for the most part, will not be. They won't be some kind of a new sort of expert that is the new AI talent. It will be about the same software developers and data engineers and data analysts that we already have.
They need to learn new things for sure, and they need to develop as experts. But it will be about those same people, and you need to also, and this is something that maybe is a little bit overlooked, that you need to understand what the quality perspective on these new AI solutions is. Traditionally, software quality is about testing and testing whether when we do this in an IT system, does it always produce this kind of outcome like it should. With AI solutions, we need to find new paradigms for testing also because it is not necessarily as deterministic as software solutions have traditionally been. So the capabilities that are needed are wide, and in that sense, I think actually Gofore is extremely well placed to answer those demands from our customer side.
Whether it comes to new talent and producing more and more skilled talent, maybe Sanna wants to comment on that a little bit.
Yeah, well, that's true that we are looking for the AI talent with the same kind of criteria that we do everything else. So there is a lot of other demands also, and then consulting all the time with the business what is really needed. But what we have so far done is that we've noticed that we have very interesting AI references for the experts. So we have been able to attract high-quality professionals, and we are sort of testing that all the time just to be sure that we have the capability whenever we decide to want that more.
Maybe one final remark from DACH, without repeating too much. Basically, maybe we have not made the use explicit as AI because AI is really in some sense everywhere now. So when just looking at our business often, we look more from a business perspective. First of all, what is AI? AI is not only large language models, it's also computer vision, it's automatic decision-making, and all this already we use it in projects. For example, in the agricultural space, we have a lot of topics where computer vision plays an important role. Or we made now a topic also based on large language models and so on. Basically, our thinking is more look for concrete use cases and where to have incorporate AI. This is one aspect, and then the other is, of course, AI is really internally used, of course.
You need AI just to be productive in future. So this plays a lot of role in coding, plays a lot of role when doing verification, automated generation of test cases, and all this stuff. I would say you find AI everywhere at Gofore, and that's maybe a little bit of the reason why it's maybe not that explicit at this one AI topic.
Excellent. Thank you. I follow up on the same topic. You said that currently it's more of a work on the advisory side and customers are doing small pilots or proof of concepts. What is your kind of, let's say, gut feeling when the bigger investments could kind of start and we could see some sort of a ketchup bottle effect here? Years, one, three, five years ahead.
Probably something already this year and in three years more. What we are working on now, as Marc also pointed out, and we have, for example, a bigger project in Finnish Employment Services, those are based on ideas and technologies that predate the generative AI boom that we now see. So it hasn't been that long that we've seen the generative AI, so it will grow.
Good. Then perhaps going back to the earlier part of the presentation, from your standpoint, where we are now with the Finnish healthcare reform and how much work there is still to be done for Gofore and other IT consultants? We know that the kind of a political framework is now ready, but how much there is work to done and what kind of growth driver this will be towards the EUR 500 million?
Should I start if you want to?
Yeah, I can start. It's a huge change. And if we look at different well-being counties, they are really in different states at the moment. So a lot of different situations. But overall, still a lot to do. And some of the well-being counties, there is still the kind of basic things what needs to be done. And then some others are now moving more really to build the digital solutions and also gain the benefits. So overall, I think a lot still to do. And also I think there is when it comes to the structures and modernizing way of working and way to operate still really a lot to do. And it needs to be done because if it's not going to happen, then we have a lot of problems in this society. So I think still a lot to do.
As said earlier, digitalization is really the key to succeed.
When it comes to what you asked, is it ready? It has barely started, I think.
Exactly.
So there's a lot of work to do. And to some extent, that is when looking at the actual reform, the structural reform, that was by design. And then you can argue if that was a good design or not, but that was a design by the government that these new regions were not allowed to invest that much into transformative digital solutions before the structural reform. And this is probably for reasons that have to do with the financing and the infinite amount of money that we have to pour into this. But most of them have now started to do more of the renewing type of renewing the processes, renewing the services type of investments. And the digital part is always present in those. So there's a lot to do. And technological advancements are equally and maybe even more important also in the health area.
We've seen a lot of technology, especially in the hospital area, but we will see a lot of advancements in that technology. And that technology, when it becomes commoditized, it will also become to the outpatient care. And we will see more and more of that technology being used by people in their homes and in their everyday lives as part of the healthcare system.
Thank you.
Daniel Lepistö, Danske Bank.
Yes, thank you. Maybe going back to your strategic targets and the 15% margin target and the very strong growth strategy, does this quite ambitious margin target restrict you on making a certain type of acquisitions, such as a company with a very high growth but very low margins that would be otherwise a perfect match for Gofore?
I can see that happening, of course, theoretically speaking. But when we actually see what kind of companies there are out there and that we talk to, growth and profitability are not mutually exclusive typically. And when we look at consultancy companies, good consultancy companies that have growth typically also have the ability to do that profitably if they are well-run companies. So I don't see that as that much of a problem for us looking at the actual cases that we look at.
Maybe on the same topic, thinking about are there any thresholds of how long or how materially you can deviate from the margin target if there were an acquisition that would be a perfect match?
That will be considered on a case-by-case basis. But what we've said earlier, I think, is also true for the future. We are not experts in turnaround cases. So if there is structural weak profitability in a company and it's a turnaround case in that sense, maybe it's not for us.
All right, that's clear. Maybe the question on the role of product business now and in the future, now after you made the Creanex acquisition and ventured into the simulator business. So what kind of investments in terms of organic CapEx investments and also inorganic investments from M&A in the future? What are you planning for this type of product business? What are your experiences thus far?
So product business as product business is still a very small part of the sales of Gofore. Maybe Teppo can give you some percentages or numbers on that. What we were more looking for when acquiring Creanex was the combination of the consultancy expertise that we have for these product development-heavy manufacturing companies, combining that with the technology and thinking about our offering from a standpoint of how it stands out from the competition. And that's the biggest value that Creanex also provides for us. Whether we will have the product business in the classical sense that we sell actual physical products and licenses in the future, or will that transform into something that will better reflect on the combination of consultancy services and this technology, we'll see. But the product business as such is not the core of our strategy.
Having said that, we need to invest into developing that technology and developing also other kinds of concepts and half-ready or ready-made products that we have. The CapEx part may be covered then by Teppo if you want to comment on that somehow.
Yes, it's well, we are talking about a couple of millions when we are building this digital product development. So that is.
We published the investment that we together with our customer Ponsse do into this technology, and we talked about a EUR 3 million investment that will partly be covered also by public funding from Business Finland. That's maybe a big investment from our point of view, and that's why we also had it published.
Thank you, Mikael. Now, I'm afraid we've run out of time. But thank you, team. Thanks for everyone here for your time. Thank you, everyone online. Bye for now. Take care.