Good morning and welcome to everyone for participating in our presentation of our fourth quarter report. We said in our invitation that we would keep this in Norwegian. However, we have had several requests for keeping it in English, so we will do that. We will just head straight into it. First, highlights of Q4. We had a revenue of NOK 116 million, which is a all-time high for the group, and that is a 91% increase compared to same quarter last year. When we compare then, remember that in Q4 2020, we had actually already acquired three companies. In it, Facil and Microsky is included in the Q4 2020 numbers.
Still, solid growth and we are also showing an adjusted EBITDA of slightly negative with NOK 900,000, while regular EBITDA at - NOK 4.5 million. I'll come back to the details behind the numbers and the activities that's been going on in parallel with the actual financial performance. On the M&A side, we closed and signed or signed and closed the acquisitions of Integra in U.K. And that, the company has around 40 people working on primarily ERP implementations for customers in the U.K.
They are very much like the original DNA in Arribatec, focusing on serving customers in the U.K. for ERP Unit4 systems and implementations. Additionally, during fourth quarter, we announced a total of NOK 55 million in new larger contracts, and they were both in EA BPM, which is the enterprise architecture and business process management business area. The other and also, similarly, we had ERP contracts also announced as a part of these NOK 55 million. Lastly, we also announced back in the twenty-first of December that we would change CEO, and that took effect January 1, 2022.
If you look at the development for the revenue for the quarters since 2020, we see here that in the fourth quarter 2020 we delivered NOK 61 million in revenue. So we have a 91% increase or NOK 55 million in absolute value. Norway here, if you look on the left-hand side, if you see the revenue by region, Norway is today accounting for 63% of our activities, down from 74% a year ago. This is an intended and desired development because we want to grow also outside Norway.
The target is to have more than 50% of revenue outside of Norway by end 2023. Europe now accounts for 32% of our activities, and that compares to 17% more than a year ago. We are heading in the right direction, and clearly, the acquisition of Integra, which was fully accounted for in Q4, that contributes also to with about 8.5 million NOK in revenue for the quarter. If you look by service, we are still a call it consulting driven revenue company. However, we are working hard to increase the relative size of the solution as a service or the recurring revenue.
While you have a dip from Q3 - Q4, we expect to see that change for Q1 with a higher level of recurring revenue. This is a slide with a lot of text, and what we are trying to communicate here is to make you all aware of what has been driving the financial performance of Arribatec over the last four quarters. While we have seen growth in revenue and both in absolute terms and percentage-wise, we have done a lot of integration work during the year. I would say most of the people today working in the Arribatec Group comes from a smaller company setting.
We acquired seven companies, most of them, with less or say 50 people or less. We have spent a significant amount of time and resources on building a support structure and policies and all the things that is required in order to build a large organization. We are training and we are providing tools and systems so that we achieve the efficiency gains that we want from the acquired companies and also that we get this cross-selling between the business areas. This means that they share the customer lists with each other and we are using that as a tool to pick the low-hanging fruits in terms of accessing already existing customers in Arribatec.
That is very important for us to achieve the growth that we're looking for. When I say we have integrated seven companies that has taken place in several or they have activities in several parts of the world and it has required a fair bit of work both for the companies that we have acquired, but also from group and for the leadership in the organization. We have been talking about integrations now for the good part of 2021. We start to see the end of the majority of the integration efforts, and I'll come back a little bit to what we have ahead of us.
We have brought all of the entities over on the cloud, our own cloud. That lowers the operational cost because we don't have to pay a third party for hosting. We have installed and implemented a common CRM system that helps us, or actually gives access. Every salesperson in the group now have access to all clients across the globe, and we can in cooperation with or the BAs cooperate and find and identifies the clients that should be approached by each individual BA in order to make the cross-sale and up-sale happening. Also, ERP system. We are selling ERP and we know ERP. Unit4 is our internal system.
We have spent a lot of time, a lot of energy, and a lot of brainpower in order to fine-tune the installation that we already had from before in Arribatec, so that it is shaped in such a way that it serves the purpose for all the companies that now forms Arribatec Group. Seventy or about 70% of all staff now is on the platform, meaning that they have access to projects and to resource planning, do their time sheets everyone in a consistent way across the globe. 70% so far and the remaining two companies, which is basically the Arribatec Marine that we haven't taken over on the ERP platform yet, and the same goes for Integra.
Integra is already using Unit4 as their internal system, so we expect a smooth and easy transition from their own platform over to our platform. We have done a significant amount of work in developing what we call the Arribatec Management System. It's an online resource for all employees in the company, whereby we describe our vision, values, goals, and we have all the main functional areas of the company modeled and the work processes are as standardized as we can get across the company.
So that when we have new employees, for example, we are able to sit them in front of the AMS, and they can read up and understand how we intend to work and how we want the company to work. It's a support and it's a help also in the matter of onboarding new employees. Onboarding new employees is something we have been doing throughout 2021 and we will continue to do that in 2022, all because of growth and demand from the market for our services and products. Another important aspect is that we have in Arribatec today call it five clusters of development resources, people sitting coding on a daily basis.
We have instituted and described a more standardized way of working with product development all the way from someone has a good idea or a customer is asking for something, and we describe the thresholds that you have to pass in order to be allowed to start working on the development. We describe the thresholds and the assessments we should do at the different stages in the product development phase, and we assign a product owner for each of the products that we have inside the group. This keeps us focused because then each product has to be sold in the marketplace, it has to perform, and it has to be able to justify the balance sheet value they carry.
We feel this is an important part of how we can get more efficiency out of the organization and also be clear in the marketplace about what we're trying to achieve with our products and services. We also have, during Q4, worked on configuring a resource planning module in our ERP system. In Q1, we are implementing this.
It will, when it's fully rolled out, give us access to all staff in the Arribatec Group globally, so that when we have a new project or when we're planning for a new project, the managers who are responsible for that given project can go online and see, okay, I know I need this type of resource on this project, and defined by competence and experience. The resource planning can then show who with the right competence and experience is fit to work on this given project. If that person is available in the time slot that he needs them, he can allocate that person to the project.
We believe this will have a tremendous effect on our ability to quickly assemble the correct team for any given project, and it gives visibility for resource utilization. It gives us indications of if we are about to be short on certain skill sets, we can hire with the better visibility, and we are more coordinated across all the business areas and all the geographical regions. I believe this is a very important part of the integration efforts, and it ties us together as a group and give everyone who needs to know access and understanding of what is the resource situation and how is that matched with the projects that's coming up.
Lastly, back in Q4, we had a large global management meeting where we worked on the strategy. We have defined the strategy, and we have started implementing it already back in Q4, and are now working and living through that strategy. As you know, we have indicated that we intend to grow, and we intend to grow out of Norway, and we are pushing pretty hard on making that happen. What I want to get across here is the fact that we are not only a company that grows, we also do integration because we have acquired several companies. It has taken a lot of energy.
We're seeing the end of the integration efforts, and we believe that we have built a platform now that can take significantly higher business volumes than what we even though we have a performance all-time high revenue for Q4, we still think it's we have a potential to grow way beyond that, with the platform and the systems that we now have established for the group. A little bit more on the year-on-year development. On the left-hand side, you see it by region. 169% growth year-on-year. In 2020, we had a total revenue of NOK 154 million. 2021 ended at NOK 414 million.
As we said earlier, the relative size of the regions is more or less unchanged, if you look at the full year. However, for 2022, we expect that Europe will become larger on a relative basis, partly because of Integra now being a part of our group, Integra being placed in the U.K., but also because we are winning contracts in Southern Europe, large contracts that will contribute to the shift of the relative size of the regions. If you look at the recurring revenue, we have growth of 420% year-on-year, and there, I think we had NOK 28 million in recurring revenue by end of 2020. We are now up at NOK 146 million.
It's a significant growth. It's a part of our strategic goal to have recurring revenue because that gives visibility and for visibility on our revenue going forward. The relative size of the recurring revenue of our total revenue is 35% by the end of 2021. That was 18% in 2020. We are heading in the right direction. To the quarterly EBITDA and adjusted EBITDA development.
Out on the right-hand side here, you see the same in keywords, the same aspects as I talked about with regard to integration efforts and system rollout. It is just to keep in mind that the financial performance you see here, we have had some of the best consultants in the group working on internal projects. It goes without saying, when you come on the other end of integration, they will be free to do what they're best at, which is to work with clients to help them find the right solutions and work on projects that is paid for by the customers.
I more than anything look forward to come to, let's say, an end of the integration efforts and so that we can fire on all cylinders as a company and all the brilliant people we have in the group can focus on the market and focus on delivering outstanding stuff to our clients. Having said all that, we had for 2021 a negative EBITDA of NOK 6.8 million, while the adjusted EBITDA was NOK 1.6 million negative. The difference between EBITDA and adjusted EBITDA is that in the adjusted EBITDA we take out M&A costs. We take out also what do you call it?
The cost for restructuring, which we have now in earnest started in Italy. Bente, what am I forgetting?
Something in Norway.
We are on the right track. I think we have built a solid foundation, and we should be able to see better results from operations, not only growth in revenue, but also we are positive about our ability to turn this into a positive performance financially going forward. Balance sheet. We are a company with a not too capital-intensive business. Our balance sheet doesn't change that much over from quarter to quarter. Primarily, the big shifts comes whenever we acquire a company. You see that on the debt and equity side.
Equity is identical from end of 2021 to what it was end of 2020, NOK 316 million. We have some debt in the group. If you look at bank debt, the majority of that is in Italy, where the Italian state has given loan guarantees so that we have borrowed in regional banks in Italy, with state backed guarantees at good interest rates. The reason why the state has done this in Italy is that there has been a moratorium on restructuring, and you could not lay off people during the pandemic.
A lot of companies obviously were hit very hard, but still they kept their employees on board, and they could do so partly because the government sponsored or guaranteed loans. We have bank loans in total around NOK 30 million in our balance sheet, and we also have some lease liabilities around NOK 31 million for the group. Look at the asset side. We have total cash in the group at the end of the year NOK 44 million.
You see goodwill, which, on the top of the left-hand side bar at NOK 205 million, that obviously stems from the acquisition of the seven companies since we were listed on the stock exchange. Cash flow. We started the quarter with NOK 56 million in cash. During Q4, we had positive NOK 6.7 million from operation, whereof accounts receivable and accounts payable in combination accounted for a positive contribution of NOK 3.1 million. Investments, we had a negative cash effect of NOK 20.8 million. More than NOK 16 million of that was the payment we made to the sellers of Integra in the U.K.
Financing no effect on the cash flow for the year, for the quarter. As I said, we end the quarter of 2021 with NOK 43.8 million in the bank. Equity development also fairly predictable. We have during fourth quarter, you see that, Integra accounts for NOK 11 million. We have not yet issued the shares. We will issue two million shares to the sellers of Integra. That will be done in this year, but we have already accounted for it in the accounts. We have a net loss of NOK 21 million in the quarter. Thus, our ending equity is NOK 316 million for 2021.
That gives us an equity ratio of 57%. That's the financial part of the presentation. Now I want to talk a little bit more about first mentioning the services that we provide to the marketplace and then go through each of the business areas with some highlights for Q4 for each of those. We have divided the entire Arribatec Group into 5 business areas. They are Business Services, as you see on the top. You have Cloud Services, and then Enterprise Architecture and Business Process Management. It's not a very elegant name, but it captures very well what we actually deliver to the marketplace. We have Hospitality, and lastly, we have Marine.
We have more than 400 people as we exit 2021 and 26 offices worldwide in 17 countries. We have now a customer list of more than 1000 clients. That gives, as I said, a fertile ground for cross-selling between the business areas. We say that we can deliver all these services as one solution for clients that are ready for it. ERP and cloud, EA & BPM, and hospitality and marine is the name of the business areas. In addition, we deliver business intelligence analytics as well as software developments.
It can all be delivered as a solution, as a service, which means that the client if they sign a SolaaS contract with us they will pay a fixed monthly fee for a period of three-five years rather than having to invest large amounts upfront. A few words about each of the business areas. For business services, which some of you know is the original part of Arribatec, the ERP-focused business, we signed and closed the acquisition of Integra. They have found themselves well positioned inside Arribatec. We are already exchanging resources and looking at common projects. We are excited to have them on board.
They continue to deliver as they did prior to us acquiring them. We have also established a presence in France early in 2021. That activity is growing fast. We are hiring people into our operation in France, and we have won several new projects in France. We are quite excited about the development in France. We have, as a company or as a group, been quite lucky or spared from the hardest part of the COVID effect over the last two years.
However, during Q4, we did see more people being affected, having to stay home, either because they were carrying the virus or had family members, children or spouses that were sick, and therefore they had to isolate themselves. However, most of us has been now on home office for two years, so several of those who have not been able to come to office have been able to work from home. When I'm talking to the business area, the head of business area and their management teams, everyone is excited about 2022. We have a good demand for ERP and ERP-related products and services. We are hiring in Central Europe. We are hiring in Norway.
We are doing this because of increased demand for what we're delivering. We are positive and excited about what we see in the market now for business services. Enterprise Architecture and Business Process Management, it's right now the fastest-growing BA in our group. They have a very strong position in the market currently. EA BPM is only delivering services in Norway. We have it as a part of our strategic initiatives to take EA BPM outside of Norway. The market is large, huge, and we are preparing for a new era where we take EA BPM outside of Norway, and we are very excited about that.
To plan for that, we have already hired more than 50%, or we have increased staff during 2021 with more than 50% in EA & BPM, and the growth continues during 2022. The onboarding program that we now have for new employees works well, and I think EA & BPM is the best proof of that, where it takes six-eight weeks for those or many of those who came on board during Q4 were on paying projects within eight weeks. For us, that is paramount importance because it ties up less working capital because we get people on paid projects quickly. This has some operational effects.
In Stavanger now, we are doubling the size of the office. Luckily, we could expand in the office place where we are. We just take down walls and upgrade the neighbor office and are now soon ready to have a opening of the enlarged office in Stavanger. The last point here is very important to actually show because we have stellar customers in EA BPM. They are large, they are global, they are very discerning and professional buyer of services. They are coming to us to help them with their enterprise architecture and to help them describe and visualize their work processes.
We have executed on projects for all these logos that you see here during 2021, and we expect to have more and additional business from each of the businesses during 2022. We're getting solid feedback. We have customers who is willing to assist us in presenting their solutions to other potential clients. For us, that's the best possible sign that we have done something right when the customer is willing to help us win new business. We are really doing good work with these clients and with every other clients within this business space. Going global with EA & BPM is something we look forward to.
Cloud, this is a typical SaaS business and also SolaaS. It's a recurring revenue, most of what we deliver from our data centers and from our main office for Cloud, which is in Hamar. We have a strong potential for cross-sell between the BAs from Cloud to the other BAs because what Cloud is delivering is kind of an industry-agnostic product. Therefore, the whole customer list globally is available for Cloud. Currently, most of the business is in Norway. We are beefing up the sales capacity in Oslo to further grow the business within Cloud.
During quarter four in last year, they have worked hard on becoming ISO 27001 certified, and we expect that to be completed at the end of first quarter this year. We have deployed 25 Unit4 ERP customers in our Arribatec private cloud. Also our cloud business area function as our advisor and support internally in Arribatec. Lastly, we used to have a data center in Bergen as well. We have now closed that down, moving all the clients and activity that used to be hosted out of Bergen over to our Hamar or Oslo data center.
This is to make the operation easier and also in order to save costs. Hospitality, as you all may know, is a fairly small company today. We had our first sales late last year in that business area. Hospitality has developed this touchless check-in check-out facilities for hotels. We have had several wins during Q4 in Norway. As you can see here, we have also had our first international sale in Dubai. Five hotels has signed up for the product we call Certify, which is a tool to help run the housekeeping, among other things, help the housekeeping department work more efficiently. We are very excited about the international sales.
There are several other types of developments going on in hospitality, all aimed at beefing up sales now. We have hired or we are hiring more staff that can support us in installation of the systems in with new clients. We are also adding DevOps resources in order to be able to meet increasing demand. We are excited about what we see going forward for hospitality and are sure that we will come out with a revenue much higher than what we saw in 2021. Lastly, Marine, headquartered in our office in Rapallo in Italy.
We announced, or we actually didn't announce it, but we changed management there. There is a new head of that BA, global head of BA, Mr. Agostino Fiorentino. He took over the helm in that BA as of January 2022. We have signed contracts with and announced a contract of NOK 13 million with a large LPG operator during which we actually started working on that project in Q4 but announced it then in Q1 this year. We have developed and deployed hotel defect management systems for MSC Cruises, which is an Italian-based large cruise operator.
We have several dialogues going with larger shipping customers for both asset management as well as deployment of our performance suite of products. Lastly, we will make organizational adjustments to this business area. This has been a planned initiative, but as I said earlier today, we have not been able to do this because it has been a moratorium on letting or doing restructuring during the COVID. Now we are past that moratorium, and we will do some readjustments there to make sure that we are staffed and have a cost base that fits our activities in the BA.
From corporate, as we said, we are starting to see the end of the integration work for the group. We expect that will trickle down the P&L and contribute to a better EBITDA and adjusted EBITDA going forward. We have Per Ronny Stav has taken on the new role as Global Chief Commercial Officer, and he is coordinating sales effort between the BAs and geographically, and we already see the effects of that. Yeah, 70% of the global staff is on the internal ERP platform. We talked about that before.
Actually in Q1, in February this year, we did move into Økern Portal, where we have co-located now three of Oslo offices into one, in brand-new offices, with all facilities that you could need to run this type of operation. The rest is appendices, and they are also shown in our quarterly report. Are there any questions? Please, Dan.
Yes, I have a couple. Christian from Carnegie here. I was wondering if you could comment on the organic growth for the quarter and also if you have it, and also if you could kind of highlight the main drivers for growth in 2022 towards your previously mentioned targets.
Yeah. Yeah, when it comes to organic growth, since we have acquired companies in Q4 2020, I think it becomes. I don't have the number here. We previously have reported on what the organic growth was on the older Arribatec platform, right? I don't want to focus too much on that. I think it's more important to actually look at how we're growing as a company. I don't want to now elaborate on what we plan to report on going forward.
We realize that it probably more useful to look at business areas rather than geography for going forward. We are discussing internally what type of segment reporting we now with the new systems on board will be able to show to the market. I can say that the intention is to report on the BA level revenue and down to EBITDA. Our intention is to do that already for Q1, but it may be Q2 before we have all systems in place that allows for that to happen.
When it comes to the growth, it is really we feel that there is a pent-up demand in many businesses for taking on both ERP systems and associated services and also EA BPM. We were almost well a little bit surprised of the demand and the expressed demand from both existing and new clients for services both for EA BPM and business services. Because it was towards the end of I would say during Q4 in particular, it became more and more pronounced that there is a lot of clients that wants to either upgrade or take on considering taking on this type of services.
It's just a increased demand that leads to this. Of course, we also have invested quite much in building out the sales capacity. We are taking on several senior resources that will work to stay close to the market, close to the clients, and help define the needs and how to present our solutions to those.
Thank you. If I could have one more when it comes to-
Sure.
to profitability.
Yep.
I mean, you've, as you discussed, 2021 was impacted by both integrations and also a poor performance by the marine segment. Could you help us understand a bit more how we should think about the impact from both those two going into 2022? Should we expect kind of full effect from less integrations in the first quarter already? Or will it be more gradual throughout the year?
We will not see the full effect. As I said, we have 70% of our global staff are on the ERP system now. So we have, too, the remaining 30%, 100 people is not yet on. We are working hard to get them on board, and we will by end of Q2, early Q3, have those entities on board. However, when you look at integration, we have done most of the system rollouts that we need.
When you implement an ERP system, I would say the majority of the work is done before you start taking people from the old system to the new system, because you want to make sure that your financial model is as you set it up in the ERP system is exactly what you need so that you can get out the information that all the stakeholders need. I would say that the heavy lifting on the ERP side for our own use has been done. Now, it's not just, but it requires less efforts to and less people involved in getting them, the remaining companies on the platform.
To make a long story short, we will see some effect in Q1, much less effect in Q2. That's for the ERP implementation. The other systems are up and running, and the effort to move, let's say, a new entity over to a new CRM system is fairly straightforward. The other part of the question was?
Was related to the Marine segment.
Marine. Yeah.
how things are progressing there.
Yes. The marine segment or business area marine, we are making organizational adjustments that will show up in Q2. We are scaling the operations in every part of the world in order to have a fit for purpose organization. What the exact financial outcome of the measures that we take will be is too early to say. Our target is to have that BA perform financially much better than we did in 2021.
Perfect. Thank you. I mean, I have some more, but if you have any other questions, you can start with those.
Sure.
I can continue later.
Yeah. That is, I think you can just continue.
Okay. I mean it seems like you're experiencing more traction on the hospitality offering. I don't know if you could comment a bit on how you see the market there and also on the LOI with, was it Apple you-
Uh.
Did you announce this quarter?
Yeah.
What's the opportunities there?
First, when it comes to the potential, we have for the check-in, check-out part of the business, the focus had been to Norway and Nordics. We are taking market share from our largest competitors. We have good feedback from all clients and we will continue to grow for that part of hospitality in Nordics, main focus on Nordics for 2022. Certify is a mature product and we will be selling that globally. As I said, the first win in Dubai is important for us and we look forward to see how we can sell Certify in other parts of the world as well.
The agreement with Apple, it remains to be seen what the actual effect will be. We are very happy to be able to say that Apple chose us and that we or on an LOI basis, right? We are associated with that brand. It remains for us to see how much we will get in terms of the new business based on that.
Thank you. I think, at CapEx, if I remember correctly, it was a bit higher than I had expected for the quarter. Could you comment on what these investments are for?
Yeah. Primarily, there are two things that drive our CapEx. One is the, let's say, acquisitions of companies, and the other is developing tools and systems. It's production systems or it's systems that our clients need. If you install the ERP system, they are asking us to put on buttons that will make their system work better. We will then develop that. That is, the time spent on development is capitalized and put on our balance sheet. Most of the development resources work like that.
Internally, a lot of the systems that we are using on board, internally, for the group is also acquired and capitalized on the balance sheet.
Thank you. I think those were my questions.
Great. If there is no further question, I would like to thank you all for showing up and have a nice day further.