Good morning, ladies and gentlemen, and welcome to the presentation of the report for the fourth quarter of 2022. This, the report and the copy of the presentation can also be found on our website and be downloaded from NewsWeb. This webcast will comprise an approximately 30-minute presentation and will be followed by a Q&A session. You can type in your questions at any time, and I will attend to them later. A recording of this webcast will also be published on our website, along with a transcript of this presentation. Alas, it will be only me today. Our CEO and my good friend, Sverre, he is in bed with high fever. But we wish him well, a swift recovery. Get well soon, Sverre, and happy birthday. All right, let's get the show on the road.
Okay, for the new viewers, CSAM, we are a healthcare specialist, and we focus only on healthcare and public safety software. We are indeed a leading provider in the Nordics, and we are growing across Europe and beyond. The kind of software we have is the one that facilitates life's defining moments, such as if you get cancer, when a baby is born, or an accident has happened. We provide software that matters and is integrated in people's lives. We have vital solutions for more than 500 healthcare and emergency response organizations, and we now have customers in 27 countries. Our presence outside of the Nordics is growing. We have a diversified portfolio of business areas, and we are focusing more and more on the business areas.
We have Medication Management, first and foremost, support for cancer medication, software to assist chemical treatment. We have everything related to Women and Children's Health, from the desire to be pregnant to following up the woman during pregnancy. We've had some successes there lately, also in with continuing delivery projects going on in Norway. We have Medical Imaging, numerous solutions used throughout Nordics and elsewhere. Connected Healthcare, also very much linked to Medical Imaging, but also standalone solutions. Health Analytics, we did one acquisition in 2022, and that was the acquisition of Carmona. Together with the previous acquisition of MedSciNet, this business area now comprises around 7% of total business.
Public safety, by far the largest business area after four acquisitions within this domain. Again, numerous things happening, and a lot of new contracts, are won. Blood management, last but not least, a business area where there is a lot of activity going on, first and foremost in Denmark with the national contract, but also several other projects going on. Real high activity in this area, actually in all business areas. Okay, to the results. The recurring revenues, really the core and the heart of Omda's income stream, continues to grow. It grew by almost 9% in the fourth quarter compared to the fourth quarter last year, and is now about NOK 70 million (Norwegian Krone)-NOK 73 million (Norwegian Krone).
Again, the recurring revenue is linked to customers, some of which we have a more than 20 years connection with. They are in the Nordics, but also outside the Nordics. Public sector, for the very large part, very little churn. A lot of the contracts or the agreements have been lasting for more than 10 years. This is really a long-term business, and we are indeed focusing on the recurring revenue. A highlight of the quarter, total income approached almost NOK 100 million (Norwegian Krone) this quarter. It landed at NOK 98 million (Norwegian Krone), and that's a growth of 11.5% compared to the fourth quarter last year. A solid growth indeed, and a lot of it is organic.
Speaking of organic growth, organic growth in the quarter was 12%. This is a little above our guidance, the total organic growth for the year ended up at 8%, 2022 full year versus 2021 full year, which is in the interval that we have guided on, 5%-10%. That was a highlight. Also the gross margin kept up. It didn't improve in the quarter. That is first and foremost due to a large hardware sale.
But the underlying trend is good, and we are slightly above 90% in the quarter. The adjusted EBITDA ended up at NOK 2.5 (Norwegian Krone), NOK 2.4 million (Norwegian Krone) around 2.5%, versus the reported EBITDA last year of - 2.8%. The sales outside the Nordics keeps growing, and the slice of the pie is expanding. 13% of total sales was outside the Nordics in the quarter, and that is up from 9% in the same quarter in 2021. You all know that CSAM, we are growing through acquisitions organically as fast as we can, but first and foremost through acquisitions.
Integrating the businesses is really an integral part of unleashing the synergies and the benefits linked between the different business areas and the different acquisitions of businesses within the business area. We have a three-step model we call buy, integrate, and build. We have the first three months or the first 100 days, and then the next year, and after two years, we shall be ready. We've had some questions, can we do it faster? Is the model the right one? We think the model is very good, but going forward, there will be some adjustments, and I will come back to those.
For acquisitions, we absolutely, we integrate our businesses, but we will do it slightly differently going forward than what we did in the past. The current integration project portfolio comprises the four last acquisitions, the acquisition of Carmenta, which was almost two years ago, February 2021, within public safety. MedSciNet, that was later the same year in May, within Health Analytics. Another acquisition within public safety, Optima in June, the very last day of June in 2021. Finally, Carmona in February 2022. We see that there are currently two acquisitions within public safety, emergency response, and two within Health Analytics.
What is changing is that they are indeed now doing more and more of the integration work is done within the actual business area. But as these acquisitions and the projects are approaching their end, we see that within the third quarter of 2023, the current businesses, they should all be more or less integrated, let alone except for Carmona, which is still probably be some work to be done. As we told you last time, we have decentralized our organizations. We have slimmed down. We are leaner, not necessarily meaner, but we are leaner, and we are more business-focused. The main thing is that we're focused into business areas.
This is a model that you will recognize from Vitec, from Constellation, and others. It's a real empowerment, real decentralization, and power is given to the business area managers, as we call them. We currently have seven business areas that are within eHealth or public safety. The last one we constructed this year, that is consulting services headed by Ilan Eini. That will be consulting services for internal use, for CSAM. All of our Filipino resources, for instance, they will be a part of that consulting services, but it will also be sold externally. You see on top here, you will see the corporate management or common services, as we call them. We are here to assist and serve the business areas because they are the main driver.
We also see that we're slimmed down common services, and we are focusing much more on the business areas. For those of you who follow us closely, you will see a new picture, and that is Roger Weman, who has taken over as the new business area manager within Health Analytics. We have mentioned Project Triginta, the cost reduction program that we launched in the middle of December last year. The aim was to take us from an average of 5% EBITDA margin in Q3 2022 to 30%, which is our target margin, within the third quarter of this year. Project Triginta comprised several cost initiatives on the COGS side, on other OPEX, but first and foremost related to salary and personnel.
Salary personnel can be divided into two groups, fixed employees and more or less permanent consultants that we used to adding to our own resources. In the Project Triginta, again, we are measuring the business areas exactly the same way as you as investors measure CSAM. We focus on organic growth. We measure them on EBITDA or actually EBITDAC, so EBITDA less CapEx, and capital discipline. That is both CapEx, but also net working capital discipline to manage the cash properly. I mentioned the buy, integrate, and build process, and as you can see from this slide, the responsibility for integration is actually now within the business areas themselves.
You'll see that, for instance, on public safety, Johan, he is responsible for integrating Optima into his Carmenta business. Roger, he will be responsible for integrating Carmona, the business where he came from, in together with MedSciNet. Lilly, responsible for Women and Children's Health, she had responsibility to integrate Fertsoft into her business area. Ilan, he is running a new profit center, handling development, test, and consulting internally and externally. What I would like to highlight is that in the Project Triginta, we are on track. We are absolutely delivering and expecting to see the results this year.
On the customer side, I mentioned previously that we are expanding in the Nordics but also outside of the Nordics, and we see that 46 of the customers are in Sweden, so that is our, you know, really the whole market. Then we have Norway, rest of the world, Denmark, and Finland. Rest of the world increasing its presence from 9% to 13%, and you also see Denmark increasing. The increase in Denmark very much related to the blood management project going on in the capital region and on the national level.
On the rest of the world, the reason for increase can be attributed to two business areas, is Health Analytics, where we have customers outside of Nordics, particularly in the U.K., and then public safety, where we have customers in Europe, like in Spain and elsewhere in Europe, but also increasingly in other parts of the world, such as New Zealand and in the U.S. Okay, let's take a look at the financials. The backbone of our income on our financials is of course the recurring revenue. This is a view graph of showing the rolling quarters, and we measured the last four quarters.
You can see that from the first quarter, 2017, the quarter, the earnings were NOK 78 million (Norwegian Krone), and the rolling, you know, four quarters in the Q4 2022 amounted to NOK 281 million (Norwegian Krone). That's an increase of 13% quarter-over-quarter, so a very healthy increase. Again, keep in mind, 95% of our customers, they are within the public sector, and we have very, very little churn. We have guided on less than 2% churn on average per year, and we are experiencing actually at the moment less than that. The revenue mix, so not only is the recurring revenue strong and growing strongly, the total revenue, the quality of earnings, so to speak, is also very strong.
NOK 73 million (Norwegian Krone) in recurring revenue and then an additional NOK 3 million (Norwegian Krone) in license sales, and NOK 80 million (Norwegian Krone) in professional services, so recurring or semi-recurring, if you like, and then some other hardware and other income. The recurring revenue and the license sales, software-related revenue, and then the professional services, they are recurring or semi-recurring, and they keep up, were high last year, and they're high in the Q4 this year or 2022, very much attributed to all of the delivery projects going on, not only in Denmark but also in other regions, and hospitals around in the Nordics and in the rest of the world.
Speaking of the recurring revenue, they grew 12% quarter-over-quarter, and comprised 78% of total sales, so very, very, very, very strong. Also, the run speed, we see that, okay, the last four quarters, show a run speed of NOK 281 million (Norwegian Krone), but the run rate based on the last quarter is NOK 295 million (Norwegian Krone), approaching NOK 300 million (Norwegian Krone), so very, very, very strong development there. What is not so good in the report, at first glance, the cost side. We see that the total cost amounted to NOK 118 million (Norwegian Krone). That is reported cost in the quarter. Keep in mind, this is a Triginta quarter. This is a restructuring quarter.
As a reported selling personnel, slightly less than NOK 74 million (Norwegian Krone), and then other costs of NOK 21 million (Norwegian Krone) and COGS of NOK 9.7 million (Norwegian Krone). We have booked restructuring costs that is just accruals for the Triginta, so directly attributable. We see over NOK 13.3 million (Norwegian Krone), but we see gross margins over 90% despite the higher hardware sales. We're still thinking that the COGS will come down. This was a one-time sale of hardware. They come in lumps as we have discussed before. This was a large hardware order related to public safety. It was a semi-strategic hardware sale. As I said, we had more than NOK 13 million (Norwegian Krone) in directly related restructuring costs.
Then we had NOK 6.7 million (Norwegian Krone) related to salary and personnel, that is accruals and other one-offs, and NOK 2.6 (Norwegian Krone) related to other costs. It is costly to reorganize and, but we have taken all the costs here. If you then take NOK 73.9 (Norwegian Krone) less NOK 6.7 (Norwegian Krone), you see that the underlying run rate for the fourth quarter is like NOK 67 million (Norwegian Krone). Then you should keep in mind that the fourth quarter salary and personnel is always a little higher. It comprises more than 25% of a, of a year, and that is linked to holiday pay, that is accrued for and paid out in July and August in Norway and Sweden.
The underlying trend is actually a little better than what you can expect at first glance. As we said, the margins are temporarily diluted, but they will improve. If you look at the adjusted EBITDA, we see the trend already. From -3% last year to 2.5% in the fourth quarter this year, or 2022. We see the capitalized R&D, the CapEx. It's back to more normal level for the quarter. We guided on around 10%. They have been slightly less in during the year, and they will hover around 10%. That is on the short term our guiding.
I mentioned the cost reduction program earlier in this presentation. I'd just like to highlight that indeed the target for Project Triginta and for the cost reduction program was to be finished by the end of the first quarter. We have actually finished already. We are in that respect making good progress. Everything, every deal is signed. Everything is with the employees. All agreements are signed. There are no loose ends, no legal disputes, no discussions within any trade unions. We are exactly where we wanted to be and where we communicated we would like to be, and maybe slightly ahead of our communicated schedule. We are also as a company focusing on the net working capital.
We have an ambition to have a target of -10% or better. In the fourth quarter of 2021, we had -13%. As you see, we will typically always be much more cash rich in the first quarter of every year because all of the prepayments on the annual subscriptions and annual recurring services. - 13% in the fourth quarter last year, -15% in the fourth quarter of 2022, so a slight improvement, not as good as we where we were at the end of 2020. We are working hard on it and progress small steps at a time, but they are going in the right direction.
Our investors, we are blessed with long-term investors, long-term thinkers that have supported us since we went public and they still do. We see that the Norwegian investors are still the biggest group, on the pie to the left, we see all investors, but we have some of the founders of the company. We're not doing anything. If I look at the free float, we have the green pie chart, you see there Norwegian investors, external investors that comprise 27%, while U.S. investors are now the second biggest and almost as big as Norwegian investors, holding 26% of the shares, almost the same as the Swedes. Norway, U.S., and the Swedes.
If we add U.K. to the Americans, we see that Anglo-American investors, they hold 35% of all shares in CSAM. There's a good mix of other countries of this world. Okay, I said that we would continue for half an hour, so that means it's time to wrap it up. I would like to highlight five things, five concluding remarks. One, we are focusing very much, of course, on growing as fast as we can, but at the short term, organic growth. We have been guiding all the years of organic growth of between 5% and 10%, and we will continue to do that. We think that 2022 is a good example. We ended up at 8%, so spot on where we have guided.
Another thing you will observe is that it is uneven from quarter to quarter, and you should expect some quarterly variations. Don't lose your sleep if you see that. It will always be a bit lumpy. Season isn't your typical quarter-by-quarter business. When you average out and measure it over a year, you see that we are indeed there. We will continue to focus on organic growth as a company and in the various business areas. Second, profits. We are focusing very much on profitability, and that is together with, you know, keeping the top line stable and stably growing, we, the rest is really about cost control within our three groups, COGS, other OpEx, and last but not least, salary and personnel.
We will focus on, you know, we have been slimming down. We are much leaner, and we will continue to do our daily jogging runs and stay slim and stay fit. You will see, and you should expect to see the profitability developing through the year. Do not expect so much for the first quarter, because a lot of the employees and, you know, the discussions they were going on in the first quarter. You could start to see maybe a little effect in the first quarter, but it's from the second quarter that you will really see it, and we should be there close to or on the target margin by the third quarter. That is what you should expect.
We are on our way, but from here on, it will take nine months, or from the first of January, it will take first, nine months. Just like a pregnancy, you can't, you can't force it, and you can't put two women on the job. M&A, very high activity. We've probably never been as active as we are now on M&A. We see that we have communicated this before, and we still do. There is a distance between what we believe is fair valuation and some of the expectations and among the entrepreneurs and the companies that want to sell their companies. This is very often linked to maybe they had an angel investor or some investor in two years ago, and it's anchoring.
So we need to take the time, but there are several dialogues going on. As soon as we have something to announce, we will. The flip side of M&A is divestment, and we have communicated before that we have some non-core or non-strategic assets in our portfolio, and we will work hard to divest them. Again, when we do, you'll be the first to know. We have decentralized our organization, and we have empowered the business area managers. They are running the business. They are responsible. I think through this exercise, we have seen that we are getting more efficient. The first thing we want to focus on, as we communicated, was sales.
We wanted to be more sales-focused and sales-driven organization, closer to the customers. I think based on the results and the sales for the fourth quarter, we see that we are perhaps starting to see some of the effects of that. Speaking of the business areas, a lot of you have asked us, you know, what is the difference between the business areas? Do they all grow as fast, etc.? Are they equally profitable, etc.? Again, we have promised to publish those results and do that by business area, reporting from the first quarter of 2023, and that will be in May this year. Starting from the first quarter this year, we will indeed give you all the information on the development within the different business areas.
It'll be easier for you to analyze the company and draw your own conclusions. Okay. These are, you know, like the five priorities and in my mind, the five key takeaways from this presentation. All right. Time to round it off. Again, remind you, we started as a very small company, Norwegian, a Norwegian company, and we have grown through Scandinavia and through the Nordics, starting to have a presence in Europe and also increasingly in the rest of the world. By 2030, we absolutely have the ambition to be, you know, a notable player in this world, and by 2025, a notable player in Europe. We continue to have ambitions.
We continue to have ambitions and we maintain the targets. If we reach it in 2025 or not, we shall see. As I said, the first priority is profitability, and that is also the link in our minds to unlock the door for future financing, which is needed to reach our ambitious targets. Okay. Before we jump into the Q&A session, remind you our newsletter. You can scan this QR code, and it will take you there, or you can log into our website. Subscribe to our newsletter, and you will get all the juicy news first. Okay. That was about it. Time to move into the to the Q&A session. You will bear with me.
As you know, I am alone today, so it may take slightly more time, but I'm sure that you will, you will give it to me. Okay. The first one from Emily, and that is related to the NOK 1 billion (Norwegian Krone) target. You say, "Can you comment on how you are planning to reach the NOK 1 billion (Norwegian Krone) target 2025 revenue and the M&A pipeline?" Okay, I think I mentioned some of the M&A pipeline. I can't, of course, go into all the juicy details. The pipeline is good. We have an M&A system, a pipeline management system, called Midaxo. We enter all the targets and leads there. There are currently more than 40 active leads. We have 400 in the database altogether. 40 of them are, you know, more or less hot or warm.
Those are all relevant to CSAM, and they comprise in total sales of between NOK 1 billion (Norwegian Krone) and NOK 1.5 billion (Norwegian Krone). There's definitely enough targets, and there are definitely enough sales within those targets. The only challenge is really to agree on valuation and close a transaction. Again, we are patient. A lot of the transactions that we have done before, we have had dialogue for many, many years. Optima, for instance, the first dialogue was in 2015. We acquired them in 2021. This is a good example, and we have a lot of other dialogues that have been going on for years.
When it comes to 2025, we still think it's possible. We're heading into 2023 with approximately NOK 400 million (Norwegian Krone) in sales. We went public two years ago with NOK 200 million (Norwegian Krone) in sales, so it definitely isn't mission impossible. We have the targets. We have the pipeline. There's enough food on the table. We still have cash. What we want to do is also to make sure that we have a financial performance that unlocks the next chest of money. Okay. I'll take your questions in turn here, so please excuse me if I go and jump back and forth here.
This is a question from Henrik Larsson, and is, "When do you expect your EBITDA margins to improve?" I touched slightly on this during the presentation, but what you should expect to see is that maybe a slight or some signs of improvement in the first quarter, but you shouldn't expect to see real improvements until the second quarter. Then we have ambitions to reach the target margins in the third quarter. Expect signs in the first quarter and then see the real proof of the pudding in the second quarter. That is what you should expect. Okay, from D.T., "How likely is it that no acquisitions will be done in 2023?" Well, very hard to guide on that one.
This is a question in the same family as how likely is it that it will not be any sunny day during summer this year? There's always a chance, but I bet there will at least be one day of summer or sunshine this summer. From Andrew. Nice to have you here, Andrew. Glad you're following us. "How are you preparing for the upcoming bond loan repayments?" A very good and very relevant question, and this really relates to what I was saying about profitability and the prioritization of profitability, organic growth profitability. The bond matures in the third quarter 2024. We aim to demonstrate our 30% margin, the target margin, by the third quarter 2023, so, like, one year before the bond matures.
We think that having a decent EBITDA and a decent cash flow, again, you know, maintaining the CapEx discipline, so, say, an EBITDA of 30% and an EBITDAC, cash EBITDA, of 20%, that will demonstrate to, and that should give comfort to, bond investors that we are indeed bankable, to use that expression. We believe that profitability and sufficient free cash flow is what will unlock the door to further bond financing. Okay, another one from Andrew. "Hi, Einar, and happy birthday, Sverre." Well, there you go. "You have seven corporate people and eight area heads. Is there any plans to grow the headcount in any area? Also, do you have assistants or other support staff?" Yes.
Behind the various business managers, there are indeed support staff. They are not all the same, but if you can produce in the graph here, there's the slide there. Yes, there you see it. You, you see the slide. Behind me and as a CFO, I of course have a team of accountants and also business controllers and a finance manager. They are also in various. That is, you know, one of the largest and also in operational services, internal IT, for instance, they are also there. Yes, there we are not the only ones, but we try to be as lean as possible and as focused as possible.
Again, what can be done in the business area will be done in the business area. We move on. Another one from Andrew. What is your personal opinion about stock-based compensation? My personal opinion, I think that if it's compensation or if it's being a shareholder, I think it's a very good idea personally. I like to, you know, all initiatives that align interests are good in my opinion. If part of a compensation, say for example, a bonus scheme is settled in shares, I personally think that is a good idea. Always good when you have your skin in the game. Here's one from Oliver. Hello, Oliver. What are the main functions that will see downsizing in addition to consultants, R&D, marketing, et cetera, et cetera?
Good question. I think it's really twofold. One is related to common services. The corporate services we have slimmed down, we are doing less. We are focusing on what we absolutely have to do, so, and needs to be done, and what's not so much what's nice to be done. Again, more is done by the business areas themselves, and as a matter of fact, much more efficiently. One is what we can say, administrative tasks. The other is some R&D and developments and consultants, so some are R&D. Again, we are prioritizing more, we to develop what needs to be developed, and what is paid for.
Again, just much more focused so that, you know, within the business areas, developers, maybe sales resources, maybe non-strategic, you know, developments. We are slimming down and tough on prioritization, actually. Of course, you mentioned consultants. Let me not forget that one. We have had extensive use of consultants. We had some, you know, delivery projects that were, you know, came suddenly and demanded more or less immediate action, and we didn't have the people on board, and that is why we used consultants temporarily for a lot of those. It is more costly, but the alternative would've been worse.
And of course, we, again, you should see the use of consultants starting to come down again, not so much in the first quarter, again, as we said before, but from the second quarter, you should start to see the results. Another one from Oliver. What are the main levers for organic growth that you see for 2023? I'd say three things. First, we are continuing to push and focus on sales, a more sales-oriented and sales-driven organization, through the decentralization and into business areas. That is one thing. We focus on sales, and what we focus on and what we measure that is what gets done.
As you saw from the view graph on the business areas, maybe you can produce it in Edward. You saw that we are measuring the business area managers the same way as we measure ourselves. We measure them on organic growth, and we measure them on EBITDA. That is really how we measure them. That is first, we focus on organic growth. The second, we will get some tailwind from inflation, the high inflation. In one way or another, most of the contracts we have with the customers, they are linked to any kind of, you know, inflation, not all of them to consumer price index.
They can be other indices, but there's always something, and that is higher now in 22 than it has been for a couple of years. Maybe the third, you could see some FX effect. Again, that isn't something we really, we really can take into budget with. Right now we are experiencing some tailwind from FX as well. Norwegian kroner has weakened again, almost all the trading currencies. Okay. Oops, I was a bit quick there. Don't know if it's a way I can get it back. Yes, I think there is. Yes. Okay. Could you elaborate a bit on the one-off costs not directly related to the restructuring?
Other one-off costs, not directly related to restructuring, they are travel, they are legal, they can be accruals, for extra use of extraordinary consultancy work that is above the average, for the year. Some on the other cost side, marketing and consultancy where on branding, for instance, there are something that are truly not recurring, but related to specific projects. It's things like that. As you know, we haven't really used to present adjusted numbers. We have done it once before, that is when we IPO'd. We thought it was fair to adjust for the IPO costs. You don't IPO regularly. This is a special project, and we thought it was fair to adjust for that.
We really haven't, we haven't used it very much, so this is the second time since we went public that we present adjusted numbers. Because most of it, like M&A, we think that's a part of the business, so we don't want to adjust for recurring one-offs, so to speak. This time we think it's fair, and in the report, if you read it, you can see each and every item is specified. We have tried to be as detailed as possible to make it really easy for you to analyze us, and again, judge for yourself if you think it's fair to calculate as a one-off or not, but you can do the math yourself.
We have been very transparent on the issue and also described it in the report itself. Okay. This is again one from Andrew, and it reads, "If when you divest some areas of the company, what would you like to do with the increase in the cash in the bank?" I think that's really easy. If and when we divest something, you will see two effects. One is that what is the divested you will see the effect in the P&L in the quarter when it was divested, so that is one effect you will see. Whatever money that goes into the bank, that is typically what we will put in. It's. Divestment is just a reverse M&A in my mind.
If we divest something, put it in the bank, and I'd like to, you know, buy something else that is more strategic for that money. To do an M&A, that would be, you know, priority number one, spending the money from a, from a divestment. Okay. I actually think I managed to cover them, cover them all. Let's see if there will be any more. I'll refresh this. Nope. No. There seems to be no more, no more questions. I'll take a last look. No. We're all good. No. Seems to be no more questions. I hope that you have enjoyed this presentation, albeit it was me in my solitude. Sverre will join me next time.
Tune in again on the 18th of April when we will present our annual report. Until then, enjoy spring. It's on its way. Take care, and stay safe.