Good afternoon, everyone. Welcome to this investor presentation. We are happy to tell you about our recent acquisition, Optima. This is the fourth one in six months and good progress for us. Before we go into the specific acquisition, I would like to just go through some of the elements of our strategy.
First of all, we are the leading provider in the Nordics, but as you probably will see based on this acquisition and others we've done this year, that we are also progressing outside the Nordics. I think that is because we have chosen this very specific strategy, defined by the three first words on this slide, eHealth, niches, and software. We stick to that strategy, and it seems to work well in our home base here in the Nordics, but also outside the Nordics.
We're proud of that, and I think also the fundamental thing, we have to repeat that with CSAM. Most of our software is actually very important to people, important to citizens, and most of the time when important milestones happen in life some healthcare personnel will probably use CSAM components while they're helping you, whether it has to do with birth or bad things like cancer or acute situations. Acute situations, for instance, would be extremely relevant to what we're talking about here today.
And also to repeat just what we have been doing here and why we're doing it like this. You see our history is based on exactly what we now have done through this acquisition. We have put together great teams, great products, with long-term recurring revenue relations with customers within specialized healthcare.
As you see here, it's becoming more and more busy when it comes to acquisition. I think this has shown that it's possible to grow and to build a sustainable portfolio of specialized components. That is in a way differentiates us from the type of ordinary software in the healthcare business. I think that is also part of the reason why we have come so far so quickly.
That is important, and we have reached now a situation where our Nordic positions is, of course, getting more and more robust and strong. At the same time, as you saw in the first quarter, we were growing outside the Nordics as well. Of course, this number, 7% per first quarter, is of course now increasing.
Increasing because we've made acquisitions after this with the international customers and also the acquisition we're talking about today will add also numbers outside the Nordics. That is a good thing. It shows that our strategy with this strong home market and with additional growth beyond the Nordics is actually working. We're proud of that.
Just to repeat, also what we want to do over time, we have communicated to everyone that we want to grow to NOK 1 billion in sales in 2025. We stick to that plan, and that plan also includes the fact that we want to grow in the important markets. So far, we've done that, if you look at our position in 2021 already.
I think what we see for 2025 and also the years beyond would be that we are getting stronger in Europe and also we're looking at the rest of the world. I think we are in a position to grow and become a notable player in the rest of the world because so far there's not many companies in the world within eHealth and digital health that have chosen this specific niche-oriented strategy that we have.
Where we are at the moment, it's important just to look at the way we have diversified CSAM because it's not only the fact that these are all important areas of healthcare, but it's of course also diversifying the business, because we have customers, most hospitals in the Nordics, having some kind of small or big or set of components from CSAM, which of course gives us a fantastic position in itself.
Secondly, all these current customers also gives us the comfort when it comes to our growth of 5%-10% within these niches, because they have their needs, added integrations, added functionality, added number of users, et cetera. We have come to a fantastic position when it comes to have a predictability when planning our operational business. Just a few words about these niches at the moment before we go into Optima.
Medication management, we're still being the leading in Nordic de facto standard, actually, the Cytodose application, helping people within the cancer oncology area in hospitals, important hospitals in the Nordics. Also supporting different user groups there, doctors, nurses, and also the pharmacy. Then we have the women's and children's health, also a leading Nordic position there, with installations in Norway, Sweden, Finland, and also having solutions for the pregnant lady, to collaborate with the users there, like nurses, midwives, and doctors.
Then we have blood management, which is also a Nordic historic solution in a way, established in 1969, and also in many ways defines why this strategy is so important. Because over time, these users have been cooperating to create functionality that really makes this business a long-term viable thing.
Also there, we support different user groups, those who help people give blood, tissue, et cetera, and then the storage, and then the distribution to hospitals and clinical environments. We have our connected healthcare business area, which is growing as well, because we have to integrate with all types of EPR solutions, like here in Norway, DIPS and Cambio in Sweden, or Epic, Cerner, and all of these type of players that delivers the fundamental big solutions, the storage solutions, and journal systems.
We have to integrate with all them, which we do, and that is also why this connected healthcare area is growing. We have our medical imaging business area, which is, of course, not the general business type like radiology and those bigger systems.
It's more focused on specialized processes, and we have many components there in many departments in many hospitals in the Nordics, which is a good thing, also integrated fully through connected healthcare with the rest of the stack at different hospitals. Then we have the public safety area, which is, of course, the biggest one at the moment in CSAM, based on the last two or three acquisitions.
The volume is, of course, increasing very fast. It's also partly, actually, this acquisition we're talking about today, related to the last niche we established, health analytics, because this all functional approach to data management and analytics is similar, which gives us the possibility to share competence and procedures, et cetera, to get more out of this last acquisition.
Public safety is a very important niche, of course, for countries, for big organizations, big regions, like the Valencia region in Spain or the national SOS Alarm in Sweden, for instance. They're completely dependent on systems like this, handling dispatch and operating the control rooms, et cetera. Also, of course, we have their software for ambulances, helicopters, et cetera. If you put all that together, what is actually missing?
What is really important when you run a business like that? That is, of course, to be able to predict how is actually this acute business, public safety business, working in a region or in a country. That is an important responsibility, and you need facts and data. This solution is what we're going to talk about today, the acquisition of Optima, which is a fantastic add-on to this niche.
I'm coming back to that in more detail. First of all, I would like to explain to you, when we acquire a company like this, which is normal for us, we acquire companies that doesn't perform well when it comes to financials. That is quite normal. Small niche entities struggling with that. However, it seems if you look at our numbers from 2019- 2020, when we don't acquire companies at the same time, of course, you see the development in our EBITA margins.
Why do we get up to 30% margin, which we also plan to do with this acquisition we're talking about today? Well, it's in a way, a simple model. Of course, it handles logistics and complexity to do it. In a way, we've trained for 10- 15 years now, and we're quite good at that.
This model is also going to be used when it comes to the acquisition of Optima. Also is an ongoing structure of projects handling the last acquisitions that we have shown you, the last four, which is within the last six months. We are able to do that in parallel. That means we will be diluted temporarily when we do acquisitions like this.
On the other hand, when we systematically do this in parallel, we will get back to the running margin target of 30% EBITA margin, which are in our book. This is how we do it, and then specifically, what is Optima? I think most important thing is, of course, you manage a lot of critical data when you do the functional things for people in that sector, helping patients, saving lives. However, this is about something else.
You also have to decide, you have to plan. These type of software that's optimized, delivered over many years is, of course, important to management and those who are responsible for such businesses, not only operators and those who are there saving lives. This software is good at that and has shown its viability in the outside world also, not only in the Nordics. This is then the planning part of this is actually the ability you get as a manager to actually use data to plan properly how are you going to rig a situation within the public safety area and in the acute service.
For instance, if you have huge number of people getting together, whether it's a national day or a big concert or things like that, you have to think about that when you are responsible for acute services. This type of software is actually supporting that part, making sure that you do the right thing, you plan the right thing before such events. That is one example of how that software is actually helping the organization, and a big part in the management of the organization.
Secondly, it's not only in the planning, it's also the very important thing, what's actually going on. That is also an important visualization. What's going on with our resources? Where is the pressure? To be able to, in live situations, to be able to actually make new decisions as you go.
The combination of these two types of software tools are critical to organizations like that, and a fantastic add-on to our business. What does it really do as a whole? Well, it's actually handling the resources in the acute sector, but also in those who get patients delivered and the summary of resources, and the ability to handle that is, of course, important to organizations.
That's why this is a fantastic niche within our niche that also helps user groups more outside the operational part that we are in, but also on the management side here. This is a very good thing, and it's also been there for many, many years. Highly competent people that have developed this over years. Somebody can talk about this as complex, it's outside the Nordics, it's international. Yes, it is.
We know this company very well. We have cooperated with them. It's a fantastic team. They deliver to some of our customers, and that means this type of software is something we feel is part of our history, and it's a niche that fits into our current niche.
We feel it's a low-risk approach where we can look at companies over time, which we have done with this, and then also get to know each other, and talk over years before we end up doing this acquisition, which is good for us and good for them because the current owner have their strategy, and this strategy is good for R1, but it's not specifically so relevant to them to use Optima as it will be for us. It's a win-win and a good transaction for both parties as well.
If you look at our solutions today, what does this component actually do? Then again, it's creating a broader value chain. This is how we've done it in other niches as well. We're adding smaller niches within the niches to create bigger value chains. That can be within maternity, for instance. We added Fertsoft as an acquisition, which is the part of maternity that is before you even are pregnant, that you think about having a child and then visit the IVF clinic, for instance.
The same principle here. We are creating more functional components into our offering and addressing bigger part of also the user groups within the sector. It's a very good news for us that this type of software is complementary to our important software that we have in many countries at the moment.
Finally, of course, this acquisition not only is good when it comes to products and people, it's also strengthening us very much. Also in the Nordics, but of course, more and more outside the Nordics. Many important structures, organizations around the world are using this software. I think in the future, the good thing for us as a vendor will be to package all this and be able to actually deliver this complete package to many of other customers. Already we got feedback from customers that are really happy that we increase this and strengthen this offering over time, which is good for everyone.
I think Einar Bonnevie, I've talked about the industrial logic about this, and I think you should also go through some of the points when it comes to the transaction itself and the reason why we do it was done like it was, and also a bit about the numbers.
Certainly. Thank you, Sverre. Let's go through to the numbers and the transaction. We have, as Sverre said, had a dialogue with Optima for a number of years, for a long period. We finally came to signing and closing actually today. A long time coming, but worth waiting for. Optima, they reported sales. Their reporting year follows the calendar year, reported $2.8 million in sales last year and an EBITDA of -8%.
The sales are spread around the world, U.S., New Zealand, U.K., and rest of the world, including Norway and Denmark. The numbers themselves, this is a typical, as Sverre said, a make better situation. We have said repeatedly that when we acquire a company, on average, they will be around zero EBITDA contribution. The last two ones, they were contributing positively. This one is negatively, slightly. Expect margins to be diluted temporarily.
They're fantastic software, fantastic people and competence, we do think that we can improve the way we manage the business. The customers are really first-class, first-rate customers, very like the customers we have in CSAM already. The relationships with the customers have been very long, for a number of years. Very typical of a niche like this.
It fits perfectly into CSAM. High degree of recurring revenue from the customers. In that respect, it strengthens the recurring revenue part of CSAM as well. We agreed to pay $2.75 million for this company, and that corresponds to an EV/sales of just below 1.0. We have settled the transaction already in cash that was done earlier this morning. Everything is done. There are no earn-outs, no bonuses, no nothing. This is it.
Okay, with this transaction, which is the fourth transaction since we IPO'd last year. As you will remember, we did Fertsoft at the end of December, we did Carmenta mid-February, we did MedSciNet in May. We just completed and closed this one. This is the fourth one. We believe that we are well on our way to reaching the NOK 1 billion in sales within 2025.
With this transaction, I think we see that we have the management capacity and we have now the power and the ability and the will to execute on the plan. What we will continue to do is focus on these companies, on these markets, in the niches. We will confirm our strong standing in the Nordics, while at the same time expand our presence through acquisitions in the rest of the world.
We are, again, just continuing to do what we have communicated that we will do, and that is just more of the same. For those of you who haven't subscribed to our newsletter, please do sign in and sign up and subscribe to the newsletter. All right. That was the end of the formal presentations, and now we are ready for any questions that you might have. I see there are some questions already, Sverre, so I'll see what they are. This is from our old friend Eddie, and that is, "Why is R1 RCM divesting the Optima business now?
Obviously, R1 could answer that better, but in my opinion, having known them for years and talked with them also about the transaction for two years, I think it's not a strategic thing for them. Most of their operations are related to management of administrative software, like also economic software for healthcare organizations. They have their very specified strategy, and they have received this Optima company through an acquisition of something else.
In a way, it was in the cards that they have handled it, but it's not part of their strategy. We've had a dialogue about this for some time, and it, in many ways, the analogy would be the acquisition we did in 2017 from Saab in Sweden. The same thing happens there. It is a company that 95% of the business is something else, and we acquired Paratus from Saab.
It fits well with us and did with them. The same thing here for R1. They have more than 90% something else, and this is not the perfect match for them. That is really the thinking that I've heard from a big organization like R1, although R1 will have to, of course, speak for themself.
The employees and the great team at Optima is finally coming home.
Exactly. I think it's a homecoming, and I think we will take care of them, and we don't divest them. It's not in our genes. I'm sure it's going to be a very well-received transaction.
Certainly. Another one from Eddie, and that is about the relevance of the Optima products for other customers. Are Optima's product features something that SOS Alarm has voiced a need for?
Well, we are not able to answer on behalf of SOS Alarm as we are able to answer on behalf of R1. Of course, it is an obvious thing for all of our customers, not only SOS Alarm, that they administer millions of transactions of important acute medical data. The only way management in that type of organization, the only way they can perform the business better is to actually get control over the analytics and understand these data to plan properly and to run the dispatch properly. For most of our customers, this is on their priority list, actually. We see that this is relevant in a broader perspective than one specific customer.
Great. That is really a good preludium to the next question from Javier, which I believe is in Spain. Whenever you acquire a business such as Optima, how are you able to increase margins so dramatically? This is really followed up by the next sentence. Is it mainly by increasing prices or by slashing costs?
Yeah, we have our different way of explaining that answer. If you look at it, if you see our 2015, 2016 recent acquisitions, the same thing happens every time. The main thing it would be that all of those types of software have some strong recurring revenue streams, and customers pay for these software because they're using the software.
As long as that is very predictable and sustainable, the ability we have that the smaller companies do not have is that we have common things that we can do together to simplify and then make a much more efficient business out of it. That would be things that sharing quality management systems, sharing test centers in the Philippines, and simple things like that.
Of course, also all the time in most of our acquisitions, we see that the added things on the customer side is probably the most valuable thing because people need added functionality, and that is the most important thing that has happened that we are able to also sell. That is, as we have told you many times, the 5%-10% growth we have is to existing customers.
That is also meaning that on a long-term basis, 5%-10% on average, sometimes more, sometimes less. What happened is really on the income side, there are huge things going on there as well. Especially if you look at a type of software like this that adds value specifically to a current installation. That is definitely what's the, let's say, the principal thing.
Buy, integrate, and build is also, of course, about saving costs also. In this case, I think more and more will be on the income side and parts will be more efficient things that we can share as a company with many niches.
You have your probably added view to that when it comes to business, Sverre ?
I think the eHealth business does two words, is eHealth and is business, and we just make sure that we focus on both of those. Again, it's really a third thing in addition to prices and cost. There is, as you say, sorry, cross-sales and just making a better business and more focused business out of it. We're very certain that including the Optima software and the team into the public safety domain will make a ton of sense.
All right. Another one from Freddy here, and that is, in which way is the acquisition of Optima similar and different from the previous acquisition of MedSciNet?
That is a very good question. The similarity would be it's always niches with long-term recurring revenues. That is exactly the same. It's also focused on analytics, which both of them do. The difference, though, is that while the MedSciNet transaction gave us the possibility to create a generic data management and, let's say, national register components and add analytics on top, a more generic thing, Optima is more dedicated within an existing niche, in this case, public safety.
That is the big difference. Of course, then again, it's highly focused only on that, and it's also been over years, meaning it also has a very strong viable position specifically in that niche, although the components themselves could have been used also outside. That is something we could explore, of course, later on.
Thank you. Questions come pouring in. That's great. Another one from Javier, and it's in two parts. On customer concentration in Norway, the regions have gone from nine to four. The same thing has happened in Sweden. He continues, how do you think about your customers having more leverage?
Well, I think when it comes to this type of software, you have to divide the market into different types of behavior when it comes to how you handle types of systems. If you look at what we are doing, as long as we stick to these highly specialized solutions, we normally have systems that are there for years or often for decades and staying there. There's very few tenders. It's not like other bigger official tenders when you acquire big systems and change organizations very much. We normally don't do that.
In that sense, whether you have merged regions, if there are five, if they're 19 or if they're one, it really doesn't matter so much. Nothing has really affected CSAM, and the reason is it's really not the political structure or the structure of the organization that defines this. It's the life and death and the importance of the nitty-gritty here that really runs this. That is how our strategy works, really. As long as we stick to that.
Don't try to do something outside, but doing this with specialized solutions inside, the nature of those, in a way, protects us very much from that. The proof of that is with five years with about 1% churn, which is fantastic and negligible really. That shows you really that this is how it is.
Okay. The next one from Emmanuel. "How much room do you have to acquire companies without raising capital?"
That's answer for you, Einar.
That's an answer for me. Well, of course, it all depends on how much we are paying for the companies, and how it is settled. Historically, we have done transactions between EV/sales between one and two, and we have settled in a number of combinations. It can be cash, it can be seller debt , seller credits, it can be in shares. If everything was settled purely in cash, we raised NOK 200 million in a tap issue on a bond early this year, and we just used, as you can see now, a small fraction of this. It will take us at least through this year, probably well into next year. All right. From McQueen, "Congrats on the acquisition." Thank you.
When do you expect margins to be break even, and when do you expect margins in line with the group targets? I guess I can try it on that one. Coming back to the buy, integrate, and build model. CSAM, we typically acquire businesses that have a great potential, where the potential isn't really realized. We try to just unleash the potential.
We have been doing that successfully a number of times over a number of years, we've no reason to believe that this one will be different. Through the buy, integrate, and build model, we have three defined milestones. Something that happens after three months, after 12 months, and 24 months. We see no reason to go any differently on this case.
We will start to improve margins and start to improve the business, and gradually, within the two years, we expect it to be on the average 30%. Following the same recipe. All right. It's one from Emilie Engen. What growth do you expect for Optima going forward? What CapEx is required to ensure this growth?
Yeah, that's a specific question. The answer to the first question is what we look at in our history and our future, would be that we think the market will still grow between 5% and 10%, and that we will grow with the market. That is what Optima has done, and that is what I think Optima is going to do. There are ups and downs. Sometimes you have some bigger installations, of course, but on average, I think that would be the story here as well. The reason is, it is highly specialized, it's a niche, and it's the same almost all over. That's how we think about it. You can talk about CapEx, Einar.
We think we will maintain the same CapEx guiding as we have, approximately 10% of total sales. This company, this business, this software, it's no different from the rest of CSAM. Okay. One from John Olsen. "Do you have any plans to change to Oslo Børs in the near term?"
I guess that's for you as well.
I guess that's for me as well. Right now, I assume you're referring to the main list. Right now, we are very comfortable on Euronext Growth. We've been so lucky to attract high-quality investors. If that changes, and if we see that it's to the benefit of the company and all the stakeholders, we will. Currently, there are no plans. It is evaluated from time to time what stock exchange and what list we should be on. Okay. Here's a question from Oliver. "What has the historical growth been in Optima?"
Yeah, as briefly mentioned, it's about the same as our history here. A bit ups and downs, but on average, the same, between 5% and 10%. I think the reason is, in a way, the market is just like that. Nothing really big happens from one year to another. I think it's going to stay that way, and it has been that way, and that's the simple answer.
Yeah. The same 5%-10% in the rest of CSAM. That is what you should expect. Okay. Another one from Oliver. "Where is Optima's organization based? In what countries, and how many employees does Optima have?"
Yeah, you have the statistics in your head, I guess.
I have the statistics in my head. There are approximately 25 employees in Optima. Most of them are based in Auckland, in New Zealand, and the rest of them, almost all of them, are in Reading, in the U.K. Then we have a couple in the U.S. That is where they are. The company originated in New Zealand, so that is where the development department is. Okay. Another one from McQueen here: When it comes to the long-term plan of NOK 1 billion in revenue per 2025, how will the acquisitions be financed, equity versus bonds?
Feel free to answer that.
Feel free to answer. Thank you, Mr. Flatby. We firmly believe that a company like CSAM should have some debt and some equity. Because of the recurring revenue that is so stable and from public customers, we think it's only fair that we apply some debt to the capital mix. You should expect to have a mix between debt and equity going forward.
Exactly how much, I mean, it's up to all the shareholders as well to decide, and the risk appetite, let's say, debt corresponding to five times EBITA, I wouldn't be uncomfortable with that. Again, for capital efficiency's sake, it will be a mix between debt and equity, but the exact number remains to be seen. Okay. Another one from McQueen here: In general, what is driving the market growth between 5%-10%?
Within the niches, there are simple things that is the broader part of that growth. Because when you have a niche, let's say like maternity, what you do there is working with a lot of details, thousands of fields in databases, as things you have to distribute to national registers, the things that you have to calculate algorithm on, and then to make decisions based on that type of data.
When they work like that, they also develop their processes. That's not only within maternity, but in every type of complex niches, specialized medicine. When they do that, they have to have add-ons. Add-ons could be a very simple thing, like using maternity example, an abortion module, I need that to make sure that everything is registered, we handle that the correct way and to the best for the patient and the baby.
That could be one thing. That would be a module. That would be an add-on, added recurring revenue. It's good for the customer, and it's a small investment, added recurring revenue. For us, it's a predictable good thing that can be delivered to many customers. That would be the broader part, that type of example.
It could be other add-ons, like a digital whiteboard, put it into a maternity ward, and then you have critical data or a chart showing things relevant to what they're doing, which creates much more efficiency than logging on to something, that everybody sees something, discuss something, et cetera. These are the things that are the real add-ons and gives most of the growth.
The other things is, of course, added number of users happens, and we have the automatic inflation protection at the same time, of course, that also sometimes add to this. This is also the reason why our organic growth is a bit predictable because we know often sometimes before it happens also because they are planning within these niches over years, so we can see a transparent line on how this growth is actually going to be.
Great. The next question is about human relations and competence. That's from Tora. He asks, "Will you keep the software development of Optima in New Zealand?"
Absolutely. I would say that what they have done is create a fantastic team, as we see in many of our historic acquisitions as well, focusing specifically on one complex thing, solving that very much, and be able to distribute it over time. Unfortunately, maybe that team has been handled a way that we can do better because they have been part of bigger systems that have other strategies. We have, on the other hand, a strategy to actually develop this as a niche within a niche, and I think definitely we should keep it and get more out of it, and that would be the strong future for us and for our customers as well.
We're focusing more on what we're able to create than where they actually have to be located.
Yes. We've known them for years, we admire them for what they've accomplished, and we are going to build together with them. I'm sure we are going to do that also with a margin of 30% within two years.
Absolutely. Another one from Eddie. As you expand into Europe and the rest of the world, are you seeing increasing interest for CSAM from non-Nordic institutions to become owners? I think I can answer that one, Eddie. Yes, absolutely. I think CSAM is more and more regarded as an international company with strong Nordic roots. We already have strong interest and commitment from European and American investors.
We expect that as we grow outside of the Nordics, we think that will probably continue to attract interest. One more from Amir. You recently stated that the shift towards the cloud is going to be a long process and continuing that could further grow the business.
Yes. There are two things with the cloudification of specialized software, because most of these software types are related to specialized processes that handles life and death or important processes related to, for instance, cancer. If you look at those processes it will always be as you see here in the Nordics, most of these are installations on-premise installations. The reason is they are critical. They have incidents when it comes to moving things outside infrastructures.
That's why I stated it will take a very long time, is that they don't want to take that risk. We don't see any fast movement anywhere when it comes to those inside processes, however, some of the outside processes, like the collaboration with a pregnant lady or a citizen wanting to look at some of their critical data within some specialized area.
There we see, of course, that we're able to, in the zone outside, be able to increase that. It will be increased when it comes to analytics, as we see from, for instance, MedSciNet where the ability, because it is cloud-based, it's easier to boost the growth than it would be with on-premise installations, which have long projects and long installation periods.
I think we see two things for CSAM in the future with the cloudification. One thing is that it will go slowly but gradually come to a situation where we can use our software also in the cloud. Already now we see that the analytics part is an ability we have to deliver already. That is the two different ways we look at it at the moment.
Right. There's two questions here that are almost the same. One is from Eddie and one is from Oliver. Eddie asks, "Optima launched in 1998, and it seems to have great products, but why not more successful than sales of $2.8 million in 2020?" We can combine this question with the one from Oliver asking about historic growth. What has it been in Optima?
Yeah. The reason why things are running as it running is it's optimized, it has the same characteristics that we have in many of our niches. To give an example, why doesn't it go faster? Why don't we have a high organic growth? Well, let's say use an example as Cytodose, our cancer application. They're in north region in Norway. We're looking at that in 2012.
We wanted to acquire that. It takes time to acquire an application. There were discussions in 2013, 2014, 2015, 2016, 2017, et cetera. It took eight years or something. Now last year they had a tender. We are installing this application. You see when the lifespan or the project period normally could be 10 years, something like that.
Let's say other institutions like Stockholm, for instance, now have been planning their tender of acquiring a lot of systems used many years and going to use many years. That is exactly what is happening with Optima as well because the big institutions wanting to do this are slow, even American because you have to change also the way you're working and how you do things.
We still think we focus on our recipe. That would be those customers you have, and you get some new ones but then the potential in the existing customer base when they do acquisitions like we do, that is the real business case here. Of course, we will attract and wanting to look at Optima as a possible place to grow faster. In our planning, we treat it as the same way we would do with any niche.
The good thing with that is it's predictable. You might say we wish it was more than 10% growth. Yes, that is really not what our plan is until this NOK 1 billion in 2025. We will just get hold of these recurring revenues and then build on those.
I guess in comparing to other objects that we have acquired, companies that we acquired, say take MedSciNet for instance, a great company, great people, great technology. They started in 1995, and they reached approximately NOK 15 million in sales last year. Optima started in 1998, reached $2.8 million. That's really if you want to grow organically, that's really how long it takes. You can want something else, you can dream of something else, but this is reality, isn't it?
Yeah. Stop dreaming and start working.
Okay, I'll get on with it. Another one from Emmanuel here. Can you talk about the churn for Optima?
I think that's quickly done.
Same as with the rest of CSAM. Very little. As you said, Sverre, once the product is installed, it's not easy. It's not just you to flip it in and flip it out. Churn negligible, same level as the rest of CSAM.
Yeah. One of the reasons why it is like that is you have to think about it from the customer side. If you have installed a product that really helps you get your business get going much better logistics, higher quality, and then what is really the business case to change that or to remove that? That is why the churn is negligible also here. It's an important software. It's not that much money they pay annually, but they pay annually, and it stays there.
Okay. Another one from Eddie here, and that is about the revenue composition. How are the revenues in Optima distributed between products and geographic regions? We don't usually give detailed breakdowns on those, what we can say is that the Optima's products are distributed in more than 10 countries. That includes Asia, North America, Europe, and the Nordics, they have a similar percentage as two product groups, Predict and Live.
It's not a very high customer concentration. On the contrary, it's nicely distributed. Another one from McQueen here. On net interest-bearing debt versus EBITDA five times, isn't that all the covenants of the bond? The covenant is not really on the bond, it was a condition to the tap issue. For the record, there are no running covenants on the outstanding bond. It's irrelevant. Another one from Eddie here. How is Optima's customer contract structured? Upfront payments or contract lengths? How is there?
It's the same as always. There are combinations of things. You have services delivered while you start. That is a project that is short-term, and then you have recurring revenue streams. Sometimes they are annually, sometimes they are longer. Then again, in CS business, the contracts is really not what gives us the business here. The contracts is more like tools, while the fact here is that as long as you stick to these highly specialized solutions, they will stay there anyway for years. The question is how you manage the contract more than the contract length, really.
Yet another one from Javier. What other market consolidators do you admire? He mentions Addtech , translation software, et cetera.
Yeah, well, to make a local one, we have Visma which is a Nordic company that really showed how you can build an M&A book there that is highly valuable, quite successful. We admire those for what they've done. What I think we have to do is to learn something from both of those and from others, but stick to what we've done, focusing more on these specialized things, which makes us different from them as well.
The last one from Javier. Are these data analytics more prone to cloud disruption?
Yes, it would be more than an operational patient acute situation, for instance. Yes, it will. On the other hand, the same thing happens there when it comes to the ability to possibly change it to something else. Yes, that's possible. It's easier in the cloud, obviously. However, again, when you use all these efforts to put in all those important data into a system, you can configure it for your operations, you start using it.
Again, you're back to the fact that it's really not a business case to change. Had it been huge amount of money to install this software and because the software itself is not the cost. The cost is really the change in the organization, and that's why it's more protected anyway, although cloud is open for more competition, obviously.
Okay, the very last question. Well-timed for us, and again, from Eddie. Is Optima having its own sales force or selling via distributors or integrators?
Yeah, it's a bit of both, but most of that is direct customer, which is good. I think that will be the model we will focus on in the future, and that has been the easiest way of connecting directly to customers and also further develop the product. Almost same there as actually all of our acquisitions we've done, really.
That was the very last question. Thanks for your questions. Thanks for tuning in, and I'll leave it up to you, Sverre, to wrap it up.
Yeah, I think hopefully you think this is a very good transaction for us because this is just exactly what we are working on, creating new niches within our niches. Hopefully your questions were answered properly and that you are as happy as we are with this situation. After that, I would like to thank you for watching, and also stay healthy and have a good summer holiday. Thank you.