Welcome everyone. My name is Rikard Engberg, and I'm an equity research analyst here at Erik Penser Bank. With me, I'm glad to have Mr. Henrik Ekelund, CEO of BTS Group. He's going to present the third quarter of the year. Henrik, the floor is yours.
Thank you, Rikard, and dear shareholders, investors, people listening in. We are very proud to deliver for you another record quarter. If we do not count the extraordinary pandemic year, it's actually the 17th record quarter in a year. We are delivering during Q3 and during the first 9 months a profit improvement of roughly 20% under strong revenue growth and despite heavy currency changes in fixed currencies, so the real profit growth is above 30%. Very happy to be able to report another record quarter, and also very happy to note that it's really the investments and the long-term thinking we did during the pandemic is really paying off now. Let me share a bit more details on the record quarter Q3.
The good news is that the market is hot. The pandemic has created a lot of change, a lot of new strategies among the top clients of the world. The demand for our services is growing. Results are up 19% in Q3 and 20% over nine months. In constant currencies, so taking away the fact that the krona has grown stronger over these compared to 2019, and I should say all these numbers are compared to 2019. It would be very easy to show improvements over 2020, but that's like an ice cream salesman who compares with a rainy summer. We compare with our top year, 2019. We would have grown our result 30%, was it not for the strengthening krona.
We can see also that the margin is growing. We are, you know, using our resources, we are optimizing our pricing, and we have been able to reduce some external costs, and that means the margin is going up. As I think you remember, our goal is about 15%. Four years ago, we were down at 10%, and we're gradually growing towards our goal of 15%. One thing that is important, when you look at our report, you will see that the gross EBITDA is actually about SEK 50 million higher. Now, that SEK 50 million is something I would consider as extraordinary cost saving. It is a loan we were given from the U.S. government during 2020 because we followed some rules and kept all our people intact in the company.
That loan given in 2020 has been forgiven during the third quarter. According to IFRS, that needs to be included in the results. Those $50 million I take out. All the profit improvement, all the growth improvements that I'm describing is excluding these extra $50 million that has landed in our equity during the quarter. Now, I want to talk a bit about Netmind. It's a company we acquired in September. Very, very interesting company. It's based in Barcelona and Madrid, and it's specialized in the area of digital transformation. When big companies want to go digital, they work with Netmind. It's a EUR 6.5 million business with about 50 employees.
It has grown very nicely over the four years, and that's not surprising because digital transformation is a growing need among big companies of the world. They have a fantastic IP, a long catalog of training connected to digital and also consulting services. The idea really here is to take this solid IP and expertise to our customer base around the world where there is a lot of demand. If we succeed with this, it's really a significant growth opportunity for BTS. I want to talk a bit about how the investments we made during 2020 has moved us forward. We see that our win rate is increasing quite a bit. The percentage of bids we give in competitive bids, that percentage is growing.
Our clients are choosing BTS more often than they did two or three years ago. One reason is that you know we were very quickly to go to virtual and digital just when the pandemic hit. We have you know we're ahead of competition. Also our underlying technology, which is based on simulations, really fit well for doing virtual and digital. Secondly, we kept all our employees, and we even hired new employees last year. Obviously going into a situation where the market is coming back, we are very strong. We also increased our R&D budget in 2020, so we have a lot of innovations to bring to market.
We've really done the right things, and we are very popular among our clients right now. We are also investing more and more in digital solutions. This is an exciting development we see in the market that users want to be able to work on their own and in front of their laptop, in front of their mobile phone. We are putting a lot of the training content we have in that format. We're also building a platform that makes it very easy to access it and use it, very user-friendly. We are investing in the post-training phase to create years of follow-up and performance support. This is really something that the market needs, and it's a huge opportunity for us to generate more license revenue.
Here you can see that, by quarter, we are growing profit year after year, obviously with a big exception in 2020 when the market took a big hit and we continued to carry our costs and our investments. Now looking a little bit more detailed at the first nine months, you can see that we have a revenue growth of about 13%. The real underlying operational revenue growth is roughly 18%, because back in 2019, and we are comparing with 2019, we had all the costs for travel and lodging and printing and so on that we don't have today. Adding those 5% means that the underlying operations is actually grown 18% currency adjusted. You can see then the EBITDA 20%.
Then looking at the regions, you can see there's a strong improvement in North America and a strong improvement in other markets, growth, profit margins. Europe is a bit of an exception, and I'll explain that when I come to the third quarter because it's really in the third quarter that Europe take a little bit of a hit. Now, Q3 revenue, you can see we are growing 15%. Again, the real number is roughly 20%, adjusting for the new virtual reality we are living in. EBITDA is growing 19%. In Q3, you can see that the strong development in North America and in other markets is really continuing. However, in Europe, it's a very different picture, and let me explain that to you.
We are overall doing well in Europe, not as well as the other regions, but we have had from Q3 a big hit in Germany. Revenues have gone down significantly, and it's for the simple reason that we or rather not lost, but two big huge client projects ended during Q2. That's why we're seeing in Q3 how this is hitting Europe and we can see the same development coming into Q4. However, from 2022, we expect BTS Germany to stabilize and, you know, even grow during the year as well. If you look at our offering, you can see we have seven practices. It's a great breadth of offering and it really helps us to compete in the marketplace to have this breadth of offering.
It's really, as I've said, you know, a really strong position. When we come to clients, we hear very positive responses, and when we get the results from our bids, we win more and more thanks to this strong offering. Again, you know, when looking at why own a BTS share, I think that's a very relevant question. Seeing how the share has gone up hugely the last five years, the last three years, the last year. The question is obviously should you sell? Should you keep your share? That is obviously a decision by, you know, by every investor.
The things speaking for us going forward that we will continue to grow revenue and profits as we have 20 years on the stock market. We've grown around 15%, 14% revenue per year and profits faster. Why will we continue to do that? Why do I believe we will continue to deliver strong year after strong year? First of all, we are in a huge market. We have offices all around the world. We're not restricted to Nordic or Northern Europe. We are accessing the world market, and we have around 1% global market share. The market is fragmented, many players, which means that it's easier to take market share. That market opportunity, I think is a reason why people hold on to our stock.
Secondly, this track record, year after year, we deliver revenue growth and profit growth. Obviously our financial goals, which are actually a bit more aggressive than how we have performed. As I mentioned, we've taken the margin from around 10% to 14%. Our goal has been 15%, so we're working towards that. Our revenue growth has been 14%, the last 20 years on average. In 2021, it's higher compared to 2019, and we aim to be at 20%. I also want to talk about our client base. We have traditionally been very focused on the top 2,000 largest companies in the world, but we've seen a huge growth in a new segment. Today we have about 40 tech unicorns as clients.
These companies are coming to us more and more. We seem to have an offering that these people like. We're not the cheapest in town, but we deliver results and we are fast. As you can see, many exciting unicorns we're working for. These are about half of them and we see this as a very interesting growth segment for us going forward. We're basically changing from having worked for the top 2,000 to working for the top 2,000 combined with the tech unicorns of the world. You know, when the pandemic hit, we said to ourselves, "We want to act fast, but we want to think long term." The opposite obviously is not good. You act slowly and you think short term.
We acted quickly, but we thought long term, and we said, "The key is to go through the pandemic and come out stronger, longer, in the longer term." We have. We have compared to two when before the pandemic started. We have a much stronger customer base, we have a stronger organization, a larger organization, and we are showing, you know, increasing revenues because of this. We're also happy to report that we are raising the 2021 outlook. In August when we reported Q2, we said that we will obviously beat 2020 by a long shot, but also we will be better than 2019, and I'm super happy to report that given how we performed the first nine months and what we see going forward, we think we can do better than that.
We will do significantly better than 2019 this year. That is an upgrade of the outlook for the year. Very, very happy to report that. This is a sheet I think every shareholder who's been with us for a long time or short time can see that it's been a good journey. Clearly better than the stock market in general. I mean, it looks like everything happened at the last five years, but it's not true. If you would have a different scale and start, take the diagram five years earlier, you would see that it was a good investment also in the early years.
Looking then at our top 10 shareholders, we're very, very happy that we have long-term institutions who stay with us and grow as shareholder, and also, for the roughly 3,000 smaller shareholders we have in our company. With that, I conclude the presentation, and look forward to questions.
Thank you, Henrik. I will start the Q&A session before we let in the telephone line. My first question is, can you please elaborate a bit about the expansion in the EBITDA margin?
Yeah
What's the reasons?
We mentioned three reasons, and one is, you know, optimizing price, so the shift from physical delivery to virtual. We very clearly analyzed how much time the different type of deliveries takes and adjusted pricing, optimized pricing accordingly. That's been one. The second one has been, you know, we use our resources more effectively, so we have had an initiative, operational initiative to allocate resources in a more efficient way. Thirdly, there's been some cost savings because we travel less, and there's less external expenses.
Okay, fine. My next question is extraordinary item on your income statement?
Yeah
This quarter, will that affect your cash flow and dividend capacity?
I mean, the money already sits with us, it's basically converted from loan to equity and because IFRS they have not really thought about the situation when something happens the year after. You know, the rules says it has to be taken over the income statement. That's not a good way to describe what has happened, I believe. It's not impacting our cash, the cash we have. In terms of the dividend, you know, I'm not a decision maker. That is the board.
Okay, fine. My next question is, can you elaborate a bit about the mix between physical delivery and virtual and digital right now? Do you see a trend to, back towards physical delivery? Looking at the future, how do you think the mix will be?
Yeah, we have a few physical deliveries. It's coming back and, interestingly, when we have those deliveries and people actually meet, they're so happy. They are so happy to meet other human beings again and not have to sit in front of the laptop with endless Zoom sessions. Very, you know, many people have forgotten how great it is to be in a live session and come back. It's still a very small portion, but we see that participants love it. Having said that, virtual has many advantages. Less travel, which saves costs and obviously saves emissions. It saves time. We believe that over half in the future will be virtual. But still a significant portion will be physical.
Okay, cool. A follow-up question on that. Do you believe that since you increase the virtual delivery, will you be able to take a larger share of wallet of those customers since they don't have to do accommodation and travel?
We're trying to do that. Sometimes there's different budget pockets within the clients. But yes. I mean, they should have more money to invest in their people because they don't have to pay for the travel.
Okay. Good. Do we have any questions from the phone?
Thank you. If you wish to ask a question on the phone line, press zero one on your telephone keypad. There'll be a brief pause while we register any questions. There are no questions currently on the phone line, so I'll hand back over.
Cool. I will finish up with one question then, and that's a bit about Netmind. Can you please give us some more financial details about the firm and how many employees there are, et cetera?
Yeah. Yeah. Revenue last year EUR 6.5 million. Employees, somewhere between 50 and 60, mostly in Madrid and Barcelona, some in the U.S. In terms of margin, they have a decent margin. We think that it can be higher. The big opportunity here is they have a service that we don't have. They have a lot of training and a lot of consulting services helping clients to transform to digital and agile. In the past, when clients have come to us and asked for this, we've had to say, "No, we don't have that expertise." Today, we can serve our big clients in the U.S. and in Europe and in most of the world with these services.
What we're doing right now is taking this to selected clients and it is indeed a significant growth opportunity that we're executing on.
Okay. Henrik, thank you for taking the time to come here to Erik Penser Bank, and thank you everyone for listening.
Thank you so much, Rikard. Again, shareholders, thank you for staying with us during the pandemic, and I hope you feel pleased with what we have delivered so far in this year. I'm very excited about finishing this year strongly and very excited about the next couple of years, really leveraging the big opportunities we have in the marketplace. Thank you.