Netcompany Group A/S Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Yiwei Zhou - SEB Bank - Analyst : Hi, Andre and Thomas. Congrats to the resource and thank you for taking my question. I have three and I do want a time. Firstly, one looking at your UK and Norwegian business and now you are right sizing this divisions ahead of delivering a large contracts. Are you confident to attract enough talent at a later stage? And when and, and do you expect to start hiring again?

Question: Yiwei Zhou - SEB Bank - Analyst : And just to be, and your expectation for start the large contract and the contract in Norway and also the contract in the UK is still unchanged in terms.

Question: Yiwei Zhou - SEB Bank - Analyst : Okay, thanks. And my next question is on your FT growth here in the quarter. I noticed that freelancers increased by 21% year over year. And where are they use the, is it a change of business model or should we understand it's just temporarily. And if it is possible, could you also quantify the margin impact?

Question: Yiwei Zhou - SEB Bank - Analyst : Great, very clear and they are only used for the European Commission projects?

Question: Yiwei Zhou - SEB Bank - Analyst : Great, thanks. And my last question is on the Danish operation, and I can see that you steer higher behind the curve here in Q3. And for how long time can you still do that?

Question: Yiwei Zhou - SEB Bank - Analyst : Okay, thank you. I'll jump back to the queue.

Question: George webb - Morgan stanley - Analyst : Yeah. Hi, Andre and Thomas. I have got a few questions, please. Firstly, maybe one of you and I'm sure you track the broader sector. Many of your peers in different companies have been putting out profit warnings over recent weeks. Some of them have been seeing demand conditions down ticking again. So just as you look forward, looks like you've got good revenue, visibility for this year, but curious how comfortable you are that that company can remain well insulated against that broader backdrop? Second one would be for you Thomas, on the license expectations. You have talked in the outlook statement about still expecting that at least point of revenue from licenses this year implies a pretty strong Q4. How confident are you that those will close in Q4 versus slip into next year? Can you add any color on how many deals that license revenue would be split between? And then just lastly, just on the Norway employee churn that ticked up quite a bit in the, in the last quarter. So curious what's been driving that? Thank you.

Question: George webb - Morgan stanley - Analyst : That's great. Thanks, both.

Question: Almer Claus - Nordea Markets - Analyst : Thank you so much. And also a few questions from my side and I will also ask a bit about the FTE development has already asked, both UK and Norway so few FTS in areas in Q3 versus Q2 and I know the ramp up of both markets have been slower from these two larger contracts you have won. But does it also reflect that order intake from other parts of the market is on a slower pace. How should we actually think about, you know, fewer people to be invoiced going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 10:00AM, NETCG.CO - Q3 2024 Netcompany Group A/S Earnings Call

Question: Almer Claus - Nordea Markets - Analyst : Sure. Can you then provide a bit of color to how much more can you grow your business based on the current number of fts?

Question: Almer Claus - Nordea Markets - Analyst : [Inaudible] try at least?

Question: Almer Claus - Nordea Markets - Analyst : So, my second question goes to the software licenses, and I know what you just replied on four questions. But in the past calls, you have given some, you know, indication for how much software licenses could be as a percentage of total revenue around 1%. Is that still the best guess for this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 10:00AM, NETCG.CO - Q3 2024 Netcompany Group A/S Earnings Call

Question: Almer Claus - Nordea Markets - Analyst : Fair enough. That was all from my side. Thank you so much.

Question: Daniel Djurberg - Handelsbanken - Analyst : Thank you, operator and good morning. I was wondering those questions asked but I, was also disconnected for a while. But on Norway, the attrition rate was quite high, I believe at 1%. Can you comment for this? And if it was temporarily or some reason that it was about 30%? Thank you.

Question: Daniel Djurberg - Handelsbanken - Analyst : Perfect. Thank you. And may I also ask you on the progress that you have in Sweden, the tax authorities as a sole supplier in Gothenburg? Have you seen any more recent wins in Sweden or if you can give an update on this project?

Question: Daniel Djurberg - Handelsbanken - Analyst : Super. And finally, if I may on the RRF projects in Greece, can you give just a comment on the recent status on the fundings if it's business as usual or have to think on the 2026 Funding Stoppers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 10:00AM, NETCG.CO - Q3 2024 Netcompany Group A/S Earnings Call

Question: Daniel Djurberg - Handelsbanken - Analyst : Perfect. Thank you. That's all for me.

Question: Aditya Buddhavarapu - BofA Global Research - Analyst : Hey Andre and Thomas. Thanks for taking my questions. Both the questions to the free cash flow. So firstly, on the working capital, I think you mentioned some impact on the work in progress because of higher fixed fee projects. Could you maybe get some color on that? And if you could also talk about the delays by some of the customers you have seen in the Greece public sector?

Question: Aditya Buddhavarapu - BofA Global Research - Analyst : Understood, and I guess in the context of the share buyback that you're doing for this year, I guess the overall free cash flow yesterday would need to see a significant improvement in Q4. So is there anything which would particularly drive that implement in Q4? I don't know if there's maybe some phasing of these payments or anything else which should help.

Question: Aditya Buddhavarapu - BofA Global Research - Analyst : And do you have a rough estimate of what the swing there could be in terms of you said more payments on [Inaudible] projects in Q4 last year. But the bank sure of that Swing [Inaudible]

Question: Aditya Buddhavarapu - BofA Global Research - Analyst : Okay, no worries. And then just one final one as you move to this platform approach over the next few years based on your strategy, how does that maybe change the has a free cash flow generation? And does that make it more predictable going forward?

Question: Aditya Buddhavarapu - BofA Global Research - Analyst : Okay. Got it. And maybe one follow up, actually on the UK, your tone on the UK, even though you are saying you have seen some delays. I think it is still relatively better than what some of your other peers are saying in terms of seeing much more significant delays in projects. So, is that because of you are exposed in the public sector or anything specific to that company?

Question: Aditya Buddhavarapu - BofA Global Research - Analyst : All right, understood. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 10:00AM, NETCG.CO - Q3 2024 Netcompany Group A/S Earnings Call