NNIT A/S (NNIT) Earnings Call Transcript & Summary

The clock is hitting the hour, so it's time to kick off our Capital Market Day. So a warm welcome to everybody. We have been very much looking forward to this day and great to see you all here at our corporate head office. Actually, this is our very first Capital Market Day. So we, as a management team, are a little bit extra excited. Whether you're following this meeting online or with us here at the corporate headquarter, we really -- we would do our utmost to make sure that you have a very productive and informative day. So the timing of this meeting is not coincidental. Last year, we made some very strategic choices at the company. And at now it's time to tell you more about how we release the full potential of the new NNIT. Last year, we divested our infrastructure operation to Agilitas, which really marked a milestone in the development of NNIT. With me today, I'm very pleased to have my management team present, the full group management team present and I will shortly introduce them, those who are in the room, but also the people online. Firstly, we have Carsten Ringius, our CFO, that's some of you, quite a few of you probably already have met. Also here, we have Kasper Andersen, running our Danish operation, Ricco Larsen, running our Life Sciences operation, and also, we have Signe Nelsson, where are you Signe, HR Vice President, Senior Vice President; and Lars Petersen, running Communication, Marketing and Commercial Excellence. And then not the least online, we have calling in from an Asian headquarter in Tianjin also Beijing, Jason Xing and not the least, Mark Ohrvall, who has got up 3:00 in the morning, Indiana time from the U.S. You're looking fresh, Mark. So warm welcome to see you here. All right. Before I get started, I'd just let remind you about the kind of really packed agenda that we have. I will kick off the meeting, sharing some aspiration and strategy for our 2026 ambitions. Then I will be joined on stage by my [indiscernible] leads who will go into different characteristics of the regional dimension of our strategy. We will love to answer all your questions along the way, but we have structured it in such a way that we have dedicated 3 separate sessions with Q&As, where you're welcome to ask whatever questions that you might have, and that goes for those of you who are here in the room in Copenhagen. Also to give you a flavor of how our solution that we develop for our clients are used in real life. We're going to present 2 client cases where you will really see how digital transformation come to life when we are teaming up with our clients. Of course, we set time for lunch that we will have in mid-day and also after the session ends at 2:15, we have a network session for those of you who want to join after the formal program end. We really hope that you will enjoy the day here with us. When we started our strategy work, we as a team gathered and fixed our minds and heads on 2026 and what kind of company we want to become at that time. And also from now into 2026, all the activities we will do to make sure we fulfill those aspirations. We are going to be an industry-leading employer and a leading international consulting company focusing on Life Science international and the Danish public sector. With industry-leading employer, we mean that we are and we're going to be even more in the future a people company with our ability to be a leading attractive employer is, of course, of key importance. And we do believe that we are in a good place because we believe truly that the people that work for us and all of those we want to attract in the future prefer to work for a focused company than a company that's trying to be everything for everybody. Also, we have set a very ambitious people agenda. We have a rigid plan to become -- how to become the employer of choice. That's a corporate agenda, but where we allow for regional differences because we know the world is not looking the same all over. We are going to be in international Life Sciences consulting company, having a product portfolio or a service portfolio addressing the entire Life Science value chain, more to come on that. We are also to be considered a leading player in the Danish public sector based on that we've been in that sector for more than 20 years with leading applications expertise. And also, we have developed further our commercial muscle and not the least, we want to be perceived as easy to do business with. But before I dive further into our strategy and our aspiration, I would like to share a video where we depict a little bit how we see this journey paving out in the future. I hope you enjoy it. [Presentation] I hope you enjoyed the video. It gave you a little bit of an overview of where we're heading as a company. And I can just tell you, it's a journey that we at NNIT, this management team and all the rest of the people at NNIT are extremely excited about. And now I'm going to start telling you a little bit more what that means. Our business approach is founded on an aspiration where we will bring digital transformation to life in industries where quality of life is at play. You heard that in the video, and that's something that resembles very well among all the NNIT employees. It is also industries which are characterized by high regulatory demand and also high business complexity. We have made some important segmental choices and in making those segmental important choices, we also chose an industry where we see there's a great growth potential because we see in these 2 specific industries, our clients still have ample room to use digital transformation to improve the way they are operating. To start with, we have Life Science, which is the cradle of this company. And that's where we all came from. And from the very beginning where we were in the cradle, we have been developing our company through both organic growth but also through a number of acquisitions. That has led to a situation now where we are covering the full Life Science value chain, already from when the clients are developing their project in the R&D phase, going into the preclinical and clinical test phase, going into actually producing their drugs, to manufacturing of the drugs and also the last phase, which is actually selling the drugs. Here, we are covering that value chain. And also, as I said, this is an industry characterized by a lot of regulations and security concerns, which means that quality and compliance is an extremely important part of this business. And here, we have an ample variety of services addressing their needs. Also, you hear a lot about data and the need of data and to work with data to extract values and of course, that's a given in this industry that is more important than ever and not to leave the accuracy of data. Therefore, we have a very good position portfolio of services and advisory things to address those challenges. We work both with high-end advisory consulting, but we also have package offerings which add even more value to our clients, what we talk about as repeatable solution. And the good news of that, that it provides more value to the clients, and it also provides more value to NNIT as a company. The first -- and also, I'd say, the first sector we moved into when we started to look beyond Life Science was public sector. It is not something we started with today when we launched the strategy. It actually started a long time ago that, that's where the first sector where we actually started to take the step. And in that sector, it's a sector where we see a lot of growth. I know there's a lot of Danish national, not the least in this room, I guess, also online that are aware that Denmark is a very digitalized society if you compare with other countries. That does not mean that Denmark is where we need to be in the future. So there is a big room for improvement actually to exchange old system and enhance the digital experience of all the citizens of Denmark. So there is a big need and big position for us or situation for us to actually grow that portfolio. And how to do that, we have the competence group that can build a customized application for the clients that -- and we have won a number of really important wins in last couple of years in that sector. And it also is a sector where we see a lot of potential, a lot of new opportunities coming up. But the Danish public and private is, of course, something more than just the public sector. We also work with selective private clients and of course, 1/3 of that business is our group company SCALES, which works uniquely with ERP solutions but we also work with a broader -- the whole broad breadth of the Microsoft portfolio but also with SAP, DevOps, security and advisory, which we address also to the Life Sciences client but also to some degrees, to clients outside the public sector. But -- and this is important, we have made a strategic bet that is it in the public sector where we will build and further build, I would say, we're already there, but we can further build our industry knowledge, the knowledge about the industry domain of the public sector. So we have in both of these 2 blocks a very good position today. It's not that we start financing the scratch, but there's ample room to grow this in the future. Then we have -- and this is something that is new when we launched the strategy that we reorganized ourselves, so we are now to execute this strategy in the regional context. We don't believe in complex matrixes. We believe in an organizational setup with clear mandates and a clear regional autonomy while we, at the same time, operate as a global company. That's why we have put our organization in place based on Denmark, Europe, U.S. and Asia. And these people, they know their markets the best. We do not intend to have a micromanagement here from the corporate head office in Copenhagen, but actually delegate as much autonomy as possible to the regional market. And also from an overhead perspective, actually, to build a slim corporate overhead and actually have most of the people working in the different regions. We believe this is the best setup to operate an international consulting company. On June 1, we launched our new organization and our new international management team, but it's an international management team that is one family working on both a global level but also on the regional level. To make this work and to have the secret source coming to life, we, of course, need some global function that enable us to work as a global company. That is as important as a regional dimension. We don't have a big organization, but we have global enabling units, that's what we call them, that actually oils the organization so we can operate as a global company whenever that is needed, whatever that is required by our clients. For example, when we develop the package solution that I talked about before, where we provide even more value to our clients and also to NNIT, we need to have a structure in place which we call Global Solution Development to make sure we make the right investment on the global scale that is something we take and coordinate on the global level. We also have our global partnerships, which is an important part of the way we operate because most of the things we do is based, of course, on partner technology, which we package. And when you go out to this global partner company, we want to leverage the full scale of -- the full power of NNIT when we interact with these global partners to make sure we can really reap the best of benefits and take those benefits and provide to our clients. Also, we have a couple of handfuls of clients which are truly global, where we are delivering to them on the global level. Then we have some global company, which we deliver in only one of the geographies which we will try to transform into global account, but the starting point is that we have a number of really big pharma companies that operates and are our clients across our regions. And here, of course, we want to have a global account management in place to be able to make sure we serve our client in the best possible way. And of course, also global delivery is another important one that we use our global delivery capabilities which is in Manila and in Czech Republic to deliver through our clients because to stay competitive, you also need to have a global delivery muscle. To have happy clients is, of course, the right to exist for all companies, and that includes also NNIT. Nothing works without happy customers. And what our unique position in the market is based on a number of big important principles. Of course, we had the industry mastery that we have, what I call, 2-legged people, people who understand the clients' industries but also have a knowledge of technology. We have a business-first approach. What we mean by that is we don't think all clients fits -- all solution fits all clients. All clients are unique. You need to tailor the solution to the specific needs of each client. That's why we go to the clients with our advisory consultant to listen to our clients to understand their environment and thereafter, pick from the array of different solutions, which one suits each specific client the best. We're also a company, and that's what I say I've said a lot. We're not talking internally and also to our clients. If you peel the onion of NNIT into its very center, you feel an obsession for quality and that we want to create solution that works. And here, our history comes to play. We started as a company that not -- was not just a project or consulting company, we were also taking responsibility for the solution we created in a continued state what people call application management and also in the old days infrastructure management, meaning that the solution really needs to work also on a daily basis. And the knowledge of that is deeply ingrained in all our people. So when we create a solution, we always keep an eye that this solution will also work in the future. So to have that mindset and also an obsession for quality is something that characterizes NNIT of today, that characterized NNIT of the past and will characterize NNIT in the future. We also talk about the seamless customer experience. And what we mean by that is that usually behind the curtain, we combine different kind of technological setup, but when the client consume them, they should have a seamless user experience, and that's also something that's ingrained. They're not interested in all the technologies that make things work. They just want it to work. And to have that mindset about the seamlessness of the user experience is something that is extremely important for us at NNIT. If we look about towards 2026, and now I'm talking on top of the strategic choices that I have elaborated on, we have decided on, there's a number of things that we need to make sure happens in order for us to fulfill our aspirations. And that is we want to be a growing company. If you have a company that grows, you come into the happy wheels and that creates a lot of opportunity if you compare with the other options, which is not where we will go. So to be a growing company is extremely important for us and our people. That's why, of course, it was really nice to see the start we had now the first quarter, but I will come back to that. Once again, we talk about our 2-legged people and to build both domain expertise within Life Science internationally and public sector in Denmark and combine that with the tech competencies. In order to achieve the margin that we are inspiring to get, you cannot just send bodies to the market. There is an end how much gross margin you can squeeze off if you sell a person just on a T&M market. You need also to have a growing proportion of package service of repeatable offering, which actually have the perfect combination of a happy client and a happy shareholder that we will do. We are also the new NNIT, a truly international company. Today, 60% of our business is outside Denmark and likely that proportion will grow versus the future because we see a lot of growth in an international operation, while, of course, as I said initially, there's also ample room to grow also the Danish part of our business. I would say we have a good structure for M&A in this company. We have been far more successful in welcoming new companies to the group than I would say is the average in the industry. And we intend to continue that. We've said that for this year, meaning '23, we are going to focus to get our house in order to get us in place to continue that growth journey also for 2024. So I can say that already during the fourth quarter now, we are increasing our activities to be able to continue that growth journey in '23. And as Carsten will come back to, also thanks to the divestment of our infrastructure operation, we are now much better positioned also financially to continue that journey. Let's now have a look on how we, from a group perspective, are performing financially. And maybe for you, at least, more importantly, take a little bit look into the future. We released our H1 figures, Q2 figures in August, which we were pleased to see -- where we were pleased to see a 15.6% revenue growth and a margin of 5.4% that led us to have the pleasure, I would say, to go to the market and do a positive profit warning where we upgraded our outlook for the remaining of the year, to revenue growth hovering around 15% versus the previous 10% and a margin that we see is landing around 6% versus the previously announced 5%. When we look towards the end of the strategy horizon, which I said earlier, when we look at 2026, we see a CAGR organic revenue growth of 10% and an operating margin on an average for this period between 10% and 13%. Listening to the coming regional presentation, I just like to remind you all that we are not and we will not guide on regional level, we will do that on corporate level. But one aspect of the new NNIT, and this is important, is that we want to build a culture, both internally primarily, where we really deliver upon our also financial promises and of course, that also goes to the external market. But that's something that -- it's more a cultural mindset where we want to make sure that when people are making a plan, putting a number on paper, they are to deliver on that number. We are to deliver on that number. So one dimension of what I have said so far, and not the least, but the rest of the people will present today is actually to give you comfort in the journey that we will make from where we are today versus the end of the strategy period. And Carsten, he will come back with some financial numbers later on in the presentation to satisfy all your needs you have for more information on our numbers. But I actually pause and leave the room for some questions. So this is the first Q&A session.

We have a microphone. Sorry, yes, we have a microphone we will pass around so that not the least everybody online, we'll hear the questions and also, of course, the answers.

I am Wei from SEB. Just on your revenue growth guidance, 10%, and I mean, your ambitions to outgrow the market, but the market is actually already growing like 12% to 13%. And your partner, Veeva also expects mid-teen market growth, revenue growth for the Life Sciences. And your Nordic peers are also growing, I mean, more than 10%, 12%, 13%, some even in mid-teen. How should we understand your guidance? Because it doesn't look that ambitious.

Okay. When we are -- when we go through the regional presentation, we are going to depict the market growth, not according to ourselves, according to external market analysts and if you take the Life Sciences piece, you're going to see that in 3 different flavors, Europe, Asia and U.S. And actually, our projection is not a double-digit growth in Life Sciences on the global level. It's less. So with the guidance we have set out on the global level, we are actually outperforming the market. So in our guidance, and it's also an average number. So one year, you might be a bit north of the numbers, some year potentially south. But on average, you're going to reach that number. So we are -- and of course, you can debate it. Our conviction is that with this forecast for '26, we intend to outgrow the market.

Poul Jessen, Danske Bank. About the margin in your guidance, you say yearly average group is that an average for the full period, aggregate over the 3 years, meaning that it could be higher at the end as we assume that you take out cost and get more scale?

It's an average growth. So I mean if you compare -- I don't -- not meant. I mean, on the average, we are growing the margin with 10% to 13%.

If I may supplement. Is average over the period? So one example could be 10%, 11% and 14%. For example it could be 9%, 10% and 11%. Just to give some examples of how we can reach this average.

Okay. It's just to be certain that we assume that it can be growing over the period. Then a question about the value chain in Life Sciences. You say you have a products for the full value chain. I assume that within that value chain, you must have lots of empty spaces.

No, I don't want to say we have empty spaces, but of course, you can broaden each of those phases. But we do have a strong position in all the different components, but -- and this is important, on the regional level, it looks different. So in all -- in some of the regions, there might be some of these steps if you use that word, where you quite significantly can strengthen your market presence. We have the solution on the global level. But in some geographies, you might strengthen your people, the number of people you have in some specific areas. So the regional dimension is there, you have differences. But on the global level, we have the full capabilities. And also -- and that's very important also, we are utilizing those capabilities to grow across our regions. If I give you an example, we have, in Europe, a very good position within production IT. We also now see a quite big demand in the U.S. where companies are investing in modernizing their production facilities. So therefore, we are now growing our manufacturing IT or production IT capabilities in the U.S. And there, the people like Ricco are heavily supporting Mark to make that happen.

Final question. You have the domain focus and then you mentioned Life Science, and you mentioned Danish public sector. Where should we see SCALES and Microsoft solutions and that kind?

That's a very good question, Poul. I mean we have said for Life Science and public sector, we're going to have people really have a very deep understanding of the public sector because that's a different kind of sport to sell to those kind of sectors. Take SCALES who sells ERP solution, which I happen to know quite well, they are selling to all sectors because even -- to sell ERP solutions, they are, say, agile enough to sell their solution without really investing a lot of industry expertise, they can sell ERP system to a financial institution. They can sell it to a public entity, they can sell it to a retailer without having to invest in an industry-specific solution. So within Microsoft, we are investing in capabilities from a technological perspective, but we do not invest in building a specific offering for the retail industry. So that's why they are a delta. So in Life Science and in public, we are taking active investment in recruiting people who are really building the acumen to understand the business logic of those 2 sectors. That's a difference.

I mean I'll be in the room. I won't leave. So it's [indiscernible] that we speed up agenda. I'm sure we're going to use the time for a lot of questions along the way. So propose we continue and then we can pick up along the way. So with that, I'm very happy to introduce the next speaker on stage, Ricco Larsen, who is heading up our European Life Science operation.

Thank you, Par. Thank you for, hopefully, an equal interest in understanding the dynamics of Life Sciences as we share. As Par said, then I'm Ricco Larsen, and I've had the privilege of being within an IT for approaching 24 years now. So I've been through a number of transformations of our company. But I have to say, despite the long tenure and I may be more than ever excited about our new beginning, not least because we're returning to our core of international Life Sciences as one of the most important pillars of the new NNIT. I am today also accountable for our European business, including the Life Science companies and customers that we serve in Denmark and I'm supported by a diverse and very capable and very senior leadership team throughout Europe, who takes care of and manage the different domain verticals that we support in Europe, that being within R&D, predominantly within the clinical and the regulatory affairs space, within manufacturing and supply chain, within quality and compliance and not least in support of the ever ongoing data and digital agenda among our Life Sciences customers. And then I'm also heading a number of client engagement teams around our bigger global accounts, as Par mentioned, which the predominant part of them have headquarters in Europe. I will deep dive into Europe, share some more details on how we see the market developing and where we place our bets. But I'll also share some perspectives across our regions when it comes to Life Sciences. And the trends and the dynamics of that industry and, of course, the sweet spot for NNIT within. And then Mark and Jason will share similar perspectives on our U.S. region and our Asian region. And finally, Carsten will deep dive into our leading position in Denmark, which constitute the other big pillar of our strategy. In Europe, we are approximately 400 colleagues underground. We also benefit from our global delivery centers out of the Czech Republic and not least the Philippines to make sure that we are able to scale according to our customers' needs. We have 400 people on the ground in Europe because Europe is a quite diverse region, multiple nations, multiple languages, multiple regulatory requirements and not least cultures. So we have decided to have people in close vicinity of our customers on the ground to truly become the trusted adviser of our customers. As I said before, diving into the global life science dynamics, then I think it's worthwhile just putting a few numbers or a few comments on our numbers. It's no secret that it has been in Europe and in Denmark, where we have had the biggest mix of also our infrastructure business into our engagement with our customers. So we have had our hands full, I'd say, in parts of this year and not least the second half of last year in disentangling that. I do believe that's behind us. And even though we have experienced some cautiousness by our customers going into this year due to the global economic turmoil, then we do see activities picking up and I do foresee that we will be returning to a growth journey in Life Sciences Europe and not least also continue the current positive momentum in picking up on profits. But before deep diving more into Europe, here's a few perspectives on how we see Global Life Sciences currently being impacted by some of the key trends that we see out there. I think it's fair to say that Life Sciences is always carefully looking towards whenever their patents runs out. And it's also with unprecedented speed that we see fewer and fewer blockbuster drugs. We've successfully -- maybe it's a bit bold to say we, but the industry has successfully been able to cure or at least impact the majority of the bigger diseases out there, cancer may be the only one excluded. And that also means that our customers are increasingly moving into smaller disease areas, rare diseases and not least towards eventually the vision of being able to provide personalized treatments for individual needs of patients. That's a big change because in a pretty conservative industry, it is a challenge to have that kind of agility and flexibility present into your production, not least, but also into your supply chain and release. And that means it requires a high level of digitalization to be able to match that need for flexibility and agility. We also see increased regulatory scrutiny, impacting the industry. That has always been there but it is definitely picking up, not least by means of digitalization. We also see, especially the medical device piece of Life Sciences being increasingly impacted by increased regulatory requirements. Not least as medical devices are converging with software and new technology as a means to better ensure treatments and administration of treatments for patients. That's a big change because that also means we have new players to the party in the industry by means of software providers, some of the platform providers who do not necessarily come with the same insights into the regulatory requirements of the industry. Hence, again, calling for partners like NNIT who are able to translate between the business dimensions as well as the regulatory requirements and, of course, the possibilities of digital transformation. We are supported by new technology advances. The industry has, for years, been pushing for consolidating, liberating data across different business entities and data islands because the power is, for sure, in the data also within Life Sciences. But that also means that some of our customers are literally drowning in data at the moment, posing a huge challenge in terms of picking the golden nuggets among the vast amounts of data being able to find new possibilities of current molecules, drugs, treatments into new treatment forms but also to cater for the ongoing regulatory requirements when it comes to side effects or adverse effects. And AI, data enablement, robotics are ways of supporting that piece as well as supporting the trend and need for agility and flexibility to cater for the needs of our customers when it comes to moving into smaller batch drugs and eventually personalized medicine. And I do believe NNIT is well positioned for that given both our track record and not least our capabilities. So when we look at the Life Science industry competition, then they're all there. Everybody wants a piece of the market. So we have the global competitors out there, all the big ones. We are meeting, sometimes partnering with, but most of the time meeting head-to-head in competition with our customers. So they are there. We also have, and I think especially and maybe most outspoken in Europe, a number of also local providers who have derived from the industry and not least are present in local countries or across some of the Life Sciences hubs in Europe. And I do believe that looking at both those global players and the house providers, you may say, or the local house providers, then we are quite uniquely positioned in that sweet spot of being very, very strong within Life Sciences, in depth and also being able to scale with means of our global and international presence across geographies. That means we are able to actually outpace some of the local providers when it comes to following our customers who, for the vast majority, have international reach and ambitions but we are also able to outshine the global ones when it comes to truly an in-depth being able to cater for their needs when it comes to Life Sciences. So a sweet spot for us, still maintaining that local autonomy and presence with our customers, but at the same time, being able to scale. I think as an illustration of both what we attempt and tried to do and our not least commitment to Life Sciences and also the very, very strong IT capabilities and technological advances that NNIT have done. I've brought along an illustration of some of our latest advances within artificial intelligence. And I can speak for hours around this. But I think the key takeaway is we see artificial intelligence taking off right now. I think the introduction of ChatGPT when we look back, will be when the Tesla car was introduced and the revolution that it had on the electric car market, meaning suddenly, we have democratized what was previously for the selected few who are able to do machine code or being able to really tap in, in terms of data science into the selected technologies of AI, now we suddenly have platforms and standard components out there that is accessible. So that means everybody who has a Chief Digital Officer hat on, is being ask right now. So how do we take advantage of that at our customers. And then IT, of course, we know our IT, we have good IT plumbers. So we, of course, put together those key components, whether it be ChatGPT, and we also focus on both AWS, but in this context, have applied the Azure and Power platform as our foundation, but the true value of NNIT is for sure our understanding of the business pains of our customers. So being able to take those business pains, translate that into actual use cases, whether it be in the R&D area, in the production space, in the commercial IT space or within quality and compliance is where the real value add lies. We then have, again, the size of NNIT and our combined solution portfolio, which allows us to take those use cases, those small wins and put them into a bigger context of truly putting some fuel behind the R&D function of the future, meaning way shorter time to market, utilizing the full data available within our customers' portfolio and the same way within the production area, being able to put actually some content behind the vision of smart factory of the future. And it's that combination of the in-depth understanding of the business pain being able to work on an advisory consultancy, but also deployment basis with our customers in combination with being able to put it into a bigger context, being able to demonstrate road maps on how to take from where they are today into the future, I believe, is a true uniqueness of NNIT. Then zooming in on Region Europe. As Par said, when we boldly say we'll outpace the market, it's based on these references when we look at the addressable market in this context, Western Europe. So Gartner predicts within the consultancy space, within application, development, deployment and management and average growth in the coming years of around 8%. It consists of a variety of different activities, but still a solid growth outlook. And that also means with our current market share in Europe, of around 3%, then there is room for continued growth, both with our existing customers as well as attracting new customers within that space. As I said, we are strongly represented in some of the key Life Science hubs in the industry. Some of them originates, as you all know, back from the days of the chemical industry around the silk route. So we have Basel in Switzerland. You have the Frankfurt area in Germany, and we have the [indiscernible] region in Denmark, who is not related to the silk route, but due to the fact that you've had strong science focus, talent mass and strong university environments, which have helped cater for thriving business of Life Sciences. We are represented strongly in those regions as well as in Ireland, we are there for other reasons. There were a lot of tax benefits from production companies in Ireland, which attracted a lot of investment into Ireland. So we are there as well. I think the only piece where we are not that heavily represented have been the U.K. We shied a little away with all the commotion around Brexit, but are increasing our presence there as we speak. But those are the major hubs in Europe, and we are represented in all of them. That also means being able to meet our customers where they are at, and at the same time, cater for their needs as we still see the Life Science industry as being very recession proof. We saw that during the pandemic, we saw it back to the financial crisis, that the Life Science industry is still prevailing through those bigger turmoils. And we do believe that there is a growth opportunity there for us also continuously. Then I think also back to the question regarding which areas do we have and see the biggest growth opportunities within. Then we, for each of the region have put together this market gameboard where we have put in our key domain areas R&D, quality and compliance, manufacturing, supply chain, the commercial space meaning sales and marketing and not least, the data and digital components, which provide variety goes across. We then divided the Life Science industry into the multinationals, predominantly the major pharmaceuticals, the midsized corporations and then there is a thriving small business and increasing population in that space across our regions, especially due to the fact that rare diseases is the new fighting ground for the Life Sciences industry. So we have an unprecedented number of first-time launches in the industry, which in some regions, offers a big opportunity for us. In Europe, we have our strongholds with the multinationals. We are represented with the vast majority of the bigger pharmaceuticals in Europe and expect to maintain that stronghold. The same way we see maybe the biggest growth opportunities within the midsized corporations, which basically derived from some of those first-time launches which launched 1 product, 2 products, maybe 2 molecules of products into the market and thereby have high needs of scalability, both in their R&D, their quality and compliance as well as within the manufacturing and supply chain area, which is some of our strongholds. We have, for now, shied a little away from the small-sized businesses. It doesn't mean that we don't follow them, and we don't advise them on, you may say spot advisory, but a lot of them in Europe have less digital maturity or ambitions. They are still way too focused on getting that first one drug through their late-stage trials or into commercialization. It's different in the U.S., as Mark will show later on. Similar we have in Europe, for now, stayed out of the sales and marketing and commercial space. It used to be heavily populated by all the generics out there because it was all about huge large-scale CRM implementations. We do see an increasing and it will happen, my predictions within the next 2 or 3 years, growth opportunity in that area, as the shortage or the distance between patients and Life Science entities are shortening due to personalized medicine. And that also means that there will be increased regulatory scrutiny in that area in combination with that some of the big platform providers, especially within the R&D space, where Veeva is at, are now actively also bringing together their data vaults across the commercial space for that same reason. So we have it under radar. But for now, we don't see it as a big growth area for us in the years to come. Lastly, then I'd like to highlight the manufacturing and supply chain. It's the vector of growth for NNIT, where we see the biggest growth opportunities at the moment. It's that part of the Life Science value chain, that maybe have lacking the most behind because it's shop floor. It's physical production lines, which is quite a hassle regulatory-wise to really ensure they have that flexibility and agility that actually the industry and the market demands and they are picking up. We've supported our capabilities in the area through the acquisition, as Par also mentioned, [indiscernible] Partners, Excellis, SL Controls and lately prime4services as some of the key components in today being able to cater both for up and downstream supply chain solutions as well as data integration, all the way from ERP to what's the core of Life Sciences, manufacturing, the manufacturing execution system and all the way down to the controllers and the shop floor. That capability will cater for that need for flexibility. It's an area which is less dominated than some of the others by prevailing leading suppliers in the market. So it's a little more crowded when it comes to platforms out there. And we have, of course, picked our bets and especially within that area, we also see a number of super interesting cloud providers popping up. And that's why we are also engaged in the small piece of the customer segmentation in that area. So to not conclude, but at least leave on a high note when it comes to Europe, then those multinationals where we have a long track record. Some of them, not only Novo Nordisk, but some of them dates all the way back to our origins when we embarked on an international Life Sciences journey. They constitute an important part of our European business. And when we summarize where our focus will be in region Europe is, of course, maintaining that leading role as a trusted partner for Life Sciences in Europe, meaning both catering for those multinational needs for continuously exploring the wonders of digital transformation, but also continuously making sure that we in the market are coming across as the trusted advisers by means of thought leadership, participation in the majority of the industry groups and associations out there and not least, being present. Secondly, we do believe there is growth opportunities within our existing customer base in Europe because we are represented with a large variety of Life Science companies in Europe, meaning we can still grow along with them and their needs for investments into digital Life Sciences, but increasingly, pan out our footprint into new domain areas or new business dimensions and divisions of our bigger customers. Then we will maintain and always up to snuff solution portfolio, which matches those business domains. All our solutions are derived from achievements or from industry trends, which we picked up in the industry, have been formalized, commercialized and packaged for repeatability. So we can use them across our regions but a lot of them, of course, derives from some of our landmarks in Europe historically. And finally, then we still will continue to be present in the major Life Sciences hubs in Europe because that's where our customers are at. And we understand that our German customers wants to speak German. And the French-speaking parts of Switzerland wants to be met by French-speaking consultants. It's not always easy to then cater for that diversity when we put together our delivery teams, but that's just part of the game in Region Europe. And I do believe that we've proven by means of proximity, cultural fit, in-depth understanding of the industry that we are able to meet and cater for that demand with our customers. So I do believe that it's more than ever an attractive place to be in the Life Science industry. I do believe that we are firm in our commitment to the industry and not least, that we will, based on that deliver profitable growth also in the Region Europe and still develop those repeatables that we are able to deploy and not least follow along with our customers internationally. And with that, then we've also a small flick on what it is that we are trying to achieve and do within Life Sciences. [Presentation]

I hope you enjoyed that. I always do. And not least because, as Par said, we are a people company. And who wouldn't want to go to work every day and know they are small integer in either improving or even saving people's lives. It may be a big bold statement. Well, we see that in the actual use cases that we provide for our customers and are able to see the impact that it has on their supply chain, on their compliance and quality and not least in bringing new drugs to market. And with that, then I'd like to introduce on stage Jason Xing, who is a long-term colleague of mine. We've actually had the pleasure of working 4 years together in China in the [indiscernible] and I know you will be in perfectly good hands with Jason, who will put some more words on what we are trying to achieve and have achieved in region Asia. Jason, welcome.

Thank you, Ricco. Hello, everybody, and good morning. My name is Jason Xing, and I'm responsible for our NNIT Region Asia office, have been with NNIT for more than 16 years being in a leadership position covering all Life Sciences business areas by expertise, actually mainly in the strategy, digital transformation on the additional development and sales, et cetera. I have been the General Manager for NNIT China since 2019 and for NNIT Asia since 2022. Like Ricco has also had a very strong leadership team in China and Singapore worked together with me to manage our regional sales business development and the deliveries in the region. We do have a lot of customers across China and Singapore. In average, their industry expertise and the experiences are more than 15 years in all Life Sciences business areas. And there are around 300 colleagues in 4 locations, more than 50 in Singapore, they are focused on manufacturing IT areas and around 250 in Shanghai, Beijing, Tianjin in China. And we focus on our business, like I mentioned, in Singapore for the manufacturing area. And in China, we are more broader in manufacturing, quality and compliance and also commercial areas because there's a lot of different customers. I will share in later slides. This year, first half, we had some impact from the Chinese macro economy slowdown. We had a growth in our revenue around 7% to DKK 74 million. But unfortunately, we had a loss of 18.9%. It's decreased 1.5% compared with last year. We are taking some actions, and we're also a little bit more in the next slide. Next slide, please. And looking to the market size and the growth for the long term, looking at the graph, the Asian Life Science IT market is mainly driven by China, Japan and Singapore. For the long-term perspective, I still believe it is a market with annual growth really more than 6% by 2022. This is combined report from Gartner and some local Chinese authorities and agents. Of course, the China economy has been slowing down. And after the removing the COVID-19 restrictions, it has been impact Asia financial results dramatically. I shared also in last slide. And we have already taken some actions to adjust our capacities in China to reduce some people and to reflect the current pipeline backlog, which definitely will improve our gross margin in Q4 and also going forward into 2024. We believe our Singapore office will continue to grow as expected. They are a very good solid growth journey. And also looking at the market share we have is only 1.4%. It's a very, very small market share. So I believe there is a large room for us to grow. And next slide, I will share more value growth and which service -- which kind of service will grow as well. Next slide, please. Yes, the Ricco shared his European market gameboard and we have a different focus compared with Europe. I believe also we are a different compared with U.S., but as the different factors in the different markets. Our current business in Asia is more focused on quality and compliance, manufacturing IT and commercial IT. We have been growing lot in the last many years. Quality and compliance service is the first solution we sold to Chinese customers. Now we are still one of the top suppliers in this area. We served almost 200 customers in quality and compliance. Regarding commercial IT, we started the multinational corporations are now expanding to midsized companies and also SMBs. We have also been very successful selling manufacturing IT to the multinational corporations in Singapore. There's a small corner in Singapore, island and there are more than 26 multinational companies. They have factories producing APIs, and it's really good for us to go there and to sell our manufacturing IT solutions. We try to grow our manufacturing IT in China. There are a lot of midsized companies and SMBs, building factories and labs in China. There's a lot of start-up companies. We'd like to copy the success in Singapore to China in the manufacturing IT area. Not like Europe, I believe this small SMBs and the midsized companies, they would like to invest into digitalization solutions starting from the beginning. Of course, also, data and AI are the hottest topic in the market in Asia, I think it's not only Asia, globally. It's very among the large and midsized corporations and we have done a few small projects with those customers and promoting our capabilities to the market and being well received before we can expand more to cross the [indiscernible] customers. The R&D area, it's not our focus for many, many years. But since later this year, we started to talk with our U.S. office. I think the [indiscernible] is very successful in our region U.S. as in market, I will share more on that. And we would like to explore the opportunities in this area, the Asia as well, by transferring their knowledge, expertise and the partnership in the U.S. region to Asia. So that will be our market [indiscernible] even in Asia and for our focus, both to the customers and also to our services. Next slide, please. Looking to the long term, we have 4 key focus areas in region Asia to drive our business growth, although we have a slowdown in China, but I still believe for the long term, we will have the growth journey. And first, for our Singapore office, it's growing as expected. And of course, we want to maintain the momentum, you and we want to grow more and expand the business further. As also mentioned previously, NNIT China is not performing in the first half, and we have taken some mitigation actions to reduce the capacity and ensure we can turn this around and back to the growth. Second, all the multinational corporations have the regional office in Asia, mostly in Singapore, in Shanghai, in Beijing, of course, in Japan like Tokyo. And our core services and solutions in commercial IT -- in manufacturing IT will fit into their business requirements, and we believe this growth continues to continue. And there are a lot of midsized and small companies -- [indiscernible] companies in China, and you may also see numbers with more than 10,000 small companies in China. And we present ourselves into them as a total solution provider, carrying quality compliance, manufacturing and commercial solutions. And third, we focus on expanding existing customers by growing current engagement and setting new services and solutions, because easier to sell to the current customers than attracting new customers. So we want through more customers into our so-called key account. We grow more customers and then, of course, build solid foundations and for our business growth for the future. Last, we will not do everything in Asia market. And our expertise and experience in manufacturing in commercial quality and compliance are well respected and accepted by the market. We will continue to focus onto these areas. So I believe NNIT is well positioned in Asian market with 3 key differentiators. First, we have deep industry domain knowledge and domain expertise in the Life Science business areas. Second, our customer proximity in China and Singapore is very [indiscernible] we have the office in Shanghai, there is the growth engine for the Chinese Life Science industry. Last but not least, our employees with strong quality and size and our track record delivering the excellent service to our customers. So that concludes my presentation. Thank you all.

Thank you, Jason. Before we put some flavor on what we actually do by customer case that Charlotte will take us through, then I recommend that we take 5 minutes of shaking a leg or whatever is needed. And then we convene again 15 minutes past. We're a little ahead of time, so that should be doable. See you again in five. [Break]

As promised before the break, then we'll put some more content on what it is that we're actually doing. So I'm happy to welcome Charlotte, who is our global practice lead within quality management, meaning the solutions that our customers leaned everything into when maintaining compliance and quality throughout their value chain. So Charlotte will take us through a long-term program, which we also as reported in our first half report recently extended the UNITY program with Boehringer Ingelheim. Please, Charlotte.

Thank you very much. And it's really a pleasure and an honor to be here today. So first of all, I've been with NNIT now for 1 year and 1 month. And before that, I have 30 years of experience within the Life Science industry from pharma company and medical device. Novo Nordisk, Leo Pharma and ConvaTec are some of the companies that I have been with. But I'm really excited to walk you through this real live case study or case together within the quality domain with 1 of our largest customers, Boehringer Ingelheim. Before walking you through this journey, please let me introduce what is the quality management system in life science industry. Quality management system is a wide-ranging concept covering all activities, which individually or collectively influence product quality or patient safety. So that covers policies, processes, procedures, organization, people, everything in the company. It is essential, it is a requirement to have a quality management system. It is both, a requirement to implement it, maintain it and continuously improve quality management system. And when I -- in a short time, we'll talk about document management system, content management system is under the same umbrella like the quality management system. It's part of that. As for Boehringer Ingelheim, just to introduce to you who that client is, it's company with a long history, founded back in 1885. They have a huge product range, both within human pharma and animal health. They cover all the stages of the product life cycle from discovery, development, manufacturing to eventually product discontinuation. They have around 75,000 internal and external employees, and they cover a market over 130. So you can probably imagine that they have all the right elements in place to introduce complexity into the quality management system. And you're absolutely right, if you think that is the case. So -- for Boehringer Ingelheim and the 75,000 employees, it has been a challenge and a pain point to manage quality documents and regulatory requirements across the divisions, both in terms of access to multiple systems across divisions, lack of link between processes, documents and people, the training part. Poor user experience resulted in siloed ways of working, inconsistency in the system and a complex search and navigation capability. Hence, the vision and the origin of the UNITY program where they would like to achieve one unified platform for all employees, being able to manage their processes end-to-end, increase the user satisfaction, simplify the ways of working, harmonize it, but also to achieve a seamless and effective navigation in the system. So just to share with you where there else is landscape is right now and where they would like to go. The [indiscernible] landscape, they have 1.3 million effective documents, that's a lot, inside this system. They are organized into 600 document types with more than 500 attributes. We have already been informed how data -- how important data is in this industry and in other industries as well, of course, but this is really a complex size. It might be difficult to imagine, but I assure you that it is complex. With NNIT on board, we have introduced a concept called process and data-oriented quality management solution. So with this introduction, we have guided bearing through organizing these 1.3 million documents into now 50 document types, reducing the document attributes to 60. So that's a huge reduction and really introducing simplification, increasing transparency in the system. And by that, you also increase the ability to be -- to work compliant with different regulations. So that's a big achievement, and we are really proud about that. So overall, the journey, how it looks like Boehringer Ingelheim wanted to replace their legacy system with a new and modern enterprise system, in this case, Veeva, Vault QualityDocs, to have one unified content management system for all employees, managing end-to-end processes, and that should be introduced over a multiyear and [ full ] phase journey. The journey started in 2019 at Boehringer Ingelheim locally, then they onboarded us as implementation partner in May 2020, where the official kickoff wind or took place. Phase I -- the scope for Phase 1 was global regulations. This includes 11,000 documents. So along with introducing or migrating 11,000 documents, we also supported bearing up with harmonizing the workflows, the systems set up with roles -- system roles to harmonize the way of managing documents globally in the company. The second phase was introduced or started in 2021. And in the beginning, we were told that second phase was 250 local and divisional regulated documents. However, it turned out to be only 65,000 which is a result of the lack of transparency in the current system. And after Phase 2, all the remaining documents are part of Phase 3. Phase 3, 1.2 million documents at the moment and in this phase is also where we really have worked with Boehringer on this huge amount of document types, really trying to narrow it down to something that makes sense, link document types to their business processes, and Phase 3 has been divided into two phases. The first one was the design phase. We have completed that now. And second phase is implementation. So now we are supporting Boehringer at configuration workshops where we sit in and translate what we have agreed during the design phase towards Veeva who then configure the system accordingly. We want to make sure that what we agreed actually also is implemented in the system. So that Boehringer in the end will get what they have desire to get. And just for the sake of fun, just to try to imagine how many documents this is if you put only the front page on top of each other, 1.2 million, and in total, it will be around 1.3 million. It will be the same as 130 meters at tower. Luckily, we are digital. NNIT has been involved on this journey with 50-plus leads, consultants across 16 nationalities, globally from NNIT and we have supported Boehringer with combining our ability to really support them on the business level, domain level, combined with our ability to also support them with technology solutions. Combining these two elements and where we have been involved, all the areas has been project and program management, business process analysis, integration, migration, change management and validation and test. And in this case, when we talk about a quality management system, change management is actually really, really huge because, we touch upon all areas. So quality goes across all business areas. And quality, if you ask me, and also, I think it's something that you can read up on is the backbone of any life science companies. NNIT is committed to continue our journey with Boehringer, both on the UNITY program, extending our collaboration with them on additional scopes post go live as well. But we also have other engagements together with Boehringer on Veeva projects and other transformational technology, digital transformation activities within both, regulatory affairs and clinical domain. So finally, I just want to summarize that this case study really serves as a good reference and backbone for our engagement with Veeva, our partner, but it also really prove our capability in -- within our Veeva and NNIT powerhouse concept. Thank you for listening in. Do you have any questions? Or maybe...

We can start with questions to the [indiscernible], this is perfectly fine.

Any questions, yes?

I just wanted to know, in the selection process, what was the reason why you were chosen? [indiscernible].

We had another reference case that proved our strong ability to be a strong partner within the Veeva concept. Am I allowed to say the other reference case?

No.

So that's it.

Following up on that, can you say something about the sell-in prices? Is it Veeva selling into Boehringer? Or is it you coming -- recommending that they should build it on Veeva?

We -- it's not our task to suggest Veeva. Veeva sell their software themselves. So we can go in and support our clients with a vendor selection and a feasibility study to see whether Veeva is the right choice for them or not.

So Veeva was chosen by Boehringer and then they seek integration partner or migration partner?

Implementation partner that could cover more areas like program, project management, business process analysis, integration between systems, migration of all these many, many documents, change management and system validation. So this is where we came into the picture. So a lot of elements. It's not just to implement a system and then turn it on, there's a lot of activities that needs to take place.

Okay. And then when you move to Phase 3.2, are you then out and then you have to seek another job? Or are there continuing business for the next 10 years in a deal like this?

We don't have any certainties about that. But of course, we have built a very strong relationship with Boehringer. They really like us, and we like to work together with them. So potentially, there could be many more activities for us or projects for us in the future as well.

And have you succeeded in selling other products into Boehringer?

Yes, we have and also in other domains. And there is -- we have -- also along during the UNITY program journey, we have received many additional tasks, so change orders. So that takes place constantly.

And could you please comment on the delivery model and the type of contracts you have in the life science, probably not specific to Boehringer? But maybe if you could provide a revenue split and profitability level between, for example, the fixed price contract or time and materials?

We do not disclose numbers on regional level nor on our specific customers. I think the last part maybe goes without saying. And in Life Sciences, it is a combination, and there are different cultural also preferences, whether it's time and material, fixed price or recurring, you may say, revenue due to the nature of this being more and on call kind of service, especially when we go into the life cycle management of current applications.

And for you to enter into [indiscernible] the Phase 3.2 was Boehringer. And is it already contracted?

Yes, that was the one we announced with the first half results this year, the last phase that we're in now until '24. We also open up for questions to both, Jason and I, on the section on Region Europe and Region Asia.

I have a question about the market size and growth. If you go back to Europe, clarifications, first of all, can you say something about consulting and then applications. How your split is, the target is 50-50 and how is NNIT within that space?

That's a good question. I think the market depicts consulting and application management as per Gartner's categorization. And they often categorize it in terms of whether this is related to actual implementation, deployment and management of application and consultancy, more broadly. And in the IT end, I think it's difficult to make that same separation. We have, of course, constantly try because we'd like to see do we still develop pieces to the same extent that the market develop. But I don't think we have a clear definition of how we separate those two. We tried as part of the divestment because we had to, to some of the regulatory authorities to split also our infrastructure business into some of these categories. And it turned out to be quite a hassle because we try to package as much as possible around our proven concepts, both the advisory piece as well as the implementation, and preferably also taking on the life cycle management following the -- and I don't think we have specifics on those pieces.

There was a reference to Veeva before. I mean -- and they are selling software. Yes, they have the services part, but the main business is a software company, and we are not a software company. We are a consultancy company. So when they project their groups, growth. That's a different part of the market. Of course, adjacent to what we do but also quite different.

And when you said the European market, for instance, at DKK 15 billion, and you say that's the addressable market. Is that for the specific market share, or is that for all of Western Europe?

All of Western Europe within Life Sciences. So it's all the spend predicted, external spend of life sciences industry sector in Europe. So when we have deselected, you may say, pieces of the customer population and also, for instance, the commercial space, then that means that we have a lesser piece of that, but we do not have details on how they depict it in the same verticals nor horizontals. That's why we bring the full potential there.

Yes. And also, please notice in all the presentation of market share. So the growth of the market is one thing and our very minimal market share. It's a very fragmented market. So there's ample room for us actually to gain market share, disregarding what the growth rate actually is.

I'm just trying to figure out what the size of the market is and how you define it. So is this based on the domains that you can serve, or is it also including commercial?

It's including commercial. So it's based on the external spend assessed by Gartner from the Life Sciences in Western Europe, [ dependent ] on whether it falls into one of the other brackets apart from main areas. So commercial is in there.

So you have an idea if you take your focus domains, how much that covers of the DKK 15 billion.

No. And the reason being that it is very different, how that spend actually pans out into those domain areas. And I don't even think any of the different analysts that we use for getting a grasp of the market are able to separate it into those brackets of the value chain.

Then about competition, that's both, you and Asia. Say something about who are the competitors? Is that the usual suspects like Accenture or Deloitte and...

In Europe, it is. And I'll let Jason comment on Asia. In Europe, it is. So it is the Accenture to Cognizant, the Indian providers and also the Deloittes and the UIs of this world who are represented heavily, also in Europe and with a focus on life sciences as one of their verticals. And then, a number of those local providers that a lot of them actually originates also from Northern Europe. [indiscernible] of this world out there to just name some of those who originates out of Denmark. But there are a number of those local providers in both, Germany and Switzerland, et cetera, who is of that same nature.

Jason, would you like to comment on the Asian competitive situation?

Yes. For Asia, it's a little different. We, of course, sometimes compete with the global big suppliers like Deloitte, [indiscernible] pretty only on the purely consultancy work. What goes to the product implementations is more like the -- some of the company who know like Catimini and TCS, HCL, but also a lot of small local players in China and Singapore.

And I think one thing that me and Ricco often talks about when we have these large bids that we're going for, even if you go to a huge global company that has hundreds of thousands of employees. But if you drill down to the number of people they have in production IT in Europe, even these huge, big players far greater of us, actually the number of people on the ground, then the delta is very much smaller. Because this is a very niche area that we are in. So that's why we could actually compete with the big players on niche projects. I don't know, Ricco, if you will add something to it.

I fully agree. So we try to be selective within the value chain, as you also alluded to. And within those areas also around certain technologies which we foresee as either leading or prevailing. So we make our bets along the way we saw, I think, pretty well on Veeva before that had really accelerated. And similar in some of the other spaces, we try to predict what's going on. We also diversified among platforms, because there's always a first runner up lurking in the distance of those platforms. So we try to stay ahead of the curve.

And then touching on your interesting presentation of the AI opportunities, I mean, that's kind of another angle of the market growth. How much is the AI growing, which is another dimension. And there, of course, that enhances the market potential because data and to be able to extract value out of data is a big driver of demand out there that goes across.

Yes, Yiwei from SEB again. Also a question on your guidance and your international Life Science used to grow, I remember, more than 20% between 2018 to 2022 organically. And now I know you don't want to give a guidance on the divisional level but still, if you assume only 10% revenue growth on the group level, you probably have assumed a slowdown here in the Life Science business. But I can see you are expecting the market growth to even accelerate in the coming years. I mean, what is the assumption? And what is the market dynamic behind your guidance here, if you can comment a little bit, it'll be appreciated.

Maybe I can start. I mean, we have depicted in these two markets, and you also see the other markets where we see the underlying market growth. And we also see what we have been growing the first 4 months. But when we look into the future, I mean, there are ups and downs in the different markets. We have seen some macroeconomic charities in the Chinese market, and there is some more signs of slowdown in Europe, while [indiscernible], there are a lot of opportunities. And when you blend that cocktail together, where we come to is the guidance that we have given and of course, you can view that in different ways, but our stand is that that's how we forecast the journey to 2026.

And can I just follow up here? Ricco, I think when we met, it was not last year or the year before, at that time, you sort of were still quite confident about you could deliver a strong double-digit growth in Life Science. And is it still your expectation?

It is still our firm expectation that we, on a group level, will reach double digit, which is 10%. But again, how it is reflected in the individual regions we do not disclose.

[indiscernible] from SEB. I'll also kind of want to understand better about your guidance. So when you talk about repeatable business, how much is currently repeatable? And how much do you expect to probably grow going forward?

I mean it also -- if you go down to the detail, what is repeatable business? There is a little bit of vagueness around the concept. But what it basically is when you provide more than sell-in just hours. And we do not display how that is looking in different geographical areas nor in different solutions. All we are saying is that we see that proportion growing going forward because that's really when you can come to the more juicier margins than the gross margin you can sell up selling a body. So we are working hard. We are making investment to increase our share, but we are not at this moment displaying how the mix is really looking.

Claus Almer from Nordea. Ricco, this is a question for you. You set out in your presentation that you are -- I think you said motivated like nothing before. What is that driven by? Is that the end market? It is in IT's product portfolio? Is it your go-to-market strategy or anything else?

It was a personal comment, but I'm pretty sure I speak for the majority of NNIT. So for me, I think that the driver is focus. As Par also mentioned, we have maybe too much in the past tried to be everything for everybody all at once. That's a movie, I think, nevertheless, we try to be too much for too many. And we've seen that the more we focused, the more in-depth we operate with our customers as trusted adviser and taking them through their life cycles in IT, the more gratifying it is for us as individuals. We can see follow and follow through on what we do, and we can also better fuel both, the growth and our profits. So that excites me. And it excites me that we return to calling out Life Sciences as 1 of 2 strategic growth drivers. Because in the past, it's been mixed up with more focuses within an IT, both segment-wise and also portfolio-wise. And calling out where we want to be in the future to me is great, because I live and breathe Life Sciences. I've been doing this, I think, with only 6 months exception throughout my 24 years in an IT. So I wake up every morning, I think Life Sciences, and I go to bed thinking Life Sciences. So that's why it excites me maybe more than ever that we are now fully committing to that 1 of 2 pillars in our future.

So to just get this right. So you have had targets for 15, 20 years for Life Science outside Denmark. It's not really been met. So it's more about you go-to-market really going for the right segments that will make the difference this time.

Yes, both segments and I think the verticals where we believe we can make a difference and then beat the competition, deliver value to our shareholders and not, least also to our customers because it's that [indiscernible] that we need to match.

Okay. Then another question regarding inflation and quality. We heard previously that quality is the center of NNIT. How do you embed quality in your daily work? And also how do you adapt to inflation?

When we talk about quality, there are 2 aspects. One thing is simply mindset, knowing that what we do -- and if we do a poor job, we have a quite disastrous consequences eventually and maybe indirectly but far out to patient safety. That calls among all our employees and the mindset of NNIT for being extra on your toes. Secondly, we, of course, as part of our quality management system, try to measure that quality and not least, as I think was also on one of Par's slides, how do our customers experience the delivery quality? So we measure that level of quality in our deliveries as well as in our mindset as individuals with very high rigidity because that's what we've been used to. That's where we come from. Then in terms of inflation, yes, then we are all impacted by inflation for sure and so have our customers been. So there have been a cost cautiousness. I think you read all the articles about some of the big pharmaceuticals, except for Novo Nordisk who have been at least cautious going into the year and that do impact the investment willingness. But again, the return of those investments, especially, I think, by means of digital transformation, is quite significant. And that means that we see things now after you may say a cautious start of the year picking up.

I was more thinking about your cost base.

Oh, the cost base, yes. So we try and do our utmost to match the development in the market, both in our rates towards our customers as well as of course, making sure that our employees have an attractive salary, so that we can match the market. That's a firm policy of NNIT and have been throughout. We have to send the bell forward to our customers, and that's our still intention.

If I take the freedom just to elaborate briefly on what Ricco said about his personal engagement, which I really see every day, but we also go and listen to our clients and listen to our people after we announce more focused NNIT, it has been very well received. Because as I said, the people, our people and also our clients prefer to work with a more focused company. And then also touching up on quality. I think we are going to be even more selective where we will go in and where we will take on new assignment to bring the quality to the client, we want to make sure that we go for the opportunities where we really can bring that value to the client at the same time as we also bring profitability to NNIT only go to top line growth, if it doesn't also deliver nice bottom line for an IT, that's not our strategy.

Could you maybe comment a bit on your resource point recruitment given Life Sciences is a very sort of specialized capabilities and you face even tougher competition in job market? And where have you being sort of mainly hiring from? Is it from competitor or from the university. And could you maybe also say a little bit about how long time normally would take you to train and convert a graduate to a good consultant?

So the short answer is firing at all cylinders as one, meaning we both, do our utmost to attract senior capabilities both from the industry. Charlotte is a good example, come from the other side of the table, wants to take what she's learned as on the customer side to broaden out to more customers of ours in the market. We also drive graduate programs structure where we bring in less Life Science savvy talent or less IT savvy talent and then build, you may say, the other wing to that. And we've done that historically, and I think quite successfully in IT internationally and will continue to do so. I think it's very different, what's the actual time to talent depending on how specialized and niche the actual specialty area is and the talent that they come along with. So we have recently just welcomed a new graduate team, and one of them had worked at a student assistant in laboratories for the last 2 years. So the time to talent for her is used to working with on-site on some of our customers understanding their business reality is way shorter than if we bring in a talented developer who we need to then add the business savviness to. So there's not a one fix to that. But I think we've been very successful at establishing programs that cater, both for the individuality but also ensuring that the basis is rock solid. So we don't take things for granted again, because we need to demonstrate quality and delivery excellence, because it's pretty quite neat industry. Also all the heads of regulatory affairs, quality of -- they rotate and they all remember the good experiences within IT and hopefully bring that on to their next assignment. And that means referenceability is so key to us.

Can you provide your employee churn in Life Science segment?

I do not believe we do report on employee attrition on our different regions. Only on top -- and we do operate across group management where a significant part of that is life sciences. We do operate and have realized also in our previous reporting numbers who are below industry average. We expect to continue driving that down because we like to have people on board, but we also like to bring in new talent. So it's that balance that we constantly try to match.

So then we welcome you all up to the lunch, where we serve some nice lunch. And then we'll be back large at 12:40. So you get some extra time over lunch. So 12:40 back in the room. Thank you very much.

Thank you. [Break]

So welcome back, everybody. I hope you have an enjoyable lunch and had some good networking opportunities, some good discussion over the lunch. And as I said, we're going to have another network session after the finish of the day. But before that, we now kick off the second half, and I'm soon happy to hand over to Mark. And if he's still awake, yes, that's great. And I was getting to early morning at your site, Mark. But before going to just remind everybody, after Mark, the afternoon we dedicated to [indiscernible] elaborating on the Danish business as well as we're going to have another business case, a very interesting one. And last but not the least, cash to round up with the financials, which I think is of some interest. And then we will have another Q&A session at the end. With that, Mark, the floor is yours. So please take it away.

Thanks, Par. Well, hopefully, you had an enjoyable lunch. While I got a quick breakfast, as you can tell, the sun hasn't a quite come over the horizon quite yet. Let's take the next 10 minutes to review the U.S. As Par said, I am Mark Ohrvall, the Head of the U.S. region. Most of my 30-year professional career has been working in big pharma across the value chain, solving business and IT problems and driving innovation at a global scale. For the last 3 years, within IT, I've had accountability for leading business development and our regional growth strategy across consultancy, capabilities and services. In my short time with NNIT, it has been very energizing, building a new footprint in the U.S. and seeing how we can collectively drive a robust international Life Sciences strategy, constantly adapting to the market conditions. We are very proud of our growth and prospects across the U.S. Our collective team has excellent regional momentum across the Life Sciences value chain, offering both, depth and breadth of business expertise, coast-to-coast market presence and a strong mindset for quality delivery. Combined, we are around 180 colleagues covering Region U.S. and were made up of essentially 3 entities. First is advisory consulting across Life Sciences value chain. With regulatory, clinical, quality and compliance, we're now emerging with manufacturing and we offer data and digital solutions. Our second element is Data Migration Powerhouse, formerly known as Valiance. And lastly, Excellis, a 2021 acquisition which focuses on supply chain, consulting services. All 3 entities serve both, enterprise and SMB customers. We have significantly developed our regional model, creating diversity in revenue, combining advisory, projects, services, ensuring sustainable growth. This includes repeatable solutions from the Migration Powerhouse. We sell software for each data migration and Excellis Service Bureau, which standardized on a serialization platform. Our customer delivery record is excellent, creating solid references, paving the way for expansion in existing customers and new logo introductions that I'll elaborate on shortly. This year, we are seeing a strong revenue growth across the business, 37% for the first half of 2023 and showing a positive profit trend of 9.9% plus 21.5% for the period in operating profit. With our refined and focused strategy, we expect to be able to continue to deliver profitable growth in the years to come. And this is what I'll cover in the next few slides. Next slide, please. To begin with, I'd like to cover the addressable U.S. market and our share. As many of you are aware, the U.S. health care market is open, which attracts large investment dollars. Large pharma, venture capital and other funds choose to significantly invest in the development of novel molecules and innovation. This is a unique aspect in the U.S. Life Sciences market with implications on a global scale. These investments create opportunity for NNIT to provide innovative solutions to historical go-to-market constraints and problems. The classic problem is how do I shorten the life cycle of getting a molecule to the market. That's a really easy question, but a very complex answer with interdependent factors that must be solved to make a difference. And NNIT works in the middle of that problem every day. You can see we have room to grow with only 1.9% of the market share. In the last 3 years, we've expanded from a basic compliance validation services and small projects to offering true advisory consulting and repeatable projects and services across the Life Sciences value chain. This strategy of covering the Life Science value chain has proven to be very effective. Where enterprise clients see NNIT as a differentiating specialist. And then SMBs who are looking for a single partner as a partner for growth as their molecules pass regulatory and clinical gates. Our forecast for the market is showing excellent future years, seeing a 9% CAGR growth from 2022 to 2026. Revenue diversification has been an important goal that we are really achieving, and we're seeing the fruit of that. Projects and programs have notable ups and downs and pending the variety of factors that we see in the U.S. inflation, regulatory guidance changes, market opportunities and even regulatory missteps by our customers, all those happen. But to ensure we can handle these factors, we expanded our offerings in the U.S. to include digital solutions and Life Sciences application support services. As mentioned before, we also have repeatable solutions that are in our book of business with Migrations and Excellis. Now that our base capabilities are in place, we are looking to invest in novel intellectual property and solutions, which specifically address common and critical problems. For example, we have just implemented an AI-driven clinical intake solution, which processes an extreme number of documents from many different CROs in many different formats. It automatically categorizes, auto applies metadata for integration and into an existing clinical tracking platform. Now let me just kind of further explain our go-to-market game board for the U.S. Next slide, please. Looking at the left side, you will see our U.S. go-to-market customer perspective is SMBs, midsize and enterprise multinationals. As mentioned previously, 18 months ago, this Board would have been much less colorful. We have now matured and delivered across the value chain, creating robust presentation to the market. We mirror the Life Sciences value chain with our business knowledge. And we have depth and breadth of solutions in each of these business areas. That's very attractive in the marketplace, and it is creating a very different persona around NNIT. Many of our existing enterprise clients have now come to know our recent U.S. expansion, which is driving NNIT into new businesses -- business areas within their organizations. So let me give a couple of examples. This year, we had a long-term multiyear enterprise customer move from a basic quality service contract, which was sizable, now has pushed us into a clinical multiphase program and even now moving us into regulatory projects. So as our brand grows, it grows rather quickly. Another example of a very possible enterprise expansion is that we are a sole development partner with a nonprofit company, which is sponsored by 8 big pharma companies. This initiative, which is an innovative regulatory platform will significantly speed up the review and submission process globally. It is working with the FDA and other regulatory agencies. This platform is near first release, and the sponsors that you can imagine are getting very excited to adopt it. So each sponsor is a potential expansion contract for NNIT. So we're excited to see how that journey will unfold. Now on the other hand, SMBs are a bit unique. They're generally well financed, start with a small footprint driving a novel molecule, a specific molecule in oncology or cancer treatment or we're involved with psychedelics or with another company that has a cystic fibrosis breakthrough and another company on rare disease. So these SMBs want a Life Sciences partner who can grow with them as they achieve the various regulatory, clinical, commercial milestones. Often, we start by providing basic application support and general advisory guidance, but this is a strong exclusive foothold, creating a pipeline of future contracts for projects and additional services. We are very excited on our next wave of maturity. NNIT is a proven global regulatory expert, and we've proven it in the U.S. as well as quality, our focus is now expanding our footprint with multinational customers, ensuring we have a regional executive connections. Manufacturing is very strong in Europe, offering a domain that we have just started now in the U.S. in this last year. That expertise is being transferred from Europe and globally into the U.S. region. And we are now staffing, and we'll be marketing in 2024, extending this business area to focus on projects, programs and services. So moving on to my last slide. To conclude on the U.S. regions and my walk-through, I'll summarize just a few key focus areas that we're actively driving to ensure we're profitable and scalable in the upcoming years. We have definitely proven to be a trusted partner, and we will continue to grow our Life Sciences across enterprise and SMB customers, demonstrating our Life Sciences knowledge, expertise and experience with a really strong diverse team. We've had strong success in recruiting and bringing in individuals with extremely good domain knowledge. Our go-to-market covers the Life Sciences value chain, providing point-in-time project and program needs, novel digital solutions and long-term support. We know the Life Sciences business, and it shows every day. Our combined sales and delivery teams continue to focus on expanding with existing customers, as I mentioned, growing our engagements, increasing our deal sizes and cultivating excellent executive relationships, which is critical given how people in Life Sciences -- it's a small community. They move around the industry they give recommendations and our references are really driving new sales. We will diversify our revenue pipeline with novel intellectual property and solutions to specific problems. In concert, we're providing long-term services of those solutions and Life Sciences application support. We are differentiating ourselves in the market in depth and breadth with repeatable solutions. Our emerging NNIT brand in the U.S. is about most importance. Those that know us respect us. we have a way to go in creating the impact we know we can as a brand. This will require an increased effort in directed marketing campaigns to very specific customers and very specific problem sets. Our customers want to see their problem solved, and they want smart people to do that, and we want them to know it's NNIT. So we're preparing such an effort with our references and frankly, I know this is really going to drive increased interest in NNIT. My last point before concluding is we're just very excited to see how the U.S. market has accepted the next wave of NNIT maturity. It's been very upbeat. Our sales focus is capitalizing on this year's momentum, which is strong, expanding our foot metric to existing customers and continuing to attract new logos. There is no doubt we have the industry domain expertise and strong employee core with experience. So we're ready. We're ready and able to capture more market share in the years to come. So this concludes my overview of the U.S. region, and I look forward to your questions. So now let's turn our attention to my colleague, [ Kasper, ] and he will cover our focus within the region in Denmark.

Thanks, Mark. Well done, not least considering the early hour. My name is [ Kasper Nielsen ]. I will pause the Life Sciences talk for a bit. I've been here for 14 years doing business across both, our consultancy space, our project implementation space and not least, our IT services. And I have to echo what the previous gentlemen have been saying. I'm pretty excited with the current point in time, generally for NNIT, but not least for NNIT Denmark. We see a lot of momentum for our business right now. And I'll try to substantiate over the coming 5, 6 slides, why we believe we can actually continue and even accelerate that. A few words on what constitutes NNIT Denmark today. We are essentially a 4-legged beast or 4-legged beauty. So we have a custom application outfit doing applications from scratch or with some of our own components, servicing those applications once they have come to life. We have SAP outfit doing functional consultancy across sectors in Denmark. We used to have also a subject that went away with the divestment. So now it's functional consultancy within the sub space. Then we have a pretty big Microsoft outfit doing basically services projects, consultancy across the many workloads in the Microsoft stack and that is growing right now. And then the fourth leg is also within the Microsoft piece, which is our group company scales, who zoom in on ERP, the F&O piece in the Microsoft suite and do so very well. They are a well-known brand in their own right in Denmark, and they are also doing quite well right now. Together, these 4 pieces comprise around 500 -- a little more than 500 employees, colleagues in Denmark. And then as is the case for all other regions, we take use of our offshore nearshore colleagues in Parque and Manila to deliver competitively in Denmark. First half revenue was around DKK 330 million, which is a pretty substantial growth year-over-year, around 19%, and we deliver at an operating profit margin of around 12%. So that is kind of some of the corner flags for the Region Denmark business. I'd like to do sort of a high-level [indiscernible] also on the on the market in Denmark, because it is obviously a little bit different from what we have been seeing on the Life Sciences side. So very roughly speaking, we can dissect the Danish market into two sections. Private segment across a number of verticals. Here, we have been doing business for the past 20 years, doing so successfully. And our ambition going forward is to continue to serve a number of verticals within the private space with our often, you could say, vertical agnostic solutions that I just went through. We hope to not only to maintain but also to expand our market in that section. But the other half of the market is what is new with our refined strategy. We have, as Par also alluded to in his intro, been doing business within the public space for 20-plus years. If you go back to the days of the [indiscernible], portal that we were there. We have been involved in many, many engagements with larger companies such as DSB, the regions, and there are a lot of different agencies across the ministries. So it's not new that we do business in the public space. What is new is that we call this out now as a strategic focus area for us. We think there is a lot going on in the market competitively and with our offerings. And we actually believe we can gain a lot of momentum and market share in the public space. So that is basically the novelty here. We will continue to do business across sectors in the private space but zoom in and put weight behind our public ambitions. So what is shaping up the Danish market right now? I could have brought a multitude of trends. Here, I brought 3 that we find to be key for the market, but not least also for NNIT in Denmark. The first one pertains to the notion of digital experience. So basically, end users, citizens, civil servants, users of IT, they have heightened expectations on how to use and the experience to get from using applications systems. It's no longer enough to have basically just a digital solution. It needs to come with a seamless experience, and you actually would want to have more options than just one application. We feel with our focus with the quality that we have in our blood that we are able to deliver just that. And that's basically also what our customers tell us. And a few of the levers that can help us in those increased ambitions are AI. Ricco touched on it in his presentation. We certainly expect to deploy use cases also in a Danish public and private setting on AI. And then not least, local, [ no code. ] That is a way of releasing the potential of digitization across sectors, across lines of business. And here, we have different tools, different platforms to apply and are pretty successful right now. So we feel we are well positioned to deliver on the increased experiences for end users. A second trend, which is a little bit opposite. The first one actually has to do with digital debt or legacy systems. We often boast from having a very digitized Denmark, which is also true. But you wouldn't imagine how much digital debt is still out there and how many outdated systems actually are lying around. So right now, there is a mammoth move in terms of modernizing existing applications, both in terms of end user experience, but also of actually substituting old systems, and we take use of that trend, obviously. One reason why modernization is pretty key is also that there is right now a lot of open doors with those legacy systems. So basically an opportunity for cybercrime to occur. So if it's not only the experience that is required to be enhanced, then also some backdoors to close. And this all is accelerated by the fact that it's difficult for organizations, both public and private, to attract the talent required to make these enhancements. Here, again, we believe in the IT that we have an employee value proposition that is winning. So we are able to onboard talent and apply for our customers. So again, a pretty good fit with who we are in the IT. The final trend here should be no surprise to any of you. You can just open any newspaper, any day of the week essentially. And you will read about new cyberattacks, new methods of attacking organizations, often, unfortunately, successfully. So that is basically a very red hot topic right now for all organizations or should be. In conjunction, we also see a lot of new legislation in this tool. ESG frameworks, new flavors of GDPR regulations. And as has been also justified by the previous presenters, compliance is in our veins. We think compliance when we wake up because we come out of pharma, and we believe we can apply that beyond pharma also in regulated pieces within Denmark. And again, lack of talent is also outspoken in that arena. So some overall developments for the market in Denmark. And again, we actually feel we are pretty well rooted to address those developments right now. Then here, I move from IT services in Denmark generally to the public sector to try and outline where we feel we are competitively using the same 2 x 2 as you've seen from the other regions. And if we start with the local global section, we don't consider ourselves to be a local niche player. We have a pretty broad portfolio of advisory offerings solutions, ruling on different platforms. So we can engage on a number of topics across the public space. We don't match entirely the reach, the scale, the size of some of our international competitors, but actually, we have the claim that with our centers in both Prague and in Manila. We were able to deliver some of what they do in the international companies, bringing together the right teams with the right price levels to compete in the public space. So we would position ourselves sort of in the middle of that section. If you look to the other section of the matrix, the generic versus public sector specific. It is our claim that we have moved pretty far to the right on domain insight in a public setting. With the projects we've delivered over the years, we have gained domain insights into processes such as payout, case handling, compliance to continuously updated legislation. So we are moving to the right. We also have specialists across our value chain -- some from selling. We have salespeople who have done nothing but sell to public constituents over their careers. We have architects, developers, testers, who know how to engage into a public constituent. And we have program application managers who also know how it is to do ongoing business with public entities. So certainly, we have also in our professions a lot of insights to the public dynamics. And then last but not least, it is our claim that we have a pretty strong brand we are pretty trusted as advisers out in the marketplace. It's not only something we think actually -- the my public surveys -- or my image survey from last year asked around 1,000 IT decision-makers and NNIT came out on top of those categories called good at implementing and good at understanding our business. So we feel we are in a pretty good position to cater for our ambitions of growing and gaining momentum in the public space. If we look to the market, strong growth in the previous years of around 11% year-over-year. And if we look a little bit ahead, the growth is thought to continue, a little dampened but around 7% still, which is a pretty good outlook, we think that is comprised of 9% in the consultancy space and around 6% in the project and service space. We are active in both categories. So we're happy to see that growth is expected on both dimensions. As was the case for our international venture, we sit on a fairly small proportion of the market right now, around 2% in a Danish context. So we don't feel that we've hit anywhere near the ceiling for us to grow both with the market but also beyond the market. We are happy that sometimes projections don't hold through the entire way. So we are happy that with the public sector and with the services and projects we deliver into life sciences, we are in fairly recession-proof sectors. So if developments happen, we feel pretty sure we can still deliver on our growth projections. We are also happy to see that public constituents right now call out continued investments in digitization to be a political theme high on the agenda. We are happy that with our portfolio, we see a strong match to the fact that Denmark compared to other countries in Europe and Northern Europe has a preference for Microsoft. We are well positioned both with our Microsoft outfit and with scales to address those needs and preferences in both in the public and private sector. And then with our custom application outfit, we certainly believe we can do good make and make an impact, both in a public setting, but also in terms of private customers in terms of modernizing their application landscape. So the same market game board with a few tweaks that you've seen. So we don't have the domain areas. We have the solution areas downstream. But otherwise, it's the same model you could say. So a few highlights to bring on to you. The first 1 being that across all our solution areas, we see a really big opportunity to grow in central government, be it ministries or agencies, we feel that they will all need capabilities within all of these swim lanes. So within swim lanes, within the DevOps, within SAP, and not least also within advisory and cybersecurity. So central government is going to be a growth arena for NNIT Denmark. Another thing to take note of on this game ball is that we believe we see a very strong fit with midsized customers for all of our solution areas. You can hypothesize why that is the case. I believe that often some of these midsized companies feel they drown a little bit if they go out internationally where they have to compete for attention with global brands, big corporations, where the fit within an IT, our size, our proximity in a Danish context is comforting, and it gives a little bit -- a good stomach feeling to mid-sized corporation in Denmark. And then finally, we actually believe that a third growth pillar for Denmark will be within the advisory space, where our capabilities on Cybersec on cloud, on ESG is a really strong fit with developments going on right now. So we expect strong growth from our cyber category as well going forward. So to summarize at least some of our core ambitions here, -- we aim to become the preferred partner in Denmark, not least deploying AI, cybersecurity rooted offerings that focus on enhancing end-user experience. That's the feedback we get from current customers, and we believe we are off to a good start on realizing that ambition. The second piece here, I think I've already mentioned 5 times, I think Par mentioned it 5 times. So it should be no surprise that we expect to conquer the public sector going forward. Both with our custom application capabilities where we already, this year, actually see really, really strong growth but also on our platform place SAP, Microsoft. So that is for us to win. That's clearly our ambition. The third piece here should actually have said that we want to reestablish ourselves as an SAP transformation partner. Of all the areas that we are involved in, this is probably where we lack a little bit some scale. So right now, our ambition is to attract new consultancy Talent in SAP setting, we have a new head of SAP joining NNIT before summer. And now it's up for us to go out and win business on smaller, midsized projects. So we gain muscle on the SAP ambition. And then finally, we want to become the preferred Microsoft partner. We are pretty far ahead on that agenda. We were actually nominated this year in 5 categories on the Microsoft Partner of the Year award across SCALES and across NNIT, we bagged 2 of those awards in the categories of health care and public and low-code. So we feel we are a household brand when it comes to Microsoft advisory capabilities, Microsoft project implementation. So in sum, why is it that we believe we actually stand a chance of delivering on all of these ambitions? We feel we are a household but differentiated name in a Danish context. We have domain knowledge, not least in the public space that I mentioned. We have a delivery model where we were able to deliver price competitively with onshore, offshore nearshore colleagues. And we have a platform focus that is very much in sync with what is being requested out in a Danish context. So those were some of the corner flags and highlights in a Danish setting now shortly I will introduce a dear colleague of mine, Jens Maagøe, who heads up the custom application outfit. Before doing so, we actually have also a small film on our public ambitions. And this is nothing less than a world premiere. So you should feel very -- it's not Barbie, it is a strong piece of communication, I think. . [Presentation]

Fantastic, And actually, 1 of the characters from the movie on stage, Jens Maagøe, we welcome.

There you go. The superstar, the Ken of the Barbie movie there. Good afternoon, everyone. My name is Jens Maagøe. I'm Vice President in NNIT. I have been working here first of October, 15 years have had different roles, but also 5 years in the role as CTO of NNIT. 2 years ago, I took over an area called custom application development. which is an area -- amazing area where we today are around 175 Danish people and probably around 50 to 60 in Czech and also the Philippines. And what are we doing there? We're doing custom development for a lot of customers, and in particular, in the Danish public sector. And what's the thing there? Well, there's a Danish public sector, in particular, within the agencies area, you need systems that are custom built you cannot take down a standard parental leave system from Microsoft app box, it's not there. You don't have standard tax systems. You don't have standard veterinary and food administration systems, you build them and you build them and modify them and configure them to the law. And today, I'm going to tell you about a case that we have done and worked around and which is what we call the ATP parental leave system. And it touches a lot of Danes and probably also touched you. I would assume many of you have probably gotten money from it. We also -- we will go to an organization called ATP. ATP is a Danish organization, that it is the biggest organization paying out money for various topics in Denmark, approximately DKK 250 billion the payout. Back to politics, the Scandinavian welfare model is based upon collecting a lot of money in taxes and VAT and then you redistribute them. And redistribution is some of the things that ATP do as a pension and processing company. And 1 of the areas they redistribute money is within the parental leave area. So outside in, it pays out DKK 11 billion yearly, actually DKK 12 million last year, all right? It's an area where law has become very complex over the years. I think there are people here, including myself, where it was predominantly the mother who took leave. And then the father was a couple of weeks was probably how it was when I became that first time. In 2023, this is totally different, and I'll come back to that as well. It's also a very dynamic legislation. Approximately 2 million citizens is inside the system today. It covers parents and children. It also contains a lot of information around private companies as well because they are part of this domain area, either paying directly to the employee or/and receiving money from ATP or delivering information into the system in order for us to determine the right payout and so on. Contains a massive amount of sensitive data when you talk about GDPR issues. This is a gold mine of data. So it's a heavily regulated about who has access to data and how we do stuff and create transparency about that. Number of cases where we get around 61,000 new bonds in Denmark every year, a child can have numerous cases associated over the entire period of a lifetime. So therefore, you see we hand around 300,000 cases a year within this system. And it goes from all various of topics, digital and a physical self-service in some way, calling up through this phone people they like that. Others are more in using mobile apps or portals themselves and so on. So it's a big area and dynamic. And what is interesting is that for many citizens in Denmark, this is their primary income. Meaning that you get your money at the right time and the right amount matters to them. We have other areas, but it is not that important, but this is an area where for many, it is actually their primary income. So this matters to them in order to pay bills and so on. Obviously, in order to realize business cases you have to drive efficiency. And actually back in -- I know in 2013, they had around 150 support case workers in ATP working on this. It has been declining over a period for us in order to automize this way of handling cases. So that is part of when you're doing business in this area, automation, automation, automation. So let's take a look at it today. We won the contract with ATP back in 2014. And then we rewon it last year in 2022. Right now, we're actually doing the transition right in these months. And it has a contract length of around 6 years, and then they have a 2 x 2 years option on top of that. So long contracts. What do we do in this? We do advisory. We do all the project business. We do maintenance business. We do the operations business and also support business. And it's interesting here that saying that the advisory piece is becoming bigger and bigger. Those kind of agencies used to be knowing a lot about this area. But the first time you implement these kind of systems, then you will see that the technical domain knowledge actually is starting to lower. It is only the legal part that they retain in there. So if you want to know how parental leave systems actually work, then you talk to NNIT today. And I think that is when you listen to Carsten, when he talks about digital debt, that is what we see across the plate in all agencies around is that the knowledge around how systems work, becomes less and less from the agencies out there, and we have to help them with also this. So business processes and how they actually work, that is where we're seeing a big lack of a going-forward consulting business, okay? If you just take the last 2 years, what has happened with this, well, we had the earmarked maternity going, it was EU regulation, kicked in last summer around August last year. We have social parents kicking in first of January 24. It's basically the LGBT plus regulation, but also single moms is a total way of a new way of living for many, where women has enough money mother themselves. And therefore, social parents, where they can give you a leave to your mother, sister, your brother, whatever, it also is a new way of living for us. And then twin parents is an issue right now, working also kicking in here in '24. That's just the kind of dynamics we've seen over the last 2 years. It drives a lot of project business for us, and it's an interesting business for us. It's where there's good money to make. Also in the corporate or the Danish infrastructure space, a lot of changes happening there, new ways of authenticating yourself, new kinds of integrations is being changed constantly, new information and need from tax authorities and so on. And that also is a big driver for new projects for us to help ATP with. So a lot of project business also in this area. We have approximately around 20 releases a year, supporting them. It's a very automated release area and test. Our tests on a system like this is around 25,000 unit tests when we do it. That's a lot, 4,000 n2n tests when we're checking in codes. So it's a big, massive system this with a lot of the main knowledge. It just entitles you, this is not a small thing. It's a team around 40 employees covering all the way from process consultants down to software architects, software developers, testers, scrum masters, program manager, project leaders and all the way down. So it's the full stack of people that is involved in this team kind of. And we do it as a dedicated team around them in order to ensure that we can continue. Right now, I think we have around 28 projects going on with ATP alone in this area. It's a big customer also for NNIT. If you take -- so do you go out and build a system every time from scratch? Yes, we do. But we have a lot of repeatable components and IP in this area. We call it BAW or citizen IT, which is basically the framework we're using when going out to customers. We have a few cases already going on in our bid work right now. Some of them are about collecting money. So that's also a thing. And other thing is paying out. And it's called case handling and payout systems in general. So it's based upon the platform where we have a number of things going on. The case handling itself into an event broker, it is an event-based platform, a lot of events storing and logging and monitoring basic components. And then we had a lot of standard plug-ins. On top of this goes around classic workflow engine, but certainly also a rule engine. And it is within the rule engine where things are interesting because that is where the knowledge of a particular domain is coated and configured into no matter if it's about maternity or if it's around student dependencies or if it's a third thing. This is where you configure and code your knowledge into. A lot of letter management going out physical and digital letters to the Danish citizens, a document management for internal workflows and so on. And a number of plug-ins is available through this one. Alone on maternity, we have 25 integration to Danish government agencies that are normal for us. 25 integration. So it's very normal that you have this amount of integration to government-owned different where you're getting information and pushing information to. It's complex this, but also some of this is standard stuff that we can do. Last but not least, you have the citizens, they interact using portals, mobile phone apps and so on, just like that you have case workers working it and making their workflow more efficient. And the best place to be is in the automatic case handling area because that's where everything is handled the fastest possible and no people is involved. And that's the primary place we want to be with our own workflows. It basically captures a lot of our know-how over the last 25 years. We've been doing case handling in NNIT. Obviously, integrates into how we develop stuff and test stuff and we lease stuff in NNIT. Last but not least, it's a pretty modern design we've created now. So basing on container technology, micro services and will -- can be leased into cloud computing, both public and private cloud computing. So that's how you win this market is you've got to have a base and strong foundation on how you start with the customer. That's important. Coming to an end, where is it? And how is it we win? Well, there's a lot of domain that is just working with agencies how they work how they are viewed upon what kind of a dynamic they are interacting with their ministries that they have to serve. That's 1 thing. That's another domain knowledge around how they are bidding and just engaging with public customers is an area of knowledge itself. Then we are able to deliver the entire value chain. And that is important when you interact in these places, meaning that we can go all the way from our presales and bid support towards the public sector. We have specialized people around this. We have the entire area from solution architecture over to software architecture, software developers and testers and all the way down to the container operations. We don't do data centers in long NNIT, we sold that out. But we control the layer above where it's the Devops and container business and all the way up to the top in the value chain. And then last but not least, we have this proximity. You talk Danish to these agencies, you don't talk English to them. It's written in Danish. Most of the material that goes in and out. We are a very trusted brand. Denmark and has been for many years, but also known a lot from outsourcing. Now it's about our consulting and projects business, that's good. Last but not least, we know how to execute these projects. And that matters to our customers. And we do a lot of this new build systems fair. But the world is also looking more and more to say how do we extend life? There's a lot of legacy systems out there. And some of them or many of them they don't want to replace an entire system, they just want to take a portion of the system and replace it because going into DKK 400 million to DKK 500 million from a project is risky business for these agencies. And we've seen failures in these. So we see more and more who would like to come down and replace parts a bit. We have a lot of noise around this, and we're also using low-code technology in this. We are a very big vendor within local platforms, and as Kas alluded to , we also became a partner of the year in Denmark within the Microsoft Power platform. So low-code is part of our tool sets when going into this area. Last but not least, it's all about customers. It's all about customer experience, what we're doing here, and that's what we focus on. Jack, I think that was all from me and I'm passing it over to you. So back to your domain now, I think, the financials.

Thank you. Ken. My name is Carsten Ringius, and I am CFO in NNIT. Before kicking off this final and very exciting part of the presentation, I just want to take the opportunity to thank you for being here today. I've been in NNIT for roughly 1 year. And during this quite eventful time in the history of NNIT, I had the pleasure of meeting several of you but I'll be looking forward to extend that network even further today, been looking forward to that. Before looking ahead, we will just quickly take a glance of our -- on our current financial performance A couple of weeks ago, we released our first half year result, reporting a revenue growth of 15.6%, slightly lower organic revenue because we have since the closing of the infrastructure business reported revenue towards our colleagues and even as inorganic. So that has been since end of April. We have seen significant improvements in our operating profit margin comparing to the same period last year, we are up with more than 10 percentage points for the first half year. This, all in all, led to us also raising our full year guidance. And of course, we are very pleased with that. We see this as an early sign that we are actually on the right track with our new strategy. It's early signs of success in our new strategy. So we will build on this positive momentum. We want to make NNIT even more attractive for our investors, our customers and our employees in the years to come. Looking at our markets, looking at our capabilities, looking at our financials and also looking at our new strategy, we are confident that we, over the years to come, can make NNIT a very attractive investment case. Of course, growth is important. As you have heard, the regional leads explained today, we are very well positioned to tap into our global growth. We have, with the new regional structure, given the agility and the flexibility to actually succeed in this on a regional level. We have already seen some improvements in our profitability, but we are very keen on improving this further, both through, of course, cost reduction initiatives, but also through leveraging our cost base and achieve further organizational efficiencies. We have a strong balance sheet. We have low debt, and we are currently in process of ensuring our long-term funding after completion of the divestment. This will also put us in a good position to pursue M&A going forward. I'll come back to that. Before I turn to the financial long-term aspiration, just spend a second on the key assumptions. We are talking about a period from now until end of '26. The current baseline or the baseline for the financial aspiration is our current upgraded guidance for the current year. We had some discussions on this already, but we are basing our assumptions on an 8% CAGR in the markets that we are tapping into. And we expect, and that's maybe quite of a luxury, but we expect somewhat stable global financial markets and also stable exchange rates for one. Based on this, we aim to deliver solid growth and increase our profitability further through a successful strategy execution. We want to drive solid organic growth providing around 10% average annual growth rate, organic growth. And we expect to be following through on the cost reductions, doing margin increases, leveraging our operational efficiencies to increase our margins to yearly average group operating profit margin before special items to be between 10% and 13% over the period. I had some questions on this in during lunch. And as we are on a, you can say, still on a transformational curve into '24. This would be a stepwise improvement. So we expect increasing profitability over the time of our strategy outlined here today. For example, if we are to deliver 13% average yearly operating profit margin over this period, and we are starting at a lower level means that by the end of this period, we will be at a higher level than 13%, just to make that absolutely clear. We are talking about an average over the period. And of course, we can see some volatility between quarters, between years, et cetera. So this is average that we are talking about here. So we want to grow our business. We feel that we are well positioned to successfully grow. And if we look at our -- you can see our plans on this. We expect to realize that, of course, both by expanding our current engagements with our existing customers, but also by winning new logos on to our wall. NNIT is benefiting from very high customer loyalty. As we see now up to 80% of our growth is actually coming from extending engagement or new engagement with existing customers. You have that also being reflected here today in the 2 cases with Boehringer Ingelheim and also ATP that we see a very high customer loyalty. We see that as a testament to the quality and our deliverables and our deep domain knowledge that we are actually -- once that we are in the door, we are quite sticky because of the quality and the value that we actually deliver to our customers. Of course, we also expect to win new customers. We have a very solid pipeline when we look at our enterprise and public business in Denmark. If we look at our Global Life Science business, we are very well positioned in top 20. So we see the biggest potential here in the mid segment being between top 50 and top 100. All in all, we see that over the period, giving us a growth of 10% CAGR organically. And of course, any M&A will come on top of this aspiration. So we want to grow and take market share. But even more importantly, we want to increase our earnings and increase our profitability. And here, we have several tools to do that. We aim at doing both cost reduction but also leveraging our cost base also reaping efficiencies in our organization. If we look at our operating performance now, we have seen some improvements in our utilization, but we still see some ample possibilities for improving our utilization. If we look at our global delivery centers, we are currently now having around 15% of our delivery capacity coming out of the global delivery centers, we see potential for growing this into the high 20s. So we see plenty of opportunities to actually ensuring operating leverage. And then we have some very specific cost reduction opportunities. I'll just dive into those on the next slide. It's important for me to stress before we move on, that we will continue to invest in our business it's important to invest in our employees. So we also, in the longer term, have a strong foundation for future growth. But becoming very specific, these are not something that we are planning on doing. This is actually something that we have either done or are in the process of doing some very specific cost reduction initiatives. One being organizational restructuring as part of our strategy loans in Q2 we were able to, based on the restructuring to reduce our salary costs both in the regions, but also in the global support functions. Another very specific initiative is that we are now in the search process for a more suitable headquarter facility for the new NNIT, reflecting that we are now, you can say, a more modern consultancy composite company. And here, we expect to reap the benefits for that with a full run rate savings from the beginning of '25. Our organizational restructuring took place in Q2. We see some gradual reaping of the full benefit into Q3 and will have the full effect in Q4. and, of course, giving us a full run rate saving into '24. Then we have 2 other initiatives that are focusing on enabling further efficiency gains. One is ensuring improved performance management. We have implemented a new financial steering model that drives a higher degree of accountability. That provides more transparency once fully in place and thereby also allow us to make faster decision making. But all in all, it's -- you can say, a more transparent view on our entire performance giving a better tool for doing performance management. I'll just come back to that also. And then we have the new systems. Our customers are not the only 1 having a legacy solutions. We have the same challenge in NNIT. We are currently operating a quite fragmented system landscape. Therefore, we have launched a global ERP implementation that we will have completed by end of '24. That will give us an opportunity to streamline our global processes work more efficiently and will actually reduce quite big load of manual work we have today. And finally, it will also provide us for a strong platform to onboard future acquisitions based on a new global system. So some very specific initiatives we have already initiated here. And then as you saw as part of the Q2 launch, we used a new financial disclosure in our reporting. Just to put a few comments on it. On the regional level, the sum of the 4 regions is equaling up to NNIT in totality. We have compared to the previous disclosure, now have a more clean production cost. Previously, we had allocation of different fixed cost into our production cost. This gives us a tool to actually have a much more transparent performance management and it also drives the high accountability directly in our regions. Now with our ambition to lift our sales significantly and also increase our earnings going forward. I will just briefly comment on our capital allocation strategy. Our current focus is very much on ensuring financial stability. We aim at a leverage ratio between 0 and 1. And then our focus is also very much on growth. So we will continue to invest in our business, and we want to pursue potential M&A opportunities looking into the next year. This also means that it's currently not a priority short term to do dividends or do share buybacks. So we are, in the short term, investing in growth. Now coming back to our track record on M&A. It's important to note here that we have the capabilities to successfully do acquisitions and also integrate them successfully in our operating model. We have had a very diversified approach to our acquisitions. For example, SCALES, which we acquired back in '17 and Excellis has been kept on a complete stand-alone basis, while other companies that we have acquired has been integrated into our business model. When we take up the pursuit for new acquisitions, our primary focus will be within Europe and the U.S. and the target size that we are looking at here is somewhere between DKK 100 million and DKK 300 million. And I can just add to that, that we will be very disciplined in that approach. We will target local market presence or scalability in the production or in the solution area that we have or do acquisitions to get very specific customer access and expand on that further. Before opening up the Q&A session, just a very quick recap of our investment case. We see that we are very well positioned in our global markets that we have the capabilities that we have, the financials that we have the strategy to be a very attractive business case. Therefore, we aim to deliver a solid organic growth of a CAGR of 10% and and a yearly average group operating profit margin before special items between 10% and 13% over the period. And now we will open up for questions. Yiwei?

And a question back to the Danish operation. So you focus a lot on the public sector. And I think the big topic we have heard in this sector over the recent years, you're still introducing more competition. And I think they specially mentioned about want more small, medium-sized IT vendors to involve in the tendering in the project delivery. And do you see this as an opportunity or a competition threat to you? And have you seen any change in the market dynamic recently? .

Yes. Good question. We see that clearly as an opportunity. So back in the day, there was 1 monopoly for a certain section of the Danish market that was broken. Over the recent years, centric approach has been taken to other vendors. We now see us as a viable alternative in a Danish context. So certainly, we welcome those dynamics and see that as a growth potential for us. And also coming back to our current market share, it is small, basically 2%. So nobody will cry wolf or monopoly if we win more business. That's for sure. Dynamics. It is true. We meet a very fragmented competitive landscape. A lot of smaller consulting houses coming in on small assignments. On the bigger projects you require some scale. So there are not a multitude of competitors in the Danish context who can win that. But it is true, we see on the consultancy space, a lot of new faces.

Yes. I have several questions. I was just wondering when you gave the guidance on the revenue of why some 10%? And when you say expansion is mid- to high single digit, let's say, 5% to 9%. And when you say new engagements is mid-single digits. So 5% plus 5% to 9% equals 10%.

I think you can add that up and get that to around 10% if your practice.

Then to the Danish business, can you say something about how you see the public sector pipeline for the next, let's say, this half and '24.

Yes, Yes. I can. So we see a fairly good pipeline for Q4. We see a really strong pipeline for next year and actually also going into '25. And when I say a strong pipeline, I mean high double-digit opportunities or even 3-digit opportunities and a number of those. So we're not talking 1 or 2, we are talking 8 to 10 very large opportunities. So we are happy with the outlook on the project and service pipeline. And then we certainly also expect to grow on the consultancy pieces where it's a little bit more short-term pipeline short-term sales cycle. But in general, we are extremely happy with our current pipeline outlook for the public sector specifically.

Can you put some name on what's in the pipeline?

You can basically go into the public portal and look for yourself, but we see opportunities with ATP, we see opportunities with [indiscernible], we see opportunities with [ Combat ], we see opportunities with [ Lambostersen ], we see opportunities with -- which ones have I forgotten and at least those are 1 -- some of the bigger ones. Yes. And then sell in, by the way, on our bigger current engagement is a very, very important part on our growth journey. You know we entered into a relationship with International Bank. We continue to see fairly big chunks being released also from them.

[indiscernible] We also focus over there and...

It's also 3 digit, just to mention some of them.

About [ Combat ], we have been now continuously talking about a new strategy for tenders. How do you expect that to impact the market?

Good question. Before they actually release it and before they become very crisp, it's -- I can hypothesize. So we will wait and see what they specifically do when they release some of the new RFPs.

So they have not been around to the vendors and presenting it.

We have been to market days on some of the opportunities, but that's more opportunity specific.

Okay. And then AI everybody talks about AI. Can you give an update on where we are now? Are we in the process where you're structured data, both the cloud or start training on data, build algorithms or when do we see products -- or are we all over the full spectrum depending on who and what we talk about?

Yes. They have put me up here. So I'm miked up here. We are under the face. And so also speaking as a CTO, I would say that at this, in general, when you look at -- we went through the machine learning phase. Now we solved a large language model phase that started out last year. And in this area, specifically, I think that the impact short term is overestimated the impact long term is underestimated. We are -- in NNIT, we are working both in the public sector and life science industry on platforms. For -- and we are building use concrete use cases, all the organizations that we work with, they see it as a big potential. They do it in life science. They certainly also do it in the public sector themselves. We are currently together with Dean's pharmacy. We're doing some proof of concept there in order to help their case workers find medication and to help guide customers on how to use it. But there are several use cases whenever we just upfront that are very easy to help with machine learning models, in particular, large language models. We are just scratching the surface right now. And -- but we see it across all our customers that they want to hear about what we do and how it can help them in different matters.

So in revenue terms, it's still very small.

Very small. You will see it and it will continue to be very small for the first couple of years. I think in Life Science, you probably has -- I don't know how big it is in life science right now. But I think in the first year or 2, it will be small revenue chunks that we see compared to our business. Long term, it will have an impact.

Okay. And the final 1 for now is about Denmark standard systems. You spoke about that everything has to be tailor-made and they are not much standard. Then we have -- and we are talking about case management. I'm still don't understand. At the same time, we have 1 company running around in Copenhagen telling that standard solutions are going to take all case management. And you say it won't sell. Can you explain what's right or wrong or is it both right?

Yes. Yes. So I wouldn't say it has to be entirely tailor-made. That's also the point Jens was trying to make with ATP. We built code library. We built prepackaged components, and then you configure those compared to what is required. So it's a little bit of both, you can say, that you need to go in and build configured systems and functionality to the public entities. But to the furthest possible degree, you obviously try and prebuild and prepackage code.

It's that newer components your building and it's not something you buy from that side.

Correct. It's our IP. Which company was it that was running around and telling? [indiscernible] Yes. It's -- so just to understand the market when you talk about case management, you actually will see that there's there is case management, there's a very simple case management that we see where you handle millions of documents and simple flows I think [ Ceban, ] there's a market for that part and has been actually over the last 15, 20 years, different vendors in this space, and they're very good at that. And we don't attack that market. When you work in -- when you come in to agency level, and it becomes complex. Then you see you need complex case management systems. You will see that [ a net ] company has 1 out there, you'll see [ LLIT ] has one, and they are probably the 2 most mature in this area to deliver on this, I think. No doubt that [ net company ] is 1 of my main competitors, just to clarify that, but good question, by the way.

And a question on the margin, Carsten. You mentioned the drivers to improve your EBIT margin from current level. And as I understand, for 2023, the employee utilization is also below where it should be. And the potential to normalize your -- or improve your employee utilization, is it a part of the performance management program or initiative? Or is it -- will be something on top of that?

Well, basically, it will be an ongoing effort to increase our margin and our utilization. Of course, it will always vary across different products across where we are actually investing and where we are more mature. So what we are -- you can say, can conclude is that we still have improvement potential and that we are not aiming for the same utilization across all our product areas. But you can say, in average, we are aiming for of billable utilization around DKK 85 million, we perceive as being at a very good level.

That DKK 85 million that only for the -- you only account for the client-facing FTE?

This a billable FTE. Yes.

Questions about the U.S. market. You have 180 people in the U.S. I was just wondering how much of that comes from the [ Alliance ] and Excellis.

Roughly, you can think about advisory and consulting Excellis and [ symbolions ] as each 1 of us is about 1/3. We also do use external consultants in the U.S., it's economically smart to do that. You actually see much higher margins than your would in Europe. So there's additional resourcing that supplements each of those organizations that way.

Okay. And when you say that within the last 18 months, you've got a significant improved offering. And you have made no acquisitions in that period. That's because you start selling services from Europe.

In many cases, so in regulatory, we just made the team larger. So regulatory and clinical. We've seen a great uptick in clinical over the last 12 months. And then quality, we're also seeing expansion on new accounts. And then in manufacturing, we did strategic placements to start building that domain. So we have roughly 10, 12 people that have been strategically placed at some large pharma accounts. In essence creating the debt, yes.

A final 1 about Veeva. Salesforce and Veeva has announced that they're going to split and stop cooperating. Is that going to have any impact on you?

In a positive way.

In In what way?

Which doesn't sound well, in that Veeva is a strong model in the U.S. almost every major pharmaceutical company as well as midsized company has Veeva already installed. If there's any challenges with the platform, how it impacts the business processes typically we're brought in not Veeva to actually help them deal with some of those challenges. So as Veeva would have to modify their platform and think about other technical avenues, we're a part of counseling the business process implications of that and helping companies through that. So that's why I say it's a possible upswing. Does it make sense?

It does. Yes.

Also 2 questions on the U.S. operation. And firstly. And how is the job market in the U.S.? And given you are growing 20%, 30% annually, do you see a labor shortage challenging the recruitment?

The answer to both of your questions is no. within my operation, I've had a long established when I came on board as a very strong recruiting arm. We have multiple avenues for that. And we've been able to acquire talent very quickly. As many of you know, the labor market is a bit different than some of the other regions where people can give a 2-week notice and move in roles. What's also benefited us is life sciences is somewhat inflation resistant where some of the tech companies have been exposed, banking and finance and other industries and have downsized some of the resources we've been able to pick up on those -- that talent also. So in essence, we haven't had a challenge at all to meet customer needs at the moment in finding top talent. The other part I would add to that is we recruit from the entire U.S. So our 4,000 kilometers across that geography gives us a lot of latitude in finding the right people.

Great. And then my second question is, if you compare the U.S. operation margin to Europe and Asia, is there any structural difference for the profitability because currently, the U.S. gross margin, if you look at -- gross margin is much higher than the other 2 operation.

I can comment on that. And that is in the U.S. we have -- or if you compare the regions a larger proportion repeatable revenue Mark mentioned the service pro at [ Excellis ] and also the data migration tools at the migration powerhouse [ old alliance, ] and that creates a high margin. So I would say, if you compare it for the 3 Life Sciences region, is 1 where you have the largest proportion of repeated revenue, but also that Mark put nice words to. I mean U.S. is really and life science powerhouse, there's a lot of money invested there. So it's a really good market to be in.

Is there any difference in the -- between fixed price contract and the time and material across the regions?

Well, difference. I mean all I can answer that at all things equal, we don't reveal any numbers, but there is a higher proportion of repeatable revenue and fixed price in the U.S. part of the business, especially repeat to the revenue, I would say, maybe not fixed price project, but there is clearly a higher proportion of repeatable revenue in the U.S. versus other regions.

Two final questions from my side. About M&A, and you talk about gearing of up to 1x. Do you already have the credit facilities to support that?

We're in process of finalizing our noncurrent financing, and it will be concluded before the end of this year.

Okay. And then the last 1 is on the LTIP programs?

The what?

LTIP. Long Term ...

Yes, yes.

Questions, are they based on the ambitions that you have given or is that other numbers? That's the base for when you get performance payments.

Well, we're actually in the process right now and to reconfigure the long-term incentive program, so it's in line with updated strategies, no dramatic things, but we are looking into actually both, so short-term incentive program and the long-term incentive program to make sure that, that's aligned with the ambition that we presented here today. .

No more questions? Then I'll here...

Just backing up a poll. And the DKK 200 million vendor loan node, you put in the long-term trade receivables. Is there any sort of uncertainty for you to get that cash. And is it possible to do any sort of financing or factoring on that money so you can sort of use the money -- use the fund to do M&As.

Well, the agreement on the vendor long node that Agilitas have to pay back within the latest 6 years. And we are not -- we have not ventured into investigating any factoring opportunities on this vendor long node. For now, it's placed in our balance sheet. And this is -- you can see where we in the short run, expected to be located.

And that money for you to get that money is going to be like over a period or you will be sort of a onetime payment when you get it?

It would be a onetime payment. Once that is paid back.

And then you have no visibility on the timing?

No. The contract that we have entered into the sales purchase agreement -- our share purchase agreement is just giving a deadline for paying it back. So we can expect at the latest within 6 years. That is the terms.

And you mentioned there will be no dividend and share buyback. And I guess you also don't have a lot of financial master to M&A in the short term. Can you confirm on that?

Well, as I pointed to, we have a capitation or capital allocation strategy where we initially focus on growth. And before M&A, we target a leverage ratio between 0 and 1. As part of this funding that we are now securing we expect to have, as part of that facility to pursue M&A. Yes. If no more questions, then I will leave the floor for some closing remarks from Par Fors.

Thank you, Carsten and Kasper and Jens. And that concludes the official part of the program. In my introduction today when I presented the long-term financial aspirations, I told a big part of this day was to explain how we are getting from where we are today versus the end of this strategy period. And I think personally, listening to my colleagues, the renew leads and not the least, the client cases gives a lot of insight of our deep domain expertise in the sectors why we have chosen to focus, but also the regional connection to a different marketplace. So I hope you share that, which is my personal opinion with that. But with that, actually, I will thank you very much for attending this day. I appreciate that you take your time. I know you have a busy agenda. And also as promised, we will hang around for some times out in the lounge, if there are some additional questions, so some networking. But once again, A big thank you for all of you attending here in Copenhagen, but also all of you online. And I wish you a great day and a great afternoon. Thank you very much.