“Quarter after quarter, we have delivered top-line growth, and this is a strong starting point for our new growth strategy – New Heights – where we expect to deliver an average annual growth of 10% while gradually lifting profitability with an EBITDA margin of 15% by the end of 2026”, says CEO & President Søren Krogh Knudsen.
Strategic growth target met ahead of time
The momentum continued in the third quarter, and Columbus delivered a total revenue in the first nine months of the year of DKK 1.1bn with a reported growth of 10% in DKK and 14% adjusted for acquisition and currency. Columbus has thus met the long-term expectation in the Focus23 strategy of 10% growth by the end of 2023.
Revenue in Q3 2023 increased by 11% to DKK 345m and 15% adjusted for acquisition and currency development, primarily in Sweden and Norway. Columbus Sweden delivered a service revenue growth of 4%, however in local currency the revenue grew by 16%. The Norwegian business is impacted by market challenges and currency resulting in a decline in service revenue of 16%, which in local currency was a decline of 4%.
Columbus’ UK business delivered an impressive Q3 with 50% growth with extraordinary high activity in all business areas, and Columbus’ Danish business also continued the progress with revenue growth of 30% in Q3 2023.
ICY Security, which Columbus acquired in April 2023, took the first steps to expand in Norway and Sweden during Q3 2023 and is in the process of building strong sales muscles in the two markets.
Columbus’ business areas showed impressive Q3 growth across the board with 13% growth in Dynamics, while Data & Analytics grew by 36% and Customer Experience & Engagement by 57% - and this despite the negative currency impact. Digital Commerce and M3 are affected by the decline in Swedish and Norwegian currency which caused a decline of 5% and 7% respectively, however measure in local currency the Business Lines delivered a growth of 5% and 0.3% respectively.
Operating profit (EBITDA) increased by 28% to DKK 21m in Q3 2023, corresponding to an EBITDA margin of 6.0% - a level that can be further lifted which is why lifting profitability is a focus area in the new strategy.
New strategy – New Heights – with ambitious growth targets
With the successful execution of the Focus23 strategy, Columbus is now ready to deliver on new ambitious growth targets. Today, Columbus has a strong foundation with a more streamlined and focused business. We will build on top of the foundation by:
- Improving our advisory capabilities and strengthen our market position as digital advisors
- Focusing on increasing customer engagement with larger customers in our key industries; Manufacturing, Retail & Distribution, Food & Beverage and Life Science
- Building on our global delivery capacity and access to talent
“We have a high customer loyalty, in Columbus ~85% of our customers choose to continue their partnership with Columbus year after year, which underlines our ability to deliver high customer value. We will continue to do so while looking for new exciting acquisition opportunities in new and existing service areas and include Life Science in our key industries”, says Søren Krogh Knudsen.
New strategic initiatives to accelerate the growth ambition
Columbus has identified three strategic initiatives which will drive the expectation of a compounded annual growth rate of 10%.
- Adding Life Science as new market
In recent years, Columbus has experienced an increased demand from Life Science companies and already serves a number of customers in the industry with good references such as Bavarian Nordic. In addition, Columbus has strong partnerships in the industry which underlines the market position in Life Science.
- Investing in new services
Columbus will continue to invest in services that complement the current service portfolio and solve complex industry challenges such as ESG compliance, the need for increased automation and new supply chains due to changes in the world market.
- Increase recurring revenue
With the transition to cloud, Columbus is experiencing an increasing need from customers to take ownership and manage their solutions in the cloud. Columbus’ ambition is to help customers in all areas of their digital transformation to the cloud – and thus increase recurring revenue in the operating business.
15% EBITDA margin by the end of 2026
Columbus will increase profitability over the coming three years and expects an EBITDA margin of 15% by the end of 2026. This will be done by:
- Increased project value delivered, translating to higher price points and better project value
- Changed delivery mix in relation to shoring and senority will improve margins
- Efficiency improvement through better utilization of available customer facing hours and larger engagements
- Better utilization of our scalable model with global functions with increased delivery capacity
”We have a clear strategic ambition to strengthen our leading position to be our customers’ preferred partner while nurturing our unique company culture. We are convinced that the various initiatives in New Heights will help create an even better Columbus for both our customers and employees,” says Søren Krogh Knudsen.